Applied Materials Earnings Rise on AI Demand
Applied Materials earnings showed record fiscal 2025 revenue $28.4B and stronger Q1 guidance $6.9B tied to AI tool demand, shifting focus to order signals.
KEY TAKEAWAYS
- Q1 FY2026 revenue was guided to $6.9 billion ± $0.5 billion and non-GAAP EPS to $2.18 ± $0.20.
- Fiscal 2025 revenue reached $28.4 billion, a 4.0% year-over-year increase.
- Non-GAAP free cash flow fell 24.0% to $5.7 billion, highlighting profit-conversion pressure.
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Applied Materials, Inc. (AMAT) reported record fiscal 2025 revenue and issued a stronger Q1 FY2026 forecast driven by demand for AI chip manufacturing tools, despite softer fourth-quarter sales and contracting operating margins.
Fiscal 2025 Results
The company’s unaudited consolidated statements showed fiscal 2025 net revenue of $28.4 billion, up 4.0% year over year. Non-GAAP diluted earnings per share (EPS) reached a record $9.42, a 9.0% increase, while GAAP diluted EPS rose 1.0% to $8.66. Non-GAAP free cash flow declined 24.0% to $5.7 billion, and cash and cash equivalents fell to $7.2 billion from $8.0 billion a year earlier.
In the fourth quarter, net revenue totaled $6.8 billion, down 3.0% from the prior year. GAAP diluted EPS increased to $2.38, while non-GAAP diluted EPS was $2.17. Foundry and logic customers accounted for $4.8 billion of fourth-quarter sales, the largest segment share. Operating margin contracted 3.8 percentage points year over year.
Q1 Guidance and AI Demand
In a press release at 4:01 p.m. ET on Nov. 13, 2025, Applied Materials set Q1 FY2026 revenue guidance of $6.9 billion, plus or minus $0.5 billion, and non-GAAP diluted EPS of $2.18, plus or minus $0.20. The company attributed this outlook to continued strong demand for tools used in AI chip manufacturing, making the forecast a clear indicator of near-term equipment order trends.
