Applied Materials Announces First Quarter 2026 Results

Rhea-AI Summary

Applied Materials (NASDAQ: AMAT) reported Q1 FY2026 revenue of $7.01 billion, down 2% year‑over‑year, GAAP EPS of $2.54 and non‑GAAP EPS of $2.38. GAAP gross margin was 49.0%; operating income was $1.83 billion. The company generated $1.69 billion cash from operations and returned $702 million to shareholders via buybacks and dividends. Management projects Q2 revenue of $7.65 billion ± $500 million and non‑GAAP diluted EPS of $2.64 ± $0.20.

Positive

• Cash from operations of $1.69 billion
• Returned $702 million to shareholders
• Non‑GAAP free cash flow +91% YoY to $1.04 billion
• Semiconductor Systems: record DRAM revenue
• Applied Global Services: record services and spares revenue

Negative

• Revenue down 2% YoY to $7.01 billion
• GAAP operating margin declined 430 basis points YoY to 26.1%
• Non‑GAAP net income down 2% YoY to $1.899 billion

News Market Reaction

-3.38%

51 alerts

-3.38% News Effect

+18.7% Peak in 27 hr 32 min

-$10.44B Valuation Impact

$298.46B Market Cap

0.3x Rel. Volume

On the day this news was published, AMAT declined 3.38%, reflecting a moderate negative market reaction. Argus tracked a peak move of +18.7% during that session. Our momentum scanner triggered 51 alerts that day, indicating high trading interest and price volatility. This price movement removed approximately $10.44B from the company's valuation, bringing the market cap to $298.46B at that time.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Q1 FY2026 Revenue: $7.01 billion Q1 GAAP EPS: $2.54 Q1 Non-GAAP EPS: $2.38 +5 more

8 metrics

Q1 FY2026 Revenue $7.01 billion Q1 FY2026 revenue, down 2% year over year

Q1 GAAP EPS $2.54 Q1 FY2026 GAAP earnings per share, up 75% year over year

Q1 Non-GAAP EPS $2.38 Q1 FY2026 non-GAAP EPS, flat year over year

GAAP Gross Margin 49.0% Q1 FY2026 GAAP gross margin vs 48.8% in Q1 FY2025

GAAP Operating Income $1.83 billion Q1 FY2026 operating income, 26.1% operating margin

Cash from Operations $1.69 billion Q1 FY2026 cash generated from operations

Capital Returned $702 million Q1 FY2026 total returned via $337M buybacks and $365M dividends

Q2 Non-GAAP EPS Guide $2.64 +/- $0.20 Guidance for Q2 FY2026 non-GAAP diluted EPS

Market Reality Check

Price: $354.91 Vol: Volume 6,879,498 is about...

normal vol

$354.91 Last Close

Volume Volume 6,879,498 is about 0.82x the 20-day average, indicating typical trading activity ahead of the release. normal

Technical Shares trade above the 200-day MA at $215.18, reflecting a sustained longer-term uptrend into this earnings print.

Peers on Argus

AMAT was up 3.29% while key peers were mixed: TER +2.89%, KLAC +0.76%, ENTG +0.6...

AMAT was up 3.29% while key peers were mixed: TER +2.89%, KLAC +0.76%, ENTG +0.63%, LRCX -0.18%, ASML -0.20%. The move appears company-specific rather than a broad sector rotation.

Previous Earnings Reports

5 past events · Latest: Nov 13 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Nov 13	FY25 results	Positive	-3.3%	Reported record FY2025 revenue and EPS with Q1 FY2026 outlook provided.
Aug 14	Q3 2025 earnings	Positive	-14.1%	Delivered record Q3 revenue and non-GAAP EPS but guided for Q4 revenue decline.
May 15	Q2 2025 earnings	Positive	-5.3%	Posted strong Q2 growth in revenue and EPS with solid Q3 outlook.
Feb 13	Q1 2025 earnings	Negative	-8.2%	Revenue grew but GAAP EPS fell sharply due to a large tax expense.
Nov 14	FY24 results	Positive	-9.2%	Reported strong Q4 and FY2024 growth with robust cash generation and returns.

Pattern Detected

Past earnings often showed strong revenue/EPS but were followed by negative price reactions, suggesting a pattern of selling into results.

Recent Company History

Over the last five earnings releases since Nov 14, 2024, Applied Materials repeatedly reported strong or record revenue and EPS, including record annual revenue of $28.37B and record non-GAAP EPS of $9.42 in fiscal 2025. Quarterly revenues generally stayed around the $6.8B–$7.3B range with solid margins. Despite these fundamentals, the stock often declined the next day, with several earnings events showing mid‑single to low‑teens percentage drops, indicating a history of cautious or profit‑taking reactions to results.

Historical Comparison

-8.0% avg move · In the past 5 earnings releases, AMAT’s average next-day move was -7.99%, often skewing negative des...

earnings

-8.0%

Average Historical Move earnings

In the past 5 earnings releases, AMAT’s average next-day move was -7.99%, often skewing negative despite generally strong financial results.

Recent earnings show Applied maintaining revenue in the $6.8B–$7.3B range with record annual revenue and non-GAAP EPS in FY2025, while guidance consistently emphasizes AI-driven demand across logic, memory and advanced packaging.

Market Pulse Summary

This announcement highlights Q1 FY2026 revenue of $7.01B, GAAP EPS of $2.54, and non-GAAP EPS of $2....

Analysis

This announcement highlights Q1 FY2026 revenue of $7.01B, GAAP EPS of $2.54, and non-GAAP EPS of $2.38, alongside strong cash generation and continued capital returns. Guidance for Q2 non-GAAP EPS of $2.64 ± $0.20 underscores management’s confidence in AI-related demand. Historically, earnings days have averaged a -7.99% move, so monitoring how the market interprets revenue growth, margins, and segment trends versus prior quarters remains important.

Key Terms

non-gaap, gaap, free cash flow, gate-all-around (gaa) transistors, +2 more

6 terms

non-gaap financial

"GAAP gross margin 49.0 percent and non-GAAP gross margin 49.1 percent"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

gaap financial

"On a GAAP basis, the company reported gross margin of 49.0 percent"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

free cash flow financial

"Non-GAAP free cash flow | $1,040 | | $544 | | 91 | %"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

gate-all-around (gaa) transistors technical

"systems that boost the energy-efficient performance of Gate-All-Around (GAA) transistors"

Gate-all-around (GAA) transistors are a semiconductor design where the transistor’s control electrode wraps completely around the conducting channel, giving much tighter control over current flow than older designs. For investors, GAA matters because it enables smaller, faster and more energy-efficient chips, which can lower manufacturing costs, improve product performance and give chipmakers a competitive edge as demand grows for high-performance and low-power devices.

atomic layer deposition technical

"Spectral™ – an atomic layer deposition system that replaces today’s tungsten"

Atomic layer deposition (ALD) is a precise manufacturing process that deposits materials one atomic layer at a time using repeated, controlled chemical steps, producing ultra-thin, highly uniform coatings even on complex shapes. It matters to investors because ALD enables smaller, faster, more power-efficient chips and more reliable sensors, batteries and optical parts, so companies with ALD capability can improve product performance and yield—like painting a detailed sculpture layer by layer for perfect, even coverage.

webcast technical

"A live webcast and related slide presentation will be available"

A webcast is a live or recorded online event where people watch or listen to presentations, announcements, or performances through the internet. It’s like a TV broadcast but over the internet, allowing viewers from anywhere to tune in in real time or later. Webcasts are important because they let companies share information quickly and widely with audiences around the world.

AI-generated analysis. Not financial advice.

• Revenue $7.01 billion, down 2 percent year over year
• GAAP gross margin 49.0 percent and non-GAAP gross margin 49.1 percent
• GAAP EPS $2.54 and non-GAAP EPS $2.38, up 75 percent and flat year over year, respectively
• Semiconductor Systems achieved record DRAM revenue
• Applied Global Services delivered record services and spares revenue

SANTA CLARA, Calif., Feb. 12, 2026 (GLOBE NEWSWIRE) -- Applied Materials, Inc. (NASDAQ : AMAT) today reported results for its first quarter ended Jan. 25, 2026.

First Quarter Results

Applied generated revenue of $7.01 billion. On a GAAP basis, the company reported gross margin of 49.0 percent, operating income of $1.83 billion or 26.1 percent of net revenue, and earnings per share (EPS) of $2.54.

On a non-GAAP basis, the company reported gross margin of 49.1 percent, operating income of $2.11 billion or 30.0 percent of net revenue, and EPS of $2.38.

The company generated $1.69 billion in cash from operations and distributed $702 million to shareholders through $337 million in share repurchases and $365 million in dividends.

“Applied Materials delivered strong results in our fiscal first quarter, fueled by the acceleration of industry investments in AI computing,” said Gary Dickerson, President and CEO. “The need for higher performance and more energy-efficient chips is driving high growth rates for leading-edge logic, high-bandwidth memory and advanced packaging. These are areas where Applied is the process equipment leader, and we expect to grow our semiconductor equipment business over 20 percent this calendar year.”

“With demand increasing for our innovative products and services, we are focused on ensuring we have the capacity to support our customers,” said Brice Hill, Senior Vice President and CFO. “Over the past several years, we have nearly doubled our system manufacturing capability, strengthened our supply chain and increased our inventories in preparation for market growth.”

Results Summary

	Q1 FY2026				Q1 FY2025				Change
	(In millions, except per share amounts and percentages)
Revenue	$	7,012			$	7,166			(2	)%
Gross margin		49.0	%			48.8	%		0.2 points
Operating margin		26.1	%			30.4	%		(4.3) points
Net income	$	2,026			$	1,185			71	%
Diluted earnings per share	$	2.54			$	1.45			75	%
Non-GAAP Results
Non-GAAP gross margin		49.1	%			48.9	%		0.2 points
Non-GAAP operating margin		30.0	%			30.6	%		(0.6) points
Non-GAAP net income	$	1,899			$	1,946			(2	)%
Non-GAAP diluted EPS	$	2.38			$	2.38			—	%
Non-GAAP free cash flow	$	1,040			$	544			91	%

A reconciliation of the GAAP and non-GAAP results is provided in the financial tables included in this release. See also “Use of Non-GAAP Financial Measures” section.

Recent Highlights

• Announced that Samsung Electronics will join Applied’s new EPIC Center in Silicon Valley. The EPIC Center is designed to dramatically reduce the time it takes to commercialize breakthrough technologies from early-stage research to full-scale manufacturing.
• Introduced new deposition, etch and materials modification systems that boost the energy-efficient performance of Gate-All-Around (GAA) transistors and wiring at 2nm and beyond.
  • Viva™ – a pure radical treatment that smoothens GAA silicon nanosheets with atomic-level precision to increase transistor performance.
  • Sym3™ Z Magnum™ – a conductor etch system that delivers angstrom-level 3D trench profile control to increase silicon nanosheet uniformity and performance.
  • Spectral™ – an atomic layer deposition system that replaces today’s tungsten transistor contacts with molybdenum, a new contact metal that lowers electrical resistance at the critical link between transistors and the copper wiring network.
• Received 2025 TSMC Excellent Performance Awards for Excellent Technology Development and Production Support and Excellent Contribution in Green Manufacturing.
• Recognized by Micron Technology with a 2025 Outstanding Performance in Sustainability Award.

Business Outlook

Applied’s total revenue and non-GAAP diluted EPS for the second quarter of fiscal 2026 are expected to be as follows:

			Q2 FY2026
(In millions, except per share amounts)
Total revenue			$	7,650	+/-	$	500
Non-GAAP diluted EPS			$	2.64	+/-	$	0.20

This outlook for non-GAAP diluted EPS excludes known charges related to completed acquisitions of $0.01 per share and includes a net income tax benefit related to intra-entity intangible asset transfers of $0.04 per share, but does not reflect any items that are unknown at this time, such as any additional charges related to acquisitions or other non-operational or unusual items, as well as other tax-related items, which we are not able to predict without unreasonable efforts due to their inherent uncertainty.

First Quarter Reportable Segment Information

Effective in the first quarter of fiscal 2026, management moved our 200-millimeter equipment business to Semiconductor Systems. The business was previously included in Applied Global Services. Additionally, effective in the first quarter of fiscal 2026, management began fully allocating corporate support costs to our operating segments. Prior-period numbers have been recast to conform to the current-year presentation. Display operating segment financial results are included in the Other category balances below.

Semiconductor Systems	Q1 FY2026				Q1 FY2025
(in millions, except percentages)
Revenue	$	5,141			$	5,597
Foundry, logic and other		62	%			69	%
DRAM		34	%			27	%
Flash memory		4	%			4	%
Gross margin		54.3	%			53.4	%
Operating income	$	1,427			$	1,872
Operating margin		27.8	%			33.4	%
Non-GAAP Results
Non-GAAP gross margin		54.5	%			53.5	%
Non-GAAP operating income	$	1,691			$	1,886
Non-GAAP operating margin		32.9	%			33.7	%

Applied Global Services	Q1 FY2026				Q1 FY2025
(in millions, except percentages)
Revenue	$	1,559			$	1,353
Gross margin		34.4	%			32.3	%
Operating income	$	438			$	336
Operating margin		28.1	%			24.8	%
Non-GAAP Results
Non-GAAP gross margin		34.4	%			32.3	%
Non-GAAP operating income	$	438			$	337
Non-GAAP operating margin		28.1	%			24.9	%

Other	Q1 FY2026					Q1 FY2025
(in millions)
Revenue	$	312				$	216
Cost of products sold and expenses		(334	)				(249	)
Restructuring charges		(12	)				—
Operating loss	$	(34	)			$	(33	)

Use of Non-GAAP Financial Measures

Applied provides investors with certain non-GAAP financial measures, which are adjusted for the impact of certain costs, expenses, gains and losses, including, as applicable, certain items related to mergers and acquisitions; restructuring and severance charges and any associated adjustments; legal settlement charges; impairments of assets; gain or loss, dividends and impairments on strategic investments; certain income tax items; and other discrete adjustments. On a non-GAAP basis, the tax effect related to share-based compensation is recognized ratably over the fiscal year. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.

Management uses these non-GAAP financial measures to evaluate the company’s operating and financial performance and for planning purposes, and as performance measures in its executive compensation program. Applied believes these measures enhance an overall understanding of its performance and investors’ ability to review the company’s business from the same perspective as the company’s management, and facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Applied's ongoing operating performance. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, may be different from non-GAAP financial measures used by other companies, and may exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.

Webcast Information

Applied Materials will discuss these results during an earnings call that begins at 1:30 p.m. Pacific Time today. A live webcast and related slide presentation will be available at https://ir.appliedmaterials.com. A replay will be available on the website beginning at 5:00 p.m. Pacific Time today.

Forward-Looking Statements

This press release contains forward-looking statements, including those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, technology transitions, our business and financial performance and market share positions, our capital allocation and cash deployment strategies, our investment and growth strategies, our development of new products and technologies, legal matters, claims and proceedings, our business outlook for the second quarter of fiscal 2026 and beyond, and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic, political and industry conditions, including changes in interest rates and prices for goods and services; the implementation of additional export regulations and license requirements and their interpretation, and their impact on our ability to export products and provide services to customers and on our results of operations; global trade issues and changes in trade and export license policies and our ability to obtain licenses or authorizations on a timely basis, if at all; imposition of new or increases in tariffs and any retaliatory measures, including their impact on demand for our products and services; our ability to effectively mitigate the impact of tariffs; the effects of geopolitical turmoil or conflicts; demand for semiconductor chips and electronic devices; customers’ technology and capacity requirements; the introduction of new and innovative technologies, and the timing of technology transitions; our ability to develop, deliver and support new products and technologies; our ability to meet customer demand, and our suppliers’ ability to meet our demand requirements; the concentrated nature of our customer base; our ability to expand our current markets, increase market share and develop new markets; market acceptance of existing and newly developed products; our ability to obtain and protect intellectual property rights in key technologies; cybersecurity incidents affecting our information systems or information contained in them, or affecting our operations, suppliers, customers or vendors; our ability to achieve the objectives of operational and strategic initiatives, align our resources and cost structure with business conditions, and attract, motivate and retain key employees; the effects of regional or global health epidemics; acquisitions, investments and divestitures; changes in income tax laws; the variability of operating expenses and results among products and segments, and our ability to accurately forecast future results, market conditions, customer requirements and business needs; our ability to ensure compliance with applicable law, rules and regulations; and other risks and uncertainties described in our filings with the Securities and Exchange Commission, including our most recent Forms 10-K, 10-Q and 8-K. All forward-looking statements are based on management’s current estimates, projections and assumptions, and we assume no obligation to update them.

About Applied Materials

Applied Materials, Inc. (Nasdaq: AMAT) is the leader in materials engineering solutions that are at the foundation of virtually every new semiconductor and advanced display in the world. The technology we create is essential to advancing AI and accelerating the commercialization of next-generation chips. At Applied, we push the boundaries of science and engineering to deliver material innovation that changes the world. Learn more at www.appliedmaterials.com.

Investor Relations Contact:
Mike Sullivan (408) 986-7977
mike_sullivan@amat.com

Media Contact:
Ricky Gradwohl (408) 235-4676
ricky_gradwohl@amat.com

APPLIED MATERIALS, INC. UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
	Three Months Ended
(In millions, except per share amounts)	January 25, 2026			January 26, 2025
Revenue	$	7,012		$	7,166
Cost of products sold		3,577			3,670
Gross profit		3,435			3,496
Operating expenses:
Research, development and engineering		928			859
Marketing and selling		222			206
General and administrative		189			256
Legal settlement		253			—
Restructuring charges		12			—
Total operating expenses		1,604			1,321
Income from operations		1,831			2,175
Interest expense		69			64
Interest and other income (expense), net		566			8
Income before income taxes		2,328			2,119
Provision for income taxes		302			934
Net income	$	2,026		$	1,185
Earnings per share:
Basic	$	2.55		$	1.46
Diluted	$	2.54		$	1.45
Weighted average number of shares:
Basic		793			814
Diluted		799			819

APPLIED MATERIALS, INC. UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
(In millions)	January 25, 2026			October 26, 2025
ASSETS
Current assets:
Cash and cash equivalents	$	7,218		$	7,241
Short-term investments		1,293			1,332
Accounts receivable, net		4,977			5,185
Inventories		5,997			5,915
Other current assets		1,564			1,208
Total current assets		21,049			20,881
Long-term investments		4,968			4,327
Property, plant and equipment, net		4,949			4,610
Goodwill		3,707			3,707
Purchased technology and other intangible assets, net		215			226
Deferred income taxes and other assets		2,756			2,548
Total assets	$	37,644		$	36,299
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	100		$	100
Accounts payable and accrued expenses		5,181			5,333
Contract liabilities		2,472			2,566
Total current liabilities		7,753			7,999
Long-term debt		6,453			6,455
Income taxes payable		507			356
Other liabilities		1,214			1,074
Total liabilities		15,927			15,884
Total stockholders’ equity		21,717			20,415
Total liabilities and stockholders’ equity	$	37,644		$	36,299

APPLIED MATERIALS, INC. UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(In millions)	Three Months Ended
	January 25, 2026				January 26, 2025
Cash flows from operating activities:
Net income	$	2,026			$	1,185
Adjustments required to reconcile net income to cash provided by operating activities:
Depreciation and amortization		127				105
Restructuring charges		12				—
Legal settlement		253				—
(Gain) / loss and impairment on investments		(466	)			100
Share-based compensation		207				195
Deferred income taxes		(78	)			668
Other		(1	)			(5	)
Net change in operating assets and liabilities		(394	)			(1,323	)
Cash provided by operating activities		1,686				925
Cash flows from investing activities:
Capital expenditures		(646	)			(381	)
Cash paid for acquisitions, net of cash acquired		—				(28	)
Proceeds from sales and maturities of investments		1,143				1,223
Purchases of investments		(1,277	)			(1,711	)
Cash used in investing activities		(780	)			(897	)
Cash flows from financing activities:
Proceeds from issuance of commercial paper		200				200
Repayments of commercial paper		(200	)			(200	)
Common stock repurchases		(337	)			(1,318	)
Tax withholding payments for vested equity awards		(229	)			(142	)
Payments of dividends to stockholders		(365	)			(326	)
Cash used in financing activities		(931	)			(1,786	)
Increase (decrease) in cash, cash equivalents and restricted cash equivalents		(25	)			(1,758	)
Cash, cash equivalents and restricted cash equivalents—beginning of period		7,312				8,113
Cash, cash equivalents and restricted cash equivalents — end of period	$	7,287			$	6,355
Reconciliation of cash, cash equivalents, and restricted cash equivalents
Cash and cash equivalents	$	7,218			$	6,264
Restricted cash equivalents included in deferred income taxes and other assets		69				91
Total cash, cash equivalents, and restricted cash equivalents	$	7,287			$	6,355
Supplemental cash flow information:
Cash payments for income taxes	$	112			$	70
Cash refunds from income taxes	$	3			$	70
Cash payments for interest	$	65			$	52

Additional Information

	Q1 FY2026				Q1 FY2025
Revenue by Geography (In millions)
United States	$	656			$	917
% of Total		9	%			13	%
Europe	$	221			$	330
% of Total		3	%			4	%
Japan	$	525			$	540
% of Total		7	%			8	%
Korea	$	1,458			$	1,667
% of Total		21	%			23	%
Taiwan	$	1,722			$	1,183
% of Total		25	%			17	%
Southeast Asia	$	335			$	286
% of Total		5	%			4	%
China	$	2,095			$	2,243
% of Total		30	%			31	%
Employees(In thousands)
Regular Full Time		35.5				36.0

APPLIED MATERIALS, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS
	Three Months Ended
(In millions, except percentages)	January 25, 2026				January 26, 2025
Non-GAAP Gross Profit
GAAP reported gross profit	$	3,435			$	3,496
Certain items associated with acquisitions1		7				7
Non-GAAP gross profit	$	3,442			$	3,503
Non-GAAP gross margin		49.1	%			48.9	%
Non-GAAP Operating Income
GAAP reported operating income	$	1,831			$	2,175
Certain items associated with acquisitions1		11				12
Acquisition integration and deal costs		—				3
Legal settlement2		253				—
Restructuring charges3		12				—
Non-GAAP operating income	$	2,107			$	2,190
Non-GAAP operating margin		30.0	%			30.6	%
Non-GAAP Net Income
GAAP reported net income	$	2,026			$	1,185
Certain items associated with acquisitions1		11				12
Acquisition integration and deal costs		—				3
Legal settlement2		253				—
Restructuring charges3		12				—
Realized loss (gain), dividends and impairments on strategic investments, net		14				(9	)
Unrealized loss (gain) on strategic investments, net		(484	)			106
Income tax effect of share-based compensation4		(21	)			(10	)
Income tax effects related to intra-entity intangible asset transfers5		31				674
Resolution of prior years’ income tax filings and other tax items		40				(16	)
Income tax effect of non-GAAP adjustments6		17				1
Non-GAAP net income	$	1,899			$	1,946

1	These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.
2	Charge of $253 million related to agreed settlement with the U.S. Commerce Department Bureau of Industry and Security to resolve a previously disclosed export controls compliance matter.
3	The restructuring charges related to a workforce reduction plan announced in the fourth quarter of fiscal 2025.
4	GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis.
5	Amount for the three months ended January 26, 2025, included changes to the income tax provision of $30 million from amortization of intangibles and a $644 million remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in fiscal 2025.
6	Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes.

APPLIED MATERIALS, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS
	Three Months Ended
(In millions, except per share amounts)	January 25, 2026				January 26, 2025
Non-GAAP Earnings Per Diluted Share
GAAP reported earnings per diluted share	$	2.54			$	1.45
Certain items associated with acquisitions		0.01				0.01
Legal settlement		0.32				—
Restructuring charges		0.02				—
Realized loss (gain), dividends and impairments on strategic investments, net		0.01				(0.01	)
Unrealized loss (gain) on strategic investments, net		(0.58	)			0.13
Income tax effect of share-based compensation		(0.03	)			(0.01	)
Income tax effects related to intra-entity intangible asset transfers1		0.04				0.83
Resolution of prior years’ income tax filings and other tax items		0.05				(0.02	)
Non-GAAP earnings per diluted share	$	2.38			$	2.38
Weighted average number of diluted shares		799				819

1

Amount for the three months ended January 26, 2025, included changes to the income tax provision of $0.04 per diluted share from amortization of intangibles and $0.79 per diluted share from a remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in fiscal 2025.

APPLIED MATERIALS, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS
	Three Months Ended
(In millions, except percentages)	January 25, 2026				January 26, 2025
Semiconductor Systems Non-GAAP Gross Profit
GAAP reported gross profit	$	2,794			$	2,986
Certain items associated with acquisitions1		7				7
Non-GAAP gross profit	$	2,801			$	2,993
Non-GAAP gross margin		54.5	%			53.5	%
Applied Global Services Non-GAAP Gross Profit
GAAP reported gross profit	$	537			$	437
Non-GAAP gross profit	$	537			$	437
Non-GAAP gross margin		34.4	%			32.3	%
Semiconductor Systems Non-GAAP Operating Income
GAAP reported operating income	$	1,427			$	1,872
Certain items associated with acquisitions1		11				12
Acquisition integration and deal costs		—				2
Legal settlement2		253				—
Non-GAAP operating income	$	1,691			$	1,886
Non-GAAP operating margin		32.9	%			33.7	%
Applied Global Services Non-GAAP Operating Income
GAAP reported operating income	$	438			$	336
Acquisition integration and deal costs		—				1
Non-GAAP operating income	$	438			$	337
Non-GAAP operating margin		28.1	%			24.9	%

1	These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.
2	Charge of $253 million related to agreed settlement with the U.S. Commerce Department Bureau of Industry and Security to resolve a previously disclosed export controls compliance matter.

Note: The reconciliation of GAAP and non-GAAP segment results above does not include certain revenues, costs of products sold and operating expenses that are reported within other and included in consolidated operating income.

APPLIED MATERIALS, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE
	Three Months Ended
(In millions, except percentages)	January 25, 2026
GAAP provision for income taxes(a)	$	302
Income tax effect of share-based compensation		21
Income tax effects related to intra-entity intangible asset transfers		(31	)
Resolutions of prior years’ income tax filings and other tax items		(40	)
Income tax effect of non-GAAP adjustments		(17	)
Non-GAAP provision for income taxes(b)	$	235
GAAP income before income taxes(c)	$	2,328
Certain items associated with acquisitions		11
Legal settlement		253
Restructuring charges		12
Realized loss (gain), dividends and impairments on strategic investments, net		14
Unrealized loss (gain) on strategic investments, net		(484	)
Non-GAAP income before income taxes(d)	$	2,134
GAAP effective income tax rate(a/c)		13.0	%
Non-GAAP effective income tax rate(b/d)		11.0	%

UNAUDITED RECONCILIATION OF NON-GAAP FREE CASH FLOW
	Three Months Ended
(In millions)	January 25, 2026				January 26, 2025
Cash provided by operating activities	$	1,686			$	925
Capital expenditures		(646	)			(381	)
Non-GAAP free cash flow	$	1,040			$	544

FAQ

What were Applied Materials (AMAT) Q1 FY2026 revenue and GAAP EPS on Feb 12, 2026?

Applied Materials reported $7.01 billion revenue and $2.54 GAAP EPS for Q1 FY2026. According to the company, revenue fell 2% year‑over‑year while GAAP gross margin was 49.0% and operating income totaled $1.83 billion.

How much cash did AMAT generate and return to shareholders in Q1 FY2026?

AMAT generated $1.69 billion cash from operations and returned $702 million to shareholders. According to the company, distributions included $337 million in share repurchases and $365 million in dividends in the quarter.

What guidance did Applied Materials (AMAT) give for Q2 FY2026 on Feb 12, 2026?

Applied expects Q2 FY2026 revenue of $7.65 billion ± $500 million and non‑GAAP diluted EPS of $2.64 ± $0.20. According to the company, EPS outlook excludes $0.01 acquisition charges and includes a $0.04 tax benefit.

Which Applied segments showed notable performance in Q1 FY2026 for AMAT investors?

Semiconductor Systems reported record DRAM revenue and Applied Global Services hit record services and spares revenue. According to the company, Semiconductor Systems revenue was $5.141 billion with a 54.3% gross margin.

How did AMAT's margins and profitability change in Q1 FY2026 versus a year ago?

GAAP gross margin rose slightly to 49.0% while GAAP operating margin fell to 26.1%. According to the company, GAAP diluted EPS increased to $2.54, a 75% increase versus prior year.

Did Applied Materials (AMAT) disclose strategic wins or product introductions in Feb 2026?

Yes. The company announced Samsung joining its EPIC Center and unveiled new deposition, etch and materials systems for GAA and 2nm and beyond. According to the company, these aim to speed commercialization and improve energy‑efficient chip performance.