Thu, May 22, 8:03 PM (21 days ago)
**Applied Materials, Inc. (AMAT) Q2 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** $7.1 billion (up 7% YoY) - **Gross Margin:** 49.1% (up 1.7 points YoY) - **Operating Income:** $2.2 billion (up 13% YoY) - **Net Income:** $2.1 billion (up 23% YoY) - **EPS:** $2.63 (up 28% YoY) **Cash Flow:** - **Operating Cash Flow:** $2.5 billion (down 33% YoY) - **Capital Expenditures:** $891 million - **Free Cash Flow:** $1.6 billion (down 33% YoY) **Earnings Changes:** - **Revenue Growth:** Driven by Semiconductor Systems (74% of total revenue) and AGS (22%). - **Gross Margin Improvement:** Due to higher revenue, favorable customer mix, and lower material costs. - **Operating Margin:** Increased by 1.7 points YoY to 30.5%. **Quarterly Performance:** - **Semiconductor Systems:** Revenue up 7% YoY, driven by foundry and logic customer spending. - **AGS:** Revenue up 2% YoY, driven by long-term service agreements and spares. - **Display:** Revenue up 45% YoY, driven by IT product investments. **Trends & Uncertainties:** - **Geographic Trends:** Revenue increased from Korea (58% YoY) and Taiwan (96% YoY), but decreased from China (37% YoY). - **Uncertainties:** Global economic conditions, trade policies, and supply chain disruptions. **Future Operations Impact:** - **Investments:** Continued investment in RD&E and strategic acquisitions. - **Share Repurchases:** $10 billion authorization, with $15.9 billion remaining. - **Dividends:** $0.46 per share, payable in June 2025. **Segment Performance:** - **Semiconductor Systems:** 74% of revenue, 36.2% operating margin. - **AGS:** 22% of revenue, 28.5% operating margin. - **Display:** 4% of revenue, 26.3% operating margin. **Market Risks:** - **Interest Rate Risk:** Hypothetical 100 bps increase in interest rates would decrease investment fair value by $33 million. - **Foreign Currency Risk:** Hypothetical 10% adverse change in FX rates would decrease hedging contract fair value by $173 million. **Legal & Regulatory Risks:** - **Export Controls:** U.S. regulations limiting sales to China. - **Trade Policies:** Uncertainty due to tariffs and trade disputes. **Outlook:** - **Revenue Growth:** Expected to continue, driven by semiconductor and display demand. - **Margin Expansion:** Expected, due to operational efficiencies and cost controls. - **Cash Flow:** Expected to improve, with continued investment in growth opportunities.