Slide 1: Second Quarter Fiscal 2025 Earnings Presentation
Second Quarter Fiscal 2025 Earnings Presentation May 15, 2025 Applied Materials External
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation 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, ou
Slide 3: Gary Dickerson, President and Chief Executive Officer
Gary Dickerson President and Chief Executive Officer Applied Materials External
Slide 4: CEO Summary
CEO ▪ Applied is delivering strong financial performance ▪ No significant changes in customer demand SUMMARY ▪ Agility and flexibility in global operations to adapt to a range of scenarios ▪ Well positioned at major device architecture inflections that enable high-performance, energy-efficient AI co
Slide 5: AI Central To Industry Outlook
AI Central To Industry Outlook ▪ In the early phases of a multi-decade AI application and infrastructure build out ▪ Advances in energy-efficient computing require disruptive innovation across the technology stack ▪ AI is reshaping the semiconductor design and manufacturing roadmap ▪ AI data center
Slide 6: Applied's Performance
Applied’s Performance ▪ CY24: Outside of China, Applied grew faster than peer group, driven by strength in leading-edge foundry-logic and DRAM ▪ FY24: Core parts and services revenues grew in the low double-digit range, despite trade restriction headwinds ▪ FY24: Grew company-level revenues for the
Slide 7: Energy-Efficient Computing Enabled by Materials Engineering
Energy-Efficient Computing Enabled by Materials Engineering MATERIALS ENGINEERING AI DATA CENTER ENABLERS INFLECTIONS LEADERSHIP Gate-all-around transistors Leading-Edge Logic Backside power delivery ✓ 4F2 High-Performance DRAM 3D DRAM ✓ DRAM Die Stacking High-Bandwidth Memory (HBM) ✓ Hybrid bonding
Slide 8: Well Positioned for Device Architecture Inflections
Well Positioned for Device Architecture Inflections Gate-All-Around LEADING-EDGE FOUNDRY-LOGIC with Backside Power Advanced fab with gate-all-around (GAA) and backside power delivery (BPD) increases Applied’s revenue opportunity by ~30% compared to FinFET node* » Transition from FinFET to GAA grows
Slide 9: Rapid Adoption of Innovative New Solutions
Rapid Adoption of Innovative New Solutions Centris Sym3 Y Magnum Etch SEMVision H20 Defect Review Cold Field Emission Technology AI Image Recognition ▪ Deposition and etch in the same chamber ▪ Second generation Cold Field Emission enables heals EUV line edge roughness better and faster analysis of
Slide 10: Unique and Connected Portfolio
Unique and Connected Portfolio BROADEST CAPABILITIES UNIQUE COMBINATIONS Applied Competitors Unit Process Tools ALD ✓ ✓ ✓ ✓ Bonding partner ✓ Cleans partner ✓ ✓ Co-optimized Solutions CMP ✓ CVD ✓ ✓ ✓ ✓ ✓ ECD ✓ ✓ Integrated Materials Solutions (IMS ) Epitaxy ✓ ✓ Etch ✓ ✓ ✓ ✓ AIx Furnace partner ✓ Imp
Slide 11: Applied's collaborative platform for high-velocity co-innovation
COMING SOON » Applied’s collaborative platform for high-velocity co-innovation » A new approach to Equipment and Process Innovation and Commercialization » Construction in progress; operations to begin Spring 2026 11 | Applied Materials External
Slide 12: Brice Hill, SVP, Chief Financial Officer
Brice Hill SVP, Chief Financial Officer Applied Materials External
Slide 13: Highlights
▪ Robust YoY revenue growth, gross margin expansion and record EPS ▪ Leading-edge foundry-logic increased YoY, driven by FQ2 demand for AI-enabling semiconductors ▪ Leveraged global supply chain and diversified manufacturing footprint to successfully navigate the HIGHLIGHTS dynamic commercial landsc
Slide 14: FQ2'25 Non-GAAP Financial Results
FQ2’25 Non-GAAP Financial Results $M, except EPS FQ2’24 FQ1’25 FQ2’25 YoY Year-over-year highlights: Revenue 6,646 7,166 7,100 7% ▪ Revenue growth across all business segments Gross Margin* 47.5% 48.9% 49.2% 170bps ▪ Highest quarterly Non-GAAP gross margin since FQ4’2000 Operating Expenses* 1,233 1,
Slide 15: FQ2'25 Segment Results
FQ2’25 Segment Results SEMICONDUCTOR SYSTEMS APPLIED GLOBAL SERVICES DISPLAY Non-GAAP Operating Margin* 37% 36% 35% 35% 35% 30% 30% 29% 28% 29% 5,356 5,255 5,177 26% 4,924 4,901 1,639 1,594 1,580 1,566 1,530 6% 8% 3% 2% 259 251 211 Revenue ($M) 183 179 Q2F24 Q3F24 Q4F24 Q1F25 Q2F25 Q2F24 Q3F24 Q4F24
Slide 16: Strong Investment-Grade Balance Sheet
Strong Investment-Grade Balance Sheet CASH AND INVESTMENTS ($M) FQ2’24 FQ3’24 FQ4’24 FQ1’25 FQ2’25 Cash and Cash Equivalents 7,085 8,288 8,022 6,264 6,169 Short-Term Investments 472 815 1,449 1,949 578 Long-Term Investments 2,983 2,981 2,787 2,686 3,638 Total Cash and Investments 10,540 12,084 12,25
Slide 17: Cash Flows and Shareholder Distributions
Cash Flows and Shareholder Distributions CASH FLOWS ($M) FQ2’24 FQ3’24 FQ4’24 FQ1’25 FQ2’25 Operating Cash Flow 1,392 2,385 2,575 925 1,571 Free Cash Flow* 1,135 2,088 2,168 544 1,061 SHAREHOLDER DISTRIBUTIONS ($M) Total Shareholder Distributions (1,086) (1,192) (1,771) (1,644) (1,995) Share Repurch
Slide 18: Business Outlook
Business Outlook Total Revenue ~$7.2B ± $500M Third OUTLOOK* Non-GAAP EPS* ~$2.35 ± $0.20 QUARTER FISCAL 2025 Semiconductor Systems ~$5.40B SEGMENT ~$1.55B Applied Global Services REVENUE Display ~$250M Non-GAAP Gross Margin* ~48.3% OTHER Non-GAAP Operating Expenses* ~$1.34B Non-GAAP Tax Rate* ~13%
Slide 19: CFO Summary
CFO ▪ Robust YoY revenue growth, gross margin expansion and record EPS SUMMARY ▪ Global supply chain and diversified manufacturing capabilities provide agility and flexibility ▪ Near-term demand and customer investments continuing at the expected rate and pace ▪ Applied is investing for the industry
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Slide 21: Capital Allocation Strategy
Capital Allocation Strategy 1. Invest in R&D and infrastructure OVER PAST 10 FISCAL YEARS (through FY24) to enable profitable growth » Reinvested >$22B in R&D and >$6B in capital additions » Distributed nearly 90% of FCF* 2. Grow dividend per share and use » Grew dividend per share at ~15% CAGR buyb
Slide 22: Glossary: Materials Engineering and Other Technologies from Applied
GLOSSARY: Materials Engineering and Other Technologies from Applied MATERIALS ENGINEERING Create and • Deposition: Depositing a thin layer of insulating material (dielectric) or conductive material (metal) onto a substrate. • Epi (Epitaxy): Growing a monocrystalline film on a lattice structure and o
Slide 23: Additional Resources
Additional Resources Investor Relations Home Page LINK Newsroom LINK 2025: Applied Materials Panel Discussion during SPIE Conference LINK 2024: Semicon West Technology Breakfast LINK 2024: 2023 WFE Market Summary LINK 2024: Applied Materials Panel Discussion during SPIE Conference LINK 2022: Service
Slide 24: Appendix: GAAP to Non-GAAP Reconciliations
Appendix GAAP to Non-GAAP Reconciliations 24 | Applied Materials External
Slide 25: Use of Non-GAAP Adjusted Financial Measures
Use of Non-GAAP Adjusted 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 certain items related to mergers and acquisitions; restructuring and severance charges and any as
Slide 26: Unaudited Quarterly Reconciliation of GAAP to Non-GAAP Adjusted Results
UNAUDITED QUARTERLY RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS AND PERCENTAGES FQ2’24 FQ3’24 FQ4’24 FQ1’25 FQ2’25 Non-GAAP Gross Profit GAAP reported gross profit $ 3,153 $ 3,205 $ 3,335 $ 3,496 $ 3,485 Certain items associated with acquisitions 1 7 6 6
Slide 27: Unaudited Quarterly Reconciliation of GAAP to Non-GAAP Segment Operating Results
UNAUDITED QUARTERLY RECONCILIATION OF GAAP TO NON-GAAP SEGMENT OPERATING RESULTS IN MILLIONS, EXCEPT PERCENTAGES Q2F24 Q3F24 Q4F24 Q1F25 Q2F25 Semiconductor Systems Non-GAAP Operating Income GAAP reported operating income $ 1,701 $ 1,712 $ 1,824 $ 1,986 $ 1,900 Certain items associated with acquisit
Slide 28: Unaudited Quarterly Reconciliation of GAAP to Non-GAAP Operating Expenses
UNAUDITED QUARTERLY RECONCILIATION OF GAAP TO NON-GAAP OPERATING EXPENSES IN MILLIONS FQ2’24 FQ3’24 FQ4’24 FQ1’25 FQ2’25 GAAP reported Operating Expenses $ 1,241 $ 1,263 $ 1,289 $ 1,321 $ 1,316 Certain items associated with acquisitions1 (3) (4) (5) (5) (5) Acquisition integration and deal costs (5)
Slide 29: Unaudited Quarterly Reconciliation of Non-GAAP Free Cash Flow
UNAUDITED QUARTERLY RECONCILIATION OF NON-GAAP FREE CASH FLOW IN MILLIONS FQ2’24 FQ3’24 FQ4’24 FQ1’25 FQ2’25 Non-GAAP Free Cash Flows1 Cash provided by operating activities $ 1,392 $ 2,385 $ 2,575 $ 925 $ 1,571 Capital expenditures (257) (297) (407) (381) (510) Non-GAAP free cash flow $ 1,135 $ 2,08
Slide 30: Unaudited Full Year Reconciliation of Non-GAAP Free Cash Flow
UNAUDITED FULL YEAR RECONCILIATION OF NON-GAAP FREE CASH FLOW IN MILLIONS FY2015 FY2016 FY2017 FY2018 FY2019 Non-GAAP Free Cash Flows1 Cash provided by operating activities $ 1,163 $ 2,566 $ 3,789 $ 3,787 $ 3,247 Capital expenditures (215) (253) (345) (622) (441) Non-GAAP free cash flow $ 948 $ 2,31
Slide 31: Reconciliation Information for Business Outlook
RECONCILIATION INFORMATION FOR BUSINESS OUTLOOK Non-GAAP outlook for the third quarter of fiscal 2025 (including non-GAAP gross margin, operating margin, operating expenses and EPS) excludes known charges related to completed acquisitions of approximately $11 million, or $0.01 per share, and include
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