Slide 1: First Quarter Fiscal 2025 Earnings Presentation
First Quarter Fiscal 2025 Earnings Presentation February 13, 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: FQ1'25: Delivered Record Results
FQ1’25: Delivered Record Results ▪ Record revenue of $7.17 billion and Non-GAAP EPS* of $2.38 ▪ Major technology trends underpin long- term secular growth ▪ Unique and connected portfolio positions us to outperform the industry * For reconciliation of GAAP to non-GAAP results, see appendix of this p
Slide 5: AI Central To Industry Outlook
AI Central To Industry Outlook ▪ Expect disruptive innovations to bring down the energy consumption and cost of AI, opening up new applications and growing overall market opportunity ▪ Innovation is required across the technology stack » Models and software » Data center architecture ARTIFICIAL INTE
Slide 6: 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 7: Well Positioned for Leading-Edge Foundry-Logic Inflections
Well Positioned for Leading-Edge Foundry-Logic Inflections TRANSISTORS ▪ Transition from FinFET to Gate-All-Around (GAA) to grow Applied’s transistor SAM from ~$6B to ~$7B* ▪ On track for >50% SAM share WIRING ▪ Introduction of Backside Power Delivery (BPD) Leading-Edge Foundry-Logic to grow Applied
Slide 8: Applied's Unique Connected Materials Engineering Portfolio
Applied’s Unique Connected Materials Engineering Portfolio BROADEST CAPABILITIES UNIQUE COMBINATIONS Applied Competitors Unit Process Tools ALD ✓ ✓ ✓ ✓ Cleans ✓ ✓ Co-optimized Solutions CMP ✓ CVD ✓ ✓ ✓ ✓ ✓ ECD ✓ ✓ Integrated Materials Solutions Epitaxy ✓ ✓ (IMS ) Etch ✓ ✓ ✓ ✓ Furnace ✓ AIx Implant ✓
Slide 9: Driving High-Velocity Co-Innovation
Driving High-Velocity Co-Innovation EPIC Advanced Packaging Advanced Substrates EPIC Center Thin-Film Batteries » Expanded innovation » Received CHIPS Act » Made significant » Partnered with TPG to platform with launch grants to develop progress with transition thin-film of EPIC Advanced advanced pa
Slide 10: Applied Global Services
APPLIED GLOBAL SERVICES® ▪ Helping customers manage increasing complexity as they ramp next generation technology into high volume manufacturing Expect low ▪ Deploying Actionable Insight Accelerator (AIx) to help accelerate double-digit » Customers’ R&D programs annualized » Reduce technology transf
Slide 11: CEO Summary
CEO ▪ Continuing to deliver strong financial performance SUMMARY in the near term ▪ Best positioned at major inflections in fast-growing areas that are critical to energy-efficient AI ▪ Focused on high-velocity co-innovation to bring breakthrough technology to market faster 11 | Applied Materials Ex
Slide 12: Brice Hill, SVP, Chief Financial Officer
Brice Hill SVP, Chief Financial Officer Applied Materials External
Slide 13: FQ1'25 Non-GAAP Financial Results
FQ1’25 Non-GAAP Financial Results Year-over-year highlights: $M, except EPS FQ1’24 FQ4’24 FQ1’25 YoY QoQ ▪ Revenue growth in Semiconductor Systems and AGS Revenue 6,707 7,045 7,166 7% 2% ▪ Highest quarterly Non-GAAP gross margin since FY2000 Gross Margin* 47.9% 47.5% 48.9% 100bps 140bps » Driven by
Slide 14: Semiconductor Systems
SEMICONDUCTOR SYSTEMS Revenue of $5.36B in FQ1’25, up 9% YoY, driven by leading-edge foundry-logic demand » Foundry-logic: revenue increased 20% YoY − Revenue for the ICAPS nodes declined slightly YoY » DRAM: revenue declined 10% YoY » NAND: revenue increased 3% YoY ICAPS = Internet of Things, Commu
Slide 15: Applied Global Services
APPLIED GLOBAL SERVICES® ▪ Revenue of $1.59B in FQ1’25, up 8% YoY AGS produces more than » Healthy growth in services, offset by a decline in sales of 200mm equipment enough operating profit to fund the company’s ▪ Expect low double-digit annualized growing dividend growth rate over the long-term 15
Slide 16: Strong Investment-Grade Balance Sheet
Strong Investment-Grade Balance Sheet CASH AND INVESTMENTS ($M) FQ1’24 FQ2’24 FQ3’24 FQ4’24 FQ1’25 Cash and Cash Equivalents 6,854 7,085 8,288 8,022 6,264 Short-Term Investments 638 472 815 1,449 1,949 Long-Term Investments 2,910 2,983 2,981 2,787 2,686 Total Cash and Investments 10,402 10,540 12,08
Slide 17: Cash Flows and Shareholder Distributions
Cash Flows and Shareholder Distributions CASH FLOWS ($M) FQ1’24 FQ2’24 FQ3’24 FQ4’24 FQ1’25 Operating Cash Flow 2,325 1,392 2,385 2,575 925 Free Cash Flow* 2,096 1,135 2,088 2,168 544 SHAREHOLDER DISTRIBUTIONS ($M) Total Shareholder Distributions (966) (1,086) (1,192) (1,771) (1,644) Share Repurchas
Slide 18: FQ2'25 Business Commentary
FQ2’25 Business Commentary Leading-edge Strong momentum as our customers ramp advanced technology nodes foundry-logic with Gate-All-Around transistors into high-volume manufacturing ICAPS nodes More measured level of investment, following strong spending in 2023 and 2024 DRAM Healthy demand but face
Slide 19: Business Outlook
Business Outlook Total Revenue ~$7.1B ± $400M SECOND OUTLOOK* Non-GAAP EPS** ~$2.30 ± $0.18 QUARTER FISCAL 2025 Semiconductor Systems ~$5.30B SEGMENT ~$1.55B Applied Global Services REVENUE Display ~$250M Non-GAAP Gross Margin** ~48.4% OTHER Non-GAAP Operating Expenses** ~$1.32B Non-GAAP Tax Rate**
Slide 20: CFO Summary
CFO ▪ Confident in long-term growth opportunities across all of our business segments SUMMARY ▪ Making significant investments in R&D to grow our share and increasing our capex to be the leader in high-velocity co-innovation with our customers ▪ Differentiated technology, unique insights and deep in
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Slide 22: 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 23: Latest 3rd Party ESG Ratings
LATEST 3rd PARTY ESG RATINGS CDP Climate B CDP Water A- MSCI AAA Sustainalytics Risk Rating Low ISS (E/S/G) 2/2/1 Links: 2023 Sustainability Report | 2023 Sustainability Highlights 23 | Applied Materials External
Slide 24: Additional Resources
Additional Resources Investor Relations Home Page LINK Latest News LINK Blog: Ideas, Actions & Technologies LINK 2024: Semicon West Technology Breakfast LINK 2024: 2023 WFE Market Summary LINK 2024: Applied Materials Panel Discussion during SPIE Conference LINK 2022: Services Master Class LINK 24 |
Slide 25: Appendix: GAAP to Non-GAAP Reconciliations
Appendix GAAP to Non-GAAP Reconciliations 25 | Applied Materials External
Slide 26: 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 27: 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 FQ1’24 FQ2’24 FQ3’24 FQ4’24 FQ1’25 Non-GAAP Gross Profit GAAP reported gross profit $ 3,204 $ 3,153 $ 3,205 $ 3,335 $ 3,496 Certain items associated with acquisitions 1 7 7 6
Slide 28: Unaudited Quarterly Reconciliation of GAAP to Non-GAAP Operating Expenses
UNAUDITED QUARTERLY RECONCILIATION OF GAAP TO NON-GAAP OPERATING EXPENSES IN MILLIONS FQ1’24 FQ2’24 FQ3’24 FQ4’24 FQ1’25 GAAP reported Operating Expenses $ 1,237 $ 1,241 $ 1,263 $ 1,289 $ 1,321 Certain items associated with acquisitions1 (4) (3) (4) (5) (5) Acquisition integration and deal costs (3)
Slide 29: Unaudited Quarterly Reconciliation of Non-GAAP Free Cash Flow
UNAUDITED QUARTERLY RECONCILIATION OF NON-GAAP FREE CASH FLOW IN MILLIONS FQ1’24 FQ2’24 FQ3’24 FQ4’24 FQ1’25 Non-GAAP Free Cash Flows1 Cash provided by operating activities $ 2,325 $ 1,392 $ 2,385 $ 2,575 $ 925 Capital expenditures (229) (257) (297) (407) (381) Non-GAAP free cash flow $ 2,096 $ 1,13
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 second 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 a gain
Slide 32: Make Possible
Ol arenas. make possible