Slide 1: Second Quarter of Fiscal 2020 Earnings Presentation
Second Quarter of Fiscal 2020 Earnings Presentation MAY 14, 2020 External Use
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: Applied Materials At-A-Glance
APPLIED MATERIALS AT-A-GLANCE REPORTING SEGMENTS FOUNDED Semiconductor Systems CURRENT FISCAL 1967 YEAR ENDS FIRST PUBLIC Applied Global Services 25 October 2020 OFFERING Display and Adjacent Markets 1974 $2.1 billion ~22,000 $14.6 billion ~13,300 FY19 R&D employees FY19 REVENUE INVESTMENTS active p
Slide 4: COVID-19 Guiding Principles and Response
COVID-19 GUIDING PRINCIPLES 1. Maintain trust of employees, customers, suppliers and partners RESPONSE 2. Drive actions that allow us to emerge stronger over the long term EMPLOYEES CUSTOMERS COMMUNITIES ▪ #1 priority = ▪ Laser-focus on ▪ Donated masks health and safety keeping customers and equipme
Slide 5: Market and Business Outlook Headlines
2nd Fiscal Quarter Near-term / Year Longer-term Q2 results negatively Foundry-Logic: Mindful of potential affected by our ability Leading-edge remains macro-economic to ship systems as strong, some weakness headwinds COVID-19 restrictions in specialty markets impacted some AI-Big Data mega- supplier
Slide 6: PPACt
ENABLED BY PERFORMANCE New architectures New structures / 3D PPACt New materials New ways to shrink POWER AREA-COST Advanced packaging Applied has broadest portfolio of products and technologies to accelerate new PPACt playbook (PPACt = Power, Performance, Area-Cost and Time-to-market) 6 | External
Slide 7: Q2F20 Non-GAAP Financial Results
Q2F20 Non-GAAP Financial Results $M, except EPS Q2F19 Q1F20 Q2F20 Y/Y Q/Q Revenue 3,539 4,162 3,957 12% (5%) Gross Margin* 43.5% 44.9% 44.6% 110bps (30bps) Operating Income* 794 1,068 976 182 (92) EPS* $0.70 $0.98 $0.89 $0.19 ($0.09) Operating Cash Flow 800 987 635 (165) (352) Free Cash Flow** 682 8
Slide 8: Q2F20 Segment Results
Q2F20 Segment Results SEMICONDUCTOR SYSTEMS APPLIED GLOBAL SERVICES DISPLAY & ADJACENT MARKETS 33% 31% Non-GAAP Operating Margin* 28% 29% 28% 28% 28% Non-GAAP Operating Margin* Non-GAAP Operating Margin* 27% 28% 26% 2,814 22% 2,567 21% 1,018 997 984 977 931 2,302 2,273 2,184 13% 13% 12% 457 Revenue
Slide 9: Liquidity and Uses of Capital
Liquidity and Uses of Capital CASH AND INVESTMENTS ($M) Q2F19 Q3F19 Q4F19 Q1F20 Q2F20 Cash and cash equivalents* 3,116 3,014 3,129 3,424 5,281 Short-term investments 507 547 489 536 423 Long-term investments 1,609 1,650 1,703 1,713 1,678 Total cash and investments 5,232 5,211 5,321 5,673 7,382 Short
Slide 10: Business Outlook
Business Outlook Not providing revenue DEMAND IF CURRENT* CUSTOMER INDICATIONS DEMAND INDICATIONS HOLD and earnings guidance for Q3F20 due to Semiconductor Revenue could be up Q/Q by Systems high-single digits in Q3F20 and potential for COVID-19 higher again Q/Q in Q4F20 related disruptions Applied
Slide 11: Appendix: Non-GAAP to GAAP Reconciliations
Appendix Non-GAAP to GAAP Reconciliations 11 | External Use
Slide 12: Use of Non-GAAP Adjusted Financial Measures
Use of Non-GAAP Adjusted Financial Measures Applied provides investors with certain non-GAAP adjusted financial measures, which are adjusted for the impact of certain costs, expenses, gains and losses, including certain items related to mergers and acquisitions; restructuring charges and any associa
Slide 13: Unaudited Reconciliation of GAAP to Non-GAAP Adjusted Results
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS IN MILLIONS, EXCEPT EPS AND PERCENTAGE Q2F19 Q3F19 Q4F19 Q1F20 Q2F20 Non-GAAP Adjusted Gross Profit Reported gross profit - GAAP basis $ 1,530 $ 1,557 $ 1,634 $ 1,858 $ 1,749 Certain items associated with acquisitions 1 9 9 9 9 8 Certain
Slide 14: Unaudited Reconciliation of GAAP to Non-GAAP Segment Operating Results
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP SEGMENT OPERATING RESULTS IN MILLIONS, EXCEPT PERCENTAGE Q2F19 Q3F19 Q4F19 Q1F20 Q2F20 Semiconductor Systems Non-GAAP Adjusted Operating Income Reported operating income - GAAP basis $ 579 $ 613 $ 641 $ 915 $ 782 Certain items associated with acquisitions
Slide 15: Cll arenas.
Cll arenas. make possible