Applied Materials Q4 profit rises 92% on record revenue

Applied Materials (AMAT) had record fourth-quarter revenue of $10.41 billion, up 53% from a year earlier. Non-GAAP earnings per share were $4.16, up 92%, and both figures were in line with consensus estimates.

Shares were little changed after hours at 5:04 p.m. ET, from a $381.21 close.

The quarter ended Oct. 25, 2026, which closed fiscal 2026.

Here's how the company did:

• Revenue: $10.41 billion vs. $6.80 billion a year earlier, against a $10.5 billion estimate
• Non-GAAP EPS: $4.16 vs. $2.17 a year earlier, against a $4.13 estimate
• GAAP EPS: $3.40 vs. $2.38 a year earlier
• Gross margin: 50.4% on a GAAP basis, vs. 48.0% a year earlier

Revenue has risen in each of the last three quarters, from $6.80 billion in the fourth quarter of fiscal 2025 to $9.12 billion in the third quarter of fiscal 2026.

For the full year, revenue was a record $34.45 billion, up 21% from a year earlier. Non-GAAP EPS was a record $12.89, up 37%.

First-quarter outlook

The company expects first-quarter fiscal 2027 total revenue of $11.10 billion, plus or minus $500 million.

It expects non-GAAP diluted EPS of $4.35, plus or minus 20 cents. That outlook excludes known charges from completed acquisitions of 1 cent per share and includes a net income tax benefit related to intra-entity intangible asset transfers of 4 cents per share.

President and CEO Gary Dickerson said: “AI continues to fuel strong incremental demand for semiconductors and Applied has built the most-enabling portfolio to advance the AI-computing roadmap, putting us in a great position for multi-year revenue and profit growth.”

Segment results

Semiconductor Systems revenue was $8.00 billion in the quarter, up from $4.88 billion a year earlier. Its operating income was $3.10 billion, with an operating margin of 38.8%.

Applied Global Services revenue was $1.90 billion, up from $1.51 billion a year earlier. Its operating margin was 30.5%.

The company moved its 200-millimeter equipment business into Semiconductor Systems in the first quarter of fiscal 2026. The business was previously part of Applied Global Services, and prior-period figures have been recast to match.

The company also recorded a $253 million charge to settle a matter with the U.S. Commerce Department’s Bureau of Industry and Security over export controls compliance. The charge is excluded from the non-GAAP figures.

Cash and capital returns

Cash from operations was $3.30 billion in the quarter and $8.87 billion for the year. Free cash flow, which the company defines as operating cash flow less capital expenditures, was $2.62 billion.

Applied returned $2.42 billion to shareholders in the quarter, including $2.00 billion in share repurchases and $421 million in dividends. For the year, it returned $4.75 billion.

CFO Brice Hill said: “We generated record quarterly free cash flow of $2.6 billion and distributed over $2.4 billion to shareholders, including the largest quarterly share buyback in more than eight years.”

The company also unveiled the EPIC Center in Silicon Valley and added four new research partnerships, bringing its announced EPIC engagements to 15. Intel will join as a founding partner, and KIOXIA Corporation will join as an innovation partner.