Applied Materials Announces First Quarter 2024 Results
-- Revenue $6.71 billion, flat year over year
-- GAAP operating margin 29.3 percent and non-GAAP operating margin 29.5
percent, up 0.1 points and flat year over year, respectively
-- GAAP EPS $2.41 and non-GAAP EPS $2.13, up 19 percent and 5 percent year
over year, respectively
-- Generated $2.33 billion in cash from operations
SANTA CLARA, Calif., Feb. 15, 2024 (GLOBE NEWSWIRE) — Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its first quarter ended Jan. 28, 2024.
First Quarter Results
Applied generated revenue of $6.71 billion. On a GAAP basis, the company reported gross margin of 47.8 percent, operating income of $1.97 billion or 29.3 percent of net revenue, and earnings per share (EPS) of $2.41.
On a non-GAAP basis, the company reported gross margin of 47.9 percent, operating income of $1.98 billion or 29.5 percent of net revenue, and EPS of $2.13.
The recently disclosed change in useful lives of certain property, plant and equipment increased GAAP and non-GAAP EPS by $0.03.
The company generated $2.33 billion in cash from operations and distributed $966 million to shareholders including $700 million in share repurchases and $266 million in dividends.
“Applied Materials delivered strong results in the first quarter of fiscal 2024 and has outperformed our markets for the fifth consecutive year,” said Gary Dickerson, President and CEO. “Our leadership positions at key semiconductor inflections support continued outperformance as customers ramp next-generation chip technologies critical to AI and IoT over the next several years.”
Results Summary
Q1 FY2024 Q1 FY2023 Change
(In millions, except per share amounts and percentages)
Net revenue $ 6,707 $ 6,739 --
Gross margin 47.8% 46.7% 1.1 points
Operating
margin 29.3% 29.2% 0.1 points
Net income $ 2,019 $ 1,717 18%
Diluted
earnings per
share $ 2.41 $ 2.02 19%
Non-GAAP
Results
-------------
Non-GAAP
gross
margin 47.9% 46.8% 1.1 points
Non-GAAP
operating
margin 29.5% 29.5% --
Non-GAAP net
income $ 1,782 $ 1,724 3%
Non-GAAP
diluted EPS $ 2.13 $ 2.03 5%
Non-GAAP free
cash flow $ 2,096 $ 1,983 6%
A reconciliation of the GAAP and non-GAAP results is provided in the financial tables included in this release. See also “Use of Non-GAAP Financial Measures” section.
Business Outlook
In the second quarter of fiscal 2024, Applied expects net revenue to be approximately $6.50 billion, plus or minus $400 million. Non-GAAP diluted EPS is expected to be in the range of $1.79 to $2.15.
This outlook for non-GAAP diluted EPS excludes known charges related to completed acquisitions of $0.01 per share and includes the normalized tax benefit of share-based compensation of $0.01 per share and includes a net income tax benefit related to intra-entity intangible asset transfers of $0.02 per share, but does not reflect any items that are unknown at this time, such as any additional charges related to acquisitions or other non-operational or unusual items, as well as other tax-related items, which we are not able to predict without unreasonable efforts due to their inherent uncertainty.
First Quarter Reportable Segment Information
Effective in the first quarter of fiscal 2024, management began including share-based compensation expense in the evaluation of reportable segments’ performance. Prior-year numbers have been recast to conform to the current-year presentation.
Semiconductor Systems Q1 FY2024 Q1 FY2023
----------------------------- ---------------------- -------------------
(In millions, except percentages)
Net revenue $ 4,909 $ 5,162
Foundry, logic and other 62% 77%
DRAM 34% 13%
Flash memory 4% 10%
Operating income $ 1,744 $ 1,855
Operating margin 35.5% 35.9%
Non-GAAP Results
Non-GAAP operating income $ 1,754 $ 1,864
Non-GAAP operating margin 35.7% 36.1%
Applied Global Services Q1 FY2024 Q1 FY2023
-------------------------- ---------------------- -------------------
(In millions, except percentages)
Net revenue $ 1,476 $ 1,369
Operating income $ 417 $ 345
Operating margin 28.3% 25.2%
Non-GAAP Results
Non-GAAP operating income $ 417 $ 345
Non-GAAP operating margin 28.3% 25.2%
Display and Adjacent Markets Q1 FY2024 Q1 FY2023
----------------------------- ------------------------- ----------------
(In millions, except percentages)
Net revenue $ 244 $ 167
Operating income $ 25 $ 3
Operating margin 10.2% 1.8%
Non-GAAP Results
Non-GAAP operating income $ 25 $ 3
Non-GAAP operating margin 10.2% 1.8%
Use of Non-GAAP 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 associated adjustments; impairments of assets; gain or loss, dividends and impairments on strategic investments; certain income tax items and other discrete adjustments. On a non-GAAP basis, the tax effect related to share-based compensation is recognized ratably over the fiscal year. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.
Management uses these non-GAAP financial measures to evaluate the company’s operating and financial performance and for planning purposes, and as performance measures in its executive compensation program. Applied believes these measures enhance an overall understanding of its performance and investors’ ability to review the company’s business from the same perspective as the company’s management, and facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Applied’s ongoing operating performance. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, may be different from non-GAAP financial measures used by other companies, and may exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.
Webcast Information
Applied Materials will discuss these results during an earnings call that begins at 1:30 p.m. Pacific Time today. A live webcast and related slide presentation will be available at . A replay will be available on the website beginning at 5:00 p.m. Pacific Time today.