Applied Materials Announces Fourth Quarter and Fiscal Year 2023 Results
-- Quarterly revenue $6.72 billion, flat year over year
-- Quarterly GAAP EPS $2.38 and non-GAAP EPS $2.12, up 29 percent and 4
percent year over year, respectively
-- Annual revenue $26.52 billion, up 3 percent year over year
-- Annual GAAP EPS $8.11 and non-GAAP EPS $8.05, up 9 percent and 5 percent
year over year, respectively
SANTA CLARA, Calif., Nov. 16, 2023 (GLOBE NEWSWIRE) — Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its fourth quarter and fiscal year ended Oct. 29, 2023.
Fourth Quarter Results
Applied generated revenue of $6.72 billion. On a GAAP basis, the company reported gross margin of 47.1 percent, operating income of $1.97 billion or 29.3 percent of net sales, and record earnings per share (EPS) of $2.38.
On a non-GAAP adjusted basis, the company reported gross margin of 47.3 percent, operating income of $1.98 billion or 29.5 percent of net sales, and record EPS of $2.12.
The company generated $1.56 billion in cash from operations and distributed $968 million to shareholders including $700 million in share repurchases and $268 million in dividends.
Full Year Results
In fiscal 2023, Applied generated record revenue of $26.52 billion. On a GAAP basis, the company recorded gross margin of 46.7 percent, operating income of $7.65 billion or 28.9 percent of net sales, and record EPS of $8.11.
On a non-GAAP adjusted basis, the company reported gross margin of 46.8 percent, operating income of $7.72 billion or 29.1 percent of net sales, and record EPS of $8.05.
The company generated a record $8.70 billion in cash from operations and distributed $3.16 billion to shareholders including $2.19 billion in share repurchases and $975 million in dividends.
“Applied Materials delivered record revenue, earnings and cash flow in fiscal 2023 and is outgrowing the wafer fabrication equipment market for the fifth year in a row,” said Gary Dickerson, President and CEO. “Applied’s broad product portfolio, strong customer relationships and leadership at major technology inflections put us in a great position to profitably grow the company as powerful trends fuel the semiconductor industry’s expansion in the years ahead.”
Results Summary
Change
Q4
FY2023 FY2023
Q4 Q4 vs. Q4 vs.
FY2023 FY2022 FY2023 FY2022 FY2022 FY2022
------ ------ ------- ------- ------ --------
(In millions, except per share amounts and percentages)
Net sales $6,723 $6,749 $26,517 $25,785 --% 3%
Gross 1.2 0.2
margin 47.1% 45.9% 46.7% 46.5% points points
Operating (0.2) (1.3)
margin 29.3% 29.5% 28.9% 30.2% points points
Net income $2,004 $1,591 $ 6,856 $ 6,525 26% 5%
Diluted
earnings
per
share $ 2.38 $ 1.85 $ 8.11 $ 7.44 29% 9%
Non-GAAP
Adjusted
Results
----------
Non-GAAP
adjusted
gross 1.3 0.2
margin 47.3% 46.0% 46.8% 46.6% points points
Non-GAAP
adjusted
operating (0.3) (1.4)
margin 29.5% 29.8% 29.1% 30.5% points points
Non-GAAP
adjusted
net
income $1,786 $1,741 $ 6,802 $ 6,756 3% 1%
Non-GAAP
adjusted
diluted
EPS $ 2.12 $ 2.03 $ 8.05 $ 7.70 4% 5%
Non-GAAP
free cash
flow $1,246 $ 634 $ 7,594 $ 4,612 97% 65%
A reconciliation of the GAAP and non-GAAP adjusted results is provided in the financial tables included in this release. See also “Use of Non-GAAP Adjusted Financial Measures” section.
Business Outlook
In the first quarter of fiscal 2024, Applied expects net sales to be approximately $6.47 billion, plus or minus $400 million. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.72 to $2.08.
This outlook for non-GAAP adjusted diluted EPS excludes known charges related to completed acquisitions 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.
Fourth Quarter and Fiscal Year Reportable Segment Information
Semiconductor
Systems Q4 FY2023 Q4 FY2022 FY2023 FY2022
-------------- ---------- ---------- ----------- -----------
(In millions, except percentages)
Net sales $4,883 $5,038 $19,698 $18,797
Foundry,
logic and
other 69% 71% 77% 66%
DRAM 27% 16% 17% 19%
Flash
memory 4% 13% 6% 15%
Operating
income $1,791 $1,849 $ 7,090 $ 6,969
Operating
margin 36.7% 36.7% 36.0% 37.1%
Non-GAAP Adjusted Results
Non-GAAP
adjusted
operating
income $1,801 $1,858 $ 7,129 $ 7,000
Non-GAAP
adjusted
operating
margin 36.9% 36.9% 36.2% 37.2%
Applied Global
Services Q4 FY2023 Q4 FY2022 FY2023 FY2022
-------------- ------------- ------------- ---------- ----------
(In millions, except percentages)
Net sales $ 1,471 $ 1,420 $5,732 $5,543
Operating
income $ 431 $ 402 $1,657 $1,661
Operating
margin 29.3% 28.3% 28.9% 30.0%
Non-GAAP Adjusted Results
Non-GAAP
adjusted
operating
income $ 431 $ 402 $1,657 $1,661
Non-GAAP
adjusted
operating
margin 29.3% 28.3% 28.9% 30.0%
Display and
Adjacent
Markets Q4 FY2023 Q4 FY2022 FY2023 FY2022
------------- --------------- ------------- --------- ----------
(In millions, except percentages)
Net sales $ 298 $ 251 $ 868 $1,331
Operating
income $ 67 $ 34 $ 133 $ 260
Operating
margin 22.5% 13.5% 15.3% 19.5%
Non-GAAP Adjusted Results
Non-GAAP
adjusted
operating
income $ 67 $ 34 $ 133 $ 263
Non-GAAP
adjusted
operating
margin 22.5% 13.5% 15.3% 19.8%
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 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 adjusted 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.