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Jan 26, 2020

Applied Materials Q1 2020 Earnings Report

Applied Materials reported first quarter results with revenue up 11 percent year over year and returned $392 million to shareholders.

Key Takeaways

Applied Materials' first quarter earnings exceeded the top-end of their guidance, giving them great momentum entering 2020. The company generated revenue of $4.16 billion, with a GAAP EPS of $0.96 and a non-GAAP EPS of $0.98. They returned $392 million to shareholders through share repurchases and dividends.

Quarterly revenue of $4.16 billion, up 11 percent year over year

GAAP EPS of $0.96 and non-GAAP EPS of $0.98, up 20 percent and 21 percent year over year, respectively

Returned $392 million to shareholders

First quarter earnings exceeded the top-end of guidance

Total Revenue
$4.16B
Previous year: $3.75B
+10.9%
EPS
$0.98
Previous year: $0.81
+21.0%
Gross Margin
44.6%
Previous year: 44.4%
+0.5%
Operating Margin
25%
Previous year: 24.2%
+3.3%
Non-GAAP Gross Margin
44.9%
Previous year: 44.6%
+0.7%
Gross Profit
$1.86B
Previous year: $1.67B
+11.6%
Cash and Equivalents
$3.42B
Previous year: $3.19B
+7.3%
Free Cash Flow
$885M
Previous year: $701M
+26.2%
Total Assets
$19.8B
Previous year: $18.9B
+4.5%

Applied Materials

Applied Materials

Applied Materials Revenue by Segment

Applied Materials Revenue by Geographic Location

Forward Guidance

For the second quarter of fiscal 2020, Applied expects net sales to be approximately $4.34 billion, plus or minus $200 million. Non-GAAP adjusted diluted EPS is expected to be in the range of $0.98 to $1.10.

Positive Outlook

  • Net sales expected to be approximately $4.34 billion, plus or minus $200 million.
  • Non-GAAP adjusted diluted EPS is expected to be in the range of $0.98 to $1.10.
  • Includes the normalized tax benefit of share-based compensation of $0.01 per share
  • Includes net income tax benefit related to intra-entity intangible asset transfers of $0.03 per share

Challenges Ahead

  • Excludes known charges related to completed acquisitions of $0.01 per share
  • Does not reflect any items that are unknown at this time
  • Excludes any additional charges related to acquisitions or other non-operational or unusual items
  • Does not include other tax related items
  • The company is not able to predict these items without unreasonable efforts due to their inherent uncertainty.

Revenue & Expenses

Visualization of income flow from segment revenue to net income