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Jul 26, 2020

Applied Materials Q3 2020 Earnings Report

Applied Materials reported strong Q3 2020 results with revenue up 23% year over year and EPS exceeding expectations.

Key Takeaways

Applied Materials announced outstanding financial results for Q3 2020, with revenue reaching $4.40 billion, a 23% increase year-over-year. GAAP EPS was $0.91, and non-GAAP EPS was $1.06, representing increases of 49% and 43% year-over-year, respectively. The company returned $402 million to shareholders through share repurchases and dividends.

Quarterly revenue reached $4.40 billion, a 23% increase year-over-year.

GAAP EPS was $0.91, up 49% year-over-year.

Non-GAAP EPS was $1.06, up 43% year-over-year.

Returned $402 million to shareholders through share repurchases and dividends.

Total Revenue
$4.4B
Previous year: $3.56B
+23.4%
EPS
$1.06
Previous year: $0.74
+43.2%
Gross Margin
44.5%
Previous year: 43.7%
+1.8%
Operating Margin
25.2%
Previous year: 22.5%
+12.0%
Non-GAAP Gross Margin
45%
Previous year: 44%
+2.3%
Gross Profit
$1.96B
Previous year: $1.56B
+25.6%
Cash and Equivalents
$4.35B
Previous year: $3.01B
+44.3%
Free Cash Flow
$780M
Previous year: $694M
+12.4%
Total Assets
$21.2B
Previous year: $18.8B
+12.6%

Applied Materials

Applied Materials

Applied Materials Revenue by Segment

Applied Materials Revenue by Geographic Location

Forward Guidance

For the fourth quarter of fiscal 2020, Applied expects net sales to be approximately $4.60 billion, plus or minus $200 million. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.11 to $1.23.

Positive Outlook

  • Net sales are expected to be approximately $4.60 billion, plus or minus $200 million.
  • Non-GAAP adjusted diluted EPS is expected to be in the range of $1.11 to $1.23.
  • Outlook excludes known charges related to completed acquisitions of $0.01 per share.
  • Outlook includes the normalized tax benefit of share-based compensation of $0.02 per share.
  • Outlook includes a net income tax benefit related to intra-entity intangible asset transfers of $0.02 per share.

Challenges Ahead

  • Outlook does not reflect any items that are unknown at this time.
  • Additional charges related to acquisitions are not included.
  • Other non-operational or unusual items are not reflected.
  • Other tax related items are not included.
  • 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