(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of Each Class | Trading Symbol | Name of Each Exchange on Which Registered | ||||||
Emerging Growth Company |
Exhibit No. | Description | |||||||
99.1 | ||||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL) |
Applied Materials, Inc. (Registrant) | ||||||||||||||
Date: | May 19, 2022 | By: | /s/ Teri A. Little | |||||||||||
Teri A. Little | ||||||||||||||
Senior Vice President, Chief Legal Officer and Corporate Secretary |
Q2 FY2022 | Q2 FY2021 | Change | |||||||||||||||
(In millions, except per share amounts and percentages) | |||||||||||||||||
Net sales | $ | 6,245 | $ | 5,582 | 12% | ||||||||||||
Gross margin | 46.9 | % | 47.5 | % | (0.6) points | ||||||||||||
Operating margin | 30.3 | % | 28.3 | % | 2.0 points | ||||||||||||
Net income | $ | 1,536 | $ | 1,330 | 15% | ||||||||||||
Diluted earnings per share | $ | 1.74 | $ | 1.43 | 22% | ||||||||||||
Non-GAAP Adjusted Results | |||||||||||||||||
Non-GAAP adjusted gross margin | 47.0 | % | 47.7 | % | (0.7) points | ||||||||||||
Non-GAAP adjusted operating margin | 30.6 | % | 31.7 | % | (1.1) points | ||||||||||||
Non-GAAP adjusted net income | $ | 1,636 | $ | 1,509 | 8% | ||||||||||||
Non-GAAP adjusted diluted EPS | $ | 1.85 | $ | 1.63 | 13% |
Semiconductor Systems | Q2 FY2022 | Q2 FY2021 | |||||||||
(In millions, except percentages) | |||||||||||
Net sales | $ | 4,458 | $ | 3,972 | |||||||
Foundry, logic and other | 65 | % | 56 | % | |||||||
DRAM | 21 | % | 14 | % | |||||||
Flash memory | 14 | % | 30 | % | |||||||
Operating income | $ | 1,648 | $ | 1,542 | |||||||
Operating margin | 37.0 | % | 38.8 | % | |||||||
Non-GAAP Adjusted Results | |||||||||||
Non-GAAP adjusted operating income | $ | 1,656 | $ | 1,555 | |||||||
Non-GAAP adjusted operating margin | 37.1 | % | 39.1 | % |
Applied Global Services | Q2 FY2022 | Q2 FY2021 | |||||||||
(In millions, except percentages) | |||||||||||
Net sales | $ | 1,383 | $ | 1,203 | |||||||
Operating income | $ | 422 | $ | 358 | |||||||
Operating margin | 30.5 | % | 29.8 | % | |||||||
Non-GAAP Adjusted Results | |||||||||||
Non-GAAP adjusted operating income | $ | 422 | $ | 359 | |||||||
Non-GAAP adjusted operating margin | 30.5 | % | 29.8 | % |
Display and Adjacent Markets | Q2 FY2022 | Q2 FY2021 | |||||||||
(In millions, except percentages) | |||||||||||
Net sales | $ | 381 | $ | 375 | |||||||
Operating income | $ | 81 | $ | 65 | |||||||
Operating margin | 21.3 | % | 17.3 | % | |||||||
Non-GAAP Adjusted Results | |||||||||||
Non-GAAP adjusted operating income | $ | 82 | $ | 66 | |||||||
Non-GAAP adjusted operating margin | 21.5 | % | 17.6 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions, except per share amounts) | May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||||||||
Net sales | $ | 6,245 | $ | 5,582 | $ | 12,516 | $ | 10,744 | |||||||||||||||
Cost of products sold | 3,318 | 2,929 | 6,630 | 5,742 | |||||||||||||||||||
Gross profit | 2,927 | 2,653 | 5,886 | 5,002 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research, development and engineering | 686 | 617 | 1,340 | 1,223 | |||||||||||||||||||
Marketing and selling | 173 | 148 | 340 | 295 | |||||||||||||||||||
General and administrative | 174 | 149 | 340 | 310 | |||||||||||||||||||
Severance and related charges | — | 6 | (4) | 158 | |||||||||||||||||||
Deal termination fee | — | 154 | — | 154 | |||||||||||||||||||
Total operating expenses | 1,033 | 1,074 | 2,016 | 2,140 | |||||||||||||||||||
Income from operations | 1,894 | 1,579 | 3,870 | 2,862 | |||||||||||||||||||
Interest expense | 58 | 61 | 115 | 122 | |||||||||||||||||||
Interest and other income, net | 28 | 27 | 34 | 45 | |||||||||||||||||||
Income before income taxes | 1,864 | 1,545 | 3,789 | 2,785 | |||||||||||||||||||
Provision for income taxes | 328 | 215 | 461 | 325 | |||||||||||||||||||
Net income | $ | 1,536 | $ | 1,330 | $ | 3,328 | $ | 2,460 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 1.75 | $ | 1.45 | $ | 3.77 | $ | 2.68 | |||||||||||||||
Diluted | $ | 1.74 | $ | 1.43 | $ | 3.74 | $ | 2.66 | |||||||||||||||
Weighted average number of shares: | |||||||||||||||||||||||
Basic | 878 | 918 | 883 | 917 | |||||||||||||||||||
Diluted | 883 | 927 | 890 | 926 |
(In millions) | May 1, 2022 | October 31, 2021 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 3,331 | $ | 4,995 | |||||||
Short-term investments | 591 | 464 | |||||||||
Accounts receivable, net | 4,883 | 4,953 | |||||||||
Inventories | 5,009 | 4,309 | |||||||||
Other current assets | 1,430 | 1,386 | |||||||||
Total current assets | 15,244 | 16,107 | |||||||||
Long-term investments | 2,102 | 2,055 | |||||||||
Property, plant and equipment, net | 2,071 | 1,934 | |||||||||
Goodwill | 3,479 | 3,479 | |||||||||
Purchased technology and other intangible assets, net | 85 | 104 | |||||||||
Deferred income taxes and other assets | 2,478 | 2,146 | |||||||||
Total assets | $ | 25,459 | $ | 25,825 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | 4,060 | $ | 4,268 | |||||||
Contract liabilities | 2,590 | 2,076 | |||||||||
Total current liabilities | 6,650 | 6,344 | |||||||||
Long-term debt | 5,455 | 5,452 | |||||||||
Income taxes payable | 962 | 1,090 | |||||||||
Other liabilities | 813 | 692 | |||||||||
Total liabilities | 13,880 | 13,578 | |||||||||
Total stockholders’ equity | 11,579 | 12,247 | |||||||||
Total liabilities and stockholders’ equity | $ | 25,459 | $ | 25,825 |
(In millions) | Three Months Ended | Six Months Ended | |||||||||||||||||||||
May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||
Net income | $ | 1,536 | $ | 1,330 | $ | 3,328 | $ | 2,460 | |||||||||||||||
Adjustments required to reconcile net income to cash provided by operating activities: | |||||||||||||||||||||||
Depreciation and amortization | 111 | 97 | 213 | 191 | |||||||||||||||||||
Severance and related charges | — | 1 | (4) | 149 | |||||||||||||||||||
Share-based compensation | 101 | 84 | 219 | 191 | |||||||||||||||||||
Deferred income taxes | (257) | (4) | (256) | 24 | |||||||||||||||||||
Other | (24) | (15) | (8) | (15) | |||||||||||||||||||
Net change in operating assets and liabilities | (1,052) | (306) | (419) | (392) | |||||||||||||||||||
Cash provided by operating activities | 415 | 1,187 | 3,073 | 2,608 | |||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Capital expenditures | (210) | (204) | (354) | (325) | |||||||||||||||||||
Cash paid for acquisitions, net of cash acquired | — | — | — | (12) | |||||||||||||||||||
Proceeds from sales and maturities of investments | 321 | 266 | 639 | 624 | |||||||||||||||||||
Purchases of investments | (524) | (281) | (836) | (722) | |||||||||||||||||||
Cash used in investing activities | (413) | (219) | (551) | (435) | |||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Proceeds from common stock issuances | 96 | 86 | 96 | 86 | |||||||||||||||||||
Common stock repurchases | (1,800) | (750) | (3,603) | (750) | |||||||||||||||||||
Tax withholding payments for vested equity awards | (21) | (17) | (256) | (159) | |||||||||||||||||||
Payments of dividends to stockholders | (211) | (202) | (425) | (403) | |||||||||||||||||||
Cash used in financing activities | (1,936) | (883) | (4,188) | (1,226) | |||||||||||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash equivalents | (1,934) | 85 | (1,666) | 947 | |||||||||||||||||||
Cash, cash equivalents and restricted cash equivalents—beginning of period | 5,369 | 6,328 | 5,101 | 5,466 | |||||||||||||||||||
Cash, cash equivalents and restricted cash equivalents — end of period | $ | 3,435 | $ | 6,413 | $ | 3,435 | $ | 6,413 | |||||||||||||||
Reconciliation of cash, cash equivalents, and restricted cash equivalents | |||||||||||||||||||||||
Cash and cash equivalents | $ | 3,331 | $ | 6,305 | $ | 3,331 | $ | 6,305 | |||||||||||||||
Restricted cash equivalents included in deferred income taxes and other assets | 104 | 108 | 104 | 108 | |||||||||||||||||||
Total cash, cash equivalents, and restricted cash equivalents | $ | 3,435 | $ | 6,413 | $ | 3,435 | $ | 6,413 | |||||||||||||||
Supplemental cash flow information: | |||||||||||||||||||||||
Cash payments for income taxes | $ | 951 | $ | 299 | $ | 1,031 | $ | 409 | |||||||||||||||
Cash refunds from income taxes | $ | 5 | $ | 4 | $ | 128 | $ | 23 | |||||||||||||||
Cash payments for interest | $ | 68 | $ | 68 | $ | 102 | $ | 103 |
(In millions) | Q2 FY2022 | Q2 FY2021 | |||||||||
Unallocated net sales | $ | 23 | $ | 32 | |||||||
Unallocated cost of products sold and expenses | (179) | (174) | |||||||||
Share-based compensation | (101) | (84) | |||||||||
Severance and related charges | — | (6) | |||||||||
Deal termination fee | — | (154) | |||||||||
Total | $ | (257) | $ | (386) |
Q2 FY2022 | Q2 FY2021 | ||||||||||
Net Sales by Geography (In millions) | |||||||||||
United States | $ | 702 | $ | 489 | |||||||
% of Total | 11 | % | 9 | % | |||||||
Europe | $ | 489 | $ | 229 | |||||||
% of Total | 8 | % | 4 | % | |||||||
Japan | $ | 407 | $ | 442 | |||||||
% of Total | 6 | % | 8 | % | |||||||
Korea | $ | 968 | $ | 1,428 | |||||||
% of Total | 16 | % | 25 | % | |||||||
Taiwan | $ | 1,408 | $ | 1,041 | |||||||
% of Total | 23 | % | 19 | % | |||||||
Southeast Asia | $ | 138 | $ | 109 | |||||||
% of Total | 2 | % | 2 | % | |||||||
China | $ | 2,133 | $ | 1,844 | |||||||
% of Total | 34 | % | 33 | % | |||||||
Employees (In thousands) | |||||||||||
Regular Full Time | 30.1 | 24.8 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions, except percentages) | May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||||||||
Non-GAAP Adjusted Gross Profit | |||||||||||||||||||||||
Reported gross profit - GAAP basis | $ | 2,927 | $ | 2,653 | $ | 5,886 | $ | 5,002 | |||||||||||||||
Certain items associated with acquisitions1 | 7 | 7 | 13 | 15 | |||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | — | 12 | |||||||||||||||||||
Other charges | — | 2 | — | 2 | |||||||||||||||||||
Non-GAAP adjusted gross profit | $ | 2,934 | $ | 2,662 | $ | 5,899 | $ | 5,031 | |||||||||||||||
Non-GAAP adjusted gross margin | 47.0 | % | 47.7 | % | 47.1 | % | 46.8 | % | |||||||||||||||
Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 1,894 | $ | 1,579 | $ | 3,870 | $ | 2,862 | |||||||||||||||
Certain items associated with acquisitions1 | 10 | 12 | 19 | 25 | |||||||||||||||||||
Acquisition integration and deal costs | 9 | 11 | 13 | 35 | |||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | — | 24 | |||||||||||||||||||
Severance and related charges3 | — | 6 | (4) | 158 | |||||||||||||||||||
Deal termination fee | — | 154 | — | 154 | |||||||||||||||||||
Other charges | — | 6 | — | 6 | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 1,913 | $ | 1,768 | $ | 3,898 | $ | 3,264 | |||||||||||||||
Non-GAAP adjusted operating margin | 30.6 | % | 31.7 | % | 31.1 | % | 30.4 | % | |||||||||||||||
Non-GAAP Adjusted Net Income | |||||||||||||||||||||||
Reported net income - GAAP basis | $ | 1,536 | $ | 1,330 | $ | 3,328 | $ | 2,460 | |||||||||||||||
Certain items associated with acquisitions1 | 10 | 12 | 19 | 25 | |||||||||||||||||||
Acquisition integration and deal costs | 12 | 12 | 16 | 36 | |||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | — | 24 | |||||||||||||||||||
Severance and related charges3 | — | 6 | (4) | 158 | |||||||||||||||||||
Deal termination fee | — | 154 | — | 154 | |||||||||||||||||||
Realized loss (gain) on strategic investments, net | (2) | 6 | — | 4 | |||||||||||||||||||
Unrealized loss (gain) on strategic investments, net | (28) | (26) | (33) | (32) | |||||||||||||||||||
Other charges | — | 6 | — | 6 | |||||||||||||||||||
Income tax effect of share-based compensation4 | 14 | 6 | (44) | (23) | |||||||||||||||||||
Income tax effects related to intra-entity intangible asset transfers | 81 | 17 | 99 | 37 | |||||||||||||||||||
Resolution of prior years’ income tax filings and other tax items | 7 | (10) | (55) | (13) | |||||||||||||||||||
Income tax effect of non-GAAP adjustments5 | 6 | (4) | 6 | (45) | |||||||||||||||||||
Non-GAAP adjusted net income | $ | 1,636 | $ | 1,509 | $ | 3,332 | $ | 2,791 |
1 | These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. | ||||
2 | Temporary incremental employee compensation during the COVID-19 pandemic. | ||||
3 | The severance and related charges primarily related to a one-time voluntary retirement program offered to certain eligible employees. | ||||
4 | GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis. | ||||
5 | Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes. | ||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions, except per share amounts) | May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||||||||
Non-GAAP Adjusted Earnings Per Diluted Share | |||||||||||||||||||||||
Reported earnings per diluted share - GAAP basis | $ | 1.74 | $ | 1.43 | $ | 3.74 | $ | 2.66 | |||||||||||||||
Certain items associated with acquisitions | 0.01 | 0.01 | 0.02 | 0.02 | |||||||||||||||||||
Acquisition integration and deal costs | 0.01 | 0.01 | 0.02 | 0.03 | |||||||||||||||||||
Certain incremental expenses related to COVID-19 | — | — | — | 0.02 | |||||||||||||||||||
Severance and related charges | — | 0.01 | — | 0.13 | |||||||||||||||||||
Deal termination fee | — | 0.17 | — | 0.17 | |||||||||||||||||||
Realized loss (gain) on strategic investments, net | — | 0.01 | — | — | |||||||||||||||||||
Unrealized loss (gain) on strategic investments, net | (0.03) | (0.03) | (0.04) | (0.02) | |||||||||||||||||||
Income tax effect of share-based compensation | 0.02 | 0.01 | (0.05) | (0.02) | |||||||||||||||||||
Income tax effects related to intra-entity intangible asset transfers | 0.09 | 0.02 | 0.11 | 0.04 | |||||||||||||||||||
Resolution of prior years’ income tax filings and other tax items | 0.01 | (0.01) | (0.06) | (0.01) | |||||||||||||||||||
Non-GAAP adjusted earnings per diluted share | $ | 1.85 | $ | 1.63 | $ | 3.74 | $ | 3.02 | |||||||||||||||
Weighted average number of diluted shares | 883 | 927 | 890 | 926 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions, except percentages) | May 1, 2022 | May 2, 2021 | May 1, 2022 | May 2, 2021 | |||||||||||||||||||
Semiconductor Systems Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 1,648 | $ | 1,542 | $ | 3,419 | $ | 2,803 | |||||||||||||||
Certain items associated with acquisitions1 | 8 | 10 | 15 | 20 | |||||||||||||||||||
Acquisition integration costs | — | — | — | (2) | |||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | — | 12 | |||||||||||||||||||
Other charges | — | 3 | — | 3 | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 1,656 | $ | 1,555 | $ | 3,434 | $ | 2,836 | |||||||||||||||
Non-GAAP adjusted operating margin | 37.1 | % | 39.1 | % | 38.0 | % | 37.7 | % | |||||||||||||||
AGS Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 422 | $ | 358 | $ | 825 | $ | 690 | |||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | — | 8 | |||||||||||||||||||
Other charges | — | 1 | — | 1 | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 422 | $ | 359 | $ | 825 | $ | 699 | |||||||||||||||
Non-GAAP adjusted operating margin | 30.5 | % | 29.8 | % | 30.5 | % | 29.6 | % | |||||||||||||||
Display and Adjacent Markets Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 81 | $ | 65 | $ | 157 | $ | 130 | |||||||||||||||
Certain items associated with acquisitions1 | 1 | 1 | 2 | 2 | |||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | — | 1 | |||||||||||||||||||
Severance and related charges3 | — | — | — | 8 | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 82 | $ | 66 | $ | 159 | $ | 141 | |||||||||||||||
Non-GAAP adjusted operating margin | 21.5 | % | 17.6 | % | 21.3 | % | 17.9 | % | |||||||||||||||
1 | These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. | ||||
2 | Temporary incremental employee compensation during the COVID-19 pandemic. | ||||
3 | The severance and related charges related to workforce reduction actions globally across the Display and Adjacent Markets business. | ||||
Three Months Ended | |||||
(In millions, except percentages) | May 1, 2022 | ||||
Provision for income taxes - GAAP basis (a) | $ | 328 | |||
Income tax effect of share-based compensation | (14) | ||||
Income tax effects related to intra-entity intangible asset transfers | (81) | ||||
Resolutions of prior years’ income tax filings and other tax items | (7) | ||||
Income tax effect of non-GAAP adjustments | (6) | ||||
Non-GAAP adjusted provision for income taxes (b) | $ | 220 | |||
Income before income taxes - GAAP basis (c) | $ | 1,864 | |||
Certain items associated with acquisitions | 10 | ||||
Acquisition integration and deal costs | 12 | ||||
Realized loss (gain) on strategic investments, net | (2) | ||||
Unrealized loss (gain) on strategic investments, net | (28) | ||||
Non-GAAP adjusted income before income taxes (d) | $ | 1,856 | |||
Effective income tax rate - GAAP basis (a/c) | 17.6 | % | |||
Non-GAAP adjusted effective income tax rate (b/d) | 11.9 | % |