(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 18, 2023 | By: | /s/ Teri A. Little | |||||||||||
Teri A. Little | ||||||||||||||
Senior Vice President, Chief Legal Officer and Corporate Secretary |
Q2 FY2023 | Q2 FY2022 | Change | |||||||||||||||
(In millions, except per share amounts and percentages) | |||||||||||||||||
Net sales | $ | 6,630 | $ | 6,245 | 6% | ||||||||||||
Gross margin | 46.7 | % | 46.9 | % | (0.2) points | ||||||||||||
Operating margin | 28.8 | % | 30.3 | % | (1.5) points | ||||||||||||
Net income | $ | 1,575 | $ | 1,536 | 3% | ||||||||||||
Diluted earnings per share | $ | 1.86 | $ | 1.74 | 7% | ||||||||||||
Non-GAAP Adjusted Results | |||||||||||||||||
Non-GAAP adjusted gross margin | 46.8 | % | 47.0 | % | (0.2) points | ||||||||||||
Non-GAAP adjusted operating margin | 29.1 | % | 30.6 | % | (1.5) points | ||||||||||||
Non-GAAP adjusted net income | $ | 1,692 | $ | 1,636 | 3% | ||||||||||||
Non-GAAP adjusted diluted EPS | $ | 2.00 | $ | 1.85 | 8% |
Semiconductor Systems | Q2 FY2023 | Q2 FY2022 | |||||||||
(In millions, except percentages) | |||||||||||
Net sales | $ | 4,977 | $ | 4,458 | |||||||
Foundry, logic and other | 84 | % | 65 | % | |||||||
DRAM | 11 | % | 21 | % | |||||||
Flash memory | 5 | % | 14 | % | |||||||
Operating income | $ | 1,764 | $ | 1,648 | |||||||
Operating margin | 35.4 | % | 37.0 | % | |||||||
Non-GAAP Adjusted Results | |||||||||||
Non-GAAP adjusted operating income | $ | 1,774 | $ | 1,656 | |||||||
Non-GAAP adjusted operating margin | 35.6 | % | 37.1 | % |
Applied Global Services | Q2 FY2023 | Q2 FY2022 | |||||||||
(In millions, except percentages) | |||||||||||
Net sales | $ | 1,428 | $ | 1,383 | |||||||
Operating income | $ | 414 | $ | 422 | |||||||
Operating margin | 29.0 | % | 30.5 | % | |||||||
Non-GAAP Adjusted Results | |||||||||||
Non-GAAP adjusted operating income | $ | 414 | $ | 422 | |||||||
Non-GAAP adjusted operating margin | 29.0 | % | 30.5 | % |
Display and Adjacent Markets | Q2 FY2023 | Q2 FY2022 | |||||||||
(In millions, except percentages) | |||||||||||
Net sales | $ | 168 | $ | 381 | |||||||
Operating income | $ | 21 | $ | 81 | |||||||
Operating margin | 12.5 | % | 21.3 | % | |||||||
Non-GAAP Adjusted Results | |||||||||||
Non-GAAP adjusted operating income | $ | 21 | $ | 82 | |||||||
Non-GAAP adjusted operating margin | 12.5 | % | 21.5 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions, except per share amounts) | April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||||||||
Net sales | $ | 6,630 | $ | 6,245 | $ | 13,369 | $ | 12,516 | |||||||||||||||
Cost of products sold | 3,536 | 3,318 | 7,130 | 6,630 | |||||||||||||||||||
Gross profit | 3,094 | 2,927 | 6,239 | 5,886 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research, development and engineering | 775 | 686 | 1,546 | 1,340 | |||||||||||||||||||
Marketing and selling | 194 | 173 | 391 | 340 | |||||||||||||||||||
General and administrative | 214 | 174 | 421 | 340 | |||||||||||||||||||
Severance and related charges | — | — | — | (4) | |||||||||||||||||||
Total operating expenses | 1,183 | 1,033 | 2,358 | 2,016 | |||||||||||||||||||
Income from operations | 1,911 | 1,894 | 3,881 | 3,870 | |||||||||||||||||||
Interest expense | 61 | 58 | 120 | 115 | |||||||||||||||||||
Interest and other income (expense), net | (73) | 28 | (23) | 34 | |||||||||||||||||||
Income before income taxes | 1,777 | 1,864 | 3,738 | 3,789 | |||||||||||||||||||
Provision for income taxes | 202 | 328 | 446 | 461 | |||||||||||||||||||
Net income | $ | 1,575 | $ | 1,536 | $ | 3,292 | $ | 3,328 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 1.87 | $ | 1.75 | $ | 3.90 | $ | 3.77 | |||||||||||||||
Diluted | $ | 1.86 | $ | 1.74 | $ | 3.88 | $ | 3.74 | |||||||||||||||
Weighted average number of shares: | |||||||||||||||||||||||
Basic | 843 | 878 | 844 | 883 | |||||||||||||||||||
Diluted | 847 | 883 | 848 | 890 |
(In millions) | April 30, 2023 | October 30, 2022 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 4,588 | $ | 1,995 | |||||||
Short-term investments | 510 | 586 | |||||||||
Accounts receivable, net | 5,516 | 6,068 | |||||||||
Inventories | 5,940 | 5,932 | |||||||||
Other current assets | 1,219 | 1,344 | |||||||||
Total current assets | 17,773 | 15,925 | |||||||||
Long-term investments | 2,024 | 1,980 | |||||||||
Property, plant and equipment, net | 2,559 | 2,307 | |||||||||
Goodwill | 3,711 | 3,700 | |||||||||
Purchased technology and other intangible assets, net | 328 | 339 | |||||||||
Deferred income taxes and other assets | 2,697 | 2,475 | |||||||||
Total assets | $ | 29,092 | $ | 26,726 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Short-term debt | $ | 199 | $ | — | |||||||
Accounts payable and accrued expenses | 4,299 | 4,237 | |||||||||
Contract liabilities | 3,373 | 3,142 | |||||||||
Total current liabilities | 7,871 | 7,379 | |||||||||
Long-term debt | 5,459 | 5,457 | |||||||||
Income taxes payable | 822 | 964 | |||||||||
Other liabilities | 811 | 732 | |||||||||
Total liabilities | 14,963 | 14,532 | |||||||||
Total stockholders’ equity | 14,129 | 12,194 | |||||||||
Total liabilities and stockholders’ equity | $ | 29,092 | $ | 26,726 |
(In millions) | Three Months Ended | Six Months Ended | |||||||||||||||||||||
April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||
Net income | $ | 1,575 | $ | 1,536 | $ | 3,292 | $ | 3,328 | |||||||||||||||
Adjustments required to reconcile net income to cash provided by operating activities: | |||||||||||||||||||||||
Depreciation and amortization | 129 | 111 | 249 | 213 | |||||||||||||||||||
Severance and related charges | — | — | — | (4) | |||||||||||||||||||
Share-based compensation | 113 | 101 | 261 | 219 | |||||||||||||||||||
Deferred income taxes | (115) | (257) | (136) | (256) | |||||||||||||||||||
Other | 167 | (24) | 174 | (8) | |||||||||||||||||||
Net change in operating assets and liabilities | 423 | (1,052) | 722 | (419) | |||||||||||||||||||
Cash provided by operating activities | 2,292 | 415 | 4,562 | 3,073 | |||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Capital expenditures | (255) | (210) | (542) | (354) | |||||||||||||||||||
Cash paid for acquisitions, net of cash acquired | 2 | — | (18) | — | |||||||||||||||||||
Proceeds from sales and maturities of investments | 255 | 321 | 669 | 639 | |||||||||||||||||||
Purchases of investments | (324) | (524) | (730) | (836) | |||||||||||||||||||
Cash used in investing activities | (322) | (413) | (621) | (551) | |||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Proceeds from commercial paper | 297 | — | 595 | — | |||||||||||||||||||
Repayments of commercial paper | (300) | — | (400) | — | |||||||||||||||||||
Proceeds from common stock issuances | 111 | 96 | 111 | 96 | |||||||||||||||||||
Common stock repurchases | (800) | (1,800) | (1,050) | (3,603) | |||||||||||||||||||
Tax withholding payments for vested equity awards | (18) | (21) | (154) | (256) | |||||||||||||||||||
Payments of dividends to stockholders | (219) | (211) | (439) | (425) | |||||||||||||||||||
Repayments of principal on finance leases | 1 | — | (9) | — | |||||||||||||||||||
Cash used in financing activities | (928) | (1,936) | (1,346) | (4,188) | |||||||||||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash equivalents | 1,042 | (1,934) | 2,595 | (1,666) | |||||||||||||||||||
Cash, cash equivalents and restricted cash equivalents—beginning of period | 3,653 | 5,369 | 2,100 | 5,101 | |||||||||||||||||||
Cash, cash equivalents and restricted cash equivalents — end of period | $ | 4,695 | $ | 3,435 | $ | 4,695 | $ | 3,435 | |||||||||||||||
Reconciliation of cash, cash equivalents, and restricted cash equivalents | |||||||||||||||||||||||
Cash and cash equivalents | $ | 4,588 | $ | 3,331 | $ | 4,588 | $ | 3,331 | |||||||||||||||
Restricted cash equivalents included in deferred income taxes and other assets | 107 | 104 | 107 | 104 | |||||||||||||||||||
Total cash, cash equivalents, and restricted cash equivalents | $ | 4,695 | $ | 3,435 | $ | 4,695 | $ | 3,435 | |||||||||||||||
Supplemental cash flow information: | |||||||||||||||||||||||
Cash payments for income taxes | $ | 152 | $ | 951 | $ | 221 | $ | 1,031 | |||||||||||||||
Cash refunds from income taxes | $ | 47 | $ | 5 | $ | 51 | $ | 128 | |||||||||||||||
Cash payments for interest | $ | 68 | $ | 68 | $ | 102 | $ | 102 |
(In millions) | Q2 FY2023 | Q2 FY2022 | |||||||||
Unallocated net sales | $ | 57 | $ | 23 | |||||||
Unallocated cost of products sold and expenses | (232) | (179) | |||||||||
Share-based compensation | (113) | (101) | |||||||||
Total | $ | (288) | $ | (257) |
Q2 FY2023 | Q2 FY2022 | ||||||||||
Net Sales by Geography (In millions) | |||||||||||
United States | $ | 1,113 | $ | 702 | |||||||
% of Total | 17 | % | 11 | % | |||||||
Europe | $ | 477 | $ | 489 | |||||||
% of Total | 7 | % | 8 | % | |||||||
Japan | $ | 460 | $ | 407 | |||||||
% of Total | 7 | % | 6 | % | |||||||
Korea | $ | 1,583 | $ | 968 | |||||||
% of Total | 24 | % | 16 | % | |||||||
Taiwan | $ | 1,435 | $ | 1,408 | |||||||
% of Total | 22 | % | 23 | % | |||||||
Southeast Asia | $ | 157 | $ | 138 | |||||||
% of Total | 2 | % | 2 | % | |||||||
China | $ | 1,405 | $ | 2,133 | |||||||
% of Total | 21 | % | 34 | % | |||||||
Employees (In thousands) | |||||||||||
Regular Full Time | 34.2 | 30.1 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions, except percentages) | April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||||||||
Non-GAAP Adjusted Gross Profit | |||||||||||||||||||||||
Reported gross profit - GAAP basis | $ | 3,094 | $ | 2,927 | $ | 6,239 | $ | 5,886 | |||||||||||||||
Certain items associated with acquisitions1 | 7 | 7 | 14 | 13 | |||||||||||||||||||
Non-GAAP adjusted gross profit | $ | 3,101 | $ | 2,934 | $ | 6,253 | $ | 5,899 | |||||||||||||||
Non-GAAP adjusted gross margin | 46.8 | % | 47.0 | % | 46.8 | % | 47.1 | % | |||||||||||||||
Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 1,911 | $ | 1,894 | $ | 3,881 | $ | 3,870 | |||||||||||||||
Certain items associated with acquisitions1 | 11 | 10 | 22 | 19 | |||||||||||||||||||
Acquisition integration and deal costs | 8 | 9 | 14 | 13 | |||||||||||||||||||
Severance and related charges2 | — | — | — | (4) | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 1,930 | $ | 1,913 | $ | 3,917 | $ | 3,898 | |||||||||||||||
Non-GAAP adjusted operating margin | 29.1 | % | 30.6 | % | 29.3 | % | 31.1 | % | |||||||||||||||
Non-GAAP Adjusted Net Income | |||||||||||||||||||||||
Reported net income - GAAP basis | $ | 1,575 | $ | 1,536 | $ | 3,292 | $ | 3,328 | |||||||||||||||
Certain items associated with acquisitions1 | 11 | 10 | 22 | 19 | |||||||||||||||||||
Acquisition integration and deal costs | 8 | 12 | 14 | 16 | |||||||||||||||||||
Severance and related charges2 | — | — | — | (4) | |||||||||||||||||||
Realized loss (gain) and impairment on strategic investments, net | 117 | (2) | 113 | — | |||||||||||||||||||
Unrealized loss (gain) on strategic investments, net | 11 | (28) | 7 | (33) | |||||||||||||||||||
Income tax effect of share-based compensation3 | 3 | 14 | (11) | (44) | |||||||||||||||||||
Income tax effects related to intra-entity intangible asset transfers | (1) | 81 | 16 | 99 | |||||||||||||||||||
Resolution of prior years’ income tax filings and other tax items | (27) | 7 | (32) | (55) | |||||||||||||||||||
Income tax effect of non-GAAP adjustments4 | (5) | 6 | (5) | 6 | |||||||||||||||||||
Non-GAAP adjusted net income | $ | 1,692 | $ | 1,636 | $ | 3,416 | $ | 3,332 |
1 | These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. | ||||
2 | The severance and related charges primarily related to a one-time voluntary retirement program offered to certain eligible employees. | ||||
3 | GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis. | ||||
4 | 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) | April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||||||||
Non-GAAP Adjusted Earnings Per Diluted Share | |||||||||||||||||||||||
Reported earnings per diluted share - GAAP basis | $ | 1.86 | $ | 1.74 | $ | 3.88 | $ | 3.74 | |||||||||||||||
Certain items associated with acquisitions | 0.01 | 0.01 | 0.03 | 0.02 | |||||||||||||||||||
Acquisition integration and deal costs | 0.01 | 0.01 | 0.01 | 0.02 | |||||||||||||||||||
Realized loss (gain) and impairment on strategic investments, net | 0.14 | — | 0.13 | — | |||||||||||||||||||
Unrealized loss (gain) on strategic investments, net | 0.01 | (0.03) | 0.01 | (0.04) | |||||||||||||||||||
Income tax effect of share-based compensation | — | 0.02 | (0.01) | (0.05) | |||||||||||||||||||
Income tax effects related to intra-entity intangible asset transfers | — | 0.09 | 0.02 | 0.11 | |||||||||||||||||||
Resolution of prior years’ income tax filings and other tax items | (0.03) | 0.01 | (0.04) | (0.06) | |||||||||||||||||||
Non-GAAP adjusted earnings per diluted share | $ | 2.00 | $ | 1.85 | $ | 4.03 | $ | 3.74 | |||||||||||||||
Weighted average number of diluted shares | 847 | 883 | 848 | 890 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions, except percentages) | April 30, 2023 | May 1, 2022 | April 30, 2023 | May 1, 2022 | |||||||||||||||||||
Semiconductor Systems Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 1,764 | $ | 1,648 | $ | 3,681 | $ | 3,419 | |||||||||||||||
Certain items associated with acquisitions1 | 10 | 8 | 19 | 15 | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 1,774 | $ | 1,656 | $ | 3,700 | $ | 3,434 | |||||||||||||||
Non-GAAP adjusted operating margin | 35.6 | % | 37.1 | % | 36.5 | % | 38.0 | % | |||||||||||||||
AGS Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 414 | $ | 422 | $ | 797 | $ | 825 | |||||||||||||||
Non-GAAP adjusted operating income | $ | 414 | $ | 422 | $ | 797 | $ | 825 | |||||||||||||||
Non-GAAP adjusted operating margin | 29.0 | % | 30.5 | % | 28.5 | % | 30.5 | % | |||||||||||||||
Display and Adjacent Markets Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 21 | $ | 81 | $ | 29 | $ | 157 | |||||||||||||||
Certain items associated with acquisitions1 | — | 1 | — | 2 | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 21 | $ | 82 | $ | 29 | $ | 159 | |||||||||||||||
Non-GAAP adjusted operating margin | 12.5 | % | 21.5 | % | 8.7 | % | 21.3 | % | |||||||||||||||
1 | These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. | ||||
Three Months Ended | |||||
(In millions, except percentages) | April 30, 2023 | ||||
Provision for income taxes - GAAP basis (a) | $ | 202 | |||
Income tax effect of share-based compensation | (3) | ||||
Income tax effects related to intra-entity intangible asset transfers | 1 | ||||
Resolutions of prior years’ income tax filings and other tax items | 27 | ||||
Income tax effect of non-GAAP adjustments | 5 | ||||
Non-GAAP adjusted provision for income taxes (b) | $ | 232 | |||
Income before income taxes - GAAP basis (c) | $ | 1,777 | |||
Certain items associated with acquisitions | 11 | ||||
Acquisition integration and deal costs | 8 | ||||
Realized loss (gain) and impairment on strategic investments, net | 117 | ||||
Unrealized loss (gain) on strategic investments, net | 11 | ||||
Non-GAAP adjusted income before income taxes (d) | $ | 1,924 | |||
Effective income tax rate - GAAP basis (a/c) | 11.4 | % | |||
Non-GAAP adjusted effective income tax rate (b/d) | 12.1 | % |