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Applied Materials Announces First Quarter 2023 Results
Feb 16, 2023 at 4:01 PM EST
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- Revenue $6.74 billion, up 7 percent year over year
- GAAP operating margin 29.2 percent and non-GAAP operating margin 29.5 percent, down 2.3 points and 2.2 points year over year, respectively
- GAAP EPS $2.02 and non-GAAP EPS $2.03, up 1 percent and 7 percent year over year, respectively
- Generated $2.27 billion in cash from operations
SANTA CLARA, Calif., Feb. 16, 2023 (GLOBE NEWSWIRE) -- Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its first quarter ended Jan. 29, 2023.
First Quarter Results
Applied generated revenue of $6.74 billion. On a GAAP basis, the company achieved gross margin of 46.7 percent, operating income of $1.97 billion or 29.2 percent of net sales, and record earnings per share (EPS) of $2.02.
On a non-GAAP adjusted basis, the company reported gross margin of 46.8 percent, operating income of $1.99 billion or 29.5 percent of net sales, and EPS of $2.03.
The company generated $2.27 billion in cash from operations and returned $470 million to shareholders including $250 million in share repurchases and $220 million in dividends.
“While the economy and semiconductor industry are facing challenges in 2023, Applied Materials delivered strong first quarter results, and we believe Applied is well positioned to outperform our markets this year,” said Gary Dickerson, President and CEO. “Our resilience is underpinned by our strong positions with leading customers at key technology inflections, large backlog of differentiated products and growing service business.”
Results Summary
| | Q1 FY2023 | | Q1 FY2022 | | Change | | | (In millions, except per share amounts and percentages) | | Net sales | $ | 6,739 | | | $ | 6,271 | | | 7% | | Gross margin | | 46.7 | % | | | 47.2 | % | | (0.5) points | | Operating margin | | 29.2 | % | | | 31.5 | % | | (2.3) points | | Net income | $ | 1,717 | | | $ | 1,792 | | | (4)% | | Diluted earnings per share | $ | 2.02 | | | $ | 2.00 | | | 1% | | Non-GAAP Adjusted Results | | | | | | | Non-GAAP adjusted gross margin | | 46.8 | % | | | 47.3 | % | | (0.5) points | | Non-GAAP adjusted operating margin | | 29.5 | % | | | 31.7 | % | | (2.2) points | | Non-GAAP adjusted net income | $ | 1,724 | | | $ | 1,696 | | | 2% | | Non-GAAP adjusted diluted EPS | $ | 2.03 | | | $ | 1.89 | | | 7% |
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 second quarter of fiscal 2023, Applied expects net sales to be approximately $6.40 billion, plus or minus $400 million, which includes ongoing supply chain challenges and a negative estimated impact of $250 million dollars related to a cybersecurity event recently announced by one of our suppliers. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.66 to $2.02.
This outlook for non-GAAP adjusted diluted EPS excludes known charges related to completed acquisitions of $0.01 per share, includes the normalized tax benefit of share-based compensation 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.
First Quarter Reportable Segment Information
| Semiconductor Systems | Q1 FY2023 | | Q1 FY2022 | | | (In millions, except percentages) | | Net sales | $ | 5,162 | | | $ | 4,567 | | | Foundry, logic and other | | 77 | % | | | 60 | % | | DRAM | | 13 | % | | | 25 | % | | Flash memory | | 10 | % | | | 15 | % | | Operating income | $ | 1,917 | | | $ | 1,771 | | | Operating margin | | 37.1 | % | | | 38.8 | % | | Non-GAAP Adjusted Results | | | | Non-GAAP adjusted operating income | $ | 1,926 | | | $ | 1,778 | | | Non-GAAP adjusted operating margin | | 37.3 | % | | | 38.9 | % |
| Applied Global Services | Q1 FY2023 | | Q1 FY2022 | | | (In millions, except percentages) | | Net sales | $ | 1,369 | | | $ | 1,320 | | | Operating income | $ | 383 | | | $ | 403 | | | Operating margin | | 28.0 | % | | | 30.5 | % | | Non-GAAP Adjusted Results | | | | Non-GAAP adjusted operating income | $ | 383 | | | $ | 403 | | | Non-GAAP adjusted operating margin | | 28.0 | % | | | 30.5 | % |
| Display and Adjacent Markets | Q1 FY2023 | | Q1 FY2022 | | | (In millions, except percentages) | | Net sales | $ | 167 | | | $ | 366 | | | Operating income | $ | 8 | | | $ | 76 | | | Operating margin | | 4.8 | % | | | 20.8 | % | | Non-GAAP Adjusted Results | | | | Non-GAAP adjusted operating income | $ | 8 | | | $ | 77 | | | Non-GAAP adjusted operating margin | | 4.8 | % | | | 21.0 | % |
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 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 www.appliedmaterials.com. A replay will be available on the website beginning at 5:00 p.m. Pacific Time today.
Forward-Looking Statements
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https://ir.appliedmaterials.com/news-releases/news-release-details/applied-materials-announces-first-quarter-2023-results |
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