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APPLIED MATERIALS ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2020 RESULTS
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- Record quarterly revenue of $4.69 billion, up 25 percent year over year
- Record quarterly GAAP EPS of $1.23 and non-GAAP EPS of $1.25, up 64 percent and 56 percent year over year, respectively
- Generated record annual cash from operations of $3.80 billion
SANTA CLARA, Calif., Nov. 12, 2020 (GLOBE NEWSWIRE) -- Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its fourth quarter and fiscal year ended Oct. 25, 2020.
Fourth Quarter Results
Applied generated revenue of $4.69 billion. On a GAAP basis, the company recorded gross margin of 45.4 percent, operating income of $1.28 billion or 27.4 percent of net sales, and earnings per share (EPS) of $1.23.
On a non-GAAP adjusted basis, the company reported gross margin of 45.7 percent, operating income of $1.33 billion or 28.3 percent of net sales, and EPS of $1.25.
The company generated $1.32 billion in cash from operations and returned $250 million to shareholders including $200 million in dividends and $50 million in share repurchases.
Full Year Results
In fiscal 2020, Applied generated revenue of $17.20 billion. On a GAAP basis, the company recorded gross margin of 44.7 percent, operating income of $4.37 billion or 25.4 percent of net sales, and EPS of $3.92.
On a non-GAAP adjusted basis, the company reported gross margin of 45.1 percent, operating income of $4.53 billion or 26.3 percent of net sales, and EPS of $4.17.
The company generated a record $3.80 billion in cash from operations, paid dividends of $787 million and used $649 million to repurchase 12 million shares of common stock.
“Applied Materials closed fiscal 2020 with record quarterly performance as demand for our semiconductor systems and services remains very strong,” said Gary Dickerson, president and CEO. “Our future opportunities have never looked better and, as powerful technology trends take shape, we are uniquely positioned to accelerate our customers’ roadmaps and outperform our markets.”
Results Summary
| | | | | | | | | Change | | | Q4 FY2020 | | Q4 FY2019 | | FY2020 | | FY2019 | Q4 FY2020
vs.
Q4 FY2019 | | FY2020
vs.
FY2019 | | | (In millions, except per share amounts and percentages) | | Net sales | $ | 4,688 | | | $ | 3,754 | | | $ | 17,202 | | | $ | 14,608 | | 25 | % | | 18 | % | | Gross margin | 45.4 | % | | 43.5 | % | | 44.7 | % | | 43.7 | % | 1.9 points | | 1.0 points | | Operating margin | 27.4 | % | | 23.0 | % | | 25.4 | % | | 22.9 | % | 4.4 points | | 2.5 points | | Net income | $ | 1,131 | | | $ | 698 | | | $ | 3,619 | | | $ | 2,706 | | 62 | % | | 34 | % | | Diluted earnings per share | $ | 1.23 | | | $ | 0.75 | | | $ | 3.92 | | | $ | 2.86 | | 64 | % | | 37 | % | | Non-GAAP Adjusted Results | | | | | | | | | | | | Non-GAAP adjusted gross margin | 45.7 | % | | 43.8 | % | | 45.1 | % | | 44.0 | % | 1.9 points | | 1.1 points | | Non-GAAP adjusted operating margin | 28.3 | % | | 23.7 | % | | 26.3 | % | | 23.5 | % | 4.6 points | | 2.8 points | | Non-GAAP adjusted net income | $ | 1,148 | | | $ | 744 | | | $ | 3,845 | | | $ | 2,875 | | 54 | % | | 34 | % | | Non-GAAP adjusted diluted EPS | $ | 1.25 | | | $ | 0.80 | | | $ | 4.17 | | | $ | 3.04 | | 56 | % | | 37 | % |
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 first quarter of fiscal 2021, Applied expects net sales to be approximately $4.95 billion, plus or minus $200 million. Non-GAAP adjusted diluted EPS is expected to be in the range of $1.20 to $1.32.
This outlook for non-GAAP adjusted diluted EPS excludes known charges related to completed acquisitions of $0.01 per share and includes a net income tax benefit related to intra-entity intangible asset transfers of $0.03 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.
Fourth Quarter and Fiscal Year Reportable Segment Information
| Semiconductor Systems | Q4 FY2020 | | Q4 FY2019 | | FY2020 | | FY2019 | | | | | | | | | | | | (In millions, except percentages) | | Net sales | $ | 3,070 | | | $ | 2,302 | | | $ | 11,367 | | | $ | 9,027 | | | Foundry, logic and other | 58 | % | | 58 | % | | 59 | % | | 52 | % | | DRAM | 21 | % | | 21 | % | | 20 | % | | 22 | % | | Flash memory | 21 | % | | 21 | % | | 21 | % | | 26 | % | | Operating income | 1,059 | | | 641 | | | 3,714 | | | 2,464 | | | Operating margin | 34.5 | % | | 27.8 | % | | 32.7 | % | | 27.3 | % | | Non-GAAP Adjusted Results | | | | | | | | Non-GAAP adjusted operating income | $ | 1,073 | | | $ | 652 | | | $ | 3,778 | | | $ | 2,507 | | | Non-GAAP adjusted operating margin | 35.0 | % | | 28.3 | % | | 33.2 | % | | 27.8 | % |
| Applied Global Services | Q4 FY2020 | | Q4 FY2019 | | FY2020 | | FY2019 | | | | | | | | | | | | (In millions, except percentages) | | Net sales | $ | 1,106 | | | $ | 977 | | | $ | 4,155 | | | $ | 3,854 | | | Operating income | 320 | | | 274 | | | 1,127 | | | 1,101 | | | Operating margin | 28.9 | % | | 28.0 | % | | 27.1 | % | | 28.6 | % | | Non-GAAP Adjusted Results | | | | | | | | Non-GAAP adjusted operating income | $ | 320 | | | $ | 274 | | | $ | 1,135 | | | $ | 1,101 | | | Non-GAAP adjusted operating margin | 28.9 | % | | 28.0 | % | | 27.3 | % | | 28.6 | % |
| Display and Adjacent Markets | Q4 FY2020 | | Q4 FY2019 | | FY2020 | | FY2019 | | | | | | | | | | | | (In millions, except percentages) | | Net sales | $ | 485 | | | $ | 457 | | | $ | 1,607 | | | $ | 1,651 | | | Operating income | 95 | | | 96 | | | 291 | | | 294 | | | Operating margin | 19.6 | % | | 21.0 | % | | 18.1 | % | | 17.8 | % | | Non-GAAP Adjusted Results | | | | | | | | Non-GAAP adjusted operating income | $ | 98 | | | $ | 99 | | | $ | 304 | | | $ | 307 | | | Non-GAAP adjusted operating margin | 20.2 | % | | 21.7 | % | | 18.9 | % | | 18.6 | % |
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 charges and any associated adjustments; certain incremental expenses related to COVID-19; impairments of assets, or investments; gain or loss on sale of strategic investments; loss on early extinguishment of debt; 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. Additionally, non-GAAP results exclude estimated discrete income tax expense items associated with U.S. tax legislation. 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. |
