Applied Materials Announces Fourth Quarter and Fiscal Year 2026 Results

Applied Materials posts record revenue and profit, driven by surging semiconductor demand.

What the company is saying

Applied Materials is highlighting record financial performance for both the fourth quarter and full fiscal year 2026, with revenue reaching $10.41 billion for Q4 and $34.45 billion for the year. The company frames these results as evidence of its technology leadership and ability to capitalize on AI-driven semiconductor demand, with President and CEO Gary Dickerson stating that AI is fueling strong incremental demand and positioning Applied for multi-year growth. CFO Brice Hill emphasizes the 53% year-over-year revenue increase and 92% non-GAAP EPS growth in Q4, as well as record free cash flow and the largest quarterly share buyback in over eight years. The announcement also spotlights operational milestones, including the unveiling of the EPIC Center, new partnerships with Intel, KIOXIA, Besi, and UCLA, and the introduction of the VeritySEM 20 metrology system. The company communicates confidence in its outlook, providing Q1 FY2027 guidance of $11.1 billion in revenue (±$500 million) and non-GAAP EPS of $4.35 (±$0.20). Applied is also increasing its investment in Besi to approximately 20% of outstanding shares, reinforcing its commitment to strategic partnerships and R&D.

What the data suggests

The disclosed figures show a sharp acceleration in financial performance. Q4 FY2026 revenue rose 53% year over year to $10.41 billion, with GAAP operating income at $3.66 billion (35.1% margin) and GAAP EPS of $3.40. Non-GAAP EPS reached $4.16, up 92% from the prior year. Net income for the quarter was $2.72 billion, and non-GAAP net income was $3.32 billion. Cash from operations hit a record $3.30 billion, and free cash flow was $2.6 billion. For the full year, revenue was $34.45 billion, GAAP EPS was $12.62, and non-GAAP EPS was $12.89. The company returned $4.75 billion to shareholders in FY2026, including $3.18 billion in buybacks and $1.57 billion in dividends. Segment data shows Semiconductor Systems revenue at $7.996 billion in Q4, with strong margins and operating income. Management attributes the growth to AI-driven semiconductor demand and technology leadership. The company’s guidance for Q1 FY2027 implies continued momentum, with revenue expected to be $11.1 billion (±$500 million) and non-GAAP EPS of $4.35 (±$0.20). The operational and financial disclosures are comprehensive, with no material gaps.

Analysis

The announcement is overwhelmingly supported by realised, measurable financial results, including record revenue, operating income, EPS, cash from operations, and free cash flow for both the quarter and full year. All key profitability and cash flow metrics are disclosed, and year-over-year growth rates are provided, demonstrating transparency and strong operational performance. Forward-looking statements are limited to next-quarter guidance and general growth expectations, which are clearly separated from realised results. There is no evidence of narrative inflation or exaggerated claims; the language is proportionate to the disclosed achievements. The only capital-intensive action (increased investment in Besi) is disclosed as a completed agreement, not a speculative plan. The gap between narrative and evidence is minimal.

Risk flags

• ●Sustaining high growth rates in a cyclical semiconductor industry is challenging; a slowdown in AI-related demand or broader macroeconomic weakness could impact future results despite current momentum.
• ●Heavy reliance on continued technology leadership and execution of R&D partnerships, such as those at the EPIC Center, introduces operational risk if commercialization timelines slip or if partners do not deliver as expected.
• ●Significant capital return to shareholders and increased investment in Besi signal confidence, but also reduce balance sheet flexibility if market conditions deteriorate or if large-scale R&D investments are required.
• ●Segment concentration remains high, with Semiconductor Systems accounting for the majority of revenue; any disruption or competitive pressure in this segment could disproportionately affect overall performance.
• ●Forward-looking statements, including Q1 FY2027 guidance and multi-year growth projections, are subject to execution risk and external factors such as supply chain disruptions, geopolitical tensions, or regulatory changes impacting the semiconductor sector.

Bottom line

Applied Materials delivered record quarterly and annual results, with revenue, profit, and cash flow all reaching new highs on the back of strong AI-driven semiconductor demand. The company’s operational disclosures are detailed and credible, and management’s explanations for growth are supported by the numbers. Strategic moves—such as the EPIC Center launch, new R&D partnerships, and increased investment in Besi—position the company for continued innovation, though their long-term financial impact remains to be proven. The near-term outlook is strong, with Q1 FY2027 guidance implying further growth, but investors should remain aware of the cyclical risks and execution challenges inherent in the semiconductor industry. The most important takeaway is that Applied is currently outperforming peers on both financial and operational fronts, but sustaining this trajectory will require continued execution and favorable market conditions.

Announcement summary

(NASDAQ:AMAT) Applied Materials, Inc. reported record revenue of $10.41 billion for its fourth quarter ended October 25, 2026. On a GAAP basis, the company achieved gross margin of 50.4 percent, record operating income of $3.66 billion or 35.1 percent of revenue, and earnings per share (EPS) of $3.40. On a non-GAAP basis, gross margin was 50.6 percent, operating income was $3.68 billion or 35.3 percent of revenue, and record EPS was $4.16. The company generated record cash from operations of $3.30 billion and distributed $2.42 billion to shareholders, including $2.00 billion in share repurchases and $421 million in dividends. For the full fiscal year 2026, Applied Materials posted record revenue of $34.45 billion. GAAP gross margin for the year was 50.0 percent, with record operating income of $11.09 billion or 32.2 percent of revenue, and record EPS of $12.62. Non-GAAP gross margin for the year was 50.1 percent, operating income was $11.42 billion or 33.1 percent of revenue, and record EPS was $12.89. The company generated record annual cash from operations of $8.87 billion and distributed $4.75 billion to shareholders, including $3.18 billion in share repurchases and $1.57 billion in dividends. In Q4 FY2026, revenue increased 53% year over year, and non-GAAP EPS increased 92% year over year. Net income for Q4 FY2026 was $2.72 billion, up 43% from Q4 FY2025. Non-GAAP net income for Q4 FY2026 was $3.32 billion, up 92% from Q4 FY2025. The company generated record quarterly free cash flow of $2.6 billion in Q4 FY2026. Applied unveiled the EPIC Center in Silicon Valley, the world’s largest facility dedicated to collaborative semiconductor process technology and manufacturing equipment R&D, and announced four new EPIC Center partnerships, bringing the total to 15. Intel joined EPIC as a founding partner, KIOXIA Corporation and BE Semiconductor Industries N.V. (Besi) joined as innovation partners, and the UCLA Samueli School of Engineering joined as a research partner. Applied introduced the VeritySEM 20 metrology system, a next-generation critical dimension scanning electron microscope. The company entered into an accelerated share purchase agreement to increase its investment in Besi to approximately 20 percent of Besi’s outstanding shares. For Q1 FY2027, Applied expects total revenue of $11,100 million plus or minus $500 million and non-GAAP diluted EPS of $4.35 plus or minus $0.20. Effective Q1 FY2026, the 200-millimeter equipment business was moved to Semiconductor Systems, and corporate support costs are now fully allocated to operating segments. In Q4 FY2026, Semiconductor Systems revenue was $7,996 million, Applied Global Services revenue was $1,896 million, and Other segment revenue was $517 million. The company hosted an Investor Breakfast Presentation during SEMICON West to present longer-term growth expectations and its leadership in materials engineering.

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