Applied Materials 2025 Q2 Earnings Strong Performance as Net Income Surges 24%

Applied Materials (AMAT), ranking 101st by market capitalization, reported its fiscal 2025 Q2 earnings on May 22nd, 2025. The company posted a 7% year-over-year revenue increase to $7.10 billion, meeting analysts' expectations. Applied Materials also provided guidance for Q3 FY25, forecasting revenue of approximately $7.2 billion, plus or minus $500 million, in line with analyst estimates. The company expects non-GAAP diluted EPS of about $2.35, plus or minus $0.20, signaling ongoing confidence in demand for leading-edge technologies despite macroeconomic uncertainties.

Revenue

Applied Materials achieved revenue growth across its key segments. The Semiconductor Systems segment recorded $5.25 billion in revenue, demonstrating robust demand in this core area. Applied Global Services contributed significantly, generating $1.57 billion in revenue, while the Display and Adjacent Markets segment brought in $259 million. Corporate and Other accounted for an additional $20 million, culminating in a total of $7.10 billion in revenue for the quarter.

Earnings/Net Income

Applied Materials reported a notable increase in its earnings per share (EPS), rising 26.9% to $2.64 from $2.08 in the previous year, supported by a strong net income growth of 24.1% to $2.14 billion. This performance signals a favorable earnings outcome for the quarter.

Price Action

The stock price of Applied Materials edged down by 0.11% during the latest trading day, experienced an 8.14% decline over the past week, and surged by 16.07% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing AMAT shares following a revenue beat and holding for 30 days yielded no returns, with a strategy return of 0.00% and an excess return of -87.97%. This approach underperformed the benchmark, exhibiting high volatility and a maximum drawdown of 0.00%. The lack of profitability and risk posed by this strategy highlight its ineffectiveness in generating returns for investors during this period.

CEO Commentary

Gary Dickerson, CEO of Applied Materials, emphasized the pivotal role of high-performance, energy-efficient AI computing in driving semiconductor innovation. Despite macroeconomic challenges, Dickerson expressed confidence in the company's strategic positioning at key technology inflection points in rapidly growing market areas, reinforcing their commitment to innovation and leadership amidst evolving market dynamics.

Guidance

For Q3 FY25, Applied Materials anticipates total revenue of approximately $7.2 billion, plus or minus $500 million, reflecting a 6% increase year-over-year at the midpoint. The company projects non-GAAP diluted earnings per share of about $2.35, plus or minus $0.20, indicating continued confidence in demand for leading-edge technologies despite macroeconomic uncertainties.

Additional News

Applied Materials recently announced a strategic investment in BE Semiconductor Industries, acquiring 9% of Besi's common stock to enhance their collaboration in hybrid bonding technology. The company also increased its quarterly cash dividend by 15% to $0.46 per share and authorized a new $10 billion share repurchase program. Additionally, CEO Gary Dickerson is set to participate in the Bernstein Strategic Decisions Conference on May 29, 2025, while CFO Brice Hill will attend the BofA Securities Global Technology Conference on June 4, 2025, both accessible via live audio webcast on the investor relations website.