Applied Materials 2025 Q3 Earnings Strong Performance as Net Income Rises 4.3%

Applied Materials (AMAT), ranked 86th by market capitalization, delivered its fiscal 2025 Q3 earnings on August 14, 2025. The results beat expectations with robust revenue and net income growth. The company also raised its guidance for operational efficiency and customer alignment, reflecting confidence in its market position despite macroeconomic uncertainties.

Applied Materials posted total revenue of $7.30 billion in fiscal 2025 Q3, representing a 7.7% increase compared to $6.78 billion in the same period in 2024. Semiconductor Systems remained the company’s largest revenue generator, contributing $5.43 billion, driven by strong demand across the global semiconductor industry. Applied Global Services followed closely with $1.60 billion in revenue, underscoring the company’s ongoing strength in service and support offerings. Meanwhile, the Display segment generated $263 million, and the Corporate and Other segment contributed $12 million, rounding out the revenue picture. The performance highlights the company’s diversified business model and its ability to scale across multiple end markets.

Net income for the quarter reached $1.78 billion, a 4.3% increase from $1.71 billion in Q3 2024. Earnings per share (EPS) also saw a 8.3% year-over-year increase, rising to $2.23 from $2.06 in the prior-year period, reflecting effective cost management and operational efficiency. These results underscore Applied Materials’ strong earnings trajectory and its ability to convert revenue growth into improved profitability.

The stock price of Applied Materials edged up 0.20% during the latest trading day, gained 2.78% during the most recent full trading week, and dropped 5.54% month-to-date. A post-earnings trading strategy, involving buying shares after a revenue raise quarter-over-quarter on the report date and holding for 30 days, yielded an impressive 81.65% return over the past three years. This outperformed the benchmark return of 46.48% by 35.17%, with a maximum drawdown of 0.00% and a compound annual growth rate (CAGR) of 22.85%, demonstrating the effectiveness of the strategy.

Following the strong quarterly results, Gary Dickerson, President and CEO of Applied Materials, emphasized the company’s record third-quarter performance and continued growth momentum in a dynamic macroeconomic environment. While noting near-term uncertainties, especially in China, he expressed confidence in the long-term growth potential of the semiconductor industry and highlighted the company’s strategic resilience through robust supply chain capabilities, global manufacturing, and deep customer relationships.

For the upcoming fourth quarter of fiscal 2025, Applied Materials expects total net revenue of approximately $6.7 billion, with a range of ±$500 million. The company also forecasts non-GAAP diluted EPS of $2.11, with a range of ±$0.20. The expected decline in revenue is attributed to capacity digestion in China and non-linear demand from leading-edge customers. Non-GAAP gross margin is projected at 48.1%. These forecasts exclude unpredictable items such as additional acquisition charges, tax adjustments, or other non-operational effects.

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