Applied Materials 2025 Q4 Earnings Beats Expectations as Net Income Rises 9.6%

Applied Materials (AMAT) reported fiscal 2025 Q4 earnings on Nov 13, 2025, with results exceeding Wall Street estimates. The company’s revenue declined slightly year-over-year but delivered a 13.3% EPS increase. Guidance for Q1 2026 was provided, reflecting confidence in AI-driven demand.

Revenue

Applied Materials reported Q4 revenue of $6.80 billion, a 3.5% decrease from $7.04 billion in 2024 Q4. Semiconductor Systems revenue totaled $4.76 billion, while Applied Global Services generated $1.63 billion. The Display segment saw a significant rebound, contributing $355 million in revenue. Operating income for the Display unit surged to $91 million, driven by advanced screen technologies.

Earnings/Net Income

The company’s EPS rose to $2.39 in 2025 Q4 from $2.11 in 2024 Q4, marking 13.3% growth. Net income reached $1.90 billion, a 9.6% increase from $1.73 billion in the prior year. Despite the revenue decline, profitability strengthened, with non-GAAP gross margin expanding to 48.8%. The EPS growth outperformed revenue trends, reflecting disciplined cost management.

Price Action

AMAT’s stock price fell 1.83% in the latest trading day and 4.41% for the week, though it gained 2.31% month-to-date. The post-earnings strategy of buying shares on revenue raises and holding for 30 days yielded moderate returns, but gains were limited by narrow quarterly revenue variations.

Post-Earnings Price Action Review

The strategy of purchasing AMAT shares following revenue announcements and holding for 30 days showed mixed results. While the stock appreciated from the announcement date, returns were capped as the market had largely priced in expected growth. Positive reactions occurred when revenue exceeded forecasts, but momentum waned as broader market dynamics took precedence. Comparative performance against the semiconductor sector was modest, suggesting AMAT’s growth, while solid, did not outpace industry trends. Investors seeking higher returns may need to factor in future earnings, macroeconomic shifts, and technological innovations.

CEO Commentary

CEO Gary Dickerson emphasized fiscal 2025 as the company’s sixth consecutive growth year, with revenue and earnings rising at ~12% and 20% annualized rates, respectively. Challenges included reduced China revenue due to trade restrictions, but the company is prioritizing AI-driven innovations like Xtera gate-all-around transistors and Kinex hybrid bonding. Dickerson expressed optimism for 2026, citing customer readiness for production ramps and leadership in advanced semiconductor nodes.

Guidance

CFO Brice Hill guided Q1 2026 revenue to $6.85 billion ±$500 million and non-GAAP EPS of $2.18 ±$0.20. Semiconductor Systems revenue is projected at $5.025 billion, while AGS revenue is expected at $1.52 billion. Free cash flow in 2025 reached $5.7 billion, with $2.3 billion allocated to EPIC Center construction.

Additional News

Applied Materials announced a 4% workforce reduction (~1,400 positions), citing automation and digitalization goals, though this will incur $160–$180 million in one-time charges. The company also launched new AI-enabling products, including Xtera, Kinex, and PROVision 10, to address next-gen computing needs. Additionally, AMAT announced a 15% increase in its quarterly dividend and a $10 billion share repurchase program, underscoring its commitment to shareholder returns.