Applied Materials, Inc. Q1 FY2021 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Applied Materials reported another record quarter with strong revenue, earnings, and free cash flow growth.
  • Demand for semiconductors continues to accelerate due to broad digital transformation and technology inflections such as 5G, cloud, and automotive electronics.
  • Management expects sustained strength well beyond 2021, driven by long-term semiconductor demand and favorable spending mix.

Financial Highlights (Compared to Q1 Fiscal 2020)

  • Revenue: Up 24% year-over-year.
  • Non-GAAP EPS: $1.39, up 42% year-over-year.
  • Gross Margin: Up ~100 basis points despite COVID-related costs.
  • Operating Profit: Nearly $1.5 billion, up 40% year-over-year.
  • Free Cash Flow: $1.3 billion, up 47% year-over-year.
  • Cash Balance: $8.22 billion, including cash awaiting regulatory decision on Kokusai acquisition.

Segment Highlights

  • Semiconductor Systems:
    • Revenue up 26% year-over-year.
    • Strongest areas: Etch, metal deposition, CMP.
    • Operating margin up 320 basis points.
    • Q2 guidance implies ~50% year-over-year growth.
    • PVD expected to grow more than 40% in FY21, exceeding $3 billion in revenue.

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Operator: Welcome to the Applied Materials Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, you will be invited to participate in a question-and-answer session. I would now like to turn the conference over to Michael Sullivan, Corporate Vice President. Please go ahead, sir. Michael Sullivan: Good afternoon, everyone, and thank you for joining Applied's First Quarter of Fiscal 2021 Earnings Call. Joining me are Gary Dickerson, our President and CEO; and Dan Durn, our Chief Financial Officer. Before we begin, I'd like to remind you that today's call contains forward-looking statements, which are subject to risks and uncertainties that could cause our actual results to differ. Information concerning the risks and uncertainties is contained in Applied's most recent Form 10-Q and 8-K filings with the SEC. Today's call also includes non-GAAP financial measures. Reconciliations to GAAP measures are found in today's earnings press release and in our quarterly earnings materials, which are available on the IR page of our website at appliedmaterials.com. Before we begin, I have a calendar announcement. On April 6, Applied plans to host a virtual investor meeting to discuss our markets, strategies and financial targets. We hope you'll save the date. And now, I'd like to turn the call over to Gary Dickerson. Gary Dickerson: Thanks, Mike. I'm very pleased to report another quarter of record performance for Applied Materials. Si

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