Applied Materials, Inc. Q1 FY2025 Earnings Call

· Earnings call transcript and AI-powered summary

Financial Highlights

  • Record quarterly revenue of approximately $7.2B, up 7% year over year (compared to Q1 FY2024).
  • Non-GAAP EPS reached a record $2.38, up 12% year over year.
  • Non-GAAP gross margin was 48.9%, up 100 basis points year over year and the company’s highest since 2000.
  • Semiconductor Systems revenue: $5.36B, up 9% year over year, driven by 20% growth in foundry logic.
  • Applied Global Services (AGS) revenue: $1.59B, up 8% year over year, though margin fell 30 basis points year over year.
  • Display revenue: $183M.
  • $1.6B returned to shareholders through $1.3B share repurchases and $326M dividends.

Operational & Market Highlights

  • Company delivered back-to-back record revenue quarters.
  • AI remains the primary driver of semiconductor demand, with global semiconductor sales growing 20% in 2024.
  • Multiple structural technology inflections globally support long-term growth, including gate-all-around (GAA), backside power delivery, 4F² DRAM, 3D DRAM, advanced packaging, and silicon photonics.
  • Applied’s technology leadership positions the company to capture more than 50% share of the incremental TAM for GAA and backside power.
  • Advanced packaging business already exceeds 50% share of served market; revenue doubled over the past four years and is expected to double again in coming years.

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Operator: Welcome to the Applied Materials First Quarter Fiscal 2025 Earnings Conference Call. Afterwards, there will be a question and answer session. I would now like to turn the call over to Liz Morali, Vice President of Investor Relations. Liz, you may begin. Liz Morali: Good afternoon, and thank you for joining us for today's call. With me today are Gary Dickerson, President and CEO, and Brice Hill, CFO. Before we continue, let me remind you that today's discussion contains forward-looking statements within the meaning of the federal securities laws, including predictions, estimates, projections, or other statements about future events. Actual results may differ materially from those mentioned in these forward-looking statements as a result of risks and uncertainties. Information concerning these risks and uncertainties is discussed in our most recent Form 10-K and 8-K filing with the SEC. We do not intend to update any forward-looking statements. During today's call, we will also reference non-GAAP financial measures. Reconciliations of GAAP to non-GAAP results can be found in today's earnings press release in our quarterly earnings materials, which are available on our Investor Relations website at ir.appliedmaterials.com. I will now turn the call over to Gary. Gary Dickerson: Thanks, Liz. In our first fiscal quarter of 2025, Applied Materials delivered record revenues surpassing the prior high we set last quarter. The major technology trends reshaping the global econo

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