Applied Materials, Inc. Q3 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Q3 FY2023 revenue was $6.43B, down 1% year-over-year but at the high end of guidance.
  • Non-GAAP EPS was $1.90, down 2% year-over-year and near the high end of guidance.
  • Results were supported by strong ICAPS and DRAM demand, offsetting weakness in leading-edge logic and NAND.
  • The company continues executing well despite a weaker wafer fab equipment (WFE) spending environment in 2023.

Strategic & Industry Context

  • Applied Materials emphasized continued momentum of the IoT–AI era, viewing IoT and AI as dual engines driving chip demand and advanced technology requirements.
  • Industry shift away from traditional Moore’s Law scaling toward a materials-driven PPACt roadmap (Power, Performance, Area-Cost, Time-to-market) benefits Applied due to its strengths in materials engineering.
  • Key technology inflections include Gate-All-Around transistors, Backside Power Distribution, heterogeneous integration, and advanced packaging.
  • Regionalization and government incentives are generating long-term global investments in semiconductor capacity.

Q3 FY2023 Financial Performance

  • Semiconductor Systems revenue was $4.68B, down 1% year-over-year.
  • Applied Global Services (AGS) posted record revenue of $1.46B, the 16th consecutive quarter of year-over-year growth.

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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 third quarter of fiscal 2023 earnings call. Joining me are Gary Dickerson, our President and CEO, and Brice Hill, 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 filing 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. And with that introduction, I'd like to turn the call over to Gary Dickerson. Gary Dickerson: Thank you, Mike. In our third fiscal quarter, Applied Materials delivered results at the high-end of our guidance range. Across the business, our teams are executing well. We are making incremental improvements in our operations as we productively scale the company, and we're driving our te

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