Applied Materials, Inc. Q4 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

Overview

  • Applied Materials delivered record earnings in Q4 and for FY2023 across revenue, earnings, and cash flow.
  • Strength came despite a down semiconductor and wafer fab equipment (WFE) market.
  • FY2023 marked the fifth consecutive year Applied outperformed the WFE market.
  • Management remains optimistic for FY2024 with growth expected in leading-edge foundry/logic, DRAM, and NAND (off low levels), though ICAPS is expected to soften.

Key Financial Results (Comparisons vs. FY2022 or Q4 FY2022)

  • FY2023 revenue: $26.5B, up nearly 3% year-over-year.
  • FY2023 non-GAAP EPS: $8.05, up 4.5% year-over-year.
  • FY2023 free cash flow: $7.6B, a record.
  • Q4 revenue: $6.72B, slightly down year-over-year.
  • Q4 non-GAAP EPS: $2.12, up 4% year-over-year.
  • Q4 non-GAAP gross margin: 47.3%, up 130 bps year-over-year.

Business Segment Highlights

  • Semi Systems
    • Q4 revenue down 3% year-over-year to $4.88B.
    • FY2023 revenue up 5% year-over-year; outperformed market, driven by strength in foundry/logic, implant, packaging, metals deposition, and CVD.
    • Continued leadership in major inflections including Gate-All-Around, Backside Power Delivery, advanced DRAM, HBM, and heterogeneous integration.
  • Applied Global Services (AGS)
    • Q4 revenue up 4% year-over-year to a record $1.47B.

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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 fourth 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 our website at ir.appliedmaterials.com. Before we begin, I have a calendar announcement. On Tuesday evening, December 12, Applied will lead a panel on the future of logic near the IEDM Conference in San Francisco. Joining us will be leading technology executives from Intel, Samsung, and TSMC, along with Google, Qualcomm, Synopsys, and the EV Group. There won't be a webcast. So we hope you'll join us in San Francisco. And with that

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