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Applied Materials External First Quarter Fiscal 2026 Earnings Presentation FEBRUARY 12, 2026
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| Applied Materials External Forward-Looking Statements This presentation contains forward-looking statements, including those regarding anticipated growth and trends in our businessesand markets, industry outlooks and demand drivers, technology transitions, our business and financial performance and market share positions, our capital allocation and cash deployment strategies, our investment and growth strategies, our development of new products and technologies, legal matters, claims and proceedings, our business outlook for the second quarter of fiscal 2026 and beyond, and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic, political and industry conditions, including changes in interest rates andprices for goods and services; the implementation of additional export regulations and license requirements and their interpretation, and their impact on our ability to export products and provide services to customers and on our results of operations; global trade issues and changes in trade and export license policies and our ability to obtain licenses or authorizations on a timely basis, if at all; imposition of new or increases intariffs and any retaliatory measures, including their impact on demand for our products and services; our ability to effectively mitigate the impact of tariffs; the effects of geopolitical turmoil or conflicts; demand for semiconductor chips and electronic devices; customers’ technology and capacity requirements; the introduction of new and innovative technologies, and the timing of technology transitions; our ability to develop, deliver and support new products and technologies; our ability to meet customer demand, and our suppliers’ ability to meet our demand requirements; the concentrated nature of our customer base; our ability to expand our current markets, increase market share and develop new markets; marketacceptance of existing and newly developed products; our ability to obtain and protect intellectual property rights in key technologies; cybersecurity incidents affecting our information systems or information contained in them, or affecting our operations, suppliers, customers or vendors; our ability to achieve the objectives of operational and strategic initiatives, align our resources and cost structure with business conditions, and attract, motivate and retain key employees; the effects of regional or global health epidemics; acquisitions, investments and divestitures; changes in income tax laws; the variability of operating expenses and results among products and segments, and our ability to accuratelyforecast future results, market conditions, customer requirements and business needs; our ability to ensure compliance with applicable law, rules and regulations; and other risks and uncertainties described in our filings with the Securities and Exchange Commission, including our most recent Forms 10-K, 10-Q and 8-K. All forward-looking statements are based on management’s current estimates, projections and assumptions, and we assume no obligation to update them. 2
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| Applied Materials External 3 Calendar Announcements FEBRUARY 24 New Product Briefings at SPIE Lithography and Patterning Conference San Jose, CA APRIL 8 | 9AM PT Transistors and Wiring Master Class Webcast OCTOBER 12 Investor Open House at the New EPIC Center Silicon Valley Sunnyvale, CA OCTOBER 13 Investor Breakfast San Francisco, CA | Webcast
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Applied Materials External Gary Dickerson President and Chief Executive Officer
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| Applied Materials External 5 CEO PERSPECTIVE ▪ FQ1 revenue and earnings above mid-point of guided range ▪ Strong performance and outlook fueled by: » Acceleration of investments in energy-efficient AI computing » High-value innovations that extend leadership in fastest growing semiconductor equipment market segments ▪ In AI, improvements in performance and cost create real-world applications that deliver productivity gains and ROI ▪ Race to build out AI infrastructure driving unprecedented spending on semiconductors, manufacturing capacity, R&D ▪ Leading-edge foundry/logic, high bandwidth memory DRAM, and advanced packaging are the most critical and fastest growing semiconductor markets – Applied has leadership positions
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| Applied Materials External 6 ▪ Global semiconductor revenues could reach $1T in 2026 ▪ Applied’s semiconductor equipment business expected to grow >20% in calendar year 2026 » Demand profile weighted towards second half of calendar year » Cleanroom space a key factor pacing rate of investment ▪ Largest customers providing increased longer-term visibility ▪ Expect momentum to be carried into 2027 Accelerated AI Adoption and Market Growth
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| Applied Materials External 7 Tokens generated per second Total Cost Of Ownership (TCOS) HIGHER PERFORMANCE CHIPS MORE ENERGY-EFFICIENT CHIPS AI is enabling real world applications with productivity gains and ROI for users AI chatbots AI coders AI agents AI productivity tools Autonomous Vehicles Robotics AI-enabled Science
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| Applied Materials External 2026 WFE Market Outlook 8 INFLECTIONS 2026 WFE MARKET DRIVERS Leading-Edge Foundry/Logic Gate-all-around transistors Backside power delivery FinFET capacity additions GAA nodes ramping DRAM 4F2 3D DRAM 6F2 capacity additions, incl HBM R&D on next gen inflections Advanced Packaging High-bandwidth memory (HBM) Hybrid bonding Panel substrates HBM packaging 3D chiplet-stacking FASTEST GROWING AREAS OF THE MARKET OTHER AREAS *ICAPS = IoT, Communications, Auto, Power, Sensors NAND Increased layers, technology transitions Modest growth Expect to remain <10% of WFE ICAPS* Compound semi (SiC, GaN) Photonics ~Flat, globally and in China Process Equipment Company in All Three Markets AP P L I E D M AT E R I AL S
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| Applied Materials External Engage with customers and partners to see technology inflections early Focus R&D on the most critical and valuable challenges using high-velocity co-innovation Create increasingly valuable solutions by connecting our broad portfolio INFLECTION- FOCUSED INNOVATION 9
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| Applied Materials External GAA DRAM GAA GAA DRAM 10 Innovative Pipeline of Next-Generation Products: Q2 Launches Conductor etch system delivers angstrom-level 3D trench profile control to increase silicon nanosheet uniformity and performance Pure radical treatment smoothens GAA silicon nanosheets with atomic-level precision to increase transistor performance ALD system replaces tungsten transistor contacts with moly, a new contact metal that lowers electrical resistance at the critical link between transistors and copper wiring network Viva Radical Treatment Sym3 Z Magnum Etch Spectral Molybdenum ALD
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| Applied Materials External 11 ANNOUNCED Samsung Electronics joins EPIC Center Co-development programs to accelerate commercialization of next-generation semiconductor technologies
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| Applied Materials External AIx Service Innovation – Accelerating Time to Market Actionable Insight Accelerator (AIX) Platform R&D Time to qualify Process window Ramp Time to match Yield optimization HVM Yield Output Cost of ownership ACCELERATE Results AI IN THE FAB ▪ >30,000 chambers connected to AIx servers using AI- powered monitoring, diagnostics and analytics ▪ 30% faster response times enables increased wafer output for customers 12 Expect Annualized Double-digit Growth Rate for AGS
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| Applied Materials External CEO SUMMARY 13 ▪ Semiconductors are the heart of the AI technology stack ▪ Semiconductor industry revenues potentially reach $1T in 2026 ▪ Inflection-focused innovation strategy is extending Applied’s leadership in leading-edge foundry/logic, memory, and advanced packaging ▪ Applied’s semiconductor equipment business expected to grow >20% in calendar year 2026 ▪ Driving deeper co-innovation engagements with customers to enable energy-efficient AI ▪ EPIC Center expected to come online later this year, bringing together key innovators to increase value creation velocity
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Applied Materials External Brice Hill SVP, Chief Financial Officer
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| Applied Materials External 15 ▪ Business is strengthening, positive demand indications throughout the ecosystem » Higher levels of planned capex from cloud service providers » Semiconductor factory utilization rising across all device types » Leading-edge foundry/logic and DRAM capacity essentially full, and prices have increased ▪ Customers are providing longer visibility » Increasing the number of new factory projects and fab expansions scheduled to be completed over the next several years DEMAND Environment
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| Applied Materials External16 Preparing for Growth ▪ Prioritizing capacity availability for our customers ▪ Over the last several years Applied nearly doubled our system manufacturing capacity and strengthened supply chain operations ▪ Giving our direct suppliers longer visibility into our requirements, allowing them to proliferate the demand signal through supply chain ▪ Proactively increased our inventory to meet the increasing build plans ▪ Well positioned to meet the increasing demand we are seeing from our customers
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| Applied Materials External17 FQ1’26 Non-GAAP Financial Results * For reconciliation of GAAP to non-GAAP results, see appendix of this presentation and non-GAAP reconciliation on the investor relations website at ir.appliedmaterials.com $M, except EPS FQ1’25 FQ4’25 FQ1’26 YoY QoQ Revenue 7,166 6,800 7,012 -2% 3% Gross Margin* 48.9% 48.1% 49.1% 20bps 100bps Operating Expenses* 1,313 1,325 1,335 2% 1% Operating Income* 2,190 1,947 2,107 -4% 8% Operating Margin* 30.6% 28.6% 30.0% -60bps 140bps EPS* $2.38 $2.17 $2.38 0% 10% Year-over-year highlights: ▪ Revenue in the upper end of guidance range ▪ China represented 27% of combined semi systems and AGS revenue, and 30% of overall revenue ▪ Gross margin: progressing on value-based pricing and manufacturing cost improvements ▪ Opex growth driven by increased R&D investments
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| Applied Materials External SEMICONDUCTOR SYSTEMS APPLIED GLOBAL SERVICES FQ1’26 Segment Results 1,353 1,420 1,463 1,506 1,559 25% 27% 27% 29% 28% Q1F25 Q2F25 Q3F25 Q4F25 Q1F26 Non-GAAP Operating Margin* 5,597 5,401 5,564 4,879 5,141 34% 33% 33% 30% 33% Q1F25 Q2F25 Q3F25 Q4F25 Q1F26 * For reconciliation of GAAP to non-GAAP results, see appendix of this presentation and non-GAAP reconciliation on the investor relations website at ir.appliedmaterials.com Non-GAAP Operating Margin* Revenue ($M) Revenue ($M) 18 Effective in the first quarter of fiscal 2026, management moved our 200-millimeter equipment business to Semiconductor Systems. The business was previously included in Applied Global Services. Additionally, effective in the first quarter of fiscal 2026, management began fully allocating corporate support costs to our operating segments. Prior-period numbers have been recast to conform to the current-year presentation. Display operating segment financial results are included in the Corporate and Other (previously reported) and the Other (recast) balances above
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| Applied Materials External CASH FLOWS ($M) FQ1'25 FQ2'25 FQ3'25 FQ4'25 FQ1’26 Operating Cash Flow 925 1,571 2,634 2,828 1,686 Free Cash Flow* 544 1,061 2,050 2,043 1,040 SHAREHOLDER DISTRIBUTIONS ($M) Total Shareholder Distributions (1,644) (1,995) (1,424) (1,216) (702) Share Repurchases (1,318) (1,670) (1,056) (851) (337) Dividends (326) (325) (368) (365) (365) Committed to distribute 80–100% of FCF to shareholders over time $13.6B remaining on share repurchase authorization at end of FQ1'26 * For reconciliation of GAAP to non-GAAP results, see appendix of this presentation and non-GAAP reconciliation on the investor relations website at ir.appliedmaterials.com Cash Flows and Shareholder Distributions 19
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| Applied Materials External Second QUARTER FISCAL 2026 OUTLOOK* Total Revenue ~$7.650B ± $500M Non-GAAP EPS* ~$2.64 ± $0.20 REVENUE Semiconductor Systems (includes 200mm equipment) ~$5.800B Applied Global Services (excludes 200mm equipment) ~$1.600B Other ~$250M OTHER Non-GAAP Gross Margin* ~49.3% Non-GAAP Operating Expenses* ~$1.415B Non-GAAP Tax Rate* ~11% * For reconciliation of GAAP to non-GAAP results, see appendix of this presentation and non-GAAP reconciliation on the investor relations website at ir.appliedmaterials.com 200mm equipment business is in Semiconductor Systems effective FQ1’26. Previously, 200mm equipment business was in Applied Global Services Business Outlook 20
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| Applied Materials External CFO SUMMARY 21 ▪ Investments made over the past several years have put Applied in a terrific position for profitable growth ▪ Global AI infrastructure expansion is translating to accelerating demand for Applied’s most enabling products in leading-edge foundry/logic, DRAM and advanced packaging – along with advanced services ▪ Focused on increasing the energy efficient performance of logic chips, compute memory, and systems – we are sharing in the value we create ▪ Applied is the materials engineering leader in the fastest growing segments of the semiconductor market ▪ Driving our operations teams and supply chain partners to increase capacity and output as our customers ramp in 2026 and 2027
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| Applied Materials External23 For a reconciliation of GAAP to non-GAAP results, see the appendix of this presentation and the non-GAAP reconciliation on the investor relations page at www.appliedmaterials.com. Effective in the first quarter of fiscal 2026, management moved our 200-millimeter equipment business to Semiconductor Systems. The business was previously included in Applied Global Services. Additionally, effective in the first quarter of fiscal 2026, management began fully allocating corporate support costs to our operating segments. Prior-period numbers have been recast to conform to the current-year presentation. Display operating segment financial results are included in the Corporate and Other (previously reported) and the Other (recast) balances above. RECAST PREVIOUSLY REPORTED In Millions, Except Percentages FY24 Q1F25 Q2F25 Q3F25 Q4F25 In Millions, Except Percentages FY24 Q1F25 Q2F25 Q3F25 Q4F25 SEMICONDUCTOR SYSTEMS SEMICONDUCTOR SYSTEMS Revenue $ 21,014 $ 5,597 $ 5,401 $ 5,564 $ 4,879 Revenue $ 19,911 $ 5,356 $ 5,255 $ 5,427 $ 4,760 Foundry, logic and other 70% 69% 66% 69% 66% Foundry, logic and other 68% 68% 65% 69% 65% DRAM 26% 27% 27% 22% 28% DRAM 28% 28% 27% 22% 29% Flash memory 4% 4% 7% 9% 6% Flash memory 4% 4% 8% 9% 6% Operating income $ 6,674 $ 1,872 $ 1,770 $ 1,837 $ 1,430 Operating income $ 6,981 $ 1,986 $ 1,900 $ 1,966 $ 1,527 Operating margin 31.8% 33.4% 32.8% 33.0% 29.3% Operating margin 35.1% 37.1% 36.2% 36.2% 32.1% Non-GAAP results Non-GAAP results Non-GAAP operating income $ 6,723 $ 1,886 $ 1,781 $ 1,849 $ 1,442 Non-GAAP operating income $ 7,021 $ 1,998 $ 1,911 $ 1,977 $ 1,538 Non-GAAP operating margin 32.0% 33.7% 33.0% 33.2% 29.6% Non-GAAP operating margin 35.3% 37.3% 36.4% 36.4% 32.3% APPLIED GLOBAL SERVICES APPLIED GLOBAL SERVICES Revenue $ 5,122 $ 1,353 $ 1,420 $ 1,463 $ 1,506 Revenue $ 6,225 $ 1,594 $ 1,566 $ 1,600 $ 1,625 Operating income $ 1,328 $ 336 $ 378 $ 400 $ 433 Operating income $ 1,812 $ 447 $ 446 $ 445 $ 454 Operating margin 25.9% 24.8% 26.6% 27.3% 28.8% Operating margin 29.1% 28.0% 28.5% 27.8% 27.9% Non-GAAP results Non-GAAP results Non-GAAP operating income $ 1,330 $ 337 $ 378 $ 400 $ 434 Non-GAAP operating income $ 1,812 $ 447 $ 446 $ 445 $ 454 Non-GAAP operating margin 26.0% 24.9% 26.6% 27.3% 28.8% Non-GAAP operating margin 29.1% 28.0% 28.5% 27.8% 27.9% OTHER CORPORATE AND OTHER Revenue $ 1,040 $ 216 $ 279 $ 275 $ 415 Revenue $ 1,040 $ 216 $ 279 $ 275 $ 415 Operating income (loss) $ (135) $ (33) $ 21 $ (4) $ (151) Operating income (loss) $ (926) $ (258) $ (177) $ (178) $ (269) Segment Financial Table
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| Applied Materials External24 Capital Allocation Strategy Shares Outstanding at FY End Quarterly Dividend per Share OVER PAST 10 FISCAL YEARS (through FY25) » Reinvested nearly $25B in R&D and >$8B in capital additions » Distributed nearly 90% of FCF* » Grew dividend per share at 16% CAGR » Reduced shares outstanding by ~32% 1. Invest in R&D and infrastructure to enable profitable growth 2. Grow dividend per share and use buybacks to distribute excess FCF Committed to distribute 80–100% of FCF to shareholders over time (Millions) $13.6B remaining on share repurchase authorization at end of FQ1'26 * For reconciliation of GAAP to non-GAAP results, see appendix of this presentation and non-GAAP reconciliation on the investor relations website at ir.appliedmaterials.com - 200 400 600 800 1,000 1,200 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25
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| Applied Materials External CASH AND INVESTMENTS ($M) FQ1'25 FQ2'25 FQ3'25 FQ4'25 FQ1'26 Cash and Cash Equivalents 6,264 6,169 5,384 7,241 7,218 Short-Term Investments 1,949 578 1,630 1,332 1,293 Long-Term Investments 2,686 3,638 4,133 4,327 4,968 Total Cash and Investments 10,899 10,385 11,147 12,900 13,479 DEBT ($M) Short-Term Debt* Current ratings (Moody’s / S&P): P-1 / A-1 799 799 799 100 100 Long-Term Debt Current ratings (Moody’s / S&P): A2 / A 5,461 5,462 5,463 6,455 6,453 Total Debt 6,260 6,261 6,262 6,555 6,553 * Includes commercial paper and current portion of long-term debt Strong Investment-Grade Balance Sheet 25
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| Applied Materials External LATEST 3rd PARTY ESG RATINGS CDP Climate B CDP Water A- MSCI AAA Sustainalytics Risk Rating Low ISS (E/S/G) 2/2/1 Link: 2024 Impact Report 26
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| Applied Materials External Investor Relations Home Page LINK Newsroom LINK 2025 SEMICON West Technology Breakfast LINK 2025: Applied Materials Panel Discussion during SPIE Conference LINK 2024: SEMICON West Technology Breakfast LINK 2024: 2023 WFE Market Summary LINK 2024: Applied Materials Panel Discussion during SPIE Conference LINK 27 Additional Resources
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| Applied Materials External| Applied Materials External Appendix GAAP to Non-GAAP Reconciliations 28
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| Applied Materials External Use of Non-GAAP Adjusted Financial Measures Applied provides investors with certain non-GAAP financial measures, which are adjusted for the impact of certain costs, expenses, gains and losses, including, as applicable, certain items related to mergers and acquisitions; restructuring and severance charges and any associated adjustments; legal settlement charges; impairments of assets; gain or loss, dividends and impairments on strategic investments; certain income tax items; and other discrete adjustments. On a non-GAAP basis, the tax effect related to share-based compensation is recognized ratably over the fiscal year. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the appendix to this presentation and on Applied’s website, ir.appliedmaterials.com. Management uses these non-GAAP financial measures to evaluate the company’s operating and financial performance and for planning purposes, and as performance measures in its executive compensation program. Applied believes these measures enhance an overall understanding of its performance and investors’ ability to review the company’s business from the same perspective as the company’s management, and facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Applied's ongoing operating performance. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, may be different from non-GAAP financial measures used by other companies, and may exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. 29
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| Applied Materials External30 UNAUDITED QUARTERLY RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS IN MILLIONS, EXCEPT PERCENTAGES FQ1'25 FQ2'25 FQ3'25 FQ4'25 FQ1'26 Non-GAAP Gross Profit GAAP reported gross profit $ 3,496 $ 3,485 $ 3,562 $ 3,265 $ 3,435 Certain items associated with acquisitions 1 7 6 7 7 7 Non-GAAP gross profit $ 3,503 $ 3,491 $ 3,569 $ 3,272 $ 3,442 Non-GAAP gross margin 48.9 % 49.2 % 48.9 % 48.1 % 49.1 % Non-GAAP Operating Income GAAP reported operating income $ 2,175 $ 2,169 $ 2,233 $ 1,712 $ 1,831 Certain items associated with acquisitions1 12 11 11 11 11 Acquisition integration and deal costs 3 — 1 2 — Impairment of goodwill — — — 41 — Legal settlement2 — — — — 253 Restructuring charges3 — — — 181 12 Non-GAAP operating income $ 2,190 $ 2,180 $ 2,245 $ 1,947 $ 2,107 Non-GAAP operating margin 30.6 % 30.7 % 30.7 % 28.6 % 30.0 % Non-GAAP Net Income GAAP reported net income $ 1,185 $ 2,137 $ 1,779 $ 1,897 $ 2,026 Certain items associated with acquisitions1 12 11 11 11 11 Acquisition integration and deal costs 3 — 1 2 — Impairment of goodwill — — — 41 — Legal settlement2 — — — — 253 Restructuring charges3 — — — 181 12 Realized loss (gain), dividends and impairments on strategic investments, net (9) (18) 16 (55) 14 Unrealized loss (gain) on strategic investments, net 106 (80) (314) (467) (484) Foreign exchange loss (gain) related to purchase of strategic investment — 23 — — — Loss (gain) on asset sale — (44) — — — Income tax effect of share-based compensation4 (10) 4 7 (1) (21) Income tax effect related to intra-entity intangible asset transfers5 674 32 32 39 31 Resolution of prior years' income tax filings and other tax items6 (16) (124) 460 (7) 40 Income tax effect of non-GAAP adjustments7 1 (1) (3) 91 17 Non-GAAP net income $ 1,946 $ 1,940 $ 1,989 $ 1,732 $ 1,899 FOOTNOTES: 1. These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. 2. Charge of $253 million related to agreed settlement with the U.S. Commerce Department Bureau of Industry and Security to resolve a previously disclosed export controls compliance matter. 3. The restructuring charges related to a workforce reduction plan announced in the fourth quarter of fiscal 2025. 4. GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis. 5. Amount for the first quarter of fiscal 2025 included changes to the income tax provision of $30 million from amortization of intangibles and a $644 million remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in fiscal 2025. 6. Amount for the third quarter of fiscal 2025 included the impact of the recognition of a $410 million valuation allowance against deferred tax assets related to corporate alternative minimum tax credits. 7. Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes.
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| Applied Materials External FOOTNOTES: 1. Amount for the first quarter of fiscal 2025 included changes to the income tax provision of $0.04 per diluted share from amortization of intangibles and $0.79 per diluted share from a remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in fiscal 2025. 2. Amount for the third quarter of fiscal 2025 included a $0.51 per diluted share impact of the recognition of a valuation allowance against deferred tax assets related to corporate alternative minimum tax credits. 31 UNAUDITED QUARTERLY RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS IN MILLIONS, EXCEPT PER SHARE AMOUNTS FQ1'25 FQ2'25 FQ3'25 FQ4'25 FQ1'26 Non-GAAP Earnings Per Diluted Share GAAP reported earnings per diluted share $ 1.45 $ 2.63 $ 2.22 $ 2.38 $ 2.54 Certain items associated with acquisitions 0.01 0.01 0.01 0.01 0.01 Impairment of goodwill — — — 0.05 — Legal settlement — — — — 0.32 Restructuring charges — — — 0.19 0.02 Realized loss (gain), dividends and impairments on strategic investments, net (0.01) (0.02) 0.02 (0.07) 0.01 Unrealized loss (gain) on strategic investments, net 0.13 (0.10) (0.39) (0.43) (0.58) Foreign exchange loss (gain) related to purchase of strategic investment — 0.03 — — — Loss (gain) on asset sale — (0.05) — — — Income tax effect of share-based compensation (0.01) — 0.01 — (0.03) Income tax effects related to intra-entity intangible asset transfers1 0.83 0.04 0.04 0.05 0.04 Resolution of prior years' income tax filings and other tax items2 (0.02) (0.15) 0.57 (0.01) 0.05 Non-GAAP earnings per diluted share $ 2.38 $ 2.39 $ 2.48 $ 2.17 $ 2.38 Weighted average number of diluted shares 819 812 802 798 799
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| Applied Materials External32 UNAUDITED QUARTERLY RECONCILIATION OF GAAP TO NON-GAAP SEGMENT OPERATING RESULTS NOTE: The reconciliation of GAAP and non-GAAP adjusted segment results above does not include certain revenues, costs of products sold and operating expenses that are reported within other and included in consolidated operating income. FOOTNOTE: 1. These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. 2. Charge of $253 million related to agreed settlement with the U.S. Commerce Department Bureau of Industry and Security to resolve a previously disclosed export controls compliance matter. IN MILLIONS, EXCEPT PERCENTAGES FQ1'25 FQ2'25 FQ3'25 FQ4'25 FQ1'26 Semiconductor Systems Non-GAAP Gross Profit GAAP reported gross profit $ 2,986 $ 2,889 $ 2,970 $ 2,569 $ 2,794 Certain items associated with acquisitions1 7 6 7 7 7 Non-GAAP gross profit $ 2,993 $ 2,895 $ 2,977 $ 2,576 $ 2,801 Non-GAAP gross margin 53.5 % 53.6 % 53.5 % 52.8 % 54.5 % AGS Non-GAAP Gross Profit GAAP reported gross profit $ 437 $ 476 $ 494 $ 514 $ 537 Non-GAAP gross profit $ 437 $ 476 $ 494 $ 514 $ 537 Non-GAAP gross margin 32.3 % 33.5 % 33.8 % 34.1 % 34.4 % Semiconductor Systems Non-GAAP Operating Income GAAP reported operating income $ 1,872 $ 1,770 $ 1,837 $ 1,430 $ 1,427 Certain items associated with acquisitions1 12 11 11 11 11 Acquisition integration and deal costs 2 — 1 1 — Legal settlement2 — — — — 253 Non-GAAP operating income $ 1,886 $ 1,781 $ 1,849 $ 1,442 $ 1,691 Non-GAAP operating margin 33.7 % 33.0 % 33.2 % 29.6 % 32.9 % AGS Non-GAAP Operating Income GAAP reported operating income $ 336 $ 378 $ 400 $ 433 $ 438 Acquisition integration and deal costs 1 — — 1 — Non-GAAP operating income $ 337 $ 378 $ 400 $ 434 $ 438 Non-GAAP operating margin 24.9 % 26.6 % 27.3 % 28.8 % 28.1 %
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| Applied Materials External33 UNAUDITED QUARTERLY RECONCILIATION OF GAAP TO NON-GAAP OPERATING EXPENSES IN MILLIONS FQ1'25 FQ2'25 FQ3'25 FQ4'25 FQ1'26 GAAP reported Operating Expenses $ 1,321 $ 1,316 $ 1,329 $ 1,553 $ 1,604 Certain items associated with acquisitions1 (5) (5) (4) (4) (4) Acquisition integration and deal costs (3) — (1) (2) — Impairment of goodwill — — — (41) — Legal settlement2 — — — — (253) Restructuring charges3 — — — (181) (12) Non-GAAP operating expenses $ 1,313 $ 1,311 $ 1,324 $ 1,325 $ 1,335 FOOTNOTE: 1. These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. 2. Charge of $253 million related to agreed settlement with the U.S. Commerce Department Bureau of Industry and Security to resolve a previously disclosed export controls compliance matter. 3. The restructuring charges related to a workforce reduction plan announced in the fourth quarter of fiscal 2025.
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| Applied Materials External34 UNAUDITED QUARTERLY RECONCILIATION OF NON-GAAP FREE CASH FLOW IN MILLIONS FQ1'25 FQ2'25 FQ3'25 FQ4'25 FQ1'26 Non-GAAP Free Cash Flows1 Cash provided by operating activities $ 925 $ 1,571 $ 2,634 $ 2,828 $ 1,686 Capital expenditures (381) (510) (584) (785) (646) Non-GAAP free cash flow $ 544 $ 1,061 $ 2,050 $ 2,043 $ 1,040 FOOTNOTE: 1. Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities less capital expenditures.
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| Applied Materials External35 UNAUDITED FULL YEAR RECONCILIATION OF NON-GAAP FREE CASH FLOW FOOTNOTE: 1. Free cash flow is a non-GAAP measure and is defined as net cash provided by operating activities less capital expenditures. IN MILLIONS FY2016 FY2017 FY2018 FY2019 FY2020 Non-GAAP Free Cash Flows1 Cash provided by operating activities $ 2,566 $ 3,789 $ 3,787 $ 3,247 $ 3,804 Capital expenditures (253) (345) (622) (441) (422) Non-GAAP free cash flow $ 2,313 $ 3,444 $ 3,165 $ 2,806 $ 3,382 IN MILLIONS FY2021 FY2022 FY2023 FY2024 FY2025 Non-GAAP Free Cash Flows1 Cash provided by operating activities $ 5,442 $ 5,399 $ 8,700 $ 8,677 $ 7,958 Capital expenditures (668) (787) (1,106) (1,190) (2,260) Non-GAAP free cash flow $ 4,774 $ 4,612 $ 7,594 $ 7,487 $ 5,698
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| Applied Materials External36 RECONCILIATION INFORMATION FOR BUSINESS OUTLOOK Non-GAAP outlook for the second quarter of fiscal 2026 (including non-GAAP gross margin, operating margin, operating expenses and EPS) excludes known charges related to completed acquisitions of ~$11 million and includes a net income tax benefit related to intra-entity intangible asset transfers of ~$29 million, but does not reflect any items that are unknown at this time, such as any additional charges related to acquisitions or other non-operational or unusual items, as well as other tax-related items, which we are not able to predict without unreasonable efforts due to their inherent uncertainty.