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Applied Materials Q1 Earnings Beat Estimates, Revenues Fall Y/Y
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Key Takeaways
AMAT reported Q1 EPS of $2.38 and $7.01B in revenues, beating consensus estimates.
Applied Materials saw services revenues rise 15.2% while Semiconductor Systems fell 8.1% YoY.
AMAT guided Q2 EPS to $2.64 /- $0.20 on sales of $7.65B, above consensus forecasts.
Applied Materials (AMAT - Free Report) reported first-quarter fiscal 2026 non-GAAP earnings of $2.38 per share, which beat the Zacks Consensus Estimate by 8.7%. AMAT’s first-quarter fiscal 2026 non-GAAP earnings remained flat from the year-ago quarter’s reported figure.
AMAT beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 5.2%.
AMAT reported revenues of $7.01 billion in the first quarter of fiscal 2026, surpassing the Zacks Consensus Estimate by 1.79%. The top line decreased 2.2% from the year-ago quarter.
This strong quarterly result pushed AMAT stock up 11.8% in Friday's pre-market session. AMAT stock has surged 112% in the past year.
Applied Materials, Inc. Price, Consensus and EPS Surprise
Segment-wise, Semiconductor Systems generated revenues of $5.14 billion, contributing 73.3% to total net revenues and declining 8.1% from the year-ago quarter.
Applied Global Services posted revenues of $1.56 billion (22.2% of total net revenues), which increased 15.2% year over year.
Other revenues totaled $312 million (4.4% of total revenues), up 44.4% year over year.
Revenues in the United States, Europe, Japan, Korea, Taiwan, Southeast Asia and China were $656 million, $221 million, $525 million, $1.46 billion, $1.72 billion, $335 million and $2.1 billion, contributing 9%, 3%, 7%, 21%, 25%, 5% and 30% to total net sales, respectively.
Year over year, revenues in Taiwan and Southeast Asia grew 45.6% and 17.1%, respectively, while revenues in Japan, Europe, China, Korea and the United States declined 2.8%, 33.0%, 6.6%, 12.5% and 28.5%, respectively.
AMAT’s Margins in Detail
The non-GAAP gross margin was 49.1%, expanding 20 basis points year over year. Non-GAAP operating expenses were $1.34 billion, up 1.7% year over year.
The non-GAAP operating margin came in at 30.0%, down 60 basis points from the year-ago quarter.
Balance Sheet & Cash Flow of AMAT
As of Jan. 25, 2026, cash and cash equivalents plus short-term investments were $8.51 billion, compared with $8.57 billion at the end of the prior quarter. Long-term debt was $6.45 billion at the end of the first quarter of fiscal 2026.
Applied Materials generated non-GAAP free cash flow of $1.04 billion. The company returned $702 million to shareholders, including $337 million in share repurchases and $365 million in dividends for the quarter.
AMAT Initiates Q2 Guidance
For the fiscal second quarter of 2026, Applied Materials expects net sales of $7.65 billion (+/- $500 million). The Zacks Consensus Estimate for the second quarter of fiscal 2026 is pegged at $7.03 billion, indicating a year-over-year decline of 1%.
Semiconductor Systems, Applied Global Services, and Display (reported under Corporate & Other) sales are anticipated to be $5.80 billion, $1.60 billion, and $250 million, respectively.
Applied Materials expects a non-GAAP gross margin of approximately 49.3% and non-GAAP operating expenses of around $1.42 billion. It projects a non-GAAP tax rate of roughly 11%.
Management expects non-GAAP earnings per share of $2.64 (+/- $0.20). The Zacks Consensus Estimate for second-quarter fiscal 2026 is pegged at $2.29, indicating a year-over-year rise of 2.1%.
Analog Devices (ADI - Free Report) carries a Zacks Rank #2 at present. Analog Devices shares have surged 64.3% in the trailing 12-month period. Analog Devices is set to report its earnings on Feb. 18, 2026.
Applied Optoelectronics (AAOI - Free Report) carries a Zacks Rank #2 at present. Applied Optoelectronics shares have surged 93.4% in the trailing 12-month period. Applied Optoelectronics is slated to report fourth-quarter 2025 results on Feb. 26.
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Applied Materials Q1 Earnings Beat Estimates, Revenues Fall Y/Y
Key Takeaways
Applied Materials (AMAT - Free Report) reported first-quarter fiscal 2026 non-GAAP earnings of $2.38 per share, which beat the Zacks Consensus Estimate by 8.7%. AMAT’s first-quarter fiscal 2026 non-GAAP earnings remained flat from the year-ago quarter’s reported figure.
AMAT beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 5.2%.
AMAT reported revenues of $7.01 billion in the first quarter of fiscal 2026, surpassing the Zacks Consensus Estimate by 1.79%. The top line decreased 2.2% from the year-ago quarter.
This strong quarterly result pushed AMAT stock up 11.8% in Friday's pre-market session. AMAT stock has surged 112% in the past year.
Applied Materials, Inc. Price, Consensus and EPS Surprise
Applied Materials, Inc. price-consensus-eps-surprise-chart | Applied Materials, Inc. Quote
AMAT’s Q1 Earnings in Detail
Segment-wise, Semiconductor Systems generated revenues of $5.14 billion, contributing 73.3% to total net revenues and declining 8.1% from the year-ago quarter.
Applied Global Services posted revenues of $1.56 billion (22.2% of total net revenues), which increased 15.2% year over year.
Other revenues totaled $312 million (4.4% of total revenues), up 44.4% year over year.
Revenues in the United States, Europe, Japan, Korea, Taiwan, Southeast Asia and China were $656 million, $221 million, $525 million, $1.46 billion, $1.72 billion, $335 million and $2.1 billion, contributing 9%, 3%, 7%, 21%, 25%, 5% and 30% to total net sales, respectively.
Year over year, revenues in Taiwan and Southeast Asia grew 45.6% and 17.1%, respectively, while revenues in Japan, Europe, China, Korea and the United States declined 2.8%, 33.0%, 6.6%, 12.5% and 28.5%, respectively.
AMAT’s Margins in Detail
The non-GAAP gross margin was 49.1%, expanding 20 basis points year over year. Non-GAAP operating expenses were $1.34 billion, up 1.7% year over year.
The non-GAAP operating margin came in at 30.0%, down 60 basis points from the year-ago quarter.
Balance Sheet & Cash Flow of AMAT
As of Jan. 25, 2026, cash and cash equivalents plus short-term investments were $8.51 billion, compared with $8.57 billion at the end of the prior quarter. Long-term debt was $6.45 billion at the end of the first quarter of fiscal 2026.
Applied Materials generated non-GAAP free cash flow of $1.04 billion. The company returned $702 million to shareholders, including $337 million in share repurchases and $365 million in dividends for the quarter.
AMAT Initiates Q2 Guidance
For the fiscal second quarter of 2026, Applied Materials expects net sales of $7.65 billion (+/- $500 million). The Zacks Consensus Estimate for the second quarter of fiscal 2026 is pegged at $7.03 billion, indicating a year-over-year decline of 1%.
Semiconductor Systems, Applied Global Services, and Display (reported under Corporate & Other) sales are anticipated to be $5.80 billion, $1.60 billion, and $250 million, respectively.
Applied Materials expects a non-GAAP gross margin of approximately 49.3% and non-GAAP operating expenses of around $1.42 billion. It projects a non-GAAP tax rate of roughly 11%.
Management expects non-GAAP earnings per share of $2.64 (+/- $0.20). The Zacks Consensus Estimate for second-quarter fiscal 2026 is pegged at $2.29, indicating a year-over-year rise of 2.1%.
Zacks Rank
AMAT carries a Zacks Rank #2 (Buy) at present.
Upcoming Releases
MKS (MKSI - Free Report) sports a Zacks Rank #1 (Strong Buy). MKS shares have gained 133% in the past 12-month period. The company is scheduled to report its fourth-quarter 2025 results on Feb. 17, 2026. You can see the complete list of today’s Zacks #1 Rank stocks here.
Analog Devices (ADI - Free Report) carries a Zacks Rank #2 at present. Analog Devices shares have surged 64.3% in the trailing 12-month period. Analog Devices is set to report its earnings on Feb. 18, 2026.
Applied Optoelectronics (AAOI - Free Report) carries a Zacks Rank #2 at present. Applied Optoelectronics shares have surged 93.4% in the trailing 12-month period. Applied Optoelectronics is slated to report fourth-quarter 2025 results on Feb. 26.