"AI Semiconductor Demand Drives Record Results"... Applied Q4 Revenue Tops $10.4 Billion

Record FY26 Results...Annual Revenue of $34.45 Billion
EPIC Center in Silicon Valley Expands Partnership Network to 15
Intel and Kioxia Strengthen R&D Alliances on Next-Generation Processes

Applied Materials (hereinafter, Applied) said on November 13 that it had achieved record results for both the fourth quarter and the full fiscal year 2026, which ended on October 25.

Applied's global revenue for the fourth quarter rose 53% year over year to $10.41 billion (about KRW 14 trillion). Its gross margin under generally accepted accounting principles (GAAP) was 50.4%, up 2.4 percentage points from the same period a year earlier. GAAP operating income reached a record $3.66 billion, with an operating margin of 35.1%. Earnings per share (EPS) rose 43% year over year to $3.40.

Non-GAAP gross margin came in at 50.6%, up 2.5 percentage points. Non-GAAP operating income was $3.68 billion, with an operating margin of 35.3%, while EPS surged 92% year over year to $4.16. The company generated a record $3.3 billion in cash from operations in the fourth quarter. It returned a total of $2.42 billion to shareholders, including $2 billion in share repurchases and $421 million in dividends.

GAAP is a set of standard accounting principles that companies are required to follow when preparing financial statements. Non-GAAP is a management metric that excludes one-time and non-recurring items, such as merger and acquisition costs, to show the ongoing performance of a company's core business.

Annual results also reached record highs across all business areas. Global revenue for fiscal year 2026 grew 21% year over year to $34.45 billion. GAAP gross margin was 50.0%, up 1.3 percentage points from the previous year. Operating income reached a record $11.09 billion, with an operating margin of 32.2%. EPS rose 46% year over year to $12.62.

Non-GAAP gross margin also increased 1.3 percentage points to 50.1%. Non-GAAP operating income was $11.42 billion, with an operating margin of 33.1%, while EPS rose 37% to $12.89. Cash from operations for the year totaled $8.87 billion. Based on this, the company returned a total of $4.75 billion to shareholders, including $3.18 billion in share repurchases and $1.57 billion in dividends.

Applied also announced progress in expanding its research and development (R&D) collaboration ecosystem. The company opened the EPIC Center in Silicon Valley, the world's largest collaborative R&D facility for semiconductor processes and equipment. It is an innovation hub where chipmakers, equipment partners and university researchers can work in one place to develop materials, equipment and process technologies simultaneously. With the addition of four new partnerships, the total number of collaborations has grown to 15.

Intel joined as a founding partner to accelerate the development of next-generation transistors, interconnects and advanced packaging. The partnership will build on the capabilities of Intel's R&D campus in Hillsboro, Oregon. Kioxia, as an innovation partner, will collaborate on high-density, next-generation memory cell structures and multi-chip stacking architectures. Besi is expanding the scope of its collaboration beyond hybrid bonding to next-generation interconnect architectures that support AI scaling. UCLA's Samueli School of Engineering joined as a research partner, focusing on addressing challenges in semiconductor materials and process integration and shortening time to commercialization.

Applied also launched new products and made a strategic equity investment. It introduced the VeritySEM 20, a next-generation critical-dimension scanning electron microscope metrology system. Combining advanced electron-beam metrology with AI-based process efficiency improvements, the system addresses challenges in measuring ultrathin photoresists and controlling patterning for high numerical aperture (High-NA) extreme ultraviolet (EUV) lithography. The company also entered into an accelerated share purchase agreement to increase its stake to approximately 20% of Besi's issued shares.

Gary Dickerson, chairman and chief executive officer (CEO) of Applied Materials, said, "We are on track to achieve our goal of growing our Semiconductor Systems business by more than 40% this year. Applied has built the broadest and most critical technology portfolio needed to advance the AI computing roadmap. This puts us in a strong position to deliver sustained revenue and earnings growth over the coming years."

This content was produced with the assistance of AI translation services.