On November 14, 2024, Applied Materials Inc (AMAT, Financial) released its 8-K filing detailing the financial results for the fourth quarter and fiscal year 2024. As the largest semiconductor wafer fabrication equipment manufacturer globally, Applied Materials holds a significant market share in deposition, serving major chipmakers like TSMC, Intel, and Samsung.
Quarterly and Annual Financial Highlights
Applied Materials reported a record quarterly revenue of $7.05 billion, surpassing the analyst estimate of $6.954 billion, marking a 5% increase year-over-year. However, the company's GAAP earnings per share (EPS) of $2.09 fell short of the estimated $2.17, reflecting a 12% decline from the previous year. On a non-GAAP basis, EPS was $2.32, a 9% increase year-over-year.
For the fiscal year 2024, the company achieved a record annual revenue of $27.18 billion, slightly above the estimated $27.116 billion, with a GAAP EPS of $8.61 and a non-GAAP EPS of $8.65, both showing growth compared to the previous year.
Performance Analysis and Challenges
The company's performance underscores its robust position in the semiconductor industry, driven by its leadership in materials engineering. However, the decline in GAAP EPS highlights challenges such as increased operating expenses and interest costs, which could impact profitability if not managed effectively.
Financial Achievements and Industry Impact
Applied Materials' financial achievements are significant in the semiconductor industry, where technological advancements and efficiency are critical. The company's ability to generate $2.58 billion in cash from operations and distribute $1.77 billion to shareholders, including $1.44 billion in share repurchases, demonstrates strong cash flow management and shareholder value creation.
Key Financial Metrics
Important metrics from the earnings report include a GAAP gross margin of 47.3% and a non-GAAP gross margin of 47.5%. Operating income reached a record $2.05 billion on a GAAP basis and $2.06 billion on a non-GAAP basis, reflecting the company's operational efficiency.
“Applied Materials’ technology leadership and strong execution drove record Q4 and fiscal 2024 performance, our fifth consecutive year of growth,” said Gary Dickerson, President and CEO.
Segment Performance
| Segment | Q4 FY2024 Revenue (in millions) | Q4 FY2023 Revenue (in millions) | FY2024 Revenue (in millions) | FY2023 Revenue (in millions) |
|---|---|---|---|---|
| Semiconductor Systems | $5,177 | $4,883 | $19,911 | $19,698 |
| Applied Global Services | $1,639 | $1,471 | $6,225 | $5,732 |
| Display | $211 | $298 | $885 | $868 |
Conclusion
Applied Materials Inc (AMAT, Financial) has demonstrated resilience and growth in a competitive industry, with record revenues and strategic financial management. While challenges remain, particularly in managing costs, the company's strong market position and technological leadership provide a solid foundation for future growth.
Explore the complete 8-K earnings release (here) from Applied Materials Inc for further details.
