Applied Materials (AMAT) · Semiconductors
Applied Materials Q2 FY2026 earnings: summary, key numbers & outlook
Results filed 14 May 2026 · Quarter ended 26 Apr 2026
Press release ↗Investor relations ↗
Summaries and transcripts are machine-generated and can contain errors.
In brief
Applied Materials reported record revenue of $7.91 billion, up 11 percent year over year, with record GAAP EPS of $3.51 and record non-GAAP EPS of $2.86.
Applied Materials posted record revenue of $7.91 billion in the second quarter of fiscal 2026, up 11 percent from a year ago. GAAP gross margin was 49.9 percent and non-GAAP gross margin was 50.0 percent. GAAP EPS was a record $3.51 and non-GAAP EPS was a record $2.86. Cash from operations was $845 million, and the company returned $765 million to shareholders through buybacks and dividends.
For the third quarter, management expects revenue of $8,950 million, plus or minus $500 million, and non-GAAP EPS of $3.36, plus or minus $0.20. It now expects its semiconductor equipment business to grow more than 30 percent in calendar 2026, driven by AI. The tension is execution: non-GAAP free cash flow fell to $210 million from $1,061 million as inventory and capital spending rose to meet demand.
Key numbers
- Revenue · GAAP
- $7.91 billion
- Net income · GAAP
- $2.8B
- Diluted EPS · GAAP
- $3.51
- Non-GAAP diluted EPS · non-GAAP
- $2.86
- GAAP gross margin · GAAP
- 49.9 percent
- Non-GAAP gross margin · non-GAAP
- 50.0 percent
- GAAP operating income · GAAP
- $2.52 billion
- GAAP operating margin · GAAP
- 31.9 percent
up 11 percent year over year
up 31% from $2,137 a year ago
up 33 percent year over year
up 20 percent year over year
up 0.8 points from 49.1% a year ago
up 0.8 points from 49.2% a year ago
up 1.4 points from 30.5% a year ago
| Segment or metric | Value | Change |
|---|---|---|
| Semiconductor Systems revenue | $6.0B | vs $5,401 in Q2 FY2025 |
| Applied Global Services revenue | $1.7B | vs $1,420 in Q2 FY2025 |
| Other (including Display) revenue | $280.0M | vs $279 in Q2 FY2025 |
| Semiconductor Systems operating margin | 35.1% | vs 32.8% in Q2 FY2025 |
| Applied Global Services operating margin | 29.2% | vs 26.6% in Q2 FY2025 |
| Semiconductor Systems DRAM share of revenue | 29% | vs 27% in Q2 FY2025 |
Where each number comes from
- Revenue: “Applied generated record revenue of $7.91 billion. On a GAAP basis, the company reported gross margin of 49.9 percent, operating income of $2.52 billion or 31.9 percent of revenue”
- Net income: “Operating margin | 31.9% | 30.5% | 1.4 points Net income | $2,806 | $2,137 | 31% Diluted earnings per share | $3.51 | $2.63 | 33%”
- Diluted EPS: “Record revenue $7.91 billion, up 11 percent year over year •GAAP gross margin 49.9 percent and non-GAAP gross margin 50.0 percent •Record GAAP EPS $3.51”
- Non-GAAP diluted EPS: “Record GAAP EPS $3.51 and record non-GAAP EPS $2.86, up 33 percent and 20 percent year over year, respectively”
- GAAP gross margin: “Applied generated record revenue of $7.91 billion. On a GAAP basis, the company reported gross margin of 49.9 percent, operating income of $2.52 billion or 31.9 percent of revenue”
- Non-GAAP gross margin: “On a non-GAAP basis, the company reported gross margin of 50.0 percent, operating income of $2.54 billion or 32.1 percent of revenue, and record EPS of $2.86.”
- GAAP operating income: “Applied generated record revenue of $7.91 billion. On a GAAP basis, the company reported gross margin of 49.9 percent, operating income of $2.52 billion or 31.9 percent of revenue”
- GAAP operating margin: “Applied generated record revenue of $7.91 billion. On a GAAP basis, the company reported gross margin of 49.9 percent, operating income of $2.52 billion or 31.9 percent of revenue”
- Semiconductor Systems revenue: “Semiconductor Systems | Q2 FY2026 | Q2 FY2025 (in millions, except percentages) Revenue | $5,965 | $5,401 Foundry, logic and other | 67% | 66%”
- Applied Global Services revenue: “Applied Global Services | Q2 FY2026 | Q2 FY2025 (in millions, except percentages) Revenue | $1,665 | $1,420 Gross margin | 34.7% | 33.5%”
- Other (including Display) revenue: “Other | Q2 FY2026 | Q2 FY2025 (in millions) Revenue | $280 | $279 Cost of products sold and expenses | (336) | (258)”
- Semiconductor Systems operating margin: “Gross margin | 54.7% | 53.5% Operating income | $2,092 | $1,770 Operating margin | 35.1% | 32.8% Non-GAAP Results Non-GAAP gross margin | 54.8% | 53.6%”
- Applied Global Services operating margin: “Gross margin | 34.7% | 33.5% Operating income | $487 | $378 Operating margin | 29.2% | 26.6% Non-GAAP Results Non-GAAP gross margin | 34.7% | 33.5%”
- Semiconductor Systems DRAM share of revenue: “Revenue | $5,965 | $5,401 Foundry, logic and other | 67% | 66% DRAM | 29% | 27% Flash memory | 4% | 7% Gross margin | 54.7% | 53.5%”
Copied from the press release ↗ and other documents in the SEC filing ↗. A figure is published only if its sentence is in the filing.
| From the filing | Q2 FY2026 | vs year ago | vs last quarter |
|---|---|---|---|
| Revenue | $7.9B | +11.4% | +12.8% |
| Operating income | $2.5B | +16.3% | +37.8% |
| Net income | $2.8B | +31.3% | +38.5% |
| Diluted EPS | $3.51 | +33.5% | +38.2% |
| Free cash flow | $210.0M | −80.2% | −79.8% |
| Gross margin | 49.9% | +0.8 pts | +0.9 pts |
| Operating margin | 31.9% | +1.4 pts | +5.8 pts |
Calculated by code from XBRL, not by the model.
Outlook
| Metric | Period | Outlook |
|---|---|---|
| Total revenue | third quarter of fiscal 2026 | $8,950 |
| Non-GAAP diluted EPS | third quarter of fiscal 2026 | $3.36 |
| Semiconductor equipment business growth | calendar 2026 | more than 30 percent |
Key takeaways
Record revenue and EPS on AI demand
Revenue reached $7.91 billion, up 11 percent year over year, with record GAAP EPS of $3.51 and record non-GAAP EPS of $2.86.
Margins expanded across the company
Non-GAAP gross margin was 50.0 percent versus 49.2% a year ago, and non-GAAP operating margin was 32.1 percent versus 30.7%.
Management lifted calendar 2026 equipment outlook
The CEO said the semiconductor equipment business is now expected to grow more than 30 percent in calendar 2026, citing the build-out of AI computing infrastructure.
Third-quarter guidance implies sequential growth
Applied guided to revenue of $8,950 million, plus or minus $500 million, and non-GAAP EPS of $3.36, plus or minus $0.20, against $7,910 million of revenue this quarter.
Free cash flow fell as spending rose
Non-GAAP free cash flow was $210 million versus $1,061 million a year ago, as operating cash flow was $845 million and capital expenditures were $635 million.
Charts
Fourth quarter worked out from the annual figure.
Data
| Q4 FY24 | $7.0B * |
| Q1 FY25 | $7.2B |
| Q2 FY25 | $7.1B |
| Q3 FY25 | $7.3B |
| Q4 FY25 | $6.8B * |
| Q1 FY26 | $7.0B |
| Q2 FY26 | $7.9B |
| Q3 FY26 | $9.1B |
Data
| Q1 FY25 | $1.45 |
| Q2 FY25 | $2.63 |
| Q3 FY25 | $2.22 |
| Q1 FY26 | $2.54 |
| Q2 FY26 | $3.51 |
| Q3 FY26 | $3.17 |
Fourth-quarter EPS appears once the press release is read; filings report it only for the full year.
Data
| Q4 FY24 | 29.0% |
| Q1 FY25 | 30.4% |
| Q2 FY25 | 30.5% |
| Q3 FY25 | 30.6% |
| Q4 FY25 | 25.2% |
| Q1 FY26 | 26.1% |
| Q2 FY26 | 31.9% |
| Q3 FY26 | 33.7% |
Data
| Q4 FY24 | $2.2B |
| Q1 FY25 | $544.0M |
| Q2 FY25 | $1.1B |
| Q3 FY25 | $2.0B |
| Q4 FY25 | $2.0B |
| Q1 FY26 | $1.0B |
| Q2 FY26 | $210.0M |
| Q3 FY26 | $2.3B |
Operating cash flow minus capital expenditure, from cash flow statements.
Questions
What were Applied Materials' main results for Q2 fiscal 2026?
Revenue was a record $7.91 billion, up 11 percent year over year. GAAP EPS was $3.51 and non-GAAP EPS was $2.86, both records.
What is Applied Materials guiding for the third quarter of fiscal 2026?
Management expects total revenue of $8,950 million, plus or minus $500 million, and non-GAAP diluted EPS of $3.36, plus or minus $0.20.
How did profitability change from a year ago?
GAAP gross margin rose to 49.9% from 49.1%, and non-GAAP operating margin rose to 32.1% from 30.7%. Both gains were 0.8 and 1.4 points respectively.
How did the segments perform?
Semiconductor Systems revenue was $5,965 million at a 35.1% operating margin, and Applied Global Services revenue was $1,665 million at 29.2%. Other, which includes Display, had an operating loss of $56 million.
What happened to cash flow and shareholder returns?
Cash from operations was $845 million and non-GAAP free cash flow was $210 million, down from $1,061 million a year ago. Applied returned $765 million to shareholders and raised its quarterly dividend 15 percent to $0.53 per share.
Documents
SEC filing