FreeJune 16, 2026

Applied Materials Posts Record Q2 FY2026 Revenue of $7.91 Billion, Raises Semiconductor Equipment Growth Outlook

Applied Materials' second-quarter fiscal 2026 earnings release reports record revenue, expanding margins, and management's raised full-year semiconductor equipment growth forecast of more than 30 percent.

Sourced from the primary SEC filing. 8-K filed May 14, 2026 · SEC EDGAR ↗

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Summary

Applied Materials, Inc. (NASDAQ: AMAT) reported record second-quarter fiscal 2026 revenue of $7.91 billion, up 11 percent year over year, alongside record GAAP diluted EPS of $3.51 and record non-GAAP diluted EPS of $2.86. Management raised its outlook for the company's semiconductor equipment business, now expecting growth of more than 30 percent in calendar 2026. For the third fiscal quarter, the company guided total revenue of approximately $8.95 billion and non-GAAP diluted EPS of $3.36, each subject to a stated range of variation.

Key metrics

Total Revenue

7,910USD m

+11%Q2 FY2026

Record quarterly revenue as reported in the Q2 FY2026 earnings release.

GAAP Gross Margin

49.9%

+0.8 pointsQ2 FY2026

GAAP gross margin increased 0.8 percentage points year over year.

Non-GAAP Gross Margin

50.0%

+0.8 pointsQ2 FY2026

Non-GAAP gross margin excludes amortization of purchased intangibles from completed acquisitions.

GAAP Operating Income

2,523USD m

Q2 FY2026

Represents 31.9% of revenue on a GAAP basis.

GAAP Operating Margin

31.9%

+1.4 pointsQ2 FY2026

Non-GAAP Operating Income

2,536USD m

Q2 FY2026

Represents 32.1% of revenue on a non-GAAP basis.

Non-GAAP Operating Margin

32.1%

+1.4 pointsQ2 FY2026

GAAP Net Income

2,806USD m

+31%Q2 FY2026

Non-GAAP Net Income

2,286USD m

+18%Q2 FY2026

GAAP Diluted EPS

3.51USD

+33%Q2 FY2026

Described as a record GAAP diluted EPS figure in the filing.

Non-GAAP Diluted EPS

2.86USD

+20%Q2 FY2026

Described as a record non-GAAP diluted EPS figure in the filing.

Cash from Operations

845USD m

-46%Q2 FY2026

Compared to $1,571 million in Q2 FY2025.

Non-GAAP Free Cash Flow

210USD m

-80%Q2 FY2026

Calculated as cash from operations less capital expenditures.

Capital Expenditures

635USD m

Q2 FY2026

Increased from $510 million in Q2 FY2025.

Share Repurchases

400USD m

Q2 FY2026

Dividends Paid

365USD m

Q2 FY2026

Quarterly Cash Dividend per Share

0.53USD

Q2 FY2026

Increased 15% from $0.46 per share; marks nine consecutive years of dividend increases.

GAAP Effective Income Tax Rate

13.0%

Q2 FY2026

Non-GAAP Effective Income Tax Rate

11.0%

Q2 FY2026

Semiconductor Systems Revenue

5,965USD m

+10%Q2 FY2026

Compared to $5,401 million in Q2 FY2025.

Semiconductor Systems GAAP Gross Margin

54.7%

+1.2 pointsQ2 FY2026

Semiconductor Systems Non-GAAP Gross Margin

54.8%

+1.2 pointsQ2 FY2026

Semiconductor Systems GAAP Operating Income

2,092USD m

+18%Q2 FY2026

Semiconductor Systems GAAP Operating Margin

35.1%

+2.3 pointsQ2 FY2026

Semiconductor Systems Non-GAAP Operating Income

2,102USD m

Q2 FY2026

Semiconductor Systems Non-GAAP Operating Margin

35.2%

+2.2 pointsQ2 FY2026

Semiconductor Systems Foundry, Logic and Other Revenue Mix

67%

Q2 FY2026

Increased from 66% in Q2 FY2025.

Semiconductor Systems DRAM Revenue Mix

29%

Q2 FY2026

Increased from 27% in Q2 FY2025.

Semiconductor Systems Flash Memory Revenue Mix

Q2 FY2026

Decreased from 7% in Q2 FY2025.

Applied Global Services Revenue

1,665USD m

+17%Q2 FY2026

Compared to $1,420 million in Q2 FY2025.

Applied Global Services GAAP Gross Margin

34.7%

+1.2 pointsQ2 FY2026

Applied Global Services GAAP Operating Income

487USD m

+29%Q2 FY2026

Applied Global Services GAAP Operating Margin

29.2%

+2.6 pointsQ2 FY2026

Other Segment Revenue

280USD m

Q2 FY2026

Total Revenue (Six Months)

14,922USD m

+5%H1 FY2026

Compared to $14,266 million in H1 FY2025.

GAAP Net Income (Six Months)

4,832USD m

+45%H1 FY2026

Non-GAAP Diluted EPS (Six Months)

5.24USD

+10%H1 FY2026

Cash from Operations (Six Months)

2,531USD m

H1 FY2026

Non-GAAP Free Cash Flow (Six Months)

1,250USD m

-22%H1 FY2026

Cash and Cash Equivalents

6,301USD m

April 26, 2026

Down from $7,241 million at October 26, 2025.

Inventories

6,343USD m

April 26, 2026

Increased from $5,915 million at October 26, 2025.

Total Assets

40,286USD m

April 26, 2026

Total Stockholders' Equity

23,909USD m

April 26, 2026

Long-Term Debt

5,256USD m

April 26, 2026

Regular Full-Time Employees

36.4thousands

Q2 FY2026

Compared to 36.0 thousand in Q2 FY2025.

China Revenue

2,087USD m

Q2 FY2026

Represents 27% of total revenue, up from 25% in Q2 FY2025.

Taiwan Revenue

2,155USD m

Q2 FY2026

Represents 27% of total revenue.

Korea Revenue

1,572USD m

Q2 FY2026

Represents 20% of total revenue.

Q3 FY2026 Revenue Guidance

8,950USD m

Q3 FY2026

Management outlook with a range of +/- $500 million; attributed to company guidance, not an analyst recommendation.

Q3 FY2026 Non-GAAP Diluted EPS Guidance

3.36USD

Q3 FY2026

Management outlook with a range of +/- $0.20; attributed to company guidance, not an analyst recommendation.

Extracted from public filings. Figures are presented for educational purposes only.

What the Filing Says

Applied Materials, Inc. filed an 8-K on May 14, 2026, attaching Exhibit 99.1, its earnings press release for the second fiscal quarter ended April 26, 2026. The release reports financial results for that quarter and the first half of fiscal 2026, provides segment-level detail, discloses forward guidance for the third fiscal quarter, and describes recent strategic announcements including new EPIC Center partnerships and a pending acquisition.

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Headline Financial Results

The filing characterizes Q2 FY2026 as a record quarter on several measures. The table below summarizes the key reported figures.

| Metric | Q2 FY2026 | Q2 FY2025 | Change | |---|---|---|---| | Revenue | $7,910M | $7,100M | +11% | | GAAP Gross Margin | 49.9% | 49.1% | +0.8 pts | | GAAP Operating Margin | 31.9% | 30.5% | +1.4 pts | | GAAP Net Income | $2,806M | $2,137M | +31% | | GAAP Diluted EPS | $3.51 | $2.63 | +33% | | Non-GAAP Gross Margin | 50.0% | 49.2% | +0.8 pts | | Non-GAAP Operating Margin | 32.1% | 30.7% | +1.4 pts | | Non-GAAP Net Income | $2,286M | $1,940M | +18% | | Non-GAAP Diluted EPS | $2.86 | $2.39 | +20% | | Non-GAAP Free Cash Flow | $210M | $1,061M | -80% |

GAAP net income of $2,806 million was notably elevated relative to the non-GAAP figure of $2,286 million, primarily because of a large unrealized gain on strategic investments of $685 million that is excluded from the non-GAAP calculation. Readers should note this distinction when comparing the two measures: GAAP net income in a given period can diverge materially from non-GAAP net income depending on the magnitude of investment fair-value movements.

Non-GAAP free cash flow declined sharply to $210 million from $1,061 million in the prior-year quarter, reflecting both higher capital expenditures ($635 million versus $510 million) and a larger net change in working capital (operating assets and liabilities consumed $1,750 million in the quarter versus $723 million a year earlier).

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Segment Performance

Semiconductor Systems

The Semiconductor Systems segment, which the filing notes now includes the 200-millimeter equipment business relocated from Applied Global Services effective Q1 FY2026, generated revenue of $5,965 million in Q2 FY2026, up from $5,401 million a year earlier. Segment operating margin expanded to 35.1% (GAAP) and 35.2% (non-GAAP) from 32.8% and 33.0%, respectively.

Within the segment, the mix by end market shifted as follows:

| End Market | Q2 FY2026 | Q2 FY2025 | |---|---|---| | Foundry, Logic & Other | 67% | 66% | | DRAM | 29% | 27% | | Flash Memory | 4% | 7% |

DRAM's share of segment revenue increased two percentage points year over year, while Flash memory's share declined three percentage points, consistent with the filing's emphasis on DRAM and high-bandwidth memory (HBM) demand tied to AI infrastructure.

Applied Global Services (AGS)

AGS, which covers the company's installed-base services and spare parts business, reported revenue of $1,665 million, up from $1,420 million a year earlier. Operating margin expanded to 29.2% from 26.6%, with no difference between GAAP and non-GAAP results in this segment for the quarter.

Other (including Display)

The "Other" category, which includes the Display operating segment, reported revenue of $280 million (essentially flat versus $279 million), but recorded an operating loss of $56 million compared to operating income of $21 million in Q2 FY2025. The filing notes that corporate support costs are now fully allocated to operating segments following a reclassification effective Q1 FY2026, and that prior-period figures have been recast accordingly.

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Revenue by Geography

The filing provides a geographic breakdown of Q2 FY2026 revenue:

| Region | Q2 FY2026 | % of Total | Q2 FY2025 | % of Total | |---|---|---|---|---| | China | $2,087M | 27% | $1,774M | 25% | | Taiwan | $2,155M | 27% | $1,997M | 28% | | Korea | $1,572M | 20% | $1,562M | 22% | | United States | $941M | 12% | $808M | 11% | | Japan | $623M | 8% | $572M | 8% | | Europe | $347M | 4% | $252M | 4% | | Southeast Asia | $185M | 2% | $135M | 2% |

China represented the largest single-country revenue source at 27% of total revenue in Q2 FY2026, up from 25% a year earlier in absolute and percentage terms. Taiwan was effectively tied at 27%. The concentration of revenue in a small number of geographies, and specifically the continued significance of China, is a factor the company's forward-looking risk disclosures address explicitly (discussed below).

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Cash Flow and Balance Sheet

The company generated $845 million in cash from operations in Q2 FY2026, compared with $1,571 million in Q2 FY2025. The filing attributes the year-over-year decline largely to changes in operating assets and liabilities. Capital expenditures of $635 million resulted in non-GAAP free cash flow of $210 million for the quarter.

During the quarter, Applied distributed $765 million to shareholders: $400 million in share repurchases and $365 million in dividends. The company also announced a 15% increase in its quarterly cash dividend, from $0.46 to $0.53 per share, which the filing states marks nine consecutive years of dividend increases.

As of April 26, 2026, the balance sheet showed:

Cash and cash equivalents of $6,301 million (down from $7,241 million at October 26, 2025)
Short-term and long-term investments totaling $7,082 million
Total assets of $40,286 million
Total debt (short-term and long-term) of approximately $6,455 million
Total stockholders' equity of $23,909 million

Inventories grew to $6,343 million from $5,915 million at fiscal year-end October 2025, and accounts receivable increased to $6,372 million from $5,185 million. The CFO's quoted remarks in the filing acknowledge that management has intentionally increased build plans and inventory positions to support customer demand.

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Management Guidance for Q3 FY2026

The filing provides the following company-issued outlook for the third quarter of fiscal 2026 (quarter ending approximately July 2026):

| Metric | Q3 FY2026 Guidance | |---|---| | Total Revenue | $8,950M ± $500M | | Non-GAAP Diluted EPS | $3.36 ± $0.20 |

The non-GAAP EPS guidance excludes acquisition-related charges of $0.01 per share, includes a normalized tax benefit from share-based compensation of $0.01 per share, and includes a net income tax benefit related to intra-entity intangible asset transfers of $0.04 per share. The filing states the guidance does not reflect items unknown at the time of filing.

Management also raised its full-year outlook for the semiconductor equipment business, with CEO Gary Dickerson quoted as saying the company now expects the semiconductor equipment business to grow more than 30 percent in calendar 2026.

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Strategic and Product Highlights

The filing details several partnership and product announcements under the company's EPIC Center initiative, described as a facility designed to accelerate commercialization of semiconductor technologies:

TSMC: A new innovation partnership to co-develop semiconductor technologies for AI at Applied's EPIC Center in Silicon Valley.
SK hynix: A long-term collaboration agreement focused on next-generation DRAM and high-bandwidth memory (HBM), with engineers working at the EPIC Center.
Micron Technology: A joint development effort for next-generation DRAM, HBM, and NAND, combining Applied's EPIC Center capabilities with Micron's Boise facility.
Samsung Electronics: A previously announced EPIC Center partnership referenced in the context of new additions.
Universities: Arizona State University, Rensselaer Polytechnic Institute, and Stanford University announced as inaugural academic research partners.
Advantest Corporation: Joining as an innovation partner to connect front-end manufacturing and back-end chip testing.
ASMPT NEXX Acquisition: Applied entered into an agreement to acquire the NEXX business from ASMPT Limited, described as a supplier of large-area advanced packaging deposition equipment. The filing frames this as broadening Applied's panel-level advanced packaging portfolio.

On the product side, the filing highlights two new chip-making systems for Gate-All-Around (GAA) transistors: Precision™ Selective Nitride PECVD and Trillium™ ALD, both described as targeting atomic-scale precision in leading-edge logic manufacturing.

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GAAP vs. Non-GAAP: Key Reconciling Items

The filing provides detailed reconciliation tables. The largest single item causing GAAP and non-GAAP figures to diverge in Q2 FY2026 was an unrealized gain on strategic investments of $685 million, which increased GAAP net income but is excluded from non-GAAP net income. Readers should be aware that this line item can be highly variable quarter to quarter depending on market valuations of the company's investment portfolio.

For the first half of fiscal 2026, the non-GAAP figures also exclude a $253 million legal settlement charge recorded in Q1 FY2026 related to a settlement with the U.S. Commerce Department Bureau of Industry and Security over an export controls compliance matter, as well as $12 million in restructuring charges related to a workforce reduction plan announced in Q4 FY2025.

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Disclosed Risks

The filing's forward-looking statements section enumerates risks the company itself has identified. Among those disclosed:

Trade and export controls: The filing cites risks from changes in trade and export regulations, license requirements and their interpretation, tariffs, retaliatory measures, and the ability to obtain export licenses on a timely basis. Given that China represented 27% of revenue in Q2 FY2026, restrictions on equipment sales to Chinese customers represent a material risk factor, as the company has previously disclosed.
Geopolitical conditions: The filing references geopolitical turmoil or conflicts as a factor that could cause results to differ from forward-looking statements.
Customer concentration: The filing notes the concentrated nature of the customer base as a risk.
Supply chain: The CFO's remarks and the risk disclosures both reference Applied's ability to meet customer demand and suppliers' ability to meet Applied's own demand requirements, particularly given the increased build plan.
Cybersecurity: Cybersecurity incidents affecting Applied or its suppliers, customers, or vendors are listed as a risk.
Forecasting variability: The company acknowledges variability of operating expenses and results among products and segments, and the ability to accurately forecast future results.
Macroeconomic conditions: Interest rate changes and broader economic, political, and industry conditions are cited.

All forward-looking statements in the filing are based on management's estimates and projections as of the filing date, and the company states it assumes no obligation to update them.

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*This article is general commentary based solely on Applied Materials' publicly filed 8-K (Exhibit 99.1) dated May 14, 2026. Nothing herein constitutes investment advice or a recommendation to buy, sell, or hold any security. Silicon Signal is not a registered investment adviser.*

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