Applied Materials, Inc. reported results for its first quarter ended January 25, 2026, highlighting strong performance driven by accelerating investments in AI computing and advanced semiconductor technologies.

Applied generated revenue of $7.01 billion in the quarter. On a GAAP basis, the company reported:

  • Gross margin of 49.0%
  • Operating income of $1.83 billion, representing 26.1% of net revenue
  • Earnings per share (EPS) of $2.54

On a non-GAAP basis, results included:

  • Gross margin of 49.1%
  • Operating income of $2.11 billion, or 30.0% of net revenue
  • EPS of $2.38

The company generated $1.69 billion in cash from operations and returned $702 million to shareholders, including $337 million in share repurchases and $365 million in dividends.

“Applied Materials delivered strong results in our fiscal first quarter, fueled by the acceleration of industry investments in AI computing,” said Gary Dickerson, President and CEO. “The need for higher performance and more energy-efficient chips is driving high growth rates for leading-edge logic, high-bandwidth memory and advanced packaging. These are areas where Applied is the process equipment leader, and we expect to grow our semiconductor equipment business over 20% this calendar year.”

Brice Hill, Senior Vice President and CFO, added that the company has nearly doubled its system manufacturing capability in recent years, strengthened its supply chain and increased inventories to support anticipated market growth.

Compared with Q1 FY2025, revenue declined 2% year-on-year to $7.01 billion, while gross margin improved slightly to 49.0%. GAAP net income rose 71% to $2.03 billion, with diluted EPS increasing 75% to $2.54.

On a non-GAAP basis, gross margin increased to 49.1%, operating margin was 30.0%, and diluted EPS remained flat at $2.38. Non-GAAP free cash flow rose 91% year-on-year to $1.04 billion.

During the quarter, Applied announced several strategic and technology milestones:

  • Samsung Electronics will join Applied’s new EPIC Center in Silicon Valley, aimed at accelerating commercialization of breakthrough semiconductor technologies.
  • Introduced new deposition, etch and materials modification systems to enhance energy-efficient performance of Gate-All-Around (GAA) transistors at 2nm and beyond, including:
    • Viva™, a radical treatment system to smooth GAA silicon nanosheets with atomic precision.
    • Sym3™ Z Magnum™, a conductor etch system enabling angstrom-level 3D trench profile control.
    • Spectral™, an atomic layer deposition system replacing tungsten contacts with molybdenum to reduce electrical resistance.
  • Received 2025 TSMC Excellent Performance Awards for technology development, production support and green manufacturing.
  • Recognized by Micron Technology with a 2025 Outstanding Performance in Sustainability Award.

Applied said demand for leading-edge logic, high-bandwidth memory and advanced packaging continues to strengthen, positioning the company to benefit from ongoing AI-driven semiconductor investment.

Original – Applied Materials