Applied Materials (NASDAQ: AMAT) reported record third-quarter fiscal 2025 results with $7.3 billion in revenue, up 8% year over year, and a non-GAAP gross margin of 48.9%. They achieved a record non-GAAP EPS of $2.48, up 17% year over year. The company expects sequential declines in revenue and non-GAAP EPS in Q4 due to reduced demand in China and non-linear orders but reaffirmed mid-single-digit full-year growth. AMAT highlighted strategic milestones in semiconductor and packaging technologies, showcasing market share gains in leading-edge and advanced memory segments. They anticipate near-term headwinds from China and leading-edge demand but remain optimistic about long-term growth.
In fiscal Q3, Applied Materials delivered record revenue and gross margin, driven by growth in Semiconductor Systems, Applied Global Services, and display segments. The company saw strong demand for equipment in foundry logic, DRAM, and NAND, leading to positive trends in core services revenue. AMAT secured wins in molybdenum deposition and reported record etch business revenue. They expect further growth in leading-edge DRAM revenue and market share, positioning themselves well for major technology transitions. Direct exposure to AI, advanced memory, and 3D packaging investments is driving outsized growth in their addressable market.
The company anticipates a $500 million sequential revenue decline in Q4 due to reduced demand in China and non-linear leading-edge demand. Uncertainties in China policy and customer delays in capital purchases contribute to low visibility in the short term. AMAT expects a display segment rebound with increased OLED adoption, offsetting some revenue declines. Management guides for Q4 revenue of $6.7 billion, semiconductor systems revenue of $4.7 billion, and Applied Global Services revenue of $1.6 billion, with mid-single-digit full-year revenue growth. Ongoing investments in U.S. manufacturing and R&D support long-term growth prospects for Applied Materials.
Read more at Nasdaq: Applied Materials Sets Revenue Record