AMAT - Earnings call transcript Q1 2025

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Operator

Welcome to the Applied Materials First Quarter Fiscal 2025 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Liz Morali, Vice President of Investor Relations. Liz, you may begin.

Liz Morali

Thank you. you us thank today's and afternoon, for for joining call. Good President today and are me and Gary With Dickerson, CEO; CFO. Brice Hill,

recent Before predictions, mentioned Actual estimates, results you in remind or other statements of let differ future a concerning discussion projections federal discussed continue, to events. about the statements including forward-looking meaning as within do result materially XX-K most these that in and laws, forward-looking and We securities may Information statements contains the of we filings today's these uncertainties. me update X-K from those is risks uncertainties our SEC. statements. with Form and risks any the forward-looking intend not

GAAP press results today's on to found in call, are and materials, website release be at non-GAAP ir.appliedmaterials.com. non-GAAP today's During will of also can earnings we our Investor Relations available reference which quarterly in our earnings Reconciliations financial measures.

over will call I turn now the to Gary.

Gary Dickerson

first XXXX, reshaping semiconductors, the we secular are Liz. The the long-term trends set technology fiscal high especially for Thanks, possible Materials. and by major Applied made quarter industry last prior growth delivered our Applied record global for the of underpinning In quarter. passing revenues advanced Materials economy

races come. technology faster than lower I'll ever AI, and market my We are is important high-velocity I'll us the latest technology to why inflections at are industry solutions road in talk prepared co-innovation are innovations for outperformance that critical to our the our and connected map, and remarks, how share to insight, advancing continued to a energy-efficient providing major In our enabling cost. to customers architecture years next-generation unique device the more consumers positioning bring as about of I'll portfolio accelerate the describe growth and

Early across AI for transformative market, our outlook. the growth to global major on sector. by of innovation XXXX, XX% lifetimes change growth remains is approximately catalyst most trillion of market of technology technology remains to almost XXXX. the infinite the and uses, a and of revenues track possible central year-on-year $X AI in sales with our With the Starting deployment semiconductor exceed supported AI and annual

only are energy we ahead, And AI and disruptive opening cost innovations look improve expect we what's of significantly as the possible. to We overall efficiency and the applications up beginning opportunity. market at the of growing new

potential, the technology and unlock stack, the required To DeepSeek dramatic weeks seen we've recent Advancements made. cost those data design AI the system foundational are architecture, to will is energy across software semiconductor data technologies in on have reduction and chips models in from chip in center a center. innovation as with and how level impact

power is connect I've high-bandwidth in to an HBM integrated to previously X package. or focusing on: losses. stacking also as Leading-edge a as we the and consumption currently chips to significantly data seeing data memory well critical described DRAM as DRAM, energy logic There's can electronics. the referred areas high-performance data packaging as advanced reduce and power center memory logic, the within transfer in innovations industry together are These major innovations fifth center address grid emerging

increase relative to inflections available FinFET power first most Applied and devices market the of silicon generation integrated grows transition best the device our power XX% from provide next-generation semiconductor advanced market we're architecture backside billion photonics. foundry month per squared memory entering and XD future of around for for architecture for equipment compute advanced has in delivery, at an for compound transistors, nodes logic, inflections power fab of starts the these technologies the to in power packaging, delivery leadership These strong materials capacity. gate-all-around every mix packaging than XXX,XXX of share. positioned and $XX wafer wafer Applied gate-all-around to and logic as and gain device total all including leading-edge opportunities grow and market Taking backside the by example, areas, more DRAM, with XF electronics

time, to grow equivalent for capacity. the revenues in expect the related At the we applied range same fab XX% wafer

incremental we While ability of inflections aggregate of seeing market packaging advanced XXXX, the is spending of service new the million and ICAPS of revenue. to the half business. positive of limited are China serve a ahead we been be is updated we fiscal in for revenue is market impact We which logic, of of bulk announced DRAM and foundry the companies further January. leading-edge will December across markets these in China. XXXX, outside these rules constrained has us, The already U.S. In rules our on in the impact and estimate by believe $XXX trade around outperformed approximately

fab see wafer global a We also China spending portion being equipment of smaller XXXX. in

for technologies logic, At across is IQOS. the our leading-edge develop and Applied advanced packaging the Materials, commercialize and enabling memory, strategy industry most to

We high-growth have these inflections us create allow capture investments to and our value. that focused on more

strategy of of of provide ways broad connected unique capabilities, and technologies, solutions partnerships. our and we are our implementing portfolio that customers to One is the our take advantage

A technologies, partner Our example innovated a customers that integrated module system. hybrid solution co-optimized single including a interconnect higher-value and X into for one device combines from integrated to address and is are solutions for replicate. bonding difficult good competitors challenges our

the customers. milestones In successfully quarter, past orders and completed received from leading-edge we multiple qualification volume important

half over the market hybrid on double track next-generation is solutions our extend one of business that to next revenues packaging. of Our XXXX, advanced to our serve, leadership in allowing is the remain more packaging we we our several years. system us our In and integrated bonding captured than

mutual believe higher customers success driving efficiencies. of and we are technology R&D By chip tighter is pillar strategy speeding high co-innovation. up at for and this faster is cost. rates next-generation through of our cycles key velocity We new lower Another bring our ecosystem to market learning key optimizing and Applied accelerating to architectures, collaborations,

we We were the we part launched Among Act summit strategy than at together packaging our teams to accomplishments Advanced companies. global R&D packaging more technical CHIPS a XD representing integration. in develop EPIC of quarter, our grants X leaders XX that for hosted received substrates advanced brought that Singapore in past

of Silicon to independent platform, into online track company. EPIC with is We investment Valley, the that will team with progress an substrates, construction the in transition XXXX the we battery for are partnership in in collaboration of core Center come and silicon long-term made the on grant a centerpiece which and business company We significant have and won global we the become leading TPG partnered and Thin-Film our glass packaging. for Applied to the EPIC

and We're customers model their they also our in are where into collaborative helping business technology as evolving we high-volume complexity manufacturing. services manage next-generation ramp increasing

including yield, in service advanced or to output our data help actionable cost insight our and AIX, deploying optimize Accelerator customers' and R&D accelerate device times platform transfer are We their technology performance, programs, products, reduce fabs.

these relationships, of in Through subscriptions our multiyear the generated of percentage working a closer is agreements. high form service revenues from

growth the service impacted still grow confident negatively we is over near-term double-digit by a growth term. remain restrictions, trade AGS rate that annualized low longer our While at we will

to Before Brice, I'll summarize. I quickly over hand

term. to reshape global economy industry, deliver the near major in in continues trends the As strong Applied semiconductor financial performance technology the

co-innovation AI, breakthrough areas device and architecture on to that bring at and ever high are are velocity our than market market best partners the with focused fast-growing inflections to positioned we are to faster before. in We customers major energy-efficient technology of critical

Brice?

Brice Hill

margin per and and for with meaningful fiscal the thank healthy to a us year-over-year had Gary, growth year, We you joining share. strong revenue Thanks, earnings everyone XX% increase drive expansion non-GAAP a call. today's start in to helped

addition, $X.X In billion to we repurchases of dividends. million shareholders with share $XXX $X.X of and distributed billion

net approximately with billion, growth $X.X QX, fiscal in our year-over-year results Semiconductor and Global up of our line Services. X% with sales For largely in both Systems were expectations, Applied total with

and basis our increasing XXXX. was fiscal of was XX.X%, advanced margin performance quarterly the and leading-edge a strong gross mix of highest integrated since XXX very The our Non-GAAP technologies year favorable up QX adoption gross and margin in year-over-year systems. margin result points

operating a year-over-year were the our growth, and billion, In growth $X.XX, share our progressed increased EPS XX% pricing reductions. better support record investments initiatives $X.XX given repurchases. with R&D Non-GAAP technology revenue areas. Non-GAAP expenses and addition, on profitability was to up we cost value-based

year-over-year, decline operating in expected across Moving the Semiconductor were and billion Non-GAAP QX, margin which Sales X% as $X.XX automotive, up flat XX.X% repeat. power communications, an not down growth markets, for points sales sales XX% and by in by IoT, year to driven did Systems quarter-over-quarter. year-over-year were for in customers the basis sensor DRAM sales segments. China offset partially up ICAP XXX the year-over-year. slightly serve of customers prior nodes, logic, foundry to was

year-over-year down X% basis Moving in delivered XXX-millimeter operating revenue in to in equipment. a by Applied with partially growth of billion XX year-over-year. up AGS offset services, of decline of margin QX, healthy $X.XX XX% was sales Non-GAAP Services. points Global

Lastly, revenue our display of business $XXX million. delivered

and the from $XXX Cash the were cash billion quarter, share free to to including shareholders the in operations $XXX and the and was cash in billion $X.X cash cash expenditures We billion. $X.X in was repurchases of flows. sheet Moving million. $XXX and million, quarter equivalents Capital million. in ended with distributed debt We billion and flow balance $X.X million dividends. of quarter $XXX $X.X

our share end $X.X available quarter, the under of the approximately As of remains authorization. billion repurchase

Turning to our outlook.

demand, positioned momentum tough nodes from as leading-edge year-over-year 'XX. the manufacturing. that in nodes, technology of In where customers leading repeat investment strong ICAP and logic in for strong XXXX the We is edge in are do the faced healthy spending all well our measured are Offsetting ramp the transistors foundry level gate compares advanced particularly but this year. we around are 'XX into high-volume most we Chinese seeing DRAM, customers given seeing not following purchases more

in also historically seeing growth levels. low NAND, are from albeit We

January, certain result that in As to we fiscal and the in Gary revenue of expect return December to step QX, the half the growth revenue would a the and approximately to more second million The no down be announced And AGS in AGS. we in to anticipate year following $XXX export XXXX. will Nearly QX a are of impact mentioned, QX. of in able longer to a will half impacts as we as headwind in fiscal weighted of for controls in serve customers. expanded be face

of or increase all represents year-over-year. into QX, of million, in XX%. percentage is of we trade This level view these be as points below lower that total fiscal of and plus total or year-over-year expect our for of which revenue business, account, billion, a which approximately and plus XX% $XXX on of X% the Based expect EPS percentage about non-GAAP a our $X.X normalized X minus represents revenue increase a minus for $X.XX these Taking China QX. will factors we QX, restrictions than $X.XX,

semiconductor expect revenue billion, approximately display We up $X.XX approximately $XXX million. revenue of year-over-year; billion, up $X.X AGS systems of year-over-year approximately X% and X% revenue

be We XX.X% expect gross operating to non-GAAP non-GAAP margin approximately and billion. $X.X approximately of expenses

of are modeling XX%. a rate We approximately tax

closing, is opportunities growth business In and our remain segments. business we confident all our of in strong, our across

edge, the making we relationships, trajectory our is technology indicator growth customers. of we years. insights growth significant in over the our at This our leader R&D the semiconductor unique is to investments investments And confidence are from have the of with to and that the coming poised co-innovation our the high-velocity transitions our share grow industry to be differentiated and We business. expected in benefit deep important with are technology, capital we are increasing leading in and an

Liz, ready we're begin now Q&A. to the

Liz Morali

on To call, limit help reach Brice. question. yourself one we can many today's as Thanks, people as to please us

have and do to an back come to later you we'll our requeue please If you additional in question, the session. best

Operator

of comes line our the first Sachs. question And from Instructions] Toshiya [Operator from Goldman Hari

Toshiya Hari

but of or focused bit Gary helpful. drivers a speak the thinking know key guys your level, view? of really haven't are context how year. can achieved 'XX, provide was you numbers, outperformance magnitude Brice, comments, And importantly, high WFE I to you you vis-a-vis XXXX geography, should a relative giving what in the And I you're on be hoping outperformance likely market, you how you gave application, be if on? some shape in and/or at by of about to of your specific to the could by we a what aren't couple been up know the I little that more is would but

Brice Hill

from you. nice hear Toshiya, to Okay.

the market So first, gives how indication we'd our QX guide a of good think evolving. really that we say is

edge you the leading factors HBM in with see So into we the market today. DRAM, AI see pulling all logic strength that what advanced in that and

the year, the the will QX. watching that also it couple lower the is we've course So build thinking been market out growing accelerating of after leading edge through in significant in in we the we that do years been We've strongly last and is that China, be ICAPS growing. And and of highlighted see QX.

things offset, in in we consistent the but total market. So still those overall that have see year-over-year you growth

that's market So perspective. from the big a change

the slight look from some at is flat but of reduction roughly quarter-over-quarter. If level. NAND memory a side, memory smaller a you and growing, our course, the NAND additions We is by on offset DRAM. that's that's side, in see

at HBM And a the we year equipment the HBM share adding thing And into capacity capacity. I still that of adds into initial is had slower last burst about amount last of think in market, packaging, a you we're would significant side when it's selling rate. the advanced still but for

So that's outlook of also. part the

And advanced best there any been ICAPS, indication all what investment QX. at is you think what ramp thing is this and try logic we're rate we've is how we if our would to can of to what that's do key today, -- point. the the and our slower that's in year we're best waiting seeing we strongly in share think see enough about and to So that seeing offset

Gary Dickerson

outperformance question. Yes, to Toshiya, the relative

with to When packaging inflections Over year, a of on computing. our the last foundry memory, of logic, leading-edge they're meeting high-bandwidth markets we energy-efficient we're X in been this and architecture outperformed China. We're talking where device across advanced customers, focused. all that's years, all we've about including And lot. outside DRAM, last focused major critical ICAPS AI aggregate

XD on XX gain logic. XF points share of gate foundry and to us, in capture as DRAM track for served our we're around We adopted. share are in of we're than and architectures to So power greater XX% positioned market share, squared all and gained DRAM backside

the as up ICAPS, in new years. X group to In several business XXXX, points Packaging double gained we since X was in around We coming said ago. to $X.X we this Xx the products several times, in years positioned billion many And we've brought we're share market. of years. formed

segment Applied available strong that grow in in chip a pipeline will architectures. clear products new of leadership this and us and is well where engineering have next-generation position market We increasing has materials our intensity

and these positioned outperform last the outperforming positioned all inflections. going forward, So going forward. I win segments we're been like of well Again, to to major we're these how to in over we've continue X years,

Operator

And Citi. our Malik comes line question from the next Atif of from

Atif Malik

impact. a Brice, I appreciate in they bit the to the growth color see? quarter and on the April to Can quarter. The the about explained growth we'll have silicon systems China on little also systems. or sequential comment to return the wait silicon down talking you July AGS. Do you're And return the by in

Brice Hill

Thanks, Yes. Atif.

power say be that QX. and for edge in significant sharing that. nodes those to expect all of the that, in wait that, semiconductor the the we that to architectures, and leading is of where been watching the I nodes put place a see what But is But just the evolve. have accelerate. leading-edge we'll what we've market you and the And good backside market amount gate in will going. capacity those we nodes. of I'll indication expect you expecting highlighted around to advantages to for the And been we be that ICAPS about a market And think is think and on we're systems. When continues then offset on we've in the see

ICAPS for every Our quarter. change single forecast for and seems China to ICAPS

year. through And so rest evolves the we'll of see how the that

yes, have see new rules. can from utilized double-digit customers. similar by back, QX, expect in types more the We'll step there as when we you locations is make but And the add guide new this services. were rate the there our business, to business services to and as customers continue low trade XXXX the the will likely at new a services of new add on then we to customers, in be And grow will it

Operator

comes Research. Rasgon our And of Bernstein from Stacy question from next line the

Stacy Rasgon

second will weighted AGS, QX. in impact You said half in be China also to to AGS but you the growth returns said the

second so? were add year? So impact like by million the the that I I still in how if would do issue this China just is million What's to the like hit you square half? $XXX China the the broadly, getting And if sanctions, that digits that offsetting $XXX back in, grow AGS added it

Brice Hill

Stacy, the That's Yes. you, a question. Thank for question. good

side, be taken AGS But and following to impact the then support In to other we same whatever way the a in continued line about a QX, it think words, half quarters. be it of will item. business can't don't the less and it on or business QX. QX, in impact So in will the we is, in the sequential be reconciling approximately expect QX that's

there base but QX, low and about at begin modeling continue described a grow million then to or add it I AGS is shouldn't higher. if and you rate installed perspective. from the we're support. there QX the tools would just take double perspective, from So we'll that to we is say do out, And double an absolutely what calculation. didn't I impact a low from digits you we worry and at growing I as We'll add $XXX in think to digits guess we've core

Operator

Muse from question And line from of Fitzgerald. comes Cantor our C.J. the next

Christopher Muse

you I margins. a was bit could hoping speak to gross

of gross helpful. quarter. model be kind you of of for hear evolving kind come calendar we half, flowing of second mix would value-based that, rate modeling starting 'XX. how 'XX be I the the exit either first of about or very that how about to calendar would more to And through margin, guess pricing in, all in I You January throughout thinking half see love talked in part should about terms as

Brice Hill

Okay. Thank from you, you. C.J. Good hear to

strong guide both mix reiterate the rate. gross going quarters, to still We're for QX, So and in very our strength. in in underlying obviously, margin, XX.X% mix it's XX% with little QX, on impacts a China our lesser bit XX.X% the

we still with think that's our rate. don't So -- for those ultra-strong we normalized have ballpark mix, about the when with quarters

we're that the or year exact we the unless So that closer to which in sorry, about think the half baseline XX% year, for expect, not where I maintain our second for think don't as you of rate guide same is for business giving a but the margin gross underlying likely think normally. we the the we will not that to year, be mix is --

then you developing solutions with we're about toward valuable think pricing. the the One, customers. I two if for And that the pointed the those that think pricing, are has Gary the solutions increasingly of dynamics company inflections,

an with discussions so the infrastructure disciplined a pricing And including the then mechanism we're value there's equipment that proposition thinking And respect in increasing for have have make to with to And also we pricing. customers. that itself. our to sure our is those

of So think we're we the to what do. as to that areas we in the execution value in which course, is we most matter that our think And market. it's of R&D, are a valuable allocating the marketplace, we're, allocate achieve to trying

think inning and process I -- last quarter for those accurate. on on I said the So third that's still pricing,

Operator

comes line of question from next the from Vivek Arya Bank of our America. And

Vivek Arya

grown views. industry takes overall or and if with semiconductor intensity H&F mid-teens. take faster for the Or both you etcher And think Gary, intensity. It stays If sides, would you Lite means next over I've share? in think, heard several actually than that do say, related industry appreciate had debt line sales conceptual to let's on around WFE semiconductor grow slower has WFE sales? overall I versus longer-term Gary more years. your but will happens, share a question arguments do more

Gary Dickerson

for the question. thanks Vivek,

and if backside and XX% size. power major have forward, So achieve if area we're customers I change really power, at our to in benefit the beyond scaling performance around inflections being focused able talked you at foundry power, look look that leading-edge no benefits on GATR going in about feature with all logic, backlog

foundry not In what customers at also architecture. seeing our in we're DRAM, that think that's if as in we look implement about XF they going about forward. basically savings what area you that And and logic, they of significant talked new have So squared, continues then talk these XD course, the you more but goes when the a again, well engineering we're materials, And versus impact up get incredibly same DRAM, for of materials all significantly lithography. things, similar relative DRAM XD spending to positioned. is where for similar,

we're tremendous X years connected from is that like area or way to the when another focused is going the X there's to be servers in course, materials the innovation. are And the we architectures, be on is at focused of very packaging. look AI entire then, And going just now, advanced what architectures look data and on And different. those around the innovation industry

around materials look is across of We percentage the forward different about our master of inflections. talked course, markets, be when to going all all I assets. materials these different We've these of really and So ICAPS innovations. through see increasing in engineering architecture any of relative driven before spending this

Operator

next the Securities. our Timothy of Arcuri UBS line from from comes And question

Timothy Arcuri

at the that us from X% sort WFE. Brice, points It's so think assess, these headwind of from now measure past how XXX I there? year-to-year. great WFE the in so WFE share question. of share? is like X about headwind because kind You've rev from and for to job you and China you the you as makes Gary, all incremental last hard done think have that to holding laid it to spending that's up X a gaining you That's China? but But then number first sort of know think And a rec, they But much give do basis think of -- year, they're do years, do how share. about of over you're on you do I you look companies Because gained the it

Brice Hill

Tim. from to Nice hear Okay, you.

there. all in yet final -- gained share measures 'XX, But about in think script, heard except On course, you he of in Gary's we the terms -- we've the of likely we don't China. markets, for talked the know in

that have all once in. So to what reading numbers we'll is are just see the share

positioned perspective. we been the have compete. from in local in about way put the just, And the trade we advantages that feel It's have with feel well even rules Chinese place. China, good vendors So we that yes, some

China, on largest think Applied. the device but headwinds And then for lower and market. I our level, we over largest market is market, huge we have think time add and And ICAPS to to do the for visibility, grow high the to digits. that's mid- a we ICAPS customers, It's continue we expect single that at

As in of couple you ahead know, of years the equipment last investments the have been market.

it some period of we've time. So to expected moderate for

that see how us, that of the markets most continues be So for for out. the plays one to important we'll company. But

Gary Dickerson

a just leading really that area position. double for I again, business. going very we logic, it's positioned and bit where share. where And one another XD we're the positioned XF DRAM, is future. up for we're that really high-bandwidth anticipate we points a those And we'll would inflections. in incredibly will into talked that just years, well inflections. earlier. another about add, Tim, this well memory. Xx have squared of Leading-edge those for again, and I well we've foundry then strong positioned and And gained little again, And That's all DRAM, X keep advanced XX packaging

about innovations. we total will to this expand pipeline our and in new formed have new products ICAPS And segments. etch, we In momentum ICAPS, the market. XX brought earlier we market. Again, in of X PDC those available talked products we group room we years have the grow ago, have and And I that in pipeline to

to competitive device co-innovating cost enable products and leading new have architectures We that ICAPS have innovations applications, for with new customers. we

So where areas our as the can our pipeline we and in feel really going Brice good forward. said, positions compete, about I

Operator

of comes from Sur from JPMorgan. Our the question next line Harlan

Harlan Sur

second track And of since of team both could customers, starts, accelerating semiconductor relative their fabless accelerated mobile. end half AI, potential talking IDMs be the like We the super to at node customers industry, is on be production X-nanometer your last and design year, team getting -- areas your sense many transition? compute Is the especially in especially design the X-nanometer and big the starts retracting in how volume importantly, a upcoming X-nanometer? to in with more

Brice Hill

on on I we're of large this. Based Harlan, I've be various the a that Gary benefits think node. might also to seen expecting estimates to add performance for X-nanometer. X-nanometer,

If should you be at good landing estimates, like the was of for for look a good X-nanometer the that landing past third-party spot some a designs. in just spot

expecting it be perspective. side from a So we're the node on large to

Gary Dickerson

And is that for I look node. the would Harlan, just focused saying, that are everybody on add what very computing bullish Yes, energy-efficient they're you about AI. if of at customers our X-nanometer size

Operator

Krish question line of Sankar next Cowen. Our from from comes TD the

Sreekrishnan Sankarnarayanan

like the of stack of TAM there. But Gary, seems and epi question the EPI some You've I had share XX% one critical seems competitor strides. is to a on around the ones, it making spoken your about more over getting be incremental

the And your bit overall if So you a confident gate-all-around talk of about I'm still of XX% share feel in the just kind EPI share? little can opportunity? gain curious, market per you

Gary Dickerson

all every high-velocity of customers Yes. the co-innovation. technology mentioned our deep we're customers we're on I And this concept of with one decade future in as around earlier, out into nodes. We're multiple partnerships a -- of working focused with our

tremendous to gaining of more very steps position the for I And on about have strength. is part have we track incremental what earlier gate-all-around. still in where are think strong we of XX% we're we of a we spending gate-all-around, EPI -- that, those had than epi XX% with are do epi For talked selective

to our innovations very bringing we confident feel new we're in and still We in going market Epi, have so forward. outperformance

Operator

comes question next James. from line from our Pajjuri Raymond And of Srini the

Srinivas Pajjuri

percent the that My on of export China said think would will are the used restrictions, exposure. below in outlook, question you word for permanent. QX be of terms you those is normal Brice, I

then just when you you And say maybe talk that the And curious for I'm Gary. previously recover to XX% So as we conditions excluding are think last how level to over days, demand are China you you expecting to the to XX do when that restrictions, you to the level? below the might get can within China? export communicated? like then normal, Gary,

Brice Hill

Thanks, Srini. Okay.

XX%, China. market, think share can't the will long-term edge. yes, an But the semiconductor the that's all, be The time. we -- -- estimate now, be long-term We us X.X over ICAPS XXXX. not to market leading trillion of first billion market. more, So a a about to or to of course, for to When think us to $X still the $X.X single good or grow rate a to will mid- good market serve devices of you high heading if digits, by that growing will for helping get

market We that will a very will less. of have as time, to that's strong through continue investment we pause the bit period grow. a a But rate short of next market little may go for may bit So us. lower that little We adjust.

So Display good of XX% of includes QX the in businesses, course, estimate a AGS our XX% for and is all . and company. also. And that

on a respect seeing think Yes, I'll largest that. on comment It's we're our make to I demand? then, with what Gary, market. And just still

market. and country market but is accelerating, leading-edge our the largest China ICAPS inside largest is see you that So still

rate thinking when so about of you're opportunity about a going describing and think opportunity should you're forward. large just And it we're a very it the thinking you in step growth as back what and as investment, about still

lot to huge X a continued grow the but We've bit And time. expect think to a are that projects. after tracking customers. years slows that over underway. We're of rate investment, so add of we market down little we

forms expectations. to the We our added be every expect single year, that capacity and of backbone

Gary Dickerson

over have I term, thing will have we high the and as market believe the longer of grow mid- opportunities And that new Yes. kind for the that in products The segments our one mentioned is available momentum. would ICAPS products add earlier, pipeline that to we to where single new segments I market, cost-competitive digits. expand grow we in total

positive So market. and term, the on on think our the I we're longer market in positive position

Operator

from question from And our Stifel. next Chin comes Brian line of the

Brian Chin

$XXX year fiscal million the you're is ] maybe in outside year. question. Brice, actual And of think reduction for a quantifying million I'll horizon? Or a or X.XX ask the for some in [ that would backup you one impact Did what sits you few revise month there impact a the disclosed amount filing. for be? of Maybe residual questions that previously $XXX maybe a the I

Brice Hill

Brian. right, exactly it got You've

So than a and it's of covered year. That backlog $X.XX not change. more it our was much a just

we you did so if that $X.XX. And was shared, think, And I think in math, was XX about the it I months. what

impact very year. we're thinking we're terms is So of still for in what the close the

Operator

question And line our of Quatrochi Wells from comes the from Fargo. Joe next

Joseph Quatrochi

a about talk expectations DRAM more of about could I the comparison to year? was if wondering think year in just your we If we the a should your for benefit this little DRAM bit growth ago, were how growth. exclude the you spending business China in

Brice Hill

one. I'll on Joe. Thanks, this start Yes.

DRAM rate continuing seen saw. think DRAM. of I investment call of 'XX And the we've of can't but in the year we that I we the record X by years demand of in world. was the And extra see buoyed course, rest China here, the

of the performance the a compute in in advanced of pull there's pull HBM and there's solution, systems. a So for lot lot DRAM for

continued expect QX. momentum would outlook in DRAM, our and I that's So in included in

Gary Dickerson

I it wafers same bullish the produce number as memory are we're number I Joe, customers storage on to of HBM. Xx mentioned we than what compute earlier, memory. And say then have our said for bits of in more takes Yes, would just that, the is

growth So the that's over certainly going term. to the help rate longer

Operator

next from Shi question Charles the from of Company. line our And comes & Needham

Yu Shi

from about expected revenue question a nodes. all the revenue gate have -- I around

probably You part -- this the think to the double said about $X.X of 'XX changes with any And end of possible? thoughts maybe expect to global the X-nanometer to more were in the your calendar year's Do billion the I year further you of we than and see built question, that up number? on think but that said 'XX? or can that early if you number move year. get capacity, Because in has could XXXX, trying want it revenue you or in kind capacity previously I potentially 'XX, other end do on spending down by implies to mean, plus be XXX,XXX this on -- previously $X fiscal last you 'XX, accelerate data into

Brice Hill

the Charles. question. Okay, for Thanks

with into 'XX thing, gate-all-around the yes, have looking expectations first So equipment. changed not growth for we related our

the you in together, implies opportunity are in excuse of over around in node So would that those put your the that the And just see me, there's you X.X just starts own double place billion. SAM 'XX. wafer yes, have 'XX back size that. that manufacturing the with put approximately XXX,XXX be. us course, describe of research you'll pilot we think that than that's and can would to nodes if and in And do $X Gadea to to And you then the for when being larger backside say high-volume power, in HBM then, and capacity suggest I beginning. what generally HVM, --

So and expect 'XX beyond we the to that sure. continue to continue ramp would for

Gary Dickerson

the and going as in thing available also there. to we our that go Yes, incrementally I you're say very that add power, strong one is you is market, backside share would forward, a growing have

power have gate and backside all around opportunity So significantly. you together, once our grows

Operator

And our Caso the Research. from Wolfe from line of next question comes Chris

Christopher Caso

forecast. generally you customers the the the about pretty for year, guess I segments sort And visibility year. to for different is of pretty regarding give now? good your spending you the obviously. know on could of haven't where logic foundry full the sound talk regard us question But your know with given you guidance I the forecast is right confidence and I in constructive customer you level Maybe

lot. that suggested forecast a comments ICAP, changing has Your the been

some So Perhaps that for segments. there's I'd in uncertainty different you speak imagine those there. terms the could

Brice Hill

Chris. Sure. the Thanks question, for

customers fairly level confidence larger I would think for the high. put I is of So

perspectives So from longer especially saw, that events the asked our since all COVID for of and we we've customers. inflation

larger visibility we So more with have the customers.

you for be tail there's if mature, space of same NAND. the good visibility, including companies of customers ICAPS, the in a So certainly visibility, in lot then for side. the more leading more China, would DRAM, there And ICAPS, about for certainly on the practices. in same up I for observation sort long ICAP think logic, longer-standing split the would then it just more experience less And

in visibility volatility our we've lower, forecast. so that's seen of the and a lot And where gets

forecast couple our gone the -- So through China years, think as I we've of the year. increased in continually we've past

plans So and you as the change have visibility that less . forward. goes

of perspective comment, thinking with try about last information to we there's from questions market a there have the the our logic triangulate but lots foundry is various just not our foundries, about expectations. then because end customers, the also And only we do

PC, understanding leading driven being the comfortable data is And for and what pretty our with markets. end demand so by center, logic we're those we think smartphone forecast for

Operator

[Operator Rakesh from Mizuho. Instructions] Our the from next comes question Vijay line of

Vijay Rakesh

look the on Just more a more packaging and there's the a on side. just wondering packaging if WFE is at you just question important what of side. know had if of becomes see of to to I'm the becoming and memory packaging logic? you bigger at chunk I mix memory total that was mix both bigger of And look and WFE a growing as and XXXX? how way packaging

Brice Hill

Packaging I'll try, our that year Advanced We in packaging $X.X that said last billion. 'XX revenues were in Vijay. related

share an that know in that we you advantaged so And have space.

some you And growing backward at have probably math do is. what So imply to a packaging strong it's rate. to

systems, there's that's -- what's -- accelerators, packaging about on all And that, GPUs, what's it leading-edge race performance Gary really for getting we highest that know et these out the technologies. thinking CPUs, think the of the these demand for driving a calls cetera. behind I just utilization increased

the that coming years. grow expect to we over So significantly

Gary Dickerson

again this very revenue in a today. it about Yes. in our grants tremendous new is Vijay, We chips like that and innovation X we few there's or also talked server different over what looks AI to be you space. glass, technologies just X happening packaging how substrate for years. going on silicon architecture talked the and And connect years about doubling than

Applied. wiring and front for of opportunity this compound it's packaging. in this on leader wafer, significant going the a And computing. important growth see I the believe annual in of so is the advanced because the for to So energy-efficient is segment back a We're wafer great rate

Operator

question Hosseini next Mehdi of line And our from comes from Susquehanna. the

Mehdi Hosseini

to the One billion, Based XX-K, expect backlog AGS down up for then SSE SSE question, and and show When of point $X.X on of inflection billion, backlog And And million going you of AGS great. out any backlog last China. $XXX backlog. a two show That would the that part backlog in the year-over-year. you color is have very XX%. XX% $X.X do of here multiyear? the on parts. reflection come the because the is AGS, can of that restriction Is the a small the AGS to Or be in growth?

Brice Hill

Yes. Mehdi, question. the for thanks

larger multiyear we AGS. AGS book-to-bill got and when the on larger contracts. that We've signed make right look that tends look it those to backlog contracts got your You've in much

we're contract X.X-year the the are that signing average So life, is and in region, longer that. I than think, some

So COVID, -- backlog on is -- the side, that been really since we've equipment equipment larger And or then distorts makes and AGS. the the what to supply it the side. on issues for related chain normalizing

our customers, the very it's indication business visibility So and the longer get of basis with -- we builds. our good a reporting on quarterly longer underlying that because we're to working not commits to changes. stopped We're on get a working

a there's of so in that. lot And movement

our other anything have what you've share than So wouldn't XX-K. in to I seen

Operator

Atlantic. question of comes Timm line next our from Redbrun And the Schulze-Melander from

Timm Schulze-Melander

advanced multiple Maybe device from volume tax tax manufacturing the you just kind please. Brice, modeling and on And Could more orders on And of on for Maybe question is remaining assets that? the to one they referenced and Gary then customers. mentioned there in little course begin? sheet? of deferred a color share provide you $X.X bit packaging maybe one you what revaluation. could for for just a real when any little expect billion that a volume balance of And implication color Gary, applications are? Brice, or terms asset you'd you leading-edge of

Gary Dickerson

portfolio. strong to very have relative Tim, packaging revenue, really the connected broad, different it's position, Yes, architectures, a packaging all we from unique coming of a

say I wouldn't architecture don't are where including us, this going to those architectures what inflections. architectures of very earlier, computing. last in want revenue than which have those to innovation space there's $XXX we let in market has architecture with to different an is Applied been positioned this energy-efficient be strength I very to the investing we win for So today. million different that, say, would mentioned types. in customers This be HBM I again, across at year, be comment I'll really I for to going comment, on all they're were tremendous important as ramping.

Brice Hill

tax then And for Tim, question. thanks the Okay.

on where good point growth you'll our happening in is news one bad good out significant And see situations news. that yes, difference GAAP in there? It's what the of net income. is non-GAAP a those So to income, our

So our renewed just in incentive Singapore. rates we've

have we that valuable from moved lower in and is it asset tax sense. Singapore, that a because makes years years so will Singapore that protect if that taxes, to less when And the we assets essentially ago was created

goes to the which from valuable rate asset good So tax our is rates. what was less tax than news. then protect it And that little down, you with is bit taxes have a higher

of our years think $XXX to asset. the so always we're And of I that benefit look on of event that. I tax there's And I in about, this revaluation think But go. number amortizing that million, tax forward we're a that wouldn't move is that any particular that look talking reconciliation. That's

Operator

like to for hand I'd Brice program back remarks. conclude the of the does this today's question-and-answer to And session further Instructions] any [Operator program.

Brice Hill

inflections, you. expected recap, leading-edge And together efforts we're semiconductor collaboration technology the years. attending Thank us call. coming up near growth in over both as from to longer the and term Liz, we our To positioned for the to the as the in industry well set close accelerate investments please the for making term believe benefit today. Thank we're with you our

Liz Morali

will Thank to in your call by be the Thank X:XX p.m. Applied continued Materials. Investor of on website for Pacific you, today. Brice, and joining call today. for Time A thank replay interest you today's available Relations everyone the you

Operator

program. conclude your for you, the gentlemen, ladies does in participation and This conference. Thank today's

You may Good now day. disconnect.

Applied Materials (AMAT) 13 Feb 252025 Q1 Earnings call transcript