Total Revenue

+7% (from $6,646M to $7,100M)

Total revenue increased by 7% YoY driven by overall improvements across key segments and geographic regions, reflecting higher spending in Semiconductor Systems, Display, and robust growth in Taiwan despite challenges in China " " " vs.. "

Semiconductor Systems

+7% (from $4,901M to $5,255M)

The segment grew by 7% YoY due to favorable customer investments in leading‐edge foundry and logic technologies, building on previous period trends of modest growth while benefiting from cost efficiencies and an improved product mix " " " vs.. "

Display Segment

+45% (from $179M to $259M)

A dramatic 45% surge in Display revenue reflects renewed customer investments in advanced display manufacturing equipment, marking a significant turnaround from Q2 2024 and supporting the overall revenue uplift " " " vs.. "

Corporate and Other

-44% (from $36M to $20M)

Revenue in this category declined by 44% YoY, likely due to revised cost allocations and reduced unallocated revenue streams, in contrast to prior periods where these items were higher, indicating adjustments in corporate expense management " " " vs.. "

Taiwan Regional Revenue

+96% (from $1,019M to $1,997M)

Taiwan saw nearly double revenue (+96%), driven by significant investments in semiconductor equipment and increased spending on spares and services, continuing a strong trend from previous periods " vs.. "

China Regional Revenue

-37% (from $2,831M to $1,774M)

The decline of 37% in China reflects lower customer spending on semiconductor equipment, consistent with prior observations of shifting investment priorities, even as some spending shifted towards spares and services " vs.. "

Korea Regional Revenue

+58% (from $988M to $1,562M)

Korea experienced strong growth (+58%) as increased investments in semiconductor equipment, spares, and services bolstered regional revenue, building on previous trends of moderate performance " vs.. "

Net Income

+24% (from $1,722M to $2,137M)

Net income improved by 24% due to higher gross margins, strong revenue growth, and operational efficiencies that resulted in better profitability compared to the previous period, reflecting successful execution across segments " vs.. "

Operating Income

+13.8% (from $1,912M to $2,169M)

Operating income rose by 13.8% YoY, primarily fueled by robust performance in Semiconductor Systems and better cost management, which outweighed declines in Corporate and Other, thereby delivering enhanced overall operational earnings " vs.. "

Total Revenue ($USD Billions)

Q3 2025

$7.1 billion, ±$400 million "

$7.2 billion, ±$500 million (6% increase YoY at midpoint) " "

raised

Non-GAAP EPS ($USD)

Q3 2025

$2.30, ±$0.18 (10% increase YoY) "

$2.35, ±$0.20 (11% increase YoY at midpoint) "

raised

Semiconductor Systems Revenue ($USD Billions)

Q3 2025

Approximately $5.3 billion, up 8% YoY "

Approximately $5.4 billion (10% increase YoY) "

raised

Applied Global Services (AGS) Revenue ($USD Billions)

Q3 2025

Approximately $1.55 billion, up 1% YoY "

Approximately $1.55 billion (2% decrease YoY) "

no change

Display Revenue ($USD Millions)

Q3 2025

Approximately $250 million "

Approximately $250 million "

no change

Non-GAAP Gross Margin (%)

Q3 2025

Approximately 48.4% "

Approximately 48.3% "

lowered

Non-GAAP Operating Expenses ($USD Billions)

Q3 2025

Approximately $1.3 billion "

Approximately $1.3 billion "

no change

Tax Rate (%)

Q3 2025

Approximately 13% "

Modeled at approximately 13% "

no change

Advanced Device Architectures

In Q1 2025, Q4 2024, and Q3 2024 calls, Applied Materials repeatedly emphasized its leadership in next‐generation foundry technologies – specifically highlighting the transition from FinFET to GAA transistors and the benefits of backside power delivery. They detailed revenue opportunities and market share capture potentials with strong customer collaboration. " " " "

In Q2 2025, the discussion remained focused on advanced foundry-logic technologies. Executives highlighted their leadership in GAA transistors and backside power delivery, expecting to capture over 50% of the opportunity and boost revenue by about 30% compared to FinFET. " " "

Consistent and positive. The messaging has remained steady across periods with a continual emphasis on market leadership, technological inflection points, and revenue expansion.

Advanced Packaging Innovations

Earlier periods (Q1, Q4 2024, Q3 2024) stressed the growth in advanced packaging – from integrated hybrid bonding systems to significant revenue multiples in the HBM segment. The companies discussed record revenues in packaging and underscored their innovation in micro-bump, through-silicon via, and other heterogeneous integration technologies. " " "

In Q2 2025, the emphasis on advanced packaging continues with clear focus on the new integrated hybrid bonding product (developed with Besi) and innovation in packaging that supports next-generation AI memory chips. Revenue growth remains a key narrative with confidence in maintaining high growth rates. " "

Steady positive momentum. The focus on innovation and revenue expansion in advanced packaging remains strong, with newer integrated solutions complementing earlier messages.

DRAM and Memory Technology Expansion

In Q1 2025, Q4 2024, and Q3 2024, discussions stressed record growth, market share gains (10-point increases), and technology evolution (transition towards 4F squared and 3D DRAM). There was consistent messaging around strong demand in DRAM and HBM as well as advanced process technologies fueling future expansion. " " "

In Q2 2025, the call highlighted robust DRAM growth driven by AI demand, with expectations for over 40% revenue increase, significant market share gains, and innovative technologies like the Sym3 Magnum etch system. HBM remains a critical growth driver, accounting for 16% of DRAM wafer starts and growing at a 40% rate. " " "

Consistent upward growth. The narrative for DRAM remains bullish and technologically innovative, with slight evolution towards emphasizing specific new solutions and stronger AI-driven demand.

China Market Risks

In Q1 2025, the discussion detailed export controls and new trade rules with an estimated $400 million impact, while Q4 2024 focused on a normalized revenue mix and Q3 2024 briefly mentioned lower China shipments after a period of elevated levels. The early commentary reflected a mix of caution and long-term optimism. " " " "

In Q2 2025, the focus on China became more nuanced – while acknowledging trade restrictions and export controls impacting equipment and service revenues, the company also noted supply chain flexibility and strong performance in non-restricted segments. The tone remained cautious but underscored strategic mitigation through global manufacturing. " " "

Heightened caution with mitigating optimism. While earlier periods normalized China’s contribution, the current period provides more detail on trade restrictions and challenges yet stresses strategic adjustments to sustain long-term growth.

Gross Margin Dynamics and Value-Based Pricing Strategies

Q3 2024 discussions mentioned a non‐GAAP gross margin of 47.4% with aspirations to reach 48% through cost and pricing improvements. Q4 2024 similarly noted a baseline around 48% and efforts in value-based pricing were highlighted in Q1 2025 with high margins and a disciplined pricing framework. " " " "

In Q2 2025, gross margins reached a record 49.2% – the highest since FY2000 – with executives emphasizing improvements from product mix, cost management, and strategic value-based pricing initiatives. Guidance for Q3 remains near 48.3%, and efforts are ongoing to sustain these margins through pricing discipline. " " "

Upward progression. Over time, consistent efforts in optimizing cost structures and implementing disciplined value pricing have steered margins higher, moving from aspirational targets to record achievements and sustainable floor levels.

Recurring Revenue Model and Strategic Capital Allocation

Earlier calls (Q1, Q3, Q4 2024) highlighted robust and steadily growing services revenues, with a high percentage of subscription-based (multi-year) agreements. Significant distributions through share repurchases and dividends were consistently mentioned and reinforced the model’s annuity-like characteristics. " " "

In Q2 2025, the recurring revenue model continues to impress – with over two-thirds of service revenue coming from subscriptions and continued low double-digit growth in parts and services. Additionally, the company distributed approximately $2 billion through dividends and repurchases, and increased its share repurchase authorization significantly. " " " "

Steady and strong. The model has maintained its attractive, recurring nature across periods, with continued capital returns reflecting confidence in cash flow and long-term growth.

Underperformance in the 200-mm Equipment Segment

Q1 2025 and Q4 2024 explicitly noted declines in 200-mm equipment sales, which somewhat offset growth in other segments. Q3 2024 did not mention this segment explicitly. " "

In Q2 2025, the 200-mm equipment segment continues to underperform – cited as experiencing a slowdown due to ties with power electronics and the impact of trade restrictions. The narrative, however, remains that long-term growth is expected at mid- to high single digits despite the short-term headwinds. "

Consistently weak. This segment has repeatedly underperformed relative to others, and while its impact is mitigated by growth elsewhere, the issue persists across periods.

Decreased Investment in the ICAPS Market

Q1 2025 and Q4 2024 reflected on decreased or variable investments in the ICAPS market, citing lower spending in slower end markets (e.g., automotive, industrial) and volatility especially in China. In contrast, Q3 2024 painted a picture of robust demand in ICAPS overall. " " " "

In Q2 2025, executives noted a slowdown in ICAPS investment following two years of rapid spending. The decrease was attributed to reduced overall customer investments in certain ICAPS nodes, though this was partly offset by higher leading-edge investments and optimism for mid- to high single-digit long-term growth. " " "

Mixed sentiment. While the long-term outlook remains positive, the most recent period underscores a short-term slowdown in ICAPS investments compared to previous rapid growth phases.

Potential CapEx Cuts from Key Customers

Q3 2024 addressed this topic explicitly, with executives (e.g., Brice Hill) stating that despite announcements (e.g., from Intel), they were not altering their outlook on leading-edge investments. Q1 and Q4 2024 did not emphasize CapEx cuts. "

In Q2 2025, there was no specific mention of new potential CapEx cuts. The commentary continued to emphasize strong spending in leading-edge segments and positive customer outlooks, aligning with historical reassurances that any previous cuts have been absorbed without changing overall forecasts. "

Largely neutral. Although the topic was raised in earlier periods, the current period maintains the view that CapEx spending on advanced technologies remains robust despite isolated customer cuts discussed previously.