APPLIED MATERIALS INC /DE

Previous wording

We believe that it is critical to make substantial investments in RD&E to assure the availability of innovative technology that meets the current and projected requirements of our customers’ most advanced designs. We have and continue to invest in RD&E in order to continue to offer new products and technologies.

Current wording

We believe that it is critical to make substantial investments in RD&E to assure the availability of innovative technology that meets the current and projected requirements of our customers’ most advanced designs. We have invested and continue to invest in RD&E in order to continue to offer new products and technologies.

Previous wording

Our results are driven primarily by customer spending on capital equipment and services to support key technology transitions or to increase production volume in response to worldwide demand for semiconductors.

Current wording

Our results are driven primarily by customer spending on capital equipment and services to support key technology transitions or changes in production volume in response to worldwide demand for semiconductors.

Previous wording

Effective the first quarter of fiscal 2026, we have moved our 200 millimeter (200mm) equipment business from our Applied Global Services (AGS) segment to our Semiconductor Systems segment. We made this change in order to increase our operational efficiency and consolidate the reporting of our 200mm equipment with the reporting of our other capital equipment used to fabricate semiconductor chips in our Semiconductor Systems segment. In addition, effective in the first quarter of fiscal 2026, we are fully allocating corporate support costs to our reportable segments. Prior-period segment balances have been recast to conform to the current-year presentation.

Current wording

Effective the first quarter of fiscal 2026, we have moved our 200 millimeter (200mm) equipment business from our AGS segment to our Semiconductor Systems segment. We made this change in order to increase our operational efficiency and consolidate the reporting of our 200mm equipment with the reporting of our other capital equipment used to fabricate semiconductor chips in our Semiconductor Systems segment. In addition, effective in the first quarter of fiscal 2026, we are fully allocating corporate support costs to our reportable segments. Prior-period segment balances have been recast to conform to the current-year presentation.

Previous wording

Fiscal 2026 and 2025 each contain 52 weeks and the first three months of fiscal 2026 and 2025 each contained 13 weeks.

Current wording

Fiscal 2026 and 2025 each contain 52 weeks and the first six months of fiscal 2026 and 2025 each contained 26 weeks.

Previous wording

Revenue in the three months ended January 25, 2026 decreased as compared to the same period in the prior year. Gross margin in the three months ended January 25, 2026 increased compared to the same period in the prior year, primarily driven by an increase in average selling prices and lower material and manufacturing costs, partially offset by lower revenue and unfavorable changes in customer and product mix.

Current wording

Revenue in the three and six months ended April 26, 2026 increased compared to the same periods in the prior year. Gross margin in the three and six months ended April 26, 2026 increased compared to the same periods in the prior year primarily driven by higher revenue and increases in average selling prices.

Previous wording

The Semiconductor Systems segment continued to represent the largest contributor of revenue. Semiconductor Systems revenue decreased for the three months ended January 25, 2026 compared to the same period in the prior year. Foundry and logic customers’ spending decreased for the three months ended January 25, 2026, compared to the same period in the prior year primarily driven by reduced demand for trailing edge logic systems. Memory customers’ spending in the three months ended January 25, 2026 was higher compared to the same period in the prior year primarily due to increased customer investments in DRAM technology transitions.

Current wording

The Semiconductor Systems segment continued to represent the largest contributor of revenue. Semiconductor Systems revenue increased for the three and six months ended April 26, 2026 compared to the same periods in the prior year. Foundry and logic customers’ spending increased for the three months ended April 26, 2026 compared to the same period in the prior year primarily driven by increased demand for leading-edge manufacturing technologies. Foundry and logic customers’ spending decreased for the six months ended April 26, 2026 compared to the same period in the prior year primarily driven by reduced demand for trailing edge logic systems. Memory customers’ spending in the three and six months ended April 26, 2026 was higher compared to the same periods in the prior year primarily due to increased customer investments in DRAM technology transitions.

Previous wording

Our AGS revenue increased in the three months ended January 25, 2026 compared to the same period in the prior year primarily due to higher long-term service agreement revenue and customer spending on spares.

Current wording

Our AGS revenue increased in the three and six months ended April 26, 2026 compared to the same periods in the prior year primarily due to higher long-term service agreement revenue and customer spending on spares.

Previous wording

RD&E expenses for the three months ended January 25, 2026 increased compared to the same period in the prior year, primarily due to additional headcount to support our ongoing investments in product development initiatives and higher depreciation expenses, consistent with our growth strategy. We continued to prioritize RD&E investments in technical capabilities and critical RD&E programs in current and new markets.

Current wording

RD&E expenses for the three and six months ended April 26, 2026 increased compared to the same periods in the prior year, primarily due to additional headcount to support our ongoing investments in product development initiatives and higher depreciation expenses, consistent with our growth strategy. We continued to prioritize RD&E investments in technical capabilities and critical RD&E programs in current and new markets.

Previous wording

Marketing and selling expenses for the three months ended January 25, 2026 increased compared to the same period in the prior year primarily due to higher employee related expenses and higher corporate support cost allocations.

Current wording

Marketing and selling expenses for the three and six months ended April 26, 2026 increased compared to the same periods in the prior year primarily due to higher employee related expenses and higher corporate support costs.

Previous wording

G&A expenses for the three months ended January 25, 2026 decreased compared to the same period in the prior year primarily due to lower corporate support cost allocations and lower spending on professional services.

Current wording

G&A expenses for the three and six months ended April 26, 2026 decreased compared to the same periods in the prior year primarily due to lower corporate support costs.

Previous wording

In the first quarter of fiscal 2026, we recorded a charge of $253 million related to a previously disclosed export controls compliance matter, and subsequently entered into a settlement agreement to resolve the matter. See the information under the heading “Legal Matters” in Note 13 of the Notes to Consolidated Condensed Financial Statements for information regarding this matter and the settlement agreement.

Current wording

In the first six months of fiscal 2026, we recorded a charge of $253 million related to a settlement agreement which resolved a previously disclosed export controls compliance matter. See the information under the heading “Legal Matters” in Note 13 of the Notes to Consolidated Condensed Financial Statements for information regarding this matter and the settlement agreement.

Previous wording

In the first quarter of fiscal 2026, we recognized $12 million in restructuring charges, consisting primarily of severance and other employment termination benefits incurred in connection with the approved Fiscal 2025 Restructuring Plan.

Current wording

In the first six months of fiscal 2026, we recognized $12 million in restructuring charges, consisting primarily of severance and other employment termination benefits incurred in connection with the approved Fiscal 2025 Restructuring Plan.

Previous wording

Interest expense incurred was primarily associated with our senior unsecured notes. Interest expense in the three months ended January 25, 2026 increased compared to the same period in the prior year, primarily due to our issuance of senior unsecured notes in September 2025.

Current wording

Interest expense incurred was primarily associated with our senior unsecured notes. Interest expense in the six months ended April 26, 2026 increased compared to the same periods in the prior year, primarily due to our issuance of senior unsecured notes in September 2025.

Previous wording

Interest and other income (expense), net in the three months ended January 25, 2026 increased compared to the same period in the prior year, primarily driven by higher net gain on equity investments, partially offset by lower interest income driven by a decrease in market rates.

Current wording

Interest and other income (expense), net in the three and six months ended April 26, 2026 increased compared to the same periods in the prior year, primarily driven by higher net unrealized gain on equity investments.

Previous wording

Our effective tax rates for the first quarter of fiscal 2026 and 2025 were 13.0 percent and 44.1 percent, respectively. The effective tax rate for the first quarter of fiscal 2026 was lower compared to the same period in the prior fiscal year, primarily due to the immediate expensing of U.S. performed research costs in fiscal 2026 and the remeasurement of deferred tax assets related to new tax incentive agreements in Singapore in fiscal 2025.

Current wording

Our effective tax rates for the first six months of fiscal 2026 and 2025 were 13.0 percent and 25.2 percent, respectively. The effective tax rate for the first six months of fiscal 2026 was lower than the same period in the prior fiscal year, primarily due to a remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore, partially offset by a reduction of unrecognized tax benefits related to foreign operations as a result of the lapse of statutes of limitations in fiscal 2025.

Previous wording

Operating income (loss) by segment for the periods presented were as follows:

Current wording

Operating income (loss) by segment for the periods presented was as follows:

Previous wording

Semiconductor Systems’ operating margin for the three months ended January 25, 2026 decreased compared to the same period in the prior year primarily driven by a legal settlement charge related to a previously disclosed export controls compliance matter, lower revenue and increased RD&E expenses, partially offset by an increase in average selling prices and lower material and manufacturing costs.

Current wording

Semiconductor Systems’ operating margin for the three months ended April 26, 2026 increased compared to the same period in the prior year primarily driven by higher revenue and increases in average selling prices, partially offset by increased RD&E expenses. Semiconductor Systems’ operating margin for the six months ended April 26, 2026 decreased compared to the same period in the prior year primarily driven by a legal settlement charge related to a previously disclosed export controls compliance matter, increased RD&E expenses, partially offset by higher revenue and increases in average selling prices.

Previous wording

AGS’ operating margin for the three months ended January 25, 2026 increased compared to the same period in the prior year primarily due to higher revenue from services and spares.

Current wording

AGS’ operating margin for the three and six months ended April 26, 2026 increased compared to the same periods in the prior year primarily due to higher revenue from services and spares and favorable changes in customer and product mix.

Previous wording

Cash from operating activities for the three months ended January 25, 2026 was $1.7 billion, which reflects net income adjusted for the effect of non-cash charges and changes in working capital components. Significant non-cash charges included depreciation, amortization, gain or loss on investments or asset sale, share-based compensation, deferred income taxes, legal settlement and restructuring charges. Cash provided by operating activities increased in the first three months of fiscal 2026 compared to the same period in the prior year primarily due to higher collections of customer receivable balances, partially offset by higher payments for income taxes and higher vendor payments.

Current wording

Cash from operating activities for the six months ended April 26, 2026 was $2.5 billion, which reflects net income adjusted for the effect of non-cash charges and changes in working capital components. Significant non-cash charges included depreciation, amortization, gain or loss on investments or asset sale, share-based compensation, deferred income taxes and restructuring charges. Cash provided by operating activities remained relatively flat in the first six months of fiscal 2026 compared to the same period in the prior fiscal year primarily due to lower payments for income taxes offset by higher vendor payments.

Previous wording

Our working capital was $13.3 billion as of January 25, 2026 and $12.9 billion as of October 26, 2025.

Current wording

Our working capital was $13.6 billion as of April 26, 2026 and $12.9 billion as of October 26, 2025.

Previous wording

Days sales outstanding of our accounts receivable at January 25, 2026 and January 26, 2025 were 65 days and 76 days, respectively. Days sales outstanding varies due to the timing of shipments and payment terms. The decrease in days sales outstanding was primarily driven by favorable collection performance.

Current wording

Days sales outstanding of our accounts receivable at April 26, 2026 and April 27, 2025 were 73 days and 79 days, respectively. Days sales outstanding varies due to the timing of shipments and payment terms. The decrease in days sales outstanding was primarily driven by favorable collection performance.

Previous wording

We used $780 million of cash in investing activities during the three months ended January 25, 2026. Capital expenditures totaled $646 million and purchases of investments, net of proceeds from sales and maturities of investments, were $134 million, during the three months ended January 25, 2026.

Current wording

We used $1.7 billion of cash in investing activities during the six months ended April 26, 2026. Capital expenditures totaled $1.3 billion and purchases of investments, net of proceeds from sales and maturities of investments, were $289 million and net cash paid for acquisition was $175 million, partially offset by net proceeds from asset sale of $6 million, during the six months ended April 26, 2026.

Previous wording

We used $931 million of cash in financing activities during the three months ended January 25, 2026, consisting primarily of cash used for repurchases of common stock of $337 million, cash dividends paid to stockholders totaling $365 million, and tax withholding payments for vested equity awards of $229 million.

Current wording

We used $1.7 billion of cash in financing activities during the six months ended April 26, 2026, consisting primarily of cash used for repurchases of common stock of $737 million, cash dividends paid to stockholders totaling $730 million, tax withholding payments for vested equity awards of $309 million and net payments on commercial paper notes of $100 million, partially offset by proceeds received from common stock issuances of $131 million under our employees’ stock purchase plan.

Previous wording

In March 2025, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in repurchases, which supplemented the previous $10.0 billion authorization approved in March 2023. As of January 25, 2026, approximately $13.6 billion remained available for future stock repurchases under the repurchase program.

Current wording

In March 2025, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in repurchases, which supplemented the previous $10.0 billion authorization approved in March 2023. As of April 26, 2026, approximately $13.2 billion remained available for future stock repurchases under the repurchase program.

Previous wording

We have credit facilities for unsecured borrowings in various currencies of up to an aggregate amount of $4.1 billion. These credit facilities consist of a $2.0 billion five-year committed revolving credit agreement with a group of banks (Five-Year Credit Agreement), a $2.0 billion 364-day committed revolving credit agreement with a group of banks (364-Day Credit Agreement), and revolving credit facilities with Japanese banks pursuant to which we may borrow up to approximately $51 million in aggregate at any time. The Five-Year Credit Agreement is scheduled to expire in February 2030, unless extended as permitted under the terms of the agreement. The 364-Day Credit Agreement is scheduled to expire in September 2026, provided, however, if any loans are outstanding on the maturity date, we may convert all or part of such loans to term loans that will mature in September 2027, subject to payment of a fee by us and other customary conditions. The Five-Year Credit Agreement and the 364-Day Credit Agreement each includes financial and other covenants with which we were in compliance as of January 25, 2026. No amounts were outstanding under any of these credit facilities as of January 25, 2026. See Note 9, Borrowing Facilities and Debt, of the Notes to the Consolidated Condensed Financial Statements for further discussion related to our Revolving Credit Agreement and other credit facilities.

Current wording

We have credit facilities for unsecured borrowings in various currencies of up to an aggregate amount of $4.1 billion. These credit facilities consist of a $2.0 billion five-year committed revolving credit agreement with a group of banks (Five-Year Credit Agreement), a $2.0 billion 364-day committed revolving credit agreement with a group of banks (364-Day Credit Agreement), and revolving credit facilities with Japanese banks pursuant to which we may borrow up to approximately $50 million in aggregate at any time. The Five-Year Credit Agreement is scheduled to expire in February 2030, unless extended as permitted under the terms of the agreement. The 364-Day Credit Agreement is scheduled to expire in September 2026, provided, however, if any loans are outstanding on the maturity date, we may convert all or part of such loans to term loans that will mature in September 2027, subject to payment of a fee by us and other customary conditions. The Five-Year Credit Agreement and the 364-Day Credit Agreement each include financial and other covenants with which we were in compliance as of April 26, 2026. No amounts were outstanding under any of these credit facilities as of April 26, 2026. See Note 9, Borrowing Facilities and Debt, of the Notes to the Consolidated Condensed Financial Statements for further discussion related to our Revolving Credit Agreement and other credit facilities.

Previous wording

We have a short-term commercial paper program under which we may issue unsecured commercial paper notes up to a total of $4.0 billion. The proceeds from the issuances of commercial paper are used for general corporate purposes. As of January 25, 2026, we had commercial paper notes outstanding with an aggregate principal amount of $100 million.

Current wording

We have a short-term commercial paper program under which we may issue unsecured commercial paper notes up to a total of $4.0 billion. The proceeds from the issuances of commercial paper are used for general corporate purposes. As of April 26, 2026, we had no commercial paper notes outstanding.

Previous wording

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (Tax Act). The Tax Act requires a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries. The transition tax expense has been paid in installments starting with fiscal 2018, and as of January 25, 2026, we had one remaining payment of $255 million, payable in February of 2026.

Current wording

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (Tax Act). The Tax Act required a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries to be paid in installments beginning in fiscal 2018. The transition tax expense has been fully paid as of April 26, 2026.

Previous wording

On August 9, 2022, the U.S. government enacted the U.S. CHIPS and Science Act (CHIPS Act). The CHIPS Act creates a 25% investment tax credit for certain investments in domestic semiconductor manufacturing. The credit is provided for qualifying property, which is placed in service after December 31, 2022, for which construction begins before January 1, 2027, and is treated as a government grant recognized against property, plant and equipment and a reduction of income taxes payable or an increase to taxes receivable for any credit expected to be refunded. We recognize this investment tax credit when there is reasonable assurance that we will qualify for the credit and the benefit will be received. As of January 25, 2026, we have recorded $975 million of investment tax credits, of which $302 million was recorded in other current assets and will offset fiscal 2026 income tax liabilities, and $673 million was recorded in deferred income taxes and other assets and is expected to be refunded.

Current wording

On August 9, 2022, the U.S. government enacted the U.S. CHIPS and Science Act (CHIPS Act). The CHIPS Act creates a 25% investment tax credit for certain investments in domestic semiconductor manufacturing. The credit is provided for qualifying property, which is placed in service after December 31, 2022, for which construction begins before January 1, 2027, and is treated as a government grant recognized against property, plant and equipment and a reduction of income taxes payable or an increase to taxes receivable for any credit expected to be refunded. We recognize this investment tax credit when there is reasonable assurance that we will qualify for the credit and the benefit will be received. As of April 26, 2026, we have recorded $1.1 billion of investment tax credits, of which $63 million was recorded in other current assets and will offset fiscal 2026 income tax liabilities, and $1.0 billion was recorded in deferred income taxes and other assets and is expected to be refunded.