Applied Materials, Inc. reported its financial results for the first quarter of fiscal 2026, ending January 25, 2026, revealing a revenue of $7.012 billion, a decrease of 2% from $7.166 billion in the same period last year. The company's net income, however, saw a significant increase, rising to $2.026 billion from $1.185 billion, resulting in earnings per diluted share of $2.54, compared to $1.45 in the prior year. The gross margin improved slightly to 49.0%, up from 48.8%, attributed to higher average selling prices and lower material costs, despite the decline in revenue.
The Semiconductor Systems segment, which remains the largest contributor to revenue, experienced an 8% decrease in sales, totaling $5.141 billion, primarily due to reduced spending from foundry and logic customers. In contrast, the Applied Global Services (AGS) segment reported a 19% increase in revenue to $1.559 billion, driven by higher long-term service agreement revenue and increased customer spending on spare parts. Geographically, revenue from Taiwan surged by 46%, while sales in the United States and Europe fell by 28% and 33%, respectively.
Operationally, Applied Materials has made strategic adjustments, including the transfer of its 200mm equipment business from the AGS segment to Semiconductor Systems to enhance operational efficiency. The company also recorded a legal settlement charge of $253 million related to export controls compliance, which impacted its operating expenses, which rose to $1.604 billion from $1.321 billion year-over-year. Research, development, and engineering expenses increased to $928 million, reflecting the company's commitment to innovation and product development.
As of January 25, 2026, Applied Materials reported total assets of $37.644 billion, with cash and cash equivalents slightly decreasing to $7.218 billion from $7.241 billion at the end of the previous quarter. The company’s working capital stood at $13.3 billion, up from $12.9 billion. Looking ahead, Applied Materials anticipates continued investment in research and development to maintain its competitive edge and adapt to evolving market demands, particularly in the semiconductor industry, which is characterized by rapid technological changes and varying customer requirements.
About APPLIED MATERIALS INC /DE
Applied Materials, Inc. is a leading provider of materials engineering solutions for the semiconductor and display industries. The company specializes in manufacturing equipment for semiconductor fabrication and display technologies, targeting markets such as personal computing, AI, and consumer electronics. With a focus on innovation, Applied Materials is expanding its portfolio to meet the growing demand for advanced technologies, including AI and clean energy applications, while enhancing customer productivity through its global services.
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