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Applied Materials' third-quarter results at a glance
Applied Materials reported fiscal third-quarter revenue of $9.115 billion for the period ended July 26, 2026, an increase of 25% from $7.302 billion a year earlier. The company described the result as record quarterly revenue.
GAAP net income rose 43% to $2.538 billion and diluted GAAP earnings per share increased 43% to $3.17. Non-GAAP diluted EPS was $3.50, up 41%. Non-GAAP figures exclude specified items and should be read alongside the GAAP reconciliation in the company's release.
Margins expanded as revenue grew
GAAP gross margin increased to 50.3% from 48.8% a year earlier. GAAP operating margin rose to 33.7% from 30.6%, while operating income reached $3.075 billion.
Margin expansion indicates that operating profit grew faster than revenue in the reported quarter. It does not by itself show whether the improvement is permanent; product mix, pricing, costs and future investment can change from quarter to quarter.
Semiconductor Systems remained the main engine
Semiconductor Systems generated $7.040 billion of revenue, compared with $5.564 billion a year earlier. Its operating income rose to $2.657 billion and operating margin reached 37.7%.
Within segment revenue, foundry, logic and other represented 67%, DRAM 26% and flash memory 7%. Applied Global Services reported $1.781 billion of revenue and a 30.1% operating margin.
Why AI infrastructure matters to the company
Applied Materials supplies manufacturing systems used to produce advanced logic, memory and packaging. The company linked demand visibility to global AI adoption and raised expectations for Semiconductor Systems revenue during calendar 2026.
Management highlighted DRAM, leading-edge foundry-logic and advanced packaging. These areas support high-bandwidth memory and complex chip packaging, but customer investment cycles, technology transitions, trade rules and supply conditions remain material uncertainties.
Cash generation and shareholder distributions
Cash from operations was a record $3.04 billion for the quarter. The company distributed $860 million to shareholders, comprising $440 million of share repurchases and $420 million of dividends.
Repurchases reduce shares only when purchases exceed equity issuance and other changes. Dividends and buybacks are capital-allocation decisions; they should be considered alongside investment needs, debt and cash holdings.
Fourth-quarter guidance points to further growth
For fiscal Q4 2026, Applied Materials forecast revenue of $10.25 billion, plus or minus $500 million. It projected non-GAAP diluted EPS of $4.02, plus or minus $0.20.
Guidance is a forward-looking estimate, not a reported result. The company identified risks including customer demand, trade and export regulations, tariffs, geopolitical conditions, technology transitions and supply availability.
How to read the earnings report without chasing the share price
Start with year-over-year revenue, GAAP profit and cash flow. Then examine segment mix, margin changes and guidance. Compare non-GAAP measures with the reconciliation and read the risk disclosures before forming an interpretation.
A share can fall after strong reported numbers if expectations were even higher, and it can rise after weak figures if the outlook improves. Market reaction is evidence about expectations, not proof that a company is attractive or unattractive as an investment.
Applied Materials Q3 FY2026 versus Q3 FY2025
| Metric | Q3 FY2026 | Q3 FY2025 | Change |
|---|---|---|---|
| Revenue | $9.115bn | $7.302bn | +25% |
| GAAP gross margin | 50.3% | 48.8% | +1.5 pts |
| GAAP operating income | $3.075bn | $2.233bn | +38% |
| GAAP net income | $2.538bn | $1.779bn | +43% |
| GAAP diluted EPS | $3.17 | $2.22 | +43% |
| Non-GAAP diluted EPS | $3.50 | $2.48 | +41% |
Frequently asked questions
What was Applied Materials' revenue in Q3 2026?
Applied Materials reported record fiscal Q3 2026 revenue of $9.115 billion, up 25% year over year.
What was Applied Materials' Q3 2026 EPS?
Diluted GAAP EPS was $3.17 and non-GAAP diluted EPS was $3.50. The non-GAAP measure should be read with the company's reconciliation.
What is Applied Materials' Q4 2026 guidance?
The company forecast revenue of $10.25 billion plus or minus $500 million and non-GAAP diluted EPS of $4.02 plus or minus $0.20.
Why is AI demand relevant to Applied Materials?
AI systems require advanced logic, high-bandwidth memory and chip packaging. Applied Materials supplies manufacturing systems used by chipmakers in these areas.
Official sources
Definitions and methodology were checked against these primary resources. Consult the current documents for complete details.
Applied Materials — Third Quarter 2026 Results ↗Applied Materials — Q3 2026 Investor Materials ↗SEC EDGAR — Applied Materials 8-K filed August 13, 2026 ↗
