Applied Materials (AMAT) delivered a strong performance in its fiscal second quarter ended April 27, 2025, demonstrating solid growth and resilience amid ongoing global market shifts. The company reported revenue of $7.10 billion, marking a 7% increase year-over-year from $6.65 billion, driven by continued momentum in AI and semiconductor innovation.

Profitability improved across the board, with GAAP gross margin rising to 49.1% from 47.4%, and non-GAAP gross margin edging up to 49.2%. Operating efficiency also strengthened, as GAAP operating margin reached 30.5%, up from 28.8%, while non-GAAP operating margin improved to 30.7%. Net income surged, with GAAP net income climbing 24% to $2.14 billion and GAAP diluted EPS jumping 28% to $2.63. On a non-GAAP basis, net income rose 11% to $1.94 billion, with EPS up 14% to $2.39.

Applied Materials generated $1.57 billion in cash from operations and returned $2.00 billion to shareholders, including $1.67 billion in share repurchases and $325 million in dividends. However, non-GAAP free cash flow declined 7% year-over-year to $1.06 billion, reflecting timing of working capital and investment cycles.

Regionally, the company saw significant shifts in revenue mix. China’s contribution dropped to 25% of total revenue from 43% a year ago, amid trade headwinds, while Korea and Taiwan expanded their shares to 22% and 28%, respectively. The U.S. accounted for 11%, Japan 8%, Europe 4%, and Southeast Asia 2%.

Segment performance was led by the Semiconductor Systems division, which posted a non-GAAP operating margin of 36.4%, up from 34.9%. The Display segment saw a sharp turnaround, with margin surging to 26.3% from just 2.8% a year earlier, while Applied Global Services remained steady at 28.5%.

On the balance sheet, Applied ended the quarter with $6.17 billion in cash, $578 million in short-term investments, and $6.19 billion in accounts receivable. Total assets stood at $33.63 billion, against $14.67 billion in liabilities, resulting in $18.96 billion in stockholders’ equity.

CEO Gary Dickerson emphasized Applied’s leadership in enabling high-performance, energy-efficient AI computing, a key driver of semiconductor demand. CFO Brice Hill highlighted the company’s stable customer outlook and robust global operations, despite a complex macroeconomic and trade landscape.

Overall, Applied Materials delivered record earnings per share, maintained strong shareholder returns, and showcased its strategic agility in navigating shifting regional dynamics—affirming its position at the forefront of the semiconductor equipment industry.