Applied Materials, Inc.: AI infrastructure buildout creates demand-supply imbalance and tool ramp visibility

Applied Materials, Inc. 2026 Q3: Financial Performance summary

• Applied Global Services revenue of $1.8 billion, up 22% year over year; AGS gross margin of 35.6% and operating margin of 30.1% (both up year over year).
• Cash flow and capital return: record operating cash flow over $3.0 billion; capex $707 million; free cash flow $2.3 billion; $860 million distributed to shareholders (including $420 million dividends and $440 million buybacks).
• Non-GAAP gross margin of 50.4%, up 40 basis points sequentially and 150 basis points year over year, marking the 13th consecutive quarter of year-over-year gross margin expansion.
• Non-GAAP operating margin of 34%, up 190 basis points sequentially and 330 basis points year over year (record operating margin).
• Record non-GAAP EPS of $3.50, up 22% sequentially and 41% year over year.
• Record Q3 fiscal 2026 revenue of $9.1 billion, up 15% sequentially and 25% year over year (company reported as “record breaking results”).
• Semiconductor Systems revenue of $7.0 billion, up 18% sequentially and 27% year over year; DRAM (including HBM packaging) grew 52% year over year to record levels.