With expanding AI chip investment rippling through the equipment and materials sectors, Applied Materials achieved record quarterly revenue in fiscal 2026 Q3. Profitability indicators also exceeded the year-prior period across all metrics, showing distinct improvement in performance.

 

Applied Materials disclosed results for fiscal 2026 Q3 ended July 26. Global revenue for the period reached $9.115 billion, up 25% from $7.302 billion in the year-prior quarter. On a GAAP basis, gross margin was 50.3%, operating income was $3.08 billion (operating margin 33.7%), and EPS was $3.17, each improving 1.5 points, 3.1 points, and 43% respectively compared to the year-prior quarter. Non-GAAP EPS reached $3.50, up 41%, marking a record high.

 

 

By segment, semiconductor systems revenue increased 26.5% to $7.04 billion from $5.564 billion year-over-year. Revenue composition was 67% foundry and logic, 26% DRAM, and 7% NAND flash. Applied Global Services, the services segment, grew 21.7% to $1.781 billion from $1.463 billion in the prior year. Applied Materials generated $3.04 billion in cash from operating activities and returned a total of $860 million to shareholders through share repurchases ($440 million) and dividends ($420 million).

 

Gary Dickerson, Chairman and CEO, stated "AI demand is driving demand across our materials engineering solutions" and added "We have raised our fiscal year semiconductor systems revenue guidance, and with enhanced demand visibility from customers, we expect sustained strong growth in 2027." Brice Hill, Senior Vice President and CFO, noted "We have achieved 13 consecutive quarters of year-over-year gross margin expansion" and commented "We expect growth momentum to continue in the second half, particularly in DRAM, advanced foundry and logic, and advanced packaging."