Applied Materials

2025
annual report

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applied materials 2025
annual report 
Dear Fellow Shareholders,
Applied Materials delivered record revenue and earnings 
per share in fiscal 2025, marking our sixth consecutive 
year of growth. Over this period, we have grown 
revenue and earnings per share at annualized rates of
approximately 12 percent and 20 percent, respectively.
We are in the early stages of a new computing era,
and the opportunities for the semiconductor industry 
and Applied Materials have never been greater. 
Semiconductors provide the foundation for advances
in technology that are reshaping the global economy, 
including artificial intelligence (AI), the internet of things, 
robotics, electric and autonomous vehicles, and clean 
energy. To prepare for the exciting opportunities ahead,
Applied has built new capabilities, strengthened our
product portfolio and streamlined our organization. Now
more than ever the work we do together advances the 
world’s technology.
INFLECTION-FOCUSED INNOVATION
In addition to fueling industry growth, AI computing is 
reshaping the semiconductor roadmap and changing 
the way chips are designed and manufactured. The
foundational semiconductor technology developed and
delivered to customers by Applied Materials plays a
critical role in improving the energy efficiency of AI in
the datacenter and at the edge. At Applied, our core
strategy is inflection-focused innovation. We partner 
with our customers to recognize technology inflections 
early, and we focus our research and development on the 
highest value technology inflections in the fastest growing 
areas of the market. We then create highly differentiated
solutions by connecting our broad portfolio of capabilities 
and technologies.
For example, in fiscal 2025, we launched several 
innovative products that extend our leadership in the
major technology inflections essential to energy-efficient 
AI computing: leading-edge logic, high-performance 
DRAM, high-bandwidth memory, and advanced 
packaging. These products enable higher performance,
lower power advanced logic and memory chips, and
improve factory yields. As deployment of AI accelerates
globally, Applied is well positioned at the most valuable
technology inflections in the fastest growing areas 
of the market.
HIGH-VELOCITY CO-INNOVATION
A key theme we consistently hear from our customers
and ecosystem partners is that co-optimization of 
the technology stack is more critical than ever. Over 
the past year, we strengthened and expanded our
collaborations with technology leaders, universities 
and research institutes. In addition, Applied’s “high-
velocity, co-innovation” model is designed to accelerate
new chip and system architectures by providing chip 
makers and chip designers much earlier access to 
next-generation process technology. This is a core value
proposition of our Equipment and Process Innovation 
and Commercialization (EPIC) platform. Construction 
of the platform’s flagship facility – the EPIC Center
in Silicon Valley – is on track, and we are excited to
begin operations in 2026. The EPIC Center will be the 
largest and most advanced facility of its type globally.
By co-locating chip makers, chip designers, university 
researchers and other ecosystem partners under one
roof, we believe we can reduce the time it takes the
industry to bring a new technology from concept to
commercialization by as much as 30 percent.
As our customers race to bring complex new device
architecture inflections to market, we are also providing 
advanced service solutions that help them quickly 
transfer new technology from R&D labs into pilot lines
and then rapidly optimize device performance, yield

applied materials 2025
annual report 
WELL POSITIONED FOR FUTURE GROWTH
Looking ahead to 2026 and beyond, we expect large-
scale AI adoption will drive substantial investment 
in AI-computing infrastructure including advanced
semiconductors and wafer fab equipment. Our customers 
are engaging with us early to ensure we are ready
to support significant production ramps in the coming
years. Inside the company, we are adopting AI and digital 
tools to drive higher velocity and productivity, innovate 
the way we work, and streamline our organization to
meet the tremendous opportunities ahead. At Applied
Materials, we deliver material innovation that changes
the world. Our inflection-focused innovation strategy 
puts us in a great position to extend our leadership
in the semiconductor technologies essential to high-
performance, energy-efficient computing.
Sincerely,
and cost in high-volume production. In fiscal 2025, the 
recurring services and parts portion of Applied Global
Services delivered another year of double-digit growth 
with more than two-thirds of this core service revenue 
generated from subscriptions.
As a leader in the technology ecosystem, we are
committed to working closely with our customers,
suppliers and partners to reduce the environmental
impact of chipmaking and support the responsible growth 
of the semiconductor industry. Applied is advancing 
energy-efficient computing through materials engineering
innovations that underpin AI and other data-heavy 
applications as well as driving progress towards our 2030 
goals for our own carbon emissions.
Thomas J. Iannotti
Chairman of the Board
Gary E. Dickerson
President and
Chief Executive Officer
December 31, 2025

applied materials 2025
annual report 
This Annual Report contains forward-looking statements, including those regarding anticipated growth and trends
in our businesses and markets, industry outlooks and demand drivers,  technology transitions, our business and 
financial performance and market share positions, our capital allocation and cash deployment strategies, our
investment and growth strategies, our development of new products and technologies, our sustainability strategies
and targets, our business outlook, and other statements that are not historical facts. These statements and their
underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors
that could cause actual results to differ materially from those expressed or implied by such statements include those
discussed in the “Risk Factors” section of, and elsewhere in, this report. Forward-looking statements are based on
management’s estimates, projections and expectations as of the date hereof, and we undertake no obligation to 
update any such statements. 
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
Santa Clara, California
NUMBER OF REGISTERED SHAREHOLDERS
2,626 (as of December 5, 2025)
STOCK LISTING
Applied Materials, Inc. is traded on
The Nasdaq Global Select Market® 
Nasdaq Symbol: AMAT
TRANSFER AGENT
Mail correspondence to:
Computershare Trust Company, N.A.
Stockholder Services
P.O. Box 43078
Providence, RI 02940-3078
Send overnight correspondence to:
Computershare
150 Royall St., Suite 101
Canton, MA 02021
Online inquiries:
www-us.computershare.com/investor/Contact
Tel: (312) 360–5186 or (877) 388–5186
Fax: (312) 601–4348
SHAREHOLDERS’ INFORMATION
INVESTOR CONTACT
Investor Relations
Applied Materials, Inc.
3050 Bowers Avenue
P.O. Box 58039, M/S 5206
Santa Clara, California 95054-3299
Tel: (408) 748–5227
Email: investor_relations@amat.com
CORPORATE HEADQUARTERS
Applied Materials, Inc.
3050 Bowers Avenue
Santa Clara, California 95054–3299
MAILING ADDRESS AND TELEPHONE
Applied Materials, Inc.
3050 Bowers Avenue
P.O. Box 58039
Santa Clara, California 95054–3299
Tel: (408) 727–5555
CORPORATE WEB SITE
Additional information can be found at
www.appliedmaterials.com

 
[THIS PAGE INTENTIONALLY LEFT BLANK] 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark one)
☑
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 26, 2025
or
☐TRANS
R
ITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number 000-06920
Applied Materials, Inc.
(Exact
E
name of regi
e st
i ra
t
nt as specifie
i
d in itst charter)
Delaware
94-1655526
(State
S
or other jurisdiction of incorporation or organiza
i
tion)
(I.R.S. Empl
m oyer Iden
d
tific
i
ation No.)
3050 Bowers Avenue, P.O. Box 58039, Santa Clara, California
95052-8039
(Address of principal
i
executive offic
f
es)s
(Zip
Z
Code)
Regi
e stra
i
nt’s telephone numbe
e
r, including area code: (408) 727-5555
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share
AMAT
The Nasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☑
No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subj
u ect to
such filing requirements for the past 90 days.
Yes ☑
No ☐
Indicate by check mark whether the registrant has subm
u
itted electronically every
r Interactive Data File required to be subm
u
itted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
subm
u
it).
Yes ☑
No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company
or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging
growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☑
Accelerated filer
☐
Smaller reporting company
☐
Non-accelerated filer ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effe
f ctiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting
firm that prepared or issued its audit report.
☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included
in the filing reflect the correction of an error to previously issued financial statements.
☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation
received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☐
No ☑
Aggregate market value of the voting stock held by non-affi
f liates of the registrant as of April 27, 2025, based upon the closing sale price reported
by the Nasdaq Global Select Market on that date: $121,318,219,350
Number of shares outstanding of the registrant’s Common Stock, $0.01 par value, as of December 5, 2025: 792,943,366
DOCUMENTS INCORPORAT
R
ED BY REFERENCE:
Portions of Part III will be provided in accordance with Instruction G(3) to Form 10-K no later than February 23, 2026.

Caution Regarding Forward-Looking Statements
This Annual Report on Form 10-K of Applied Materials, Inc. and its subs
u
idiaries, including “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” in Item 7, contains forward-looking statements that involve a
number of risks and uncertainties. Examples of forward-looking statements include those regarding our future financial or
operating results, customer demand and spending, end-user demand, trends and outlooks in our markets and industries, cash
flows and cash deployment strategies, declaration of dividends, share repurchases, business strategies and priorities, costs and
cost controls, products, competitive positions, management’s plans and objectives for future operations, research and
development, acquisitions, investments and divestitur
t
es, growth opportunities, restructur
t
ing and severance activities, backlog,
working capital, liquidity, investment portfol
f io and policies, taxes, supply
u
chain, manufact
f
ur
t
ing, properties, legal matters,
claims and proceedings, and other statements that are not historical facts, as well as their underlying assumptions. Forward-
looking statements may contain words such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,”
“believe,” “estimate,” “intend,” “potential” and “continue,” the negative of these terms, or other comparable terminology. All
forward-looking statements are subj
u ect to risks and uncertainties and other important factors, including those discussed in
Part I, Item 1A, “Risk Factors,” below and elsewhere in this report. These and many other factors could affe
f ct our future
financial condition and operating results and could cause actua
t
l results to differ materially from expectations based on forward-
looking statements made in this document or elsewhere by us or on our behalf.f Forward-looking statements are based on
management’s estimates, projections and expectations as of the date hereof, and we undertake no obligation to revise or update
any such statements.
The following information should be read in conjunction with the Consolidated Financial Statements and the
accompanying Notes to Consolidated Financial Statements included in this report.
2

APPLIED MATERIALS, INC.
FORM 10-K FOR THE FISCAL YEAR ENDED OCTOBER 26, 2025
TABLE OF CONTENTS
Page
PART I
Item 1:
Business
4
Item 1A:
Risk Factors
11
Item 1B:
Unresolved Staff Comments
23
Item 1C:
Cybersecurity
23
Item 2:
Properties
24
Item 3:
Legal Proceedings
25
Item 4:
Mine Safety Disclosures
25
PART II
Item 5:
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
26
Item 6:
[Reserved]
27
Item 7:
Management’s Discussion and Analysis of Financial Condition and Results of Operations
28
Item 7A:
Quantitative and Qualitative Disclosures About Market Risk
39
Item 8:
Financial Statements and Supplementary Data
39
Item 9:
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
39
Item 9A:
Controls and Procedures
40
Item 9B:
Other Information
40
Item 9C:
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
40
PART III
Item 10:
Directors, Executive Officers and Corporate Governance
41
Item 11:
Executive Compensation
41
Item 12:
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
42
Item 13:
Certain Relationships and Related Transactions, and Director Independence
43
Item 14:
Principal Accounting Fees and Services
43
PART IV
Item 15:
Exhibits, Financial Statement Schedules
44
em 16:
Form 10-K Summary
44
Signatures
87
3

PART I
Item 1:
Busine
i
ss
Applied Materials, Inc. is the leader in the materials engineering solutions used to produce virtua
t
lly every
r semiconductor
in the world. Semiconductors provide the foundation for advances in technology that are reshaping the global economy,
including artificial intelligence, the internet of things, robotics, electric and autonomous vehicles, and clean energy. We are
experts in the design, development, production, and servicing of the critical wafer fabr
a
ication tools our customers need to
manufact
f
ur
t
e semiconductors. Our customers’ produc
d
ts are used across personal computing devices, mobile phones, artificial
intelligence (AI) and data center servers, automobiles, connected devices, industrial applications and consumer electronics. We
are well positioned to address the increasing complexity in manufact
f
ur
t
ing semiconductors, by leveraging the semiconductor
capital equipment industry’
r
s most comprehensive portfol
f io of products to connect and co-optimize our technologies. This
enables our customers to evolve their semiconductor technology roadmaps
a
and achieve supe
u
rior results in their products.
Incorporated in 1967, we are a Delaware corporation. Our fiscal year ends on the last Sunday in October. We operate in
two reportabl
a e segments: Semiconductor Systems and Applied Global Services® (AGS). The Semiconductor Systems segment
represents the largest contributor to our net revenue. A summary of
r
financial information for each reportabl
a e segment is found
in Note 15 of Notes to Consolidated Financial Statements. A discussion of factors that could affe
f ct operations is set forth under
“Risk Factors” in Item 1A, which is incorporated herein by reference.
Semiconductor
t
System
t
s
Our Semiconductor Systems segment designs, develops, manufact
f
ur
t
es and sells a wide range of equipment used to
fabr
a
icate semiconductor chips, also referred to as integrated circuits (ICs). The Semiconductor Systems segment consists of the
semiconductor capital equipment industry’
r
s most comprehensive portfol
f io of products used in the chip making process. Our
products address steps across materials engineering, process control and advanced packaging, including the conversion of
patterns into device structur
t
es, transistor and interconnect fabr
a
ication, metrology, inspection and review, and packaging
technologies for connecting finished IC die. In addition to providing equipment for individual process steps, we have the ability
to combine, co-optimize and integrate our technologies to develop highly differentiated solutions for our customers. Our
equipment helps customers improve the power, performance, yield and costs of semiconductor devices.
Our patterning systems and technologies address challenges resulting from shrinking pattern dimensions and the growing
complexity in vertical stacking found in today’s most advanced semiconductor devices. Our transistor and interconnect
products and technologies enable continued power and performance improvements of 3D transistors. Our process control
systems employ optical and eBeam technologies that allow customers to inspect and review critical semiconductor architectur
t
es
throughout the manufac
f
turing process, helping improve chip yields. Our advanced packaging systems use our materials
engineering expertise to allow customers to connect multiple chips together through heterogeneous integration, enabling them
to advance the technology roadmap beyond
a
a single chip, leading to performance and energy-effi
f ciency improvements.
Our Semiconductor Systems sales are to customers that serve the following markets: foundry, logic and other; dynamic
random access memory (DRAM); and flash memory (NAND). Foundry, logic, and other is comprised of leading-edge and non-
leading edge technology nodes. Leading-edge represents customers that are producing on the most advanced technology nodes,
defined as 7 nanometers and smaller. Non-leading edge technology nodes serve markets such as internet of things,
communications, automotive, power and sensors.
4

Appl
p ie
l d Glo
G bal Services
Our AGS segment provides services, spares and factory a
r
utomation softw
f
are to customer fab
f
rication plants globally.
Through October 26, 2025, our AGS segment also manufact
f
ur
t
ed and sold 200 millimeter (200mm) and other equipment to
customers globally that serve non-leading-edge markets. Effe
f ctive the first quarter of fiscal 2026, our 200mm equipment
business will be moved to our Semiconductor Systems segment.
AGS’s transactional and subs
u
cription service products, spares and factory a
r
utomation softw
f
are is purchased by
customers to optimize the performance of our large, global installed base of semiconductor and other equipment. These
solutions are also used to optimize plant performance and productivity. Customer demand is ful
f filled through a global
distribution system and trained fie
f ld engineers located near customer sites to support our semiconductor and other equipment
worldwide.
Other
t
We also manufac
f
ture products and serve customers in certain other industries, including manufact
f
ur
t
ing equipment for
f
the
display industry.
r
The fin
f ancial results of our businesses that are not included in our Semiconductor Systems segment or our
AGS segment, such as our display business, are reported in the Corporate and Other category.
5

Backlog
We manufact
f
ur
t
e systems to meet demand represented by order backlog and customer commitments. Backlog consisted
of:f (1) orders for which written authorizations have been accepted, or shipment has occurred but revenue has not been
recognized; and (2) contractua
t
l service revenue and maintenance fees.
Backlog by reportabl
a e segment as of October 26, 2025 was as follows:
2025
(In millions, except percentages)
Semiconductor Systems
$
7,105
47 %
Applied Global Services
7,141
48 %
Corporate and Other
756
5 %
Total
15,002
100 %
Of the total backlog as of October 26, 2025, approximately 31% is not reasonably expected to be filled within the next 12
months.
Our backlog on any particular date is not necessarily indicative of actua
t
l sales for any future periods. Our backlog is
subj
u ect to change, including the addition of new orders, potential amendments or cancellations of existing orders, and changes
in export rules and regulations. Customers may delay delivery of products or cancel orders prior to shipment, subj
u ect to possible
cancellation penalties. Delays in delivery
r schedules or a reduction of backlog during any particular period could have a material
adverse effe
f ct on our business and results of operations.
Manufac
f
turing, Raw Materials and Supplies
Our worldwide manufac
f
turing activities consist primarily of assembly, integration and test of various proprietary
r
and
commercial parts, components and suba
u
ssemblies that are used to manufact
f
ur
t
e systems. We utilize a distributed manufac
f
turing
model under which manufac
f
turing and supply
u
chain activities are conducted in various countries, including United States,
Singapore, Japan,
a
China, Korea, Taiwan, Israel and other countries in Asia and Europe. We use qualified vendors, including
contract manufact
f
ur
t
ers, to supp
u
ly parts, services and product suppor
u
t. Our supply
u
chain strategy commits to adhere to ethical
labor pr
a
actices, responsible minerals sourcing, Responsible Business Alliance and SEMI guidelines, and the Applied Materials
Standards of Business Conduct.
Although we make reasonable effort
f
s to assure that parts are availabl
a e from multiple qualified suppl
u
iers, this is not
always possible. Accordingly, some key parts may be obtained from only a qualified single suppl
u
ier or a limited group of
qualified suppl
u
iers. We seek to reduce costs and to lower the risks of manufact
f
ur
t
ing and service interrupt
u ions by selecting and
qualifying
f
alternate suppl
u
iers for parts; monitoring the financial condition of key suppl
u
iers; maintaining appropriate inventories
of parts; qualifying ne
f
w parts on a timely basis; and ensuring quality and performance of parts.
Research, Development and Engineering
Our long-term growth strategy requires continued development of new materials engineering solutions, including
products and platforms that enable expansion into new and adja
d cent markets. Our significant investments in RD&E must
generally enable us to deliver new products and technologies before the emergence of strong demand, thus allowing customers
to incorporate these products into their manufact
f
ur
t
ing plans during early-stage technology selection. We work closely with our
global customers and ecosystem partners to design systems and processes that meet planned technical and production
requirements. Our product development and engineering, and process suppor
u
t are performed primarily in the United States,
India and Israel. Our customer demonstrations are perfor
f
med primarily in the United States, China, Taiwan, Israel and South
Korea.
6

Marketing and Sales
Because of the highly technical nature of our produc
d
ts, we market and sell products worldwide almost entirely through a
direct sales force.
We have operations in many countries, with some of our business activities concentrated in certain geographic areas. Our
business is based on capi
a tal equipment investments by major semiconductor and other manufact
f
ur
t
ers, and is subj
u ect to
significant variability in customer demand for our products. Customers’ expenditures depend on many factors, including:
general economic conditions; anticipated market demand and pricing for semiconductors and other electronic devices; the
development of new technologies; customers’ factory utilization; capital resources and financing; trade policies and export
regulations; and government incentives.
Information on net revenue to unaffiliated customers and long-lived assets attributable to our geographic regions is
included in Note 15 of Notes to Consolidated Financial Statements. During fiscal 2025, two customers accounted for
approximately 19% and 15%, respectively, of our net revenue.
Competition
The industries in which we operate are highly competitive and characterized by rapid
a
technological change. Our ability to
compete generally depends on our ability to commercialize our technology in a timely manner, continually improve our
products, and develop new products that meet constantly evolving customer requirements. Significant competitive factors
include technical capability and differentiation, productivity, cost-effectiveness and the ability to suppor
u
t a global customer
base. The importance of these factors varies according to customers’ needs, including product mix and respective product
requirements, applications, and the timing and circumstances of purchasing decisions. Subs
u
tantial competition exists across all
the segments of our business. Competitors range from small companies that compete in a single region, which may benefit from
policies and regulations that favor domestic companies, to global, diversified companies, which operate in more complex global
economic and regulatory environments. We could see increased competition from domestic equipment manufact
f
ur
t
ers in China
resulting from local government incentives and funding as well as export controls establ
a ished by the United States government
to restrict the sale of certain technologies to customers in China. Export controls enacted by the United States government that
restrict the sale of certain technologies to customers in China may also provide an advantage to our international competitors.
Our ability to compete requires a high level of investment in RD&E, marketing and sales, and global customer suppor
u
t
activities. We believe that many of our products have strong competitive positions.
The competitive environment for each segment is described below.
The semiconductor industry
r
is driven by demand for advanced electronic products, including smartphones and other
mobile devices, servers, personal computers, automotive electronics, storage, and other products. The growth of data and
emerging end-market drivers such as artificial intelligence, the internet of things, robotics and smart vehicles are also creating
the next wave of growth for the industry.
r
As a result, products within the Semiconductor Systems segment are subj
u ect to
significant changes in customer requirements, including transitions to smaller dimensions, increasingly complex chip
architectur
t
es, new materials and an increasing number of applications. While certain existing technologies may be adapted to
new requirements, some applications create the need for an entirely different technological approach. The rapid pa
a
ce of
technological change can quickly diminish the value of current technologies and products and create opportunities for existing
and new competitors. Our comprehensive portfol
f io offers
f
a variety of differentiated products, including co-optimized and
integrated materials solutions that enable unique films, structur
t
es and devices. We must successful
f ly anticipate technology
inflections, and our products must continuously evolve to satisfy customers’ requirements to compete effe
f ctively in the
marketpl
t ace. We allocate resources among our numerous produc
d
t offeri
f
ngs and therefor
f
e may decide not to invest in an
individual product depending on market requirements. Competitors serving the semiconductor equipment industry
r
range from
companies offeri
f
ng a single product line to others offeri
f
ng multiple product lines, and those that serve a single region to global,
diversified companies.
The products and services offere
f
d by the AGS segment enhance those of the Semiconductor Systems segment,
particularly in markets with demanding global service requirements. Competition in the AGS segment includes a diverse group
of third-party service providers as well as customers that choose to perform their own service.
To compete effe
f ctively, we offer
f
products and services to improve system performance, lower overall cost of ownership,
and increase yields and productivity of customers’ fab ope
a
rations. Significant competitive factors include cost-effectiveness and
the level of technical service and suppor
u
t. The importance of these factors varies according to customers’ needs and the type of
products or services offere
f
d.
7

Patents and Licenses
Protection of our technology assets through enforcement of our intellectua
t
l property rights, including patents, is important
for our competitive position. Our practice is to file patent applications in the United States and other countries for inventions
that we consider significant. We have more than 23,500 active patents in the United States and other countries, and additional
applications are pending for new inventions. Although we do not consider our business materially dependent upon any one
patent, our rights and the products made and sold under our patents, taken as a whole, are a significant element of our business.
In addition to our patents, we possess other intellectual property, including trademarks, know-how, trade secrets, and
copyrights.
We enter into patent and technology licensing agreements with other companies when it is determined to be in our best
interest. We pay royalties under patent license agreements for the use, in some of our products, of certain patented technologies.
We also receive royalties from licenses granted to third parties. Royalties received from or paid to third parties have not been
material to our consolidated results of operations.
In the normal course of business, we periodically address the possibility of patent infringement. In responding to such
inquiries, it may become necessary or useful
f
for us to obtain or grant licenses or other rights. However, there can be no
assurance that such licenses or rights will be availabl
a e to us on commercially reasonable terms, or at all. If we are not able to
resolve or settle claims, obtain necessary licenses on commercially reasonable terms, or successful
f ly prosecute or defend our
position, our business, financial condition and results of operations could be materially and adversely affe
f cted.
Governmental Regulation
As a public company with global operations, we are subj
u ect to the laws and regulations of the United States and multiple
foreign jurisdictions. These regulations, which differ among jurisdictions, include those related to financial and other
disclosures, accounting standards, securities, corporate governance, public procurement and public funding, intellectua
t
l
property, tax, trade (including import, export and customs), antitrus
r
t, cybersecurity, environment (including those related to
sustainability and climate), health and safety, employment, immigration and travel regulations, human rights, privacy, data
protection and localization, and anti-corrupt
u ion. See “Risk Factorsr – Legal,
e
Compliance and Othe
t
r Risks
i
– We are exposed to
risks related to the global regulator
e
y envi
r
ronment” for furthe
t
r details.
We are regulated under various international laws regarding the purchase and sale of goods and related items, including
but not limited to those related to trade policies and export regulations, and limitations on transfer
f
of intellectua
t
l property. See
“Risk Factorsr – Business and Industry
r
Risks
i
– Global trade
d
issues and changes in and uncertainties with respect to trade
policies and export regulat
e
ions, including impor
m
t and expor
x
t license requirements,
t
trade sanctions, tariffs
i
and international
trade disp
i
utes, have adverse
r
ly impac
m
ted and could furthe
t
r adverse
r
ly impac
m
t our business and operations, and reduce the
competitiveness of our products and services relative to local and global competitors” for furthe
t
r details.
With respect to environmental, health and safety regulations, we maintain a number of programs that are primarily
preventative in nature and regularly monitor ongoing compliance with applicable laws and regulations. In addition, we have
trained personnel to conduct investigations of any environmental, health, or safety incidents, including, but not limited to, spills,
releases, or possible contamination. See also
l
“Risk Factorsr – Legal,
e
Compliance and Othe
t
r Risks
i
– We are subject to risks
associated with environmental, health and safety
a
regulat
e
ions” for furthe
t
r details.
l
We are subj
u ect to income taxes in the United States and foreign jurisdictions. Our provision for income taxes, effe
f ctive
tax rate and financial results can be and are affe
f cted by numerous factors, including changes in applicable tax laws,
interpretations of applicable tax laws, amount and composition of pre-tax income in jurisdictions with differing tax rates, and
valuation of deferred tax assets. There have been a number of proposed changes in the tax laws that could increase our tax
liabi
a lity. See “Risk Factorsr – Operational and Financial Risks
i
– We operate in jurisdictions with complex
e and changing tax
a
laws” for furthe
t
r details. For additional discussions regarding the impact of compliance with income tax laws and regulations
on our business and operations, see also
l
“Manage
M
ment’s Disc
i
ussion and Analys
l
is of Financial Condition and Resultst
of
Operations– Resultst of Operations – Income Taxes
a
” and Note 13 of the Notes to the Consolidat
d ed Financial Statements.
8

Our People
Our commitment to innovation begins with the commitment to creating an environment in which our employees can do
their best work. Our ability to create differentiated value in the marketpl
t ace is driven by the capability of our people to
anticipate technology inflections and integrate customer requirements. To achieve this level of value creation, we believe we
must continue to attract, hire, develop and retain a world-class global workforce. We invest in our employees by providing
quality training and learning oppor
r
tunities, a compelling career path, building a connected and highly engaged cultur
t
e, and
upholding a high standard of ethics and respect for human rights.
As of October 26, 2025, we employed approximately 36,500 regular full-time employees spanning 25 countries, of whom
approximately 46%, 42% and 12% resided in the Asia-Pacific region, North America, and Europe/Middle East, respectively.
Connected and Collaborat
l
iv
t e Culture
We value great talent and having employees with a broad mix of perspectives, skills and experiences. We therefor
f
e strive
to provide fair and equal opportunity for career development and advancement to all our employees and to build a connected
and highly engaged culture where all of our employees feel they belong. We seek to cultivate a culture that reflects our values –
being the Most Valued Partner, being part of a Winning Team, operating with Responsibility & Integrity, and achieving World
Class Performance.
Talent Acquisition and Retention
t
We believe that our future success is highly dependent upon our continued ability to attract, develop, retain and engage
employees. As part of our effort
f
to attract and retain employees, we offer
f
competitive rewards, compensation and benefits,
including an Employee Stock Incentive Plan, an Employees’ Stock Purchase Plan, healthcare and retirement benefits, parental
and family leave, adoption credits, holiday and paid time off,
f
and tuition assistance.
Employ
m
ee Learning & Developm
l
ent
We seek to create growth and development opportunities to suppor
u
t an engaged and connected workforce. We promote
holistic employee learning
r
and development based on the 70/20/10 model--70% on-the-jo
- b learning, 20% social/collabor
a
ative
and 10% formal training, with a focus on advancing technical skills as well as improving general business acumen to address
increasing work complexity. Also, to help expand profes
f
sional breadth, the segments and functions provide technical and job-
specific training tied to their disciplines, while general profes
f
sional, management, and leadership training is provided at the
corporate level. All training is coordinated centrally and aligned with common objectives through Applied Global University. In
addition to instructor-led and web-based training, we offer
f
state-of-t
f he-art training modalities, such as AI-based simulations and
Augmented and Virtua
t
l Reality learning capabilities, to further the development of our new products, train our manufact
f
ur
t
ing
and field suppor
u
t employees, and facilitate remote collaboration.
Employ
m
ee Engagement
We have historically measured employee engagement through surveys to gain insight into employees’ experiences, levels
of workpl
k ace satisfaction, and key drivers for engagement, belonging and overall well-being. During fiscal 2025, we conducted
an all-employee survey, which was conducted anonymously through an external partner to encourage maximum participation
and elicit candid responses. We also benchmarked the results of that survey against a large and standardized data set involving
large technology companies globally. We use the results of employee surveys like the one we conducted in fiscal 2025 and the
associated benchmarking data to help us better understand enterprise-wide trends, gauge effe
f ctiveness of interventions, and
define targeted employee populations (e.g., early tenure employees). Employee survey results are also used to provide leaders
and people managers with actionable insights tailored to their own groups that can further enhance employee engagement and
collabor
a
ation. These actionable insights are then integrated with the people strategy process and cadence within Applied.
Additional information regarding our activities related to our people and sustainability, can be found in our latest Impact
Report, which is located on our website at https://www.appliedmaterials.com/us/en/corporate-responsibility.html. The Impact
Report is updated annually. This website address is intended to be an inactive textual reference only. None of the information
on, or accessible through, our website is part of this Form 10-K or is incorporated by reference herein.
9

Information about our executive offi
f cers
The following tabl
a e and notes set forth information about our executive offi
f cers:
Name of Individual
Position
Gary E. Dickerson(1)
President, Chief Executive Offi
f cer
Brice Hill(2)
Senior Vice President, Chief Financial Offi
f cer and Global Information Services
Prabu Raja
a (3)
President, Semiconductor Products Group
Timothy M. Deane(4)
Senior Vice President, Applied Global Services
Teri Little(5)
Senior Vice President, Chief Legal Offi
f cer and Corporate Secretary
Omkaram Nalamasu(6)
Senior Vice President, Chief Technology Offi
f cer
(1)
Mr. Dickerson, age 68, was named President of Applied in June 2012 and appointed Chief Executive Offi
f cer and a
member of the Board of Directors in September 2013. Before joining Applied, he served as Chief Executive Offi
f cer and a
director of Varian Semiconductor Equipment Associates, Inc. (Varian) from 2004 until its acquisition by us in November
2011. Prior to Varian, Mr. Dickerson served 18 years with KLA-Tencor Corporation (KLA-Tencor), a suppl
u
ier of process
control and yield management solutions for the semiconductor and related industries, where he held a variety of
operations and product development roles, including President and Chief Operating Offi
f cer. Mr. Dickerson started his
semiconductor career in manufac
f
turing and engineering management at General Motors’ Delco Electronics Division and
then AT&T Technologies.
(2)
Mr. Hill, age 59, has been Senior Vice President and Chief Financial Offi
f cer since March 2022. He also oversees Global
Information Services for Applied. Prior to joining Applied, Mr. Hill was Executive Vice President and Chief Financial
Offi
f cer of Xilinx, Inc., a company that designed and developed programmabl
a e devices and associated technologies, from
April 2020 until its acquisition by Advanced Micro Devices, Inc. in February 2022. Prior to Xilinx, Mr. Hill served in
various finance positions with Intel Corporation for 25 years, most recently as Corporate Vice President and Chief
Financial Offi
f cer and Chief Operating Offi
f cer, Technology, Systems and Core Engineering Group.
(3)
Dr. Raja
a , age 63, has been President, Semiconductor Products Group since March 2023. He previously served as Senior
Vice President, Semiconductor Products Group of Applied from November 2017 to March 2023, and before that served in
various senior management, product development and operational roles since joining Applied in 1995, including Group
Vice President and General Manager of the Patterning and Packaging Group.
(4)
Mr. Deane, age 60, has been Senior Vice President, Applied Global Services since December 2024 and previously served
as Group Vice President, Applied Global Services since September 2022. He joined Applied in 1995 and previously
served in various senior management and field operations roles, including head of Field Operations and Business
Management for the Semiconductor Products Group, Account General Manager and Region General Manager.
(5)
Ms. Little, age 61, joined Applied as Senior Vice President, Chief Legal Offi
f cer and Corporate Secretary
r
in June 2020.
Prior to joining Applied, Ms. Little served as Executive Vice President, Chief Legal Offi
f cer and Corporate Secretary
r
at
KLA Corporation from August 2017 to June 2020. Prior to that she was Senior Vice President, General Counsel and
Corporate Secretary of
r
KLA Corporation from October 2015 until August 2017, and prior to that she held various other
positions at KLA Corporation since 2002. Prior to joining KLA Corporation, she was a Senior Corporate Associate at
Wilson Sonsini Goodrich & Rosati, and a Litigation Associate at Heller Ehrman White & McAuliffe.
f
(6)
Dr. Nalamasu, age 67, has been Senior Vice President, Chief Technology Offi
f cer since June 2013, and President of
Applied Ventures, LLC, Applied’s venture capi
a tal arm, since November 2013. He had served as Group Vice President,
Chief Technology Offi
f cer from January 2012 to June 2013, and as Corporate Vice President, Chief Technology Offi
f cer
from January 2011 to January 2012. Upon joining Applied in June 2006 until January 2011, Dr. Nalamasu was an
Appointed Vice President of Research and served as Deputy Chief Technology Offi
f cer and General Manager for the
Advanced Technologies Group. From 2002 to 2006, Dr. Nalamasu was a NYSTAR distinguished profes
f
sor of Materials
Science and Engineering at Rensselaer Polytechnic Institut
t e, where he also served as Vice President of Research from
2005 to 2006. Prior to Rensselaer, Dr. Nalamasu served in several leadership roles at Bell Labor
a
atories.
Available Information
Our website is http://w
/
ww.appliedmaterials.com. We make availabl
a e free of charge, on or through our website, our
annual, quarterly and current reports, and any amendments to those reports, as soon as reasonably practicable afte
f r
electronically filing such reports with, or furnishing them to, the SEC. The SEC’s website, www.sec.gov, contains reports,
proxy and information statements, and other information regarding issuers that file electronically with the SEC. These website
addresses are intended to be an inactive textual references only. None of the information on, or accessible through, these
websites is part of this Form 10-K or is incorporated by reference herein.
10

Item 1A:
Risk
i
Factors
t
The following risk factors could materially and adversely affe
f ct our business, financial condition or results of operations
and cause reputational harm, and should be careful
f ly considered in evaluating our business, in addition to other information
presented elsewhere in this report.
Business and Industry Risks
y
The industries we serve can be volatile and diffi
i
cult to predict.
d
The industries in which we operate, including the global semiconductor industry, have hi
r
storically been cyclical and are
subj
u ect to volatility in customer demand. Demand for our produc
d
ts and services is impacted by technology inflections and
advances in fabr
a
ication processes, new and emerging technologies and market drivers, production capacity relative to demand
for semiconductor chips and electronic devices, end-user demand, the timing of customers’ investment in new or expanded
fabr
a
ication plants, customers’ capa
a
city utilization, production volumes, access to afford
f
able capital, business and consumer
buying patterns and general economic and political conditions. Artificial intelligence (AI) and technologies related to AI are a
significant demand driver for the industries we serve. AI is evolving rapidly
a
and the expected timing and amount of investments
related to AI can change significantly. As a result, it is difficult to accurately forecast demand for our products related to AI.
Changes in demand can affe
f ct the timing and amounts of customer investments in technology and manufact
f
ur
t
ing equipment
and can significantly impact our operating results. The amount and mix of our customers’ capital equipment spending between
different products and technologies can also significantly impact our operating results.
To meet rapidly
a
changing demand, we must accurately forecast demand and effe
f ctively manage our resources,
investments, production capa
a
city, supply
u
chain, workforce, inventory and other components of our business. We may incur
unexpected or additional costs to align our business operations with changes in demand. If we do not effe
f ctively manage these
challenges, our business performance and operating results may be adversely impacted. Even with effe
f ctive allocation of
resources and management of costs, our gross and operating margins, cash flows and earnings may be adversely impacted
during periods of changing demand.
We are expos
x
ed to risks associated
t
with
i
an uncertain global economy.
Our business and the industries in which we operate can be impacted by uncertain or adverse economic and business
conditions, including uncertainties and volatility in the financial markets, national debt, fiscal or monetary concerns, inflation
and changes in interest rates, bank failures, tariffs and trade policies and economic recession. These conditions have caused, and
may in the future cause, our customers to delay, cancel or refrain from purchasing our equipment or services, which could
negatively impact demand for our products and services, reduce our backlog and increase our inventory. Customers may also
scale back operations, exit businesses, merge with other manufact
f
ur
t
ers, or file for bankruptcy, which can reduce our revenue
and result in additional inventory or bad debt expense. Other equipment manufact
f
ur
t
ers may also consolidate or form strategic
alliances, which could adversely affe
f ct our ability to compete.
These conditions make it more difficult to accurately forecast operating and financial results and make business and
investment decisions. We may be required to implement additional cost reduction effort
f
s, including restructur
t
ing activities,
which may adversely impact our ability to capitalize on opportunities. Even during periods of economic uncertainty or lower
demand, we must continue to invest in research and development and maintain a global business infrastructur
t
e to compete
effe
f ctively and suppor
u
t our customers. The consequences of these conditions could have an adverse effe
f ct on our business,
financial condition and results of operations.
Our investment portfol
f io is subj
u ect to general credit, liquidity, market and interest rate risks, which may be exacerba
r
ted
by rising inflation, rising interest rates, bank failures or economic recession and the value and liquidity of our portfol
f io and
returns on pension assets could be negatively impacted and lead to impairment charges. We also maintain cash balances in
various bank accounts globally and if any of these financial institut
t ions become insolvent, it could limit our ability to access our
cash and affe
f ct our ability to manage our operations.
We are expos
x
ed to the risks of operating a global bu
n
sine
i
ss.
We have product development, engineering, manufac
f
turing, sales and other operations distributed throughout many
countries, and some of our business activities are concentrated in certain geographic areas. In fiscal 2025, approximately 89%
of our net revenue was to customers in regions outside the United States. As a result of the global nature of our operations, we
are subj
u ect to a number of factors that could have an adverse impact on our business, financial condition and results of
operations. These factors include global political and social conditions, such as policies or regulations within countries,
including in China, the United States and countries in Europe and Asia, that favor domestic companies over non-domestic
companies, including effort
f
s to promote the development and growth of local competitors to us, or regarding national,
commercial or security issues. Other factors include geopolitical turmoil, acts of war or social unrest; our ability to maintain
appropriate business processes, procedur
d
es and internal controls in our geographically diverse operations; delays or restrictions
11

on personnel travel and in shipping materials or products; our ability to develop relationships with local customers, suppl
u
iers
and governments; performance of our geographically diverse third-party providers; impacts of regional or global health
epidemics, natural disasters and extreme and chronic weather events; fluctuations in interest rates and currency exchange rates;
as well as other factors discussed in this Risk Factors section. Any of these factors may have an adverse impact on our business
and manufact
f
ur
t
ing operations or demand for our produc
d
ts and services, and our performance and results of operations may be
adversely affe
f cted.
Global
l
trade issues and changes in and uncertainties with
i
respect to trade policie
l
s and expor
x
t regu
e
lations,s includin
d
g
import and expor
x
t license requirements,s trade sanctions,s tariffs
i
and internatio
t nal trade disp
i
utes
t
,s have adverse
r
ly impacted
and couldl
furthe
t
r adverse
r
ly impact our busine
i
ss and operations, and
s
reduce the competitiv
t
eness of our productst
and
services relative to local and global competito
t
rs.
A majority of our products and services are delivered to customers in jurisdictions outside of the United States, including
China, Taiwan and Korea. We also purchase a significant portion of equipment and suppl
u
ies from suppl
u
iers outside of the
United States. There is inherent risk, based on the complex relationships among the United States and the countries in which we
conduct our business, that political, diplomatic and national security factors can lead to global trade restrictions and changes in
trade policies and export regulations that affe
f ct the semiconductor industry.
r
The United States and other countries have imposed
and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods and
could significantly increase or impose new tariffs on a broad array of goods. Trade restrictions and export regulations, or
increased or new tariffs and additional taxes, including any retaliatory measures, can negatively impact end-user demand and
customer investment in semiconductor equipment, increase our supply
u
chain complexity and our manufact
f
ur
t
ing costs, decrease
margins, reduce the competitiveness of our products, or restrict our ability to sell products, provide services or purchase
necessary equipment and suppl
u
ies, any or all of which could have a material and adverse effe
f ct on our business, results of
operations, or financial condition.
For example, certain international sales depend on our ability to obtain export licenses, and our inability to obtain such
licenses has limited and could further limit our markets and negatively impact our business. Over the past several years, the
U.S. government announced additional export regulations for U.S. semiconductor technology sold in China, including wafer
fabr
a
ication equipment and related parts and services, with disparate impact on companies in different jurisdictions, which have
limited the market for certain of our products and services, adversely impacted our revenues and increased our exposure to
foreign and Chinese domestic competition. The U.S. Department of Commerce expanded export license requirements for U.S.
companies that sell certain products or provide certain services to entities in China whose actions or functions are intended to
suppor
u
t military end uses, eliminated certain export license exceptions for exports of certain items to China, added certain
Chinese companies to its “Entity List,” making those companies subj
u ect to additional licensing requirements, and expanded
licensing requirements for exports to China of items for use in the development or production of integrated circuits and certain
technologies. These regulations require us to obtain additional export licenses to supply
u
certain of our products or provide
services to certain customers in China. Obtaining export licenses may be difficult and time-consuming, and there is no
assurance we will be issued licenses on a timely basis or at all. Our inability to obtain such licenses could limit our sales in
China, may cause us to be displaced by foreign and Chinese domestic companies and adversely affe
f ct our results of operations.
The implementation and interpretation of these complex rules and other regulatory actions taken by the U.S. government are
uncertain and evolving and may make it more challenging for us to manage our operations and forecast our operating results.
The U.S. and other governments may promulgate new or additional export licensing or other requirements that have the effe
f ct
of further limiting our ability to provide certain produc
d
ts and services to customers outside the U.S., including China. The U.S.
government may also revise or expand existing requirements or issue guidance clarifying
f
the scope and application of these
requirements, which could change the impact of these rules on our business and manufact
f
ur
t
ing operations. The U.S.
government may also continue to add customers to its “Entity List,” promulgate additional restrictions, or take measures that
could disrupt our produc
r
t shipments or the provision of services to certain customers. These and other potential futur
t
e
regulatory changes could materially and adversely affe
f ct our business, results of operations or financial condition.
As a global business with customers, suppl
u
iers and operations in many countries around the world, from time to time we
may receive inquiries from government authorities about transactions between us and certain foreign entities. For example,
since 2022, we have received multiple subpoena
u
s from government authorities requesting information relating to certain China
customer shipments and export controls compliance, including from the U.S. Department of Justice, the U.S. Commerce
Department Bureau of Industry
r and Security and the U.S. Securities and Exchange Commission. We are cooperating fully with
the U.S. government in these matters. We have continued to receive related subpoena
u
s, as well as requests for information, and
may in the future receive additional related subpoena
u
s and requests for information from such or other government authorities.
Any such inquiries are subj
u ect to uncertainties, and we cannot predict the outcome of these inquiries, or any other governmental
inquires or proceedings that may occur. Any violation or alleged violation of law or regulations could result in significant legal
costs or in legal proceedings in which we or our employees could be subj
u ected to fines and penalties and could result in
restrictions on our business and damage to our global brand and reputation, and could have a material and adverse impact on
our business operations, financial condition and results of operations.
12

Furthermore, government authorities may take retaliatory actions, impose conditions that require the use of local suppl
u
iers
or partnerships with local companies, require the license or other transfer
f
of sensitive data or intellectua
t
l property, or engage in
other effort
f
s to promote local businesses and local competitors, which could have a material and adverse impact on our
business. Many of these challenges are present in China and Korea, markets that represent a significant portion of our business.
We are expos
x
ed to risks and uncertai
t nt
i
yt related to changes in trade policie
l
s, and increased tariffs
i
and trade disp
i
utes
t
.
Our business, financial condition and results of operations may be adversely affe
f cted by uncertainty and changes in trade
policies, including tariffs, and trade disputes between the United States and other countries. The United States has announced
changes to its trade policy, including increased tariffs on imports. These actions have caused subs
u
tantial uncertainty and have
resulted in retaliatory measures, including new tariffs on U.S. goods imposed by China and other countries. Some of these
actions have been followed by announcements of limited exemptions and temporary paus
r
es and trade frameworks with certain
countries.
A significant number of our customers and suppl
u
iers are located outside of the United States. Increases in tariffs increase
our costs and can negatively impact our margins and reduce the competitiveness of our products due to the increase in the cost
of importing materials, parts and components used in manufac
f
turing our products. Tariffs can also increase supply
u
chain
complexity and may make it more difficult to purchase necessary equipment and suppl
u
ies to manufact
f
ur
t
e our products.
Increases in tariffs, including reciprocal and sector-based tariffs, also increase the cost to our customers of importing our
products, which could harm customer demand for our produc
d
ts. Uncertainty or volatility with respect to tariffs and trade
disputes may also make it difficult for us and our customers and suppl
u
iers to make and execute business and capital equipment
investment plans; lead to global or regional inflation and economic recession and reduce demand for semiconductor chips and
electronic devices; cause our customers to delay or cancel orders or negatively impact our competitive position; impede our
ability to purchase materials, including critical materials and minerals, and disrupt
r
supply
u
chain and logistics. For example, in
2025 the Chinese government implemented export controls on the export of rare earth minerals that are used in certain of our
products and may implement additional controls in the future. We may take actions to mitigate the impact of increases in tariffsf
and changes in trade policies, but there can be no assurance that we will be successful,
f
and any such actions could result in
additional costs, manufac
f
turing delays or other difficulties, as well as additional risks, and may not be effe
f ctive. Any or all of
these factors may have a material and adverse impact on our business, financial condition and results of operations.
We are expos
x
ed to risks associated
t
with
i
a high
i
ly concentrated
t
custom
t
er base.
A relatively limited number of customers account for a subs
u
tantial portion of our business. As a result, the actions of even
a single customer have exposed and can further expose our business and operating results to greater volatility. Our customer
base is geographically concentrated, particularly in China, Taiwan and Korea, and export regulations that apply to customers in
certain countries, such as those in China, have exposed and can further expose our business and operating results to greater
volatility. The geographic concentration of our customer base could shift over time as a result of changes in technology and
competitive landscape,
a
as well as government policy and incentives to develop regional semiconductor industries. The mix and
type of customers and sales to any single customer, including as a result of changes in government policy, have varied and may
vary significantly over time and may continue to have a significant impact on our operating results. Our products are config
f ured
to customer specifications, and changing, rescheduling or canceling orders may result in significant, non-recoverabl
a e costs. If
customers do not place orders, or they subs
u
tantially reduce, delay or cancel orders, we may not be able to replace the business,
which may have a material and adverse impact on our results of operations and financial condition. The concentration of our
customer base increases our risks related to the financial condition of our customers, and the deterioration in financial condition
of a single customer or the failure of a single customer to perform its obligations could have a material and adverse effe
f ct on
our results of operations and cash flow. To the extent our customers experience liquidity constraints, we may incur bad debt
expense, which may have a significant impact on our results of operations. Majo
a r customers may seek pricing, payment,
intellectua
t
l property-related, or other commercial terms that are less favorable to us, which may have a negative impact on our
business, cash flow, revenue and gross margins.
Suppl
p y ch
l
ain
i
disru
i
pt
u io
t ns,s manufac
f
turing
i
interruptions or delays
a
, or
s
the failure to accurately forecast custom
t
er
demand,d could af
l
fe
f ct our abili
i ty to me
i
et custom
t
er demand,d lead to high
i
er costs, or result in excess or obsolete
l
inventor
t
y.
r
Our business depends on our timely supply of pr
u
oduc
d
ts and services to meet the changing requirements of our customers,
which depends in part on the timely delivery of pa
r
rts, materials and services from suppl
u
iers and contract manufact
f
ur
t
ers.
Volatility in demand for our produc
d
ts and worldwide demand for semiconductor chips and electronic devices can impact our
suppl
u
iers’ ability to meet our demand requirements and has in the past resulted in a shortage of parts, materials and services
needed to manufac
f
ture our products. These shortages, as well as delays in and unpredictabi
a lity of shipments due to
transportation interrupt
u ions, may adversely impact our manufact
f
ur
t
ing operations and our ability to meet customer demand.
Supply
u
chain constraints may increase costs of logistics and parts for our products and may cause us to pass on increased costs
to our customers, which may lead to reduced demand for our products. Supply
u
chain disrupt
r
ions have in the past caused, and
may from time to time cause, delays in our equipment production and delivery
r
schedules, which can lead to our business
13

performance becoming significantly dependent on quarter-end production and delivery
r schedules.
We may further experience supply
u
chain disrupt
r
ions, significant interrupt
u ions of our manufact
f
ur
t
ing operations, delays in
our ability to deliver or install products or services, increased costs, customer order cancellations or reduced demand for our
products as a result of:
•
global trade issues and changes in and uncertainties with respect to trade and export regulations, trade policies and
sanctions, tariffs, international trade disputes, particularly those relating to exports of certain technologies to China,
where a significant portion of our supply
u
chain is located, and any retaliatory measures, that adversely impact us or our
direct or sub-
u
tier suppl
u
iers;
•
political instability, social unrest, terrorism, acts of war or other geopolitical turmoil in locations where we or our
customers or suppl
u
iers have operations;
•
the failure or inability to accurately forecast demand and obtain quality parts on a cost-effective basis;
•
cybersecurity incidents affe
f cting our supply
u
chain;
•
volatility in the availabi
a lity and cost of parts, commodities, energy and shipping related to our products, including
increased costs due to rising inflation or interest rates or other market conditions, as well as uncertainties arising from
the imposition of tariffs and any retaliatory measures;
•
diffi
f culties or delays in obtaining required import or export licenses and approvals;
•
shipment delays due to transportation interrupt
u ions or capa
a
city constraints;
•
a worldwide shortage of semiconductor components as a result of sharp
r
increases in demand for semiconductor
products in general;
•
limited availability of critical materials and minerals, including due to Chinese government restrictions on the export
of certain rare earth minerals implemented in 2025, which could be expanded in the future, and limited feasible
alternatives to materials subj
u ect to existing or proposed regulations to limit their use (such as hydroflu
f orocarbons
r
and
per- and polyflu
f oroalkyl
k
subs
u
tances), which are found in parts, components, process chemicals and other materials
suppl
u
ied to us or used in the manufact
f
ur
t
ing or operations of our products; and
•
impacts of natural disasters, extreme and chronic weather events, regional or global health epidemics, or other events
beyond our control.
If a suppl
u
ier fails to meet our requirements concerning quality, cost, intellectua
t
l property protection or other perform
f
ance
factors, or does not meet regulatory requirements applicable to our supply
u
chain, we may transfer
f
our business to alternative
sources, which could result in manufact
f
ur
t
ing delays, additional costs or other difficulties, and impair our ability to protect,
enforce and extract the full value of our intellectua
t
l property rights and the intellectua
t
l property rights of our customers and
other third parties.
If we need to rapidly
a
increase our business and manufact
f
ur
t
ing capacity to meet increases in demand or expedited shipment
schedules, this may strain our manufact
f
ur
t
ing and supply
u
chain operations and negatively impact our working capital. If we are
unable to accurately forecast demand for our products, we may purchase more or fewer parts than necessary or incur costs for
canceling, postponing or expediting delivery of pa
r
rts. If we purchase or commit to purchase inventory in anticipation of
customer demand that does not materialize, or the inventory is rendered obsolete by the rapid pa
a
ce of technological change, or
if customers reduce, delay or cancel orders, we may incur excess or obsolete inventory charges.
Any of these events impacting our supply
u
chain could affe
f ct our ability to meet our customers’ demand, result in higher
costs to us and have an adverse effe
f ct on customer relationships and our business, financial condition and results of operations.
We are expos
x
ed to various factor
t
sr that impact the industries in which we operate,e includin
d
g factor
t
s sp
r
ecific to the
semiconductor
t
industry.
t
The industries in which we operate are characterized by factors that impact demand for and the profita
f
bi
a lity of our
products and services and our operating results. The largest proportion of our net revenue and profita
f
bi
a lity is derived from our
Semiconductor Systems segment’s sale of a wide range of equipment used to fabr
a
icate semiconductor chips, and a majo
a rity of
the revenue of Applied Global Services is from sales to semiconductor manufact
f
ur
t
ers. The industries in which we operate,
including the semiconductor industry,
r
are characterized by factors particular to these industries that impact demand for and the
profita
f
bi
a lity of our products and services, including:
•
changes in demand for semiconductor chips and electronic devices, including those related to fluctuations in consumer
buying patterns tied to general economic or geopolitical conditions, seasonality or the introduction of new products;
•
the frequency and complexity of technology transitions and inflections, and our ability to timely and effe
f ctively
anticipate and adapt to these changes;
14

•
the cost of research and development due to many factors, including shrinking geometries, the use of new materials,
new and more complex device structur
t
es, more applications and process steps, increasing chip design costs, and the
cost and complexity of integrated manufac
f
turing processes;
•
the need to reduce product development time and meet technical challenges;
•
the number of types and varieties of semiconductors and number of applications;
•
capital requirements for building and operating new fabr
a
ication plants and customers’ ability to raise the necessary
capital;
•
trade, regulatory, tax or government incentives impacting customers’ investment in new or expanded fabr
a
ication plants
and semiconductor research and development;
•
the cost and complexity for customers to move from product design to volume manufact
f
ur
t
ing, and the impact on
investment in capital equipment;
•
semiconductor manufac
f
turers’ levels of capital expenditures and the allocation of capital investment to market
segments that we do not serve, such as lithography, or segments where our products have lower relative market
presence;
•
delays in installation of our equipment delivered to customers;
•
changes in growth rates among the semiconductor and other industries in which we operate;
•
the importance of increasing market positions in segments with growing demand;
•
manufact
f
ur
t
ers’ ability to reconfig
f ure and re-use equipment, resulting in diminished need to purchase new equipment
and services from us, and challenges in providing parts for reused equipment;
•
the availabi
a lity of spare parts to maximize the time that customers’ systems are availabl
a e for production;
•
system reliability and productivity and the effe
f ct on demand for fabr
a
ication systems as a result of their increasing
productivity, device yield and reliabi
a lity;
•
shorter cycle times between order placements by customers and product shipment require greater reliance on
forecasting of customer investment, which may lead to inventory write-offs and manufact
f
ur
t
ing ineffi
f ciencies that
decrease gross margin;
•
competitive factors that make it difficult to enhance position, including total cost of manufact
f
ur
t
ing system ownership
and other challenges in securing development-tool-of-record (DTOR) and production-tool-of-record (PTOR) positions
with customers;
•
consolidation in the semiconductor industry,
r
including among semiconductor manufact
f
ur
t
ers and among semiconductor
equipment suppl
u
iers;
•
shifts in sourcing strategies by computer and electronics companies, and manufact
f
ur
t
ing processes for advanced circuit
technologies, that impact the equipment requirements of our foundry customers;
•
the fragmentation of semiconductor markets, leading certain markets to become too small to suppor
u
t the cost of a new
fabr
a
ication plant, while others require less technologically advanced products;
•
the importance of specialty markets (such as internet of things, communications, automotive, power and sensors) that
use process technologies that have a low barrier to entry;
r
•
the increasing role for and complexity of software in our products;
•
the focus on reducing energy usage and improving the environmental impact and sustainability associated with
manufact
f
ur
t
ing operations, and the availabi
a lity of adequate and reliabl
a e sources of energy; and
•
the importance of advanced packaging to AI computing.
If we do not effe
f ctively address these factors, accurately forecast and allocate appropriate resources and investment
towards addressing key technology changes and inflections, successful
f ly develop and commercialize products to meet demand
for new technologies, and effe
f ctively address industry
r
trends, our business and results of operations may be materially and
adversely impacted.
The industries in which we operate are high
i
ly competit
t iv
t e and subject to rapid
a
technologi
o cal and market changes.
We operate in a highly competitive environment in which innovation is critical, and our future success depends on many
factors, including the development of new technologies, commercialization of our products and services, and our ability to
increase our position in our current markets and expand into adja
d cent and new markets. The development, introduc
d
tion and
15

suppor
u
t of products in a geographically diverse and competitive environment requires collabor
a
ation with customers and other
industry pa
r
rticipants, which has grown more complex and expensive over time. New or improved products may entail higher
costs and longer development cycles, and may have unforeseen product design or manufact
f
ur
t
ing defects. To compete
successful
f ly, we must:
•
identify
f
and address technology inflections, market changes, competitor innovations, new applications, customer
requirements and end-use demand;
•
develop new products and disrupt
r
ive technologies, improve and develop new applications for existing products, and
adapt products for use by customers in different applications and markets with varying technical requirements;
•
complete our new Equipment and Process Innovation and Commercialization Center and other major infrastructure
t
projects on schedule and on budget, and realize the anticipated benefits of those projects;
•
differe
f
ntiate our products from those of competitors, meet customers’ performance specifications, and successful
f ly
commercialize our products and achieve market acceptance;
•
maintain operating flexibility to enable responses to changing markets, applications and customer requirements;
•
enhance our worldwide operations across our businesses to reduce cycle time, enable continuous quality improvement,
reduce costs, and enhance design for manufact
f
ur
t
ability and serviceability;
•
focus on produc
f
t development and sales and marketing strategies that address customers’ high value problems and
strengthen customer relationships;
•
effectively allocate resources between our existing products and markets, the development of new produc
d
ts, and
expanding into new and adja
d cent markets;
•
improve the productivity of capital invested in research and development activities;
•
accurately forecast demand, work with suppl
u
iers and meet production schedules for our products, improve our
manufact
f
ur
t
ing processes and achieve cost effi
f ciencies across product offeri
f
ngs; and
•
implement changes in our design engineering methodology to reduce material costs and cycle time and improve
product lifef cycle management.
If we do not successful
f ly anticipate technology inflections, develop and commercialize new products and technologies,
and respond to changes in customer requirements and market trends, our business performance and operating results may be
materially and adversely impacted.
We are expos
x
ed to risks related to government incentiv
t es and othe
t
r agreements that may
a involve government entiti
i es.
From time to time, we enter into agreements with government entities for grants, tax benefits and other incentives, other
funding
f
related to our investment, research and development and production activities or for sale of our products to government
entities or government-funded programs. These agreements typically include terms that are not common in similar agreements
with non-governmental entities, including representations and warranties, covenants and certifications, and record-keeping,
accounting, audit, intellectual property rights-sharing, information handling, supply
u
chain management, headcount, security,
disclosure and other requirements. These agreements may also require us to achieve or maintain certain levels of investment,
capital spending and performance milestones. Compliance with these requirements may add complexity to our operations and
increase our costs, and a failure to comply could result in cancelation of agreements or transactions, investigations, civil and
criminal penalties, forfeitur
t
e of profits
f
, reduction, termination or clawback of any funding, suspension or debarment from doing
business with the government, or other penalties, any of which could have a material and adverse effe
f ct on our business,
financial condition and results of operations.
We are expos
x
ed to factor
t
s sp
r
ecific to the disp
i
lay
a industry.
We are a suppl
u
ier to the global display industry,
r
which has experienced considerable volatility in capital equipment
investment levels, due in part to the limited number of display manufact
f
ur
t
ers, the concentrated nature of end-use applications,
production capacity relative to end-use demand, the speed of adopting new technologies and panel manufact
f
ur
t
er profitabi
a lity.
Industry grow
r
th depends primarily on consumer demand for increasingly larger and more advanced TVs, and on demand for
advanced smartphones and mobile device displays, which demand is highly sensitive to cost and improvements in technologies
and featur
t
es. Demand for and the profita
f
bi
a lity of our display products and services is impacted by the foregoing industry
r
factors, as well as the introduction of and rate of transition to new types of display technologies, our ability to anticipate and
adapt to technology transitions and inflections, and the expansion of display manufact
f
ur
t
ing facilities in China. If we do not
successful
f ly develop and commercialize products to meet demand for new and emerging display technologies, or if industry
r
demand for display fabr
a
ication equipment and technologies does not grow, our business and our operating results may be
adversely impacted.
16

We are expos
x
ed to risks associated
t
with
i
expandi
x
ng
i
into new and related marketst and industries.
As part of our growth strategy, we seek to continue to expand into related or new markets and industries, either with our
existing products or with new products developed internally, or those developed in collabor
a
ation with third parties, or obtained
through acquisitions. Our ability to successful
f ly expand our business into new and related markets and industries may be
adversely affe
f cted by a number of factors, including:
•
the need to devote additional resources to develop new products for, and operate in, new markets;
•
the need to develop new sales and technical marketing strategies and to develop relationships with new customers;
•
differing rates of profit
f ability and growth among multiple businesses;
•
our ability to anticipate demand, capitalize on opportunities and avoid or minimize risks;
•
the complexity of managing multiple businesses with variations in production planning, execution, supply
u
chain
management and logistics;
•
the adoption of new business models, business processes and systems;
•
the complexity of entering into and effe
f ctively managing strategic alliances or partnering opportunities;
•
the need to attract, motivate and retain employees with skills and expertise in these new areas;
•
new and more diverse customers and suppl
u
iers, including some with limited operating histories, uncertain or limited
funding, evolving business models or locations in regions where we do not have, or have limited, operations;
•
new or different competitors with potentially more financial or other resources, industry
r
experience and establ
a ished
customer relationships;
•
entry
r
into new industries and countries, with differ
f ing levels of government involvement, laws and regulations, and
business, employment and safety practices and requirements;
•
third parties’ intellectua
t
l property rights; and
•
the need to comply with, or work to establ
a ish, industry
r standards and practices.
We are expos
x
ed to risks related to the use of AI by us and our competito
t
rs.
We are increasingly incorporating AI capabilities into the development of technologies, our business operations and our
products and services. AI technology is complex and rapidly
a
evolving and may subj
u ect us to significant competitive, legal,
regulatory, operational and other risks. The implementation of AI can be costly, and there is no guarantee that our use of AI will
enhance our technologies, benefit our business operations, or produce products and services that are preferred by our customers.
Our competitors may be more successful
f
in their AI strategy and develop supe
u
rior products and services with the aid of AI
technology. Additionally, AI algorithms or training methodologies may be flawed, and datasets may contain irrelevant,
insufficient or biased information, which can cause errors in outputs. This may give rise to legal liabi
a lity, damage our
reputation, and materially harm our business. The use of AI in the development of our products and services could also cause
loss of intellectua
t
l property, as well as subj
u ect us to risks related to intellectua
t
l property infringement or misappropriation, data
privacy and cybersecurity. We also utilize third-party providers of AI capabilities, and our ability to implement AI successful
f ly
in our business operations relies on our continued access to third-party providers and safeguards implemented by them.
Additionally, AI technology may also create ethical issues, which could impair market adoption of such technology and impair
demand for our products and services. Furthermore, the United States and other countries may adopt laws and regulations
related to AI. These laws and regulations could cause us to incur greater compliance costs and limit the use of AI in the
development of our products and services. Any failure or perceived failure by us to comply with these regulatory requirements
could subj
u ect us to legal liabi
a lities, damage our reputation, or otherwise have a material and adverse impact on our business.
Operational and Financial Risks
p
We are expos
x
ed to risks related to protect
t
io
t n and enfo
n
rcement of intellectual propertyt righ
i
ts.
Our success depends on the protection of our technology using patents, trade secrets, copyrights and other intellectua
t
l
property rights. Infringement or misappropriation of our intellectua
t
l property rights, such as the manufact
f
ur
t
e or sale of
equipment or spare parts that use our technology without authorization, could result in uncompensated lost market and revenue
opportunities. Detecting and preventing misuse of our intellectual property is difficult and costly, and we cannot be certain that
our protective measures will be successful.
f
Our ability to enforce our intellectua
t
l property rights is subj
u ect to litigation risks and
uncertainty as to the protection and enforceability of those rights in some countries. Enforcement effort
f
s may be subj
u ect to
claims that our rights are invalid or unenforceable and may result in counterclaims against us, which could have a negative
impact on our business. If we are unable to enforce and protect intellectua
t
l property rights, or if they are circumvented, rendered
obsolete, invalidated by the rapi
a d pace of technological change, or stolen or misappropriated by employees or third parties, it
17

could have an adverse impact on our competitive position and business. Changes in intellectua
t
l property laws or their
interpretation may impact our ability to protect and assert our intellectua
t
l property rights, increase costs and uncertainties in the
prosecution of patent applications or related enforcement actions and diminish the value and competitive advantage confer
f red
by our intellectua
t
l property assets.
From time to time third parties have asserted, and may continue to assert, intellectua
t
l property claims against us and our
products. Claims that our products infringe the rights of others, whether or not meritorious, can be expensive and time-
consuming to defend and resolve, and may divert the effort
f
s and attention of management and personnel. The inability to obtain
rights to use third-party intellectua
t
l property on commercially reasonable terms could have an adverse impact on our business.
We may face claims based on the theftf or unauthorized use or disclosure of third-party trade secrets and other confid
f ential
business information. Any of these incidents and claims could severely harm our business and reputation, result in significant
expenses, harm our competitive position, and prevent us from selling certain products, all of which could have a material and
adverse impact on our business and results of operations.
We are expos
x
ed to cyberse
r
curity
i
threatst and incidents.
t
In the conduct of our business, we collect, use, transmit, store and otherwise process data using information technology
systems, including systems owned and maintained by us or our third-party providers. These data include confid
f ential
information and intellectua
t
l property belonging to us or our customers or other business partners, and personal information of
individuals. All information technology systems are subj
u ect to disrupt
r
ions, outages, failures and security breaches or incidents,
which may be caused by a variety of internal and external factors. We and our third-party providers have experienced, and
expect to continue to experience, cybersecurity incidents. Cybersecurity incidents may range from physical attacks on our
computer system or network infrastructur
t
e, to employee or contractor error or misuse or unauthorized use of information
technology systems or confid
f ential information, to individual attempts to gain unauthorized access to these information
systems, to sophisticated cybersecurity attacks, or advanced persistent threats, any of which may target or impact us directly or
indirectly through our third-party providers and global supply
u
chain. Threat actors may also attempt to influence employees,
suppl
u
iers and other third-party providers, or customers to disclose sensitive information to gain access to our, our customers’ or
business partners’ data. Cybersecurity attacks are increasing in number and the attackers are increasingly organized and well-
financed, or at times suppor
u
ted by state actors. Geopolitical tensions or conflicts
f
, such as Russia’s invasion of Ukraine, tension
with China and confli
f ct in the Middle East may create a heightened risk of cybersecurity attacks. The techniques used by threat
actors to identify vulne
f
rabi
a lities and craftf cybersecurity attacks change frequently and may increasingly involve the use of new
technologies, including AI and quantum computing. AI and deepfake technologies could be used to attack information systems
by creating more effe
f ctive phishing emails or social engineering and by exploiting vulnerabi
a lities in electronic security
programs utilizing false image or voice recognition. Vulnerabilities, technical errors and other risks may be introduced through
the use of AI by us, our customers, suppl
u
iers and other business partners and third-party providers, or through the use of third-
party hardware and software. Advances in quantum computing have the potential to undermine current encrypt
r
ion standards
and may allow threat actors to circumvent existing protective measures. Although we are not aware of any cybersecurity
incidents impacting our information systems that have been determined to have a material impact on us to date, we continue to
devote significant resources to network security, data encryp
r
tion and other measures to protect our systems and data from
unauthorized access or misuse, and we may be required to expend greater resources in the future. We may be unable to
anticipate, prevent or remediate future incidents, and in some instances, we may be unaware of incidents or their magnitude and
effe
f cts, particularly as attackers are increasingly able to circumvent controls and remove forensic evidence. Cybersecurity
incidents, including incidents on third-party provider networks, may result in business disrupt
r
ion; delay in the development and
delivery of our produc
r
ts; disrupt
r
ion of our manufac
f
turing processes, internal communications, interactions with customers and
suppl
u
iers and processing and reporting financial results; the theftf or misappropriation of intellectua
t
l property; corrup
r
tion, loss
of, or inability to access (e.g., through ransomware or denial of service) confid
f ential information and critical data (i.e., that of
our company and our third-party providers and customers); reputational damage; private claims, demands, and litigation or
regulatory investigations, enforcement actions, or other proceedings related to contractua
t
l or regulatory privacy, cybersecurity,
data protection or other confid
f entiality obligations; diminution in the value of our investment in research, development and
engineering; and increased costs associated with the implementation of cybersecurity measures to detect, deter, protect against
and recover from these incidents. Our effort
f
s to comply with and changes to laws, regulations and contractua
t
l and other actual
and asserted obligations concerning privacy, cybersecurity and data protection, including developing restrictions on cross-
border data transfer an
f
d data localization, could result in significant expense, and any actua
t
l or alleged failure to comply could
result in inquiries, investigations and other proceedings against us by regulatory authorities or other third parties. Customers
and third-party providers increasingly demand rigorous contractua
t
l provisions regarding privacy, cybersecurity, data protection,
confid
f entiality and intellectua
t
l property, which may increase our overall compliance burden.
18

We are expos
x
ed to risks associated
t
with
i
busine
i
ss combinatio
t ns, acqu
s
isitions,s strategi
e c investmentst and divestitu
i
res.
We may engage in acquisitions of or investments in companies, technologies or products in existing, related or new
markets. Business combinations, acquisitions and investments involve numerous risks to our business, financial condition and
operating results, including:
•
inability to complete proposed transactions timely or at all due to the failure to obtain regulatory or other approvals,
including through expanding global national security regimes that impose prohibitions on foreign investments in or
acquisitions of local businesses; litigation or other disputes, and any ensuing obligation to pay a termination fee;
•
diversion of management’s attention and disrupt
r
ion of ongoing businesses;
•
the failure to realize expected revenues, gross and operating margins, net income and other returns from acquired
businesses;
•
requirements imposed by government regulators in connection with their review of a transaction, including post-
closing investigations of non-notified transactions, which may include, among other things, divestitur
t
es and
restrictions on the conduct of our existing business or the acquired business;
•
following completion of acquisitions, ineffe
f ctive integration of businesses, operations, systems, digital and physical
security, technologies, products, employees, compliance programs, changes in laws or regulations, including tax laws,
or other factors, may impact the ability to realize anticipated synergies or other benefits;
•
failure to commercialize technologies from acquired businesses or developed through strategic investments;
•
dependence on unfam
f
iliar supply
u
chains or relatively small supply pa
u
rtners;
•
inability to capi
a talize on characteristics of new markets that may be significantly different from our existing markets
and where competitors may have stronger market positions and customer relationships;
•
failure to retain and motivate key employees of acquired businesses;
•
the impact of the announcement or consummation of a proposed transaction on relationships with third parties;
•
changes in our credit rating, which could adversely impact our access to and cost of capital;
•
increases in debt obligations to finance activities associated with a transaction, which increase interest expense, and
reductions in cash balances, which reduce the availabi
a lity of cash flow for general corporate or other purposes,
including share repurchases and dividends;
•
exposure to new operational risks, rules, regulations, worker expectations, customs and practices to the extent acquired
businesses are located in regions where we have not historically conducted business;
•
challenges associated with managing new, more diverse and more widespread operations, projects and people;
•
inability to obtain and protect intellectua
t
l property rights in key technologies;
•
inadequacy or ineffe
f ctiveness of an acquired company’s internal financial controls, disclosure controls and procedur
d
es,
cybersecurity, privacy policies and compliance programs, trade control processes or programs, or environmental,
health and safety, anti-corrupt
u ion, human resource or other policies or practices;
•
impairment of acquired intangible assets and goodwill as a result of changing business conditions, technological
advancements or worse-than-expected performance of the segment;
•
the risk of litigation, government enforcement actions or claims associated with a proposed or completed transaction;
•
unknown, underestimated, undisclosed or undetected commitments or liabi
a lities, including potential intellectual
t
property infringement claims, or non-compliance with laws, regulations or policies; and
•
the inappropriate scale of acquired entities’ critical resources or facilities for business needs.
We make investments in other companies, including companies formed as joint ventures, which may decline in value or
not meet desired objectives. The success of these investments depends on various factors over which we may have limited or no
control and, particularly with respect to joint ventures, requires ongoing and effe
f ctive cooperation with partners. In addition,
new legislation, additional regulations or global economic or political conditions may affe
f ct or impair our ability to invest in
certain countries or require us to obtain regulatory approvals to do so. We may not receive the necessary regulatory approvals,
or the approvals may come with significant conditions or obligations. The risks to our investment portfol
f io may be exacerba
r
ted
by unfav
f
orable financial market and macroeconomic conditions, and as a result, the value of the investment portfol
f io could be
negatively impacted and lead to impairment charges.
We may seek to divest portions of our business that are not deemed to fit with our strategic plan. Divestitur
t
es involve
additional risks and uncertainties, such as our ability to sell these businesses at a price and on terms that are satisfactory and in a
19

timely manner or at all, disrupt
r
ion to other parts of the businesses and distraction of management, allocation of internal
resources that would otherwise be devoted to completing strategic acquisitions or other strategic projects or initiatives, loss of
key employees or customers, loss of access by retained business units to critical intellectua
t
l property or other assets transfer
f red
with the divested business, exposure to unanticipated liabi
a lities or ongoing obligations to suppor
u
t the businesses following these
divestitures and other adverse financial impacts.
The ability to
i
attr
t act, retain and motivatet key em
e
ploy
m
ees is vital to
i
our success.
Our success depends in large part on our ability to attract, retain and motivate qualified employees and leaders with the
necessary expertise and capabilities, representing diverse backgrounds and experiences. Achieving this objective may be
difficult due to many factors, including fluctuations in global economic and industry
r conditions, management or organizational
changes, ongoing competition for talent, the availabi
a lity of qualified employees, the ability to obtain necessary authorizations
for workers to provide services outside their home countries, challenges in hiring and integrating workers in different countries,
the attractiveness of our compensation and benefit programs, our career growth and development opportunities and our
employment policies. If we are unable to attract, retain and motivate qualified employees and leaders, we may be unable to fully
capitalize on current and new market opportunities, which could adversely impact our business and results of operations. The
loss of knowledgeable and experienced employees may result in unexpected costs, reduced productivity or difficulties with
respect to internal processes and controls.
We operate in jurisdictio
d
ns with
i
complex and
e
changing
i
tax
a laws.
We are subj
u ect to income taxes in the United States and foreign jurisdictions. Significant judgment is required to
determine and estimate worldwide tax liabi
a lities. Our provision for income taxes and effe
f ctive tax rates could be affe
f cted by
numerous factors, including changes in applicable tax laws, interpretations of applicable tax laws, amount and composition of
pre-tax income in jurisdictions with differing tax rates and valuation of deferred tax assets.
There have been a number of enacted and proposed changes in the tax laws that could have a material impact on our
provision for income taxes and effe
f ctive tax rate. An increase in our provision for income taxes and effe
f ctive tax rate could, in
turn, have a material and adverse impact on our results of operations and financial condition. For example, various countries
where we do business have enacted or plan to enact new tax laws to implement the global minimum tax regimes based on the
Organization for Economic Cooperation and Development Base Erosion and Profit
f
Shifting Project, and where enacted, the
rules began to be effe
f ctive in fiscal 2025. Additionally, on July 4, 2025, the U.S. government enacted the One Big Beautiful
Bill Act (OBBBA). Key tax provisions of the OBBBA are designed to accelerate tax deductions, but that may have a
detrimental impact on our ability to use certain deferred tax assets. For example, as a result of the acceleration of certain tax
deductions under the OBBBA, we are unable to forecast utilization of our existing corporate alternative minimum tax (CAMT)
credit deferred tax asset. We have recorded a full valuation allowance against the CAMT credit deferred tax asset, which
increased our effe
f ctive tax rate and provision for income taxes in fiscal 2025. The amount of the valuation allowance may be
adju
d sted in future quarters if estimates of our future taxable income change. We continue to monitor developments and evaluate
the impact, if any, of enacted and proposed changes in the tax laws on our results of operations and cash flows. The adoption
and effe
f ctive dates of changes in the tax laws vary by country and could increase tax complexity and uncertainty and may
adversely affe
f ct our provision for income taxes in future years.
We have been granted additional conditional reduced tax rates in Singapore that expire beginning in fiscal 2030. There is
risk our conditional reduced tax rates may not be renewed.
Consistent with the international nature of our business, we conduct certain manufact
f
ur
t
ing, supply
u
chain and other
operations in Asia, bringing these activities closer to customers and reducing operating costs. In some foreign jurisdictions, we
must meet certain requirements to continue to qualify
f
for tax incentives. There is no assurance we will be able to meet such
requirements in the future to fully realize benefits from these incentives. Furthermore, the proposed plans to implement global
minimum tax regimes could reduce or eliminate the benefits of our tax incentives.
We are subj
u ect to examination by the U.S. Internal Revenue Service and other tax authorities, and from time to time
amend previously filed tax returns. We regularly assess the likelihood of favorable or unfav
f
orable outcomes resulting from
these examinations and amendments to determine the adequacy of our provision for income taxes, which requires estimates and
judgments. Although we believe our tax estimates are reasonable, there can be no assurance the tax authorities will agree with
such estimates. We may have to engage in litigation to achieve the results reflected in the estimates, which may be time-
consuming and expensive. There can be no assurance that we will be successful or
f
that any final determination will not be
materially different from the treatment reflected in our historical income tax provisions and effe
f ctive tax rates.
Our indebted
t
ne
d
ss and debt covenantst couldl adverse
r
ly affe
f ct our financ
i
ial conditio
d
n and busine
i
ss.
As of October 26, 2025, we had $6.5 billion in aggregate principal amount of senior unsecured notes outstanding. Under
the indenture governing the senior unsecured notes, we may be required to offer
f
to repurchase the notes at a price equal to
20

101% of the principal amount, plus accrued
r
and unpaid interest, if we experience a change of control and a contemporaneous
downgrade of the notes below investment grade. We also have in place revolving credit facilities that allow us to borrow up to
an aggregate amount of approximately $4.1 billion. While no amounts were outstanding under these credit facilities as of
October 26, 2025, we may borrow amounts in the future under these credit facilities or enter into new financing arrangements.
Our ability to satisfy our debt obligations is dependent upon the results of our business operations and subj
u ect to other risks
discussed in this section. If we fail to satisfy our debt obligations, or comply with financial and other debt covenants, we may
be in default and any borrowings may become immediately due and payable, and such default may constitute a default under
our other obligations. There can be no assurance that we would have sufficient financial resources or be able to arrange
financing to repay any borrowings at such time. Significant changes in our credit rating, disrupt
r
ions in the global financial
markets, or incurrence of new or refinancing of existing indebtedness at higher interest rates could have a material and adverse
impact on our access to and cost of capital for future financings and our financial condition.
Our busine
i
ss depends
d on the successful
f
implementat
t io
t n and proper functioning of info
n
rmatio
t n system
t
s we use.
Our business depends on certain information systems, including, enterprise resource planning, product research and
development, financial reporting, information technology network management and telecommunications. These systems may be
maintained by us or by our third-party vendors. Failures of these systems could disrupt our ope
r
rations, impede our ability to
timely and accurately process and report financial results, and adversely impact our business, financial condition and results of
operations.
We periodically implement new or enhanced information systems. Implementation of new business processes and
information systems requires the commitment of significant personnel, training and financial resources, and entails risks to our
business operations. If the implementation or improvement of information systems is delayed or unsuccessful,
f
we may not
realize anticipated productivity improvements or cost effi
f ciencies and may experience interrupt
u ions in service and operational
difficulties, which could result in quality issues, reputational harm, lost market and revenue opportunities and otherwise
adversely affe
f ct our business, financial condition and results of operations.
We may
a incur impairm
i
ent charges related to goodwilll or long-l
g iv
l ed assets.
We have a significant amount of goodwill and other acquired intangible assets related to acquisitions. Goodwill and
purchased intangible assets with indefinite useful
f
lives are not amortized but are reviewed for impairment annually during the
fourth quarter of each fiscal year and more frequently when events or changes in circumstances indicate the carrying value of an
asset may not be recoverabl
a e. The review compares the fair value for each of our reporting units to its associated carrying value,
including goodwill. Factors that could lead to impairment of goodwill and intangible assets include adverse industry or
r
economic trends, reduced estimates of future cash flows, declines in the market price of our common stock, changes in our
strategies or product portfol
f io and restructur
t
ing activities. Our valuation methodology for assessing impairment requires
management to make judgments and assumptions based on historical experience and projections of future operating
performance. We have recorded charges to earnings, and may in the future be required to record charges to earnings, when
impairments of goodwill or intangible assets have been determined to exist.
We may
a not contin
t
ue to declar
l
e cash dividends
d or repu
e
rchase our shares.
Our ability to continue to pay quarterly dividends and to repurchase our shares is subj
u ect to capital availabi
a lity and
periodic determinations by our Board of Directors that cash dividends and share repurchases are in the best interest of our
stockholders and are in compliance with applicable laws and agreements. Future dividends and share repurchases may be
affe
f cted by, among other factors, our cash flow; potential future capital requirements for investments, acquisitions,
infrastructur
t
e projects and research and development; changes in applicable tax, corporate, or other laws; contractua
t
l
restrictions, such as financial or operating covenants in our debt arrangements; and changes to our business model. Our
dividend payments and share repurchases may change from time to time, and we cannot provide assurance that we will continue
to declare dividends or repurchase shares in any particular amounts or at all. A reduction or suspension in our dividend
payments or share repurchases could have a negative effe
f ct on the price of our common stock.
Legal, Compliance and Other Risks
g ,
p
We are expos
x
ed to risks related to legal proc
e
eeding
i
s,
g
clai
l ms
i
and investigatio
t ns.
From time to time we are, and in the future may be, involved in legal proceedings or claims regarding patent
infringement, trade secret misappropriation, other intellectua
t
l property rights, trade compliance, including import, export and
customs, antitrus
r
t, anti-corrupt
u ion, compliance with government contracting requirements, environmental regulations,
cybersecurity, privacy, data protection, securities, contracts, product performance, product liabi
a lity, unfai
f r competition,
employment, workpl
k ace safety and other matters. We may receive, and have received, inquiries, warrants, subpoena
u
s, and other
requests for information in connection with government investigations of potential or suspected violations of law or regulations
by our company or our employees. For example, we have received subpoena
u
s from government authorities requesting
21

information relating to China customer shipments, export controls compliance, certain federal award applications and
information subm
u
itted to the federal government. We also on occasion receive notifications from customers who believe we
owe them indemnific
f ation, product warranty or have other obligations related to claims made against such customers by third
parties.
Legal proceedings, claims and government investigations, whether with or without merit, and internal investigations, may
be time-consuming and expensive to prosecute, defend or conduct; divert management’s attention and our other resources;
constrain our ability to sell our products and services; result in adverse judgments for damages, injunctive relief, penalties and
fines; and negatively affe
f ct our business. We cannot predict the outcome of current or future legal proceedings, claims or
investigations.
We are expos
x
ed to risks related to the global regu
e
latory enviro
i
nment.
We are subj
u ect to the laws of the United States and multiple foreign jurisdictions and the rules and regulations of various
governing bodies, including those related to financial and other disclosures, accounting standards, securities, corporate
governance, public procurement and public funding, intellectua
t
l property, tax, trade (including import, export and customs
regulations), antitrust, cybersecurity, environment, health and safety, employment, immigration and travel regulations, human
rights, privacy, data protection and localization and anti-corrupt
u ion. Changing, inconsistent or conflictin
f
g laws, rules and
regulations, and ambiguities in their interpretation and application create uncertainty and challenges, and compliance may be
onerous and expensive, divert management time and attention and otherwise adversely impact our business operations.
Violations of these law, rules and regulations could result in fines, criminal penalties, restrictions on our business, and damage
to our reputation, and could have an adverse impact on our business operations, financial condition and results of operations.
Impl
m emen
l
tation and repor
e
ting
i
on our sustai
t na
i
bili
i ty
i
stra
t
tegi
e es and targetst couldl
result in additio
i
nal costs, and our
inability to
i
achieve them couldl have an adverse
r
impact on our repu
e
tation and perfor
f
ma
r
nce.
We periodically communicate our strategies and targets related to sustainability matters. These strategies and targets, and
their underlying assumptions, reflect our current plans and aspirations, and we may be unable to achieve them. Changing
customer and shareholder sustainability expectations, including increasing customer demand for sustainable products, and
regulatory requirements, as well as actions taken to achieve our sustainability targets, could cause us to incur subs
u
tantial
expense and alter our manufac
f
turing, operations or equipment designs and processes. Any failure or perceived failure to timely
meet these sustainability requirements, expectations or targets, or a failure to realize the anticipated benefits of planned
investments and technology innovations related to sustainability, could adversely impact the demand for our produc
d
ts and
subj
u ect us to significant costs and liabi
a lities and reputational risks that could in turn adversely affe
f ct our business, financial
condition and results of operations. In addition, standards and processes for measuring and reporting greenhouse gas emissions
and other sustainability metrics may change over time and may result in inconsistent data, increase our costs, result in
significant revisions to our strategies and targets or impact our ability to achieve them. We also are or may become subj
u ect to
new climate and sustainability laws and regulations, such as the State of Californi
f
a’s climate change disclosure rules, the
European Union’s Corporate Sustainability Reporting Directive and International Sustainability Standards Board standards.
Compliance with such laws and regulations, as well as increased scrutiny from regulators, customers and other stakeholders on
our sustainability practices, could result in additional costs and expose us to new risks. Any scrutiny of our greenhouse gas
emissions or other sustainability disclosures, our failure to achieve related strategies and targets, or our failure to disclose our
sustainability measures consistent with applicable laws and regulations or to the satisfaction of regulators or our stakeholders
could negatively impact our reputation or performance.
We are subject to risks associated
t
with
i
enviro
i
nmental, health
l
and safe
a ty regu
e
lations.
We are subj
u ect to environmental, health and safety regulations in connection with our global business operations,
including but not limited to: regulations related to the design, manufact
f
ur
t
e, sale, shipping, import, export and use of our
products; use, handling, discharge, recycling, transportation and disposal of hazardous materials used in our produc
d
ts or in
producing our products; the operation of our facilities; and the use of our real property, including in connection with
construc
r
tion of our infrastructur
t
e projects. The failure or inability to comply with existing or future environmental, health and
safety regulations could result in: significant remediation or other legal liabi
a lities; the imposition of penalties and fines;
restrictions on the development, manufact
f
ur
t
e, sale, shipping, import, export or use of certain of our products; limitations on the
operation of our facilities or ability to use our real property; and a decrease in the value of our real property. We could be
required to alter our product design, manufact
f
ur
t
ing and operations and incur subs
u
tantial expense to comply with environmental,
health and safety regulations, including reporting requirements. Any failure to comply with these regulations could subj
u ect us to
significant costs and liabi
a lities that could materially and adversely affe
f ct our business, financial condition and results of
operations.
22

Item 1B:
Unresolved Staf
t
ff Comments
None.
Item 1C:
Cybersecurity
i
Risk Management and Strategy
We have implemented processes for assessing, identifying and managing material risks from cybersecurity threats as part
of our cybersecurity risk management program. This program includes processes for continuous cybersecurity risk and
advanced persistent cybersecurity threat monitoring; cybersecurity attack, vulnerabi
a lity and cloud security management; and
penetration testing. Our cybersecurity risk management program includes a cybersecurity incident response plan and escalation
protocols; cybersecurity and data protection policies and training to our employees; a supply
u
chain cybersecurity program to
increase awareness, assess suppl
u
ier security controls, help improve suppl
u
ier security controls and manage security incidents; a
program to protect company, customer and suppl
u
ier intellectua
t
l property by operationalizing strategy, policy and awareness; a
privacy and data protection program to keep pace with rapidly
a
evolving global data laws and regulations as well as emerging
technologies; engagement of third-party auditors to help assure the effe
f ctiveness of internal controls, including cybersecurity
controls; and partnership with industry groups, gove
r
rnment agencies and third-party experts in an effort
f
to continuously
improve our cybersecurity risk management program. We conduct assessments based on the National Institute of Standards and
Technology Cybersecurity (NIST) Framework to evaluate our program, and we engage third-parties for assistance and to
independently assess, proactively monitor and provide an external view of our cybersecurity program. We conduct risk
assessments and tabl
a etop exercises to evaluate the effe
f ctiveness of our systems and processes in addressing cybersecurity
threats, including threats associated with our use of third-party service providers, and to identify
f
areas for improvements. Our
cybersecurity risk management program is integrated with our enterprise risk management (ERM) program, and information
about cybersecurity risks and our cybersecurity risk management program is reviewed as part of our ERM program, sharing
common risk governance and reporting processes that apply across our ERM program.
While we are not aware of having directly experienced a cybersecurity incident that has materially impacted our business,
financial condition or results of operations, we face risks from cybersecurity threats that, if realized, could reasonably likely
materially affe
f ct us, our business strategy, results of operations, or financial condition. See “Risk Factorsr - Operational and
Financial Risks
i
– We are expos
x
ed to cyberse
r
curity threatst
and incidents”
t
for additional information about cyberse
r
curity
related risks.
Governance
Our Board of Directors is responsible for overseeing the assessment of major risks facing us, and its Audit Committee
oversees our ERM program, including oversight of cybersecurity risks and of our cybersecurity risk management program. The
Audit Committee receives quarterly reports from management on our cybersecurity risks and cybersecurity risk management
program, and our management regularly updates the Chair of the Audit Committee regarding cybersecurity incidents where
appropriate in accordance with our cybersecurity incident response plan and escalation protocols. The Audit Committee reports
to the full Board regarding its activities, including those related to cybersecurity, and management reports to the full Board on
our cybersecurity risks and cybersecurity risk management program at least annually.
Our management has day-to-day responsibility for assessing and managing material risks from cybersecurity threats,
including implementing risk mitigation plans, processes and controls, and managing our cybersecurity risk management
program. Our Chief Information Security Offi
f cer (CISO), who has extensive experience in cybersecurity and information
security management, is primarily responsible for managing our cybersecurity risk management program, cybersecurity
incident response plan and escalation protocols, and reports at least quarterly to the Audit Committee and at least annually to
the full Board on our cybersecurity, data and intellectua
t
l property security programs, policies, risks and controls. The CISO
reports to our Chief Information Offi
f cer, who is responsible for administering secure and scalable security infrastructure and
reports to our Chief Digital Offi
f cer, each of whom has extensive experience in information technology.
Our management team’s effort
f
s to prevent, detect, mitigate and remediate cybersecurity risks and incidents are informed
by reviews with our information technology security teams, receipt of threat intelligence and other information obtained from
governmental, public or private sources, including external consultants engaged by us, periodic assessments against the NIST
Framework and through alerts and reports produced by security tools deployed in our information technology environment.
23

Item 2:
Properties
t
We own and lease facilities throughout the world for use as offi
f ces, manufact
f
ur
t
ing facilities, warehouses, and research
and development centers, primarily in the United States, Singapore, Taiwan, Israel, China, and India. As of October 26, 2025,
we owned and leased approxi
a
mately 9.1 million square feet and 5.3 million square feet of space, respectively. Our headquarters
are in Santa Clara, California. Our products are manufact
f
ur
t
ed primarily in the United States, Singapore, Taiwan and Israel.
Because of the interrelation of our operations, properties within a country may be shared by the segments operating within that
country.
We also own a total of approximately 279 acres of buildable land primarily in the United States that could accommodate
additional facilities.
We consider the properties that we own or lease as adequate to meet our current and future requirements. We regularly
assess the size, capability and location of our global infrastructur
t
e and periodically make adju
d stments based on these
assessments.
24

Item 3:
Legal
e
Proceedings
i
The information set forth under “Legal Matters” in Note 14 of Notes to Consolidated Financial Statements is incorporated
herein by reference. See also
l
“Risk Factorsr – Legal,
e
Compliance and Othe
t
r Risks –
i
We are exposed to risks related to legal
e
proceedings, claims and investigat
i
ions.”
Item 4:
Mine
i
Safe
a ty Disc
i
losures
None.
25

PART II
Item 5:
Market for Regi
e stra
i
nt’s Common Equity
i ,y Related Stockholde
t
r Matter
t
sr and Issuer Purchases of Equity
i
Securiti
i es
Market Information
Our common stock is traded on the Nasdaq Global Select Market under the symbol AMAT. As of December 5, 2025,
there were 2,626 registered holders of our common stock. Information regarding quarterly cash dividends declared on our
common stock during fiscal 2025, 2024 and 2023 may be found under “Management’s Discussion and Analysis of Financial
Condition and Results of Operations - Financial Condition, Liquidity and Capi
a tal Resources”.
Perfor
f
mance Graph
The performance graph below shows the five-year cumulative total stockholder return on our common stock during the
period from October 25, 2020 through October 26, 2025. This is compared with the cumulative total return of the Standard &
Poor’s 500 Stock Index and the PHLX Semiconductor Index over the same period. The comparison assumes $100 was invested
on October 25, 2020 in our common stock and in each of the foregoing indices and assumes reinvestment of dividends, if any.
Dollar amounts in the graph are rounded to the nearest whole dollar. The performance shown in the graph represents past
performance and should not be considered an indication of future performance.
The graph below assumes that the value of the investment in our common stock and in each of the indexes was $100 at
October 25, 2020, and that all dividends were reinvested.
Copyright© 2025 Standard & Poor’s, a division of S&P global. All rights reserved.
10/25/2020
10/31/2021
10/30/2022
10/29/2023
10/27/2024
10/26/2025
Applied Materials
100.00
226.06
149.67
221.11
316.48
392.09
S&P 500 Index
100.00
134.88
116.04
124.53
178.22
211.12
PHLX Semiconductor Index
100.00
148.13
105.92
142.27
232.14
313.53
26
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
10/25/2020
10/31/2021
10/30/2022
10/29/2023
10/27/2024
10/26/2025
Applied Materials, Inc.
S&P 500
PHLX Semiconductor
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
Among Applied Materials, Inc., the S&P 500 Index,
an
and th
the PH
PHLX
LX Se
Semi
mico
cond
nduc
ucto
tor In
Index
dex

Issuer Purchases of Equity Securities
In March 2025, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in
repurchases, which suppl
u
emented the previous $10.0 billion authorization approved in March 2023. At October 26, 2025,
approximately $14.0 billion remained availabl
a e for future stock repurchases under the repurchase program.
The following tabl
a e provides information as of October 26, 2025 with respect to the shares of common stock repurchased
by us during the fourth quarter of fiscal 2025 pursuant to the foregoing Board authorization.
Period
Total Number
of Shares
Purchased
Average
Price Paid
per Share*
Aggregate
Price Paid*
Total Number of
Shares Purchased as
Part of Publicly
Announced Programs
Maximum Dollar
Value of Shares
That May Yet be
Purchased Under
the Programs*
(In millions, except per share amounts)
Month #1
(July 28, 2025 to August 24, 2025)
3.0
$ 170.20
$
503
3.0
$
14,329
Month #2
(August 25, 2025 to September 21, 2025)
1.6
$ 163.59
254
1.6
$
14,075
Month #3
(September 22, 2025 to October 26, 2025)
0.4
$ 217.41
99
0.4
$
13,976
Total
5.0
$ 172.46
$
856
5.0
*Amounts include the 1% surcharge on stock repurchases under the Inflation Reduction Act’s excise tax. This excise tax is recorded in equity
and reduces the amount availabl
a e under the repurchase program, as applicable.
Item 6:
[Reserved]
27

Item 7:
Manage
a
ment’s Disc
i
ussion and Analys
l
is of Financ
i
ial Condit
d io
t n and Results of Operatio
t ns
Introduction
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to
facilitate an understanding of our business and results of operations. This MD&A should be read in conjunction with our
Consolidated Financial Statements and the accompanying Notes to Consolidated Financial Statements included elsewhere in
this Form 10-K. The following discussion contains forward-looking statements and should also be read in conjunction with the
cautionary statement set forth at the beginning of this Form 10-K.
The following section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
Discussions of 2024 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be
found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our
Annual Report on Form 10-K for the fiscal year ended October 27, 2024, filed on December 13, 2024.
Overview
We provide equipment, services and software to the semiconductor and related industries. Our customers include
manufact
f
ur
t
ers of semiconductor wafers and chips and other electronic devices. Our customers’ products are used in a wide
variety of products such as personal computing devices, mobile phones, artificial intelligence (AI) and data center servers,
automobiles, connected devices, industrial applications and consumer electronics. Each of our segments is subj
u ect to variable
industry
r
conditions, as demand for equipment and services can change depending on supply
u
and demand for chips and other
electronic devices, as well as other factors, such as global economic, political and market conditions, and the nature and timing
of technological advances in fabr
a
ication processes.
Our strategic priorities include developing products that help solve customers’ challenges at technology inflections,
growing our service business, and expanding our served market opportunities in the semiconductor industry.
r
Our long-term
growth strategy requires continued development of new materials engineering capabilities, including products and platforms
that enable expansion into new and adja
d cent markets. Our significant investments in research, development and engineering
(RD&E) are intended to enable us to deliver new produc
d
ts and technologies before the emergence of strong demand, allowing
customers to incorporate these products into their manufac
f
turing plans during early-stage technology selection. We collaborate
closely with our global customers to design systems and processes to meet their technical and production requirements.
Our future operating results depend to a considerable extent on our ability to maintain a competitive advantage in the
equipment and service products we provide. Development cycles depend on whether the product is an enhancement of an
existing product, which typically has a shorter development cycle, or a new product, which typically has a longer development
cycle. Most of our existing products resulted from internal development activities and innovations involving new technologies,
materials and processes. In certain instances, we acquire technologies, either in existing or new product areas, to complement
our existing technology capabi
a
lities and to reduce time to market. Product development and manufact
f
ur
t
ing activities occur
primarily in the United States, Europe, Israel, and Asia. Our portfol
f io of equipment and service products are highly technical
and are sold primarily through a direct sales force.
We believe that it is critical to make subs
u
tantial investments in RD&E to assure the availabi
a lity of innovative technology
that meets the current and projected requirements of our customers’ most advanced designs. We have and continue to invest in
RD&E in order to continue to offer
f
new products and technologies.
We operate in two reportabl
a e segments: Semiconductor Systems and Applied Global Services® (AGS). As of October 26,
2025, management no longer considers Display a significant operating segment for separate reporting purposes. The financial
results of our other operating segments that do not meet the requirements for a reportabl
a e segment, including our Display
operating segment, are included in Corporate and Other. Prior-year Corporate and Other balances have been recast to include
Display financial results. A summary of financial information for each reportabl
a e segment is found in Note 15 of Notes to
Consolidated Financial Statements. A discussion of factors that could affe
f ct our operations is set forth under “Risk Factors” in
Part I, Item 1A, which is incorporated herein by reference.
Our results are driven primarily by customer spending on capital equipment and services to suppor
u
t key technology
transitions or to increase production volume in response to worldwide demand for semiconductors.
28

The Semiconductor Systems segment is comprised primarily of capital equipment used to fabr
a
icate semiconductor chips.
Spending by semiconductor customers, which include companies that operate in the foundry, logic, memory, and other
semiconductor chip markets, is driven by demand for products such as smartphones, mobile devices, personal computers (PC),
servers for artificial intelligence (AI) and data centers, automobiles, clean energy, storage, and other products, and the nature
and timing of technological advances in fabr
a
ication processes. The growth of data and emerging end-market drivers such as AI,
the internet of things, robotics and smart vehicles are also creating the next wave of growth for the industry.
r
As a result,
products within the Semiconductor Systems segment are subj
u ect to significant changes in customer requirements, including
transitions to smaller dimensions, increasingly complex chip architectur
t
es, new materials and an increasing number of
applications. Spending can also depend on customer facility readiness and timeline for installation of capital equipment at
customer sites. Development effort
f
s are focused on solving customers’ key technical challenges in patterning, transistor,
interconnect, process control, and packaging performance.
The AGS segment provides services, spares and factory automation software to customer fabr
a
ication plants globally to
help customers optimize performance of our large, global installed base of semiconductor and other equipment. The AGS
segment also includes 200 millimeter (200mm) and other equipment, which is shipped to many customers globally that serve
the non-leading-edge end markets. Effe
f ctive the first quarter of fiscal 2026, our 200mm equipment business will be moved to
our Semiconductor Systems segment. Demand for AGS’ service and spares is driven by our large and growing installed base of
manufact
f
ur
t
ing systems, and customers’ needs to shorten ramp times, improve system performance, and optimize factory output
and operating costs. Industry
r conditions that affe
f ct AGS’ sales of spares and services are primarily characterized by changes in
semiconductor manufac
f
turers’ wafer starts and utilization rates, growth of the installed base of equipment and growing service
intensity of newer tools. Our strategy is to continue to shiftf the AGS’ service and spares business to a subs
u
cription agreement
model, improving customer factory performance and optimizing operating costs, and providing us a more predictabl
a e revenue
stream.
The Corporate and Other category
r includes revenues and costs of product not included in our reportabl
a e segments, as well
as certain operating expenses that are not allocated to our reportabl
a e segments and are managed separately at the corporate
level. These operating expenses include costs for certain management, finance, legal, human resources, and RD&E functions
performed at the corporate level; and unabsorbed information technology and occupancy.
u
In addition, we do not allocate to our
reportabl
a e segments charges associated with restructur
t
ing actions, such as employee severance costs and asset impairment
charges, unless the restructur
t
ing actions pertain to a specific reportabl
a e segment.
The United States government has implemented export regulations for U.S. semiconductor technology sold or provided to
customers in China, which have limited our ability to provide certain products and services to customers in China, over the past
several years. The U.S. government continues to issue new export licensing requirements, and additional updates and other
requirements that have had the effe
f ct of further limiting our ability to provide certain products and services to customers outside
the U.S., including in China. Also, the United States has announced changes to its trade policy, including increased tariffsf on
imports. These actions have caused subs
u
tantial uncertainty and have resulted in retaliatory measures, including new tariffs on
U.S. goods imposed by China and other countries. Some of these actions have been followed by announcements of limited
exemptions and temporary paus
r
es. For a description of these risks, see the risk factors entitled “Business and Industry
r Risks -
Global trade issues and changes in and uncertainties with respect to trade policies and export regulat
e
ions, including impor
m
t
and export license requirements,
t
trade sanctions, tariff
i sf and international trade disp
i
utes, have adverse
r
ly impac
m
ted and couldl
furthe
t
r adverse
r
ly impac
m
t our business and operations, and reduce the competitiveness of our products and services relative to
local and global competitors” and “Business and Industry
r Risks
i
- We are exposed to risks and uncertainty related to changes in
trade policies, and increased tariffs
i
and trade disp
i
utes ” in Part I, Item 1A, “Risk Factors.”
29

Results of Operations
Our fiscal 2025 and 2024 each contained 52 weeks.
The following tabl
a e presents certain significant measurements for the periods presented:
Change
2025
2024
2025 over 2024
(In millions, except per share amounts and
percentages)
Net revenue
$
27,176
$
1,192
$
28,368
Gross margin
48.7
4
%
7.5 %
1.2 points
Operating income
$
7,867
$
422
$
8,289
Operating margin
29.2
2
%
8.9 %
0.3 points
Net income
$
7,177
$
$
6,998
(179)
Earnings per diluted share
$
8.61
$
0.05
$
8.66
Net revenue by segment for the periods presented were as follows:
Change
2025
2024
2025 over 2024
(In millions, except percentages)
Semiconductor Systems
$
20,798
73%
$
19,911
73%
4 %
Applied Global Services
6,385
23%
6,225
23%
3 %
Corporate and Other
1,185
4%
1,040
4%
14 %
Total
$
28,368
100%
$
27,176
100%
4 %
Net revenue for Semiconductor Systems by market for the periods presented were as follows:
2025
2024
Foundry, logic and other
67 %
68 %
Dynamic random-access memory (DRAM)
26 %
28 %
Flash memory (NAND)
7 %
4 %
100 %
100 %
Net revenue in fiscal 2025 increased as compared to the prior year. Gross margin increased primarily driven by higher net
revenue, favorable changes in customer and product mix, an increase in average selling prices, and lower material and
manufact
f
ur
t
ing costs.
Semiconductor Systems net revenue increased in fiscal 2025 as compared to the prior year as customers continued to
make strategic investments in new capacity and new technology transitions. Foundry and logic customers’ spending in fiscal
2025 increased driven primarily by higher customer investments in leading-edge manufact
f
ur
t
ing technologies. Memory
customers’ spending in fiscal 2025 was higher due to increased customer investments in NAND fabr
a
ication equipment
upgrades. Investments by semiconductor equipment customers are expected to remain strong with growth in the adoption of
high-bandwidth memory and other forms of advanced packaging, continued demand for AI and data center computing, and for
non-leading edge nodes. The Semiconductor Systems segment continued to represent the largest contributor of net revenue.
Our AGS net revenue in fiscal 2025 increased compared to the prior year primarily due to higher customer spending on
long-term service agreements and spares, partially offs
f et by lower customer spending on 200mm equipment. Demand for
services is expected to grow as our installed base of systems and chambers increases and customers renew long-term service
agreements.
Over the longer term, we believe secular drivers such as data center AI, edge AI and the internet of things, robotics and
electric and autonomous vehicles will continue to create the next wave of growth for semiconductors and expand our served
market opportunities. We believe device refresh cycles, such as those for PCs and smartphones, will also contribute to the next
wave of growth.
30

Net revenue by geographic region, determined by the location of customers’ facilities to which products were shipped
and services were performed, was as follows:
Change
2025
2024
2025 over 2024
(In millions, except percentages)
China
$
8,529
30%
$
10,117
37%
(16)%
Korea
5,608
20%
4,493
17%
25 %
Taiwan
6,857
24%
4,010
15%
71 %
Japan
a
2,273
8%
2,154
8%
6 %
Southeast Asia
1,076
4%
1,141
4%
(6)%
Asia Pacific
24,343
86%
21,915
81%
11 %
United States
3,063
11%
3,818
14%
(20)%
Europe
962
3%
1,443
5%
(33)%
Total
$
28,368
100%
$
27,176
100%
4 %
The changes in net revenue from customers in all regions for fiscal 2025 primarily reflected changes in investments in
semiconductor equipment.
Operatin
t
g Expe
x
nses
Operating expenses for the periods presented were as follows:
Change
2025
2024
2025 over 2024
(In millions)
Research, development and engineering (RD&E)
$
337
$
3,570
$
3,233
Marketing and selling
$
858
$
836
$
22
General and administrative (G&A)
$
961
$
$
910
(51)
Restructur
t
ing charges
$
181
$
—
$
181
The year-over-year change in RD&E expenses was primarily due to additional headcount to suppor
u
t our ongoing
investments in product development initiatives and higher depreciation expenses, consistent with our growth strategy. We
continued to prioritize RD&E investments in technical capabilities and critical RD&E programs in current and new markets.
Marketing and selling expenses for fiscal 2025 increased primarily due to higher employee related expenses.
General and administrative expenses in fiscal 2025 decreased primarily due to lower spending on profes
f
sional services,
partially offs
f et by an impairment of goodwill of $41 million recognized during the fourth quarter of fiscal 2025.
In the fourth quarter of fiscal 2025, we approved a workforce reduction plan (Fiscal 2025 Restructur
t
ing Plan) to position
us for continued growth as a more competitive and productive organization and expect approximately 4% of our global
workforce to be impacted under this plan. In the fourth quarter of fiscal 2025, we recognized $181 million of restructur
t
ing
charges consisting primarily of severance and other employment termination benefits to be paid in cash, and other non-cash
related charges. We expect to complete the plan in fiscal 2026.
Interest Expe
x
nse and Interest and Othe
t
r Income (expe
e
nse), net
Interest expense and interest and other income (expense), net for the periods presented were as follows:
Change
2025
2024
2025 over 2024
(In millions)
Interest expense
$
269
$
247
$
22
Interest and other income (expense), net
$
1,251
$
532
$
719
Interest expense incurred was primarily associated with senior unsecured notes. Interest expense in fiscal 2025 increased
slightly as a result of the issuance of senior unsecured notes in June 2024.
31

Interest and other income (expense), net in fiscal 2025 increased primarily driven by higher net gain on equity
investments, partially offs
f et by lower interest income driven by lower cash balances and a decrease in market interest rates.
Income Taxes
a
Provision for income taxes and effe
f ctive tax rates for the periods indicated were as follows:
Change
2025
2024
2025 over 2024
(In millions, except percentages)
Provision for income taxes
$
2,273
$
975
$
1,298
Effe
f ctive income tax rate
24.5 %
12.0 %
12.5 points
Our provision for income taxes and effe
f ctive tax rate are affe
f cted by the geographical composition of pre-tax income
which includes jurisdictions with differing tax rates, conditional reduced tax rates and other income tax incentives. It is also
affe
f cted by events that vary from period to period, such as changes in income tax laws and the resolution of prior years’ income
tax filings.
Our effe
f ctive tax rate for fiscal 2025 was higher than the prior fiscal year primarily due to a $659 million remeasurement
of deferred tax assets resulting from new tax incentive agreements in Singapore and the recognition of a $407 million valuation
allowance against deferred tax assets related to corporate alternative minimum tax (CAMT) credits. These credits are not
expected to be realized as a result of changes in the timing of future tax deductions, following the enactment of the One Big
Beautiful
f
Bill Act. No prudent and feasible tax-planning strategies are currently availabl
a e. The amount of the valuation
allowance may be adju
d sted in future quarters if estimates of future taxable income change.
Segm
e
ent Operatin
t
g Income (Loss)
Operating income (loss) by segment for the periods presented were as follows:
Change
2025
2024
2025 over 2024
(In millions, except percentages and ratios)
Operating income (loss)
Semiconductor Systems
$
7,379
$
6,981
$
398
6 %
Applied Global Services
1,792
1,812
(20)
(1)%
Corporate and Other
(882)
(926)
44
5 %
Total
$
8,289
$
7,867
$
422
5 %
Operating margin
Semiconductor Systems
35.5 %
35.1 %
0.4 points
Applied Global Services
28.1 %
29.1 %
(1.0) points
Semiconductor Systems’ operating margin for fiscal 2025 increased compared to the same period in the prior year
primarily driven by higher net revenue, favorable changes in customer and product mix, lower material and manufac
f
turing
costs, and an increase in average selling prices, partially offs
f et by increased RD&E expenses.
AGS’ operating margin for fiscal 2025 decreased compared to the same periods in the prior year primarily due to a
decrease in 200mm equipment net revenue, higher expense related to an increase in headcount to suppor
u
t business growth, and
higher excess and obsolete inventory charges, partially offs
f et by higher net revenue from services and spares.
32

Recent Accounting Pronouncements
Accountin
t
g Standards
t
Not Yet Adopt
d
ed
t
Targeted Impr
m
ovements to the Accounting for Internal-Use
U
Softw
f
are. In September 2025, the Financial Accounting
Standards Board (FASB) issued an accounting standard update to increase the operabi
a lity of the recognition guidance
considering different methods of software development by replacing the current stage-based capitalization model with a
principles-based approach. Under the new guidance, costs are capi
a talized once management authorizes and commits to funding
the software project, it is probable that the project will be completed and the software will be used to perform the function
intended. This authoritative guidance will be effe
f ctive for us beginning with our interim and annual reporting for fiscal year
2029, with early adoption permitted. We are evaluating the effe
f ct of this guidance on our consolidated financial statements and
related disclosures.
Measurement of Credit Losses for Accountst
Receivable and Contra
t
ct Assets. In July 2025, the FASB issued an
accounting standard update to provide a practical expedient that simplifies the calculation of expected credit losses (Topic 326).
The practical expedient allows an entity to assume that current conditions as of the balance sheet date do not change for the
remaining lifef of the asset, therefor
f
e, an entity will no longer need to develop reasonable and suppor
u
tabl
a e forecasts of futur
t
e
economic conditions. This authoritative guidance will be effe
f ctive for us beginning with our interim and annual reporting for
fis
f cal year 2027, with early adoption permitted. Although this guidance will simplify our proc
f
ess of calculating expected credit
losses on accounts receivable and contract assets, we do not expect this guidance to materially impact our consolidated financial
statements or related disclosures.
Disa
i
ggregation of Income Statements Expens
x
es. In November 2024, the FASB issued an accounting standard update to
improve income statement expenses disclosures (Subtopic 220-40). The standard requires more detailed information related to
the types of expenses, including (among other items) the amounts of purchases of inventory, employee compensation,
depreciation and intangible asset amortization included within each interim and annual income statement’s expense capt
a ion, as
applicable. This authoritative guidance can be applied prospectively or retrospectively and will be effe
f ctive for us in fiscal 2028
for annual periods and in the first quarter of fiscal 2029 for interim periods, with early adoption permitted. We are evaluating
the effe
f ct of this guidance on our consolidated financial statements and related disclosures.
Improv
m
ements to Income Tax
a Disc
i
losures. In December 2023, the FASB issued an accounting standard update to improve
income tax disclosures (Topic 740). The standard prescribes specific categories for the components of the effe
f ctive tax rate
reconciliation, requires disclosure of income taxes paid by jurisdiction, and modifies other income tax-related disclosures. This
authoritative guidance will be effe
f ctive for us beginning with our annual reporting for fiscal year 2026. We are evaluating the
effe
f ct of this guidance on our consolidated financial statements and related disclosures.
Accountin
t
g Standards
t
Adopt
d
ed
t
For a description of recently adopted accounting standards, including the date of adoption and the effe
f ct, if any, on our
consolidated financial statements, see Note 1, “Summary of Significant Accounting Policies,” of the Notes to Consolidated
Financial Statements.
33

Financial Condition, Liquidity and Capital Resources
Our cash, cash equivalents and investments consisted of the following:
October 26,
2025
October 27,
2024
(In millions)
Cash and cash equivalents
$
8,022
$
7,241
Short-term investments
1,332
1,449
Long-term investments
4,
2,787
327
Total cash, cash-equivalents and investments
$
12,900
$
12,258
Sources and Uses of Cash
A summary of cash provided by (used in) operating, investing, and financing activities was as follows:
2025
2024
(In millions)
Cash provided by operating activities
$
7,958
$
8,677
Cash used in investing activities
$
(2,782) $
(2,327)
Cash used in financing activities
$
(5,977) $
(4,470)
Operatin
t
g Activities
t
Cash from operating activities for fiscal 2025 was $8.0 billion, which reflects net income adju
d sted for the effe
f ct of non-
cash charges and changes in working capital components. Significant non-cash charges included depreciation, amortization,
gain or loss on investments or asset sale, share-based compensation, deferred income taxes and restructur
t
ing charges. Cash
provided by operating activities in fiscal 2025 was lower primarily due to higher payments for income taxes and inventory.
We have agreements with various financial institutions to sell accounts receivable and discount promissory notes from
selected customers. We sell our accounts receivable generally without recourse. From time to time, we also discount letters of
credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors,
including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. We sold
$501 million and $444 million of accounts receivable during fiscal 2025 and 2024, respectively. We did not discount letters of
credit issued by customers in fiscal 2025 and 2024. There was no discounting of promissory notes in each of fiscal 2025 and
2024.
Our working capi
a tal was $12.9 billion at October 26, 2025 and $12.8 billion at October 27, 2024.
Days sales outstanding of our accounts receivable at the end of fiscal 2025 and 2024 was 69 days and 68 days,
respectively. Days sales outstanding varies due to the timing of shipments and payment terms. The slight increase in days sales
outstanding was primarily due to unfav
f
orable revenue linearity.
Investing
n Activities
We used $2.8 billion and $2.3 billion of cash in investing activities in fiscal 2025 and 2024, respectively. Capi
a tal
expenditures in fiscal 2025 and 2024 were $2.3 billion and $1.2 billion, respectively. Capi
a tal expenditures were primarily for
investments in real property and improvements, demonstration and testing equipment, manufact
f
ur
t
ing and network equipment.
Purchases of investments, net of proceeds from sales and maturities of investments, for 2025 and 2024 were $526 million and
$1.1 billion, respectively. Net proceeds from asset sale were $33 million, and net cash paid for acquisition was $29 million in
fiscal 2025. Investing activities also included investments in technology to allow us to access new market opportunities or
emerging technologies.
Our investment portfol
f io consists principally of investment grade money market mutual funds, U.S. Treasury and agency
securities, municipal bonds, corporate bonds and mortgage-backed and asset-backed securities, as well as equity securities. We
regularly monitor the credit risk in our investment portfol
f io and take appropriate measures, which may include the sale of
certain securities, to manage such risks prudently in accordance with our investment policies.
34

Financ
i
ing Activiti
i es
We used $6.0 billion of cash in financing activities in fiscal 2025, consisting primarily of repurchases of common stock of
$4.9 billion, cash dividends to stockholders of $1.4 billion, repayment of $700 million senior notes and tax withholding
payments for vested equity awards of $248 million, partially offs
f et by net proceeds received from the issuance of senior
unsecured notes of $991 million and proceeds received from common stock issuances under our employee stock purchase plan
of $261 million.
We used $4.5 billion of cash in financing activities in fiscal 2024, consisting primarily of repurchases of common stock
of $3.8 billion, cash dividends to stockholders of $1.2 billion and tax withholding payments for vested equity awards of $291
million, and net payments of principal on financing leases of $102 million, partially offs
f et by net proceeds received from the
issuance of senior unsecured notes of $694 million and proceeds received from common stock issuances under our employee
stock purchase plan of $243 million.
In March 2025, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in
repurchases, which suppl
u
emented the previous $10.0 billion authorization approved in March 2023. At October 26, 2025,
approximately $14.0 billion remained availabl
a e for future stock repurchases under the repurchase program.
During each of fiscal 2025 and 2024, we paid four quarterly cash dividends, totaling $1.4 billion and $1.2 billion,
respectively. We currently anticipate that cash dividends will continue to be paid on a quarterly basis, although the declaration
of any future cash dividend is at the discretion of the Board of Directors and will depend on our financial condition, results of
operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that
cash dividends are in the best interests of our stockholders.
We have credit facilities for unsecured borrowings in various currencies of up to an aggregate amount of $4.1 billion.
These credit facilities consist of a $2.0 billion five-year committed revolving credit agreement with a group of banks (Five-Year
Credit Agreement), a $2.0 billion 364-day committed revolving credit agreement with a group of banks (364-Day Credit
Agreement), and revolving credit facilities with Japane
a
se banks pursuant to which we may borrow up to approximately
$53 million in aggregate at any time. The Five-Year Credit Agreement is scheduled to expire in February 2030, unless extended
as permitted under the terms of the agreement. The 364-Day Credit Agreement is scheduled to expire in September 2026,
provided, however, if any loans are outstanding on the maturity date, we may convert all or part of such loans to term loans that
will mature in September 2027, subj
u ect to payment of a fee by us and other customary
r
conditions. The Five-Year Credit
Agreement and the 364-Day Credit Agreement each includes financial and other covenants with which we were in compliance
as of October 26, 2025. No amounts were outstanding under any of these credit facilities as of October 26, 2025 and
October 27, 2024. See Note 9, Borrowing Facilities and Debt, of the Notes to the Consolidated Financial Statements for further
discussion related to our credit facilities.
We have a short-term commercial paper program under which we may issue unsecured commercial paper notes up to a
total of $4.0 billion. We increased the amount of commercial paper notes we may issue to $4.0 billion in the fourth quarter of
fiscal 2025, subs
u
equent to increasing the amount from $1.5 billion to $2.0 billion in the third quarter of fiscal 2025. The
proceeds from the issuances of commercial paper are used for general corporate purposes. At October 26, 2025, we had $100
million of commercial paper notes outstanding.
In September 2025, we issued $550 million in aggregate principal amount of 4.000% senior unsecured notes due 2031 and
$450 million in aggregate principal amount of 4.600% senior unsecured notes due 2036, in a registered public offeri
f
ng. In
October 2025, we used a portion of the net proceeds from the offeri
f
ng to repay the outstanding $700 million in aggregate
principal amount of our 3.900% senior unsecured notes due October 1, 2025. The remaining net proceeds from the issuance of
the senior unsecured notes are intended for general corporate purposes.
We had senior unsecured notes in the aggregate principal amount of $6.5 billion outstanding as of October 26, 2025. See
Note 9 of the Notes to the Consolidated Financial Statements for additional discussion of existing debt. We may seek to
refinance our existing debt and may incur additional indebtedness depending on our capital requirements, general corporate
purposes and the availabi
a lity of financing.
35

Othe
t
rs
On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (Tax Act). The Tax Act requires a one-
time transition tax on certain unrepatriated earnings of foreign subs
u
idiaries. The transition tax expense has been paid in
installments starting with fiscal 2018, and as of October 26, 2025, we had one remaining payment of $255 million, payable in
February of 2026.
On August 9, 2022, the U.S. government enacted the U.S. CHIPS and Science Act (CHIPS Act). The CHIPS Act creates
a 25% investment tax credit for certain investments in domestic semiconductor manufact
f
ur
t
ing. The credit is provided for
qualifying prope
f
rty, which is placed in service afte
f r December 31, 2022, for which construc
r
tion begins before January 1, 2027,
and is treated as a government grant recognized against property, plant and equipment and a reduction of income taxes payable.
We recognize this investment tax credit when there is reasonable assurance that we will qualify
f
for the credit and the benefit
will be received. As of October 26, 2025, our current income taxes payable was reduced by $233 million, and futur
t
e income
taxes payable will be reduced by $548 million, both of which are due to the investment tax credit.
On July 4, 2025, the U.S. government enacted the One Big Beautiful
f
Bill Act (OBBBA). The OBBBA includes a broad
range of tax reform provisions including extending and modifying certain key Tax Act provisions and expanding certain Chips
Act incentives. These changes include full expensing of domestic research costs, immediate expensing of qualifying prope
f
rty
and increasing the investment tax credit for certain investments in domestic semiconductor manufact
f
ur
t
ing from 25% to 35%.
Key tax provisions of the OBBBA are designed to accelerate tax deductions but that may have a detrimental impact on our
ability to use certain tax credits. The use of certain tax credits may not be economically viable if it requires electing to forgo
significant tax deductions. Most of the provisions are effe
f ctive beginning in fiscal years 2026 or 2027, with immediate
expensing of qualifying prope
f
rty being effe
f ctive in fiscal 2025. We will continue to evaluate the full impact of these legislative
changes as more guidance becomes availabl
a e.
Various countries where we do business have enacted or plan to enact new tax laws to implement the global minimum tax
regimes based on the Organization for Economic Cooperation and Development Base Erosion and Profit
f
Shifting Project, and
where enacted, the rules began to be effe
f ctive in fiscal 2025. The impact of the currently enacted legislation is not material to
our fiscal 2025 financial results. We continue to monitor developments and evaluate impacts, if any, of these rules on our
results of operations and cash flows. The adoption and effe
f ctive dates of these rules vary by country and could increase tax
complexity and uncertainty and may adversely affe
f ct our provision for income taxes in future years.
We have been granted additional conditional reduced tax rates in Singapore that expire beginning in fiscal 2030.
Although cash requirements will fluctuate based on the timing and extent of factors such as those discussed above, our
management believes that cash generated from operations, together with the liquidity provided by existing cash balances and
borrowing capability, will be sufficient to satisfy our liquidity requirements for the next 12 months. For further details regarding
our operating, investing and financing activities, see the Consolidated Statements of Cash Flows in this report.
For details on standby letters of credit, guarantee instruments and other agreements with banks, see Off-B
f
alance Sheet
Arrangements below.
36

Contractual Obligations and Off-B
f
alance Sheet Arrangements
We have certain on-balance sheet and off-b
f
alance sheet obligation arrangements to make future payments under various
contracts. Certain contractua
t
l arrangements which are recorded on our balance sheet include borrowing facilities and debts and
lease obligations.
Borrowing
i
Facilit
i
ie
t s and Debt Obligatio
t ns
As of October 26, 2025, we had $6.5 billion in aggregate principal amount of senior unsecured notes with varying
maturities, which are due beyond 12 months. Future interest payments associated with these unsecured notes were $2.9 billion,
of which $246 million is due within 12 months and the remaining interest payments are due beyond 12 months. See Note 9,
Borrowing Facilities and Debt, of the Notes to the Consolidated Financial Statements for further discussion related to our
borrowing facilities and debt obligations.
Lease Obligatio
t ns
As of October 26, 2025, our operating lease obligation was $565 million related to va irious opera iti g
ng lease arra g
ngements
for cer i
tain fa icili i
lities, of
h
which $104
h
million is payabl
payable
i
wi hi
thin 12 mo h
nths and hthe re
i i
maining amount is payabl
payable beyond 12
beyond 12
mo h
nths.
Purchase Obligatio
t ns
As of October 26, 2025, we had $10.6 billion of purchase obligations for goods and services, of which $7.3 billion is
payable within 12 months and the remaining amount is payable beyond 12 months.
Deemed Repat
e
ri
t atio
t n Tax
a Paya
a
ble
As of October 26, 2025, we had one remaining payment of $255 million, payable in February of 2026. This transition tax
liabi
a lity is associated with the deemed repatriation of accumulated foreign earnings as a result of the enactment of the Tax Act.
Othe
t
r Long-t
g er
t
m
r
Liabilit
i
ies
t
We also have the obligation to fund our pension, postretirement and deferred compensation plans. We evaluate the need to
make contributions to our pension and postretirement benefit plans afte
f r considering the funded status of
t
the plans, movements
in the discount rate, performance of the plan assets and related tax consequences. Payments to the plans would be dependent on
these factors and could vary across a wide range of amounts and time periods. Payments for deferred compensation plans are
dependent on activity by participants, making the timing of payments uncertain. As of October 26, 2025, the total of our future
expected benefit payments for the pension plans and the postretirement plan over the next ten fiscal years were $250 million, of
which $19 million is payable within 12 months and the remaining amount is payable beyond 12 months.
As of October 26, 2025, the gross liabi
a lity for unrecognized tax benefits that was not expected to result in payment of cash
within one year was $452 million. Interest and penalties related to uncertain tax positions that were not expected to result in
payment of cash within one year of October 26, 2025 was $118 million. At this time, we are unable to reliably
a
estimate the
timing of payments due to uncertainties in the timing of tax audit outcomes.
Off-B
f
alance Sheet Arrangements
In the ordinary course of business, we provide standby letters of credit or other guarantee instruments to third parties as
required for certain transactions initiated by either us or our subs
u
idiaries. These include agreements with various banks to
facilitate subs
u
idiary banking operations worldwide, including overdraft arrangements. We also have agreements with various
banks to facilitate subs
u
idiary banking operations worldwide, including overdraft arrangements, issuance of bank guarantees,
and letters of credit. See Note 14, Guarantees, Commitments and Contingencies, of the Notes to the Consolidated Financial
Statements for further discussion relating to these arrangements.
37

Critical Accounting Estimates
The preparation of consolidated financial statements and related disclosures in conformity with accounting principles
generally accepted in the United States of America requires management to make judgments, assumptions and estimates that
affe
f ct the amounts reported.
Estimates and assumptions about future events and their effe
f cts cannot be determined with certainty. We base our
estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the
circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating
environment changes. These changes have historically been minor and have been included in the consolidated financial
statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of
which are not within our control and will not be known for prolonged periods of time. These uncertainties include those
discussed in Part I, Item 1A, “Risk Factors.”
Management believes that the following is a critical accounting estimate:
Income Taxe
a
s
We are subj
u ect to income taxes in the U.S. and numerous foreign jurisdictions. The calculation of our provision for
income taxes and effe
f ctive tax rate involves significant judgment in estimating the impact of uncertainties in the application of
complex and evolving tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a
material impact on our results of operations and financial condition. We recognize a current tax liabi
a lity for the estimated
amount of income taxes payable on tax returns for the current fiscal year. Deferred tax assets and liabi
a lities are recognized for
the estimated future tax effe
f cts of temporary di
r
fferences between the book and tax bases of assets and liabi
a lities. Deferred tax
assets are also recognized for net operating loss and tax credit carryovers. Deferred tax assets and liabi
a lities are adju
d sted to
reflect the effe
f cts of enacted changes in tax rates, laws and status,
t
including changes in tax incentives. We record a valuation
allowance against deferred tax assets when it is more likely than not that some portion, or all, of the assets will not be realized.
In making this assessment, we weigh all availabl
a e positive and negative evidence, including expected future taxable income,
existing taxable temporary di
r
fferences, carryback potential and prudent and feasible tax-planning strategies.
The acceleration of tax deductions for U.S. tax purposes, under the One Big Beautiful
f
Bill Act, limits our ability to use
our corporate minimum tax credits. As a result, we have recorded a full valuation allowance against this deferred tax asset. We
reviewed potential tax-planning strategies to accelerate income recognition within a reasonable time, but none were prudent and
feasible. We will continue to evaluate new strategies as additional One Big Beautiful
f
Bill Act guidance is issued.
38

Item 7A:
Quantitat
t iv
t e and Qualita
l
tive Disc
i
losures About Market Risk
i
We are exposed to financial market risks, including fluctuations in interest rate and foreign currency exchange rates.
Interest Rate Risk
Available-fo
- r-sale Debt Securities - The market value of our investments in availabl
a e-for-sale securities was
approximately $3.2 billion at October 26, 2025. An immediate hypothetical 100 basis point increase in interest rates would
result in a decrease in the fair value of investments as of October 26, 2025 of approximately $36 million.
Debt - At October 26, 2025, the aggregate principal of long-term senior unsecured notes issued by us was $6.5 billion
with an estimated fair value of $6.2 billion. A hypothetical decrease in interest rates of 100 basis points would result in an
increase in the fair value of our long-term senior notes issuances of approximately $462 million at October 26, 2025. From time
to time, we use interest rate swaps or rate lock agreements to mitigate the potential impact of changes in benchmark interest
rates on interest expense and cash flows.
Foreign Currency Risk
Certain of our operations are conducted in foreign currencies, such as Japane
a
se yen, Israeli shekel, euro and Taiwanese
dollar. Hedges are used to reduce, but not eliminate, the impact of foreign currency exchange rate movements on the
consolidated balance sheet, statement of operations, and statement of cash flows. A hypothetical 10% adverse change in foreign
currency exchange rates relative to the U.S. Dollar would result in a decrease in the fair value of these hedging contracts of
$177 million at October 26, 2025.
We use primarily foreign currency forward contracts to offs
f et the impact of foreign exchange movements on non-U.S.
dollar denominated monetary assets and liabi
a lities. The foreign exchange gains and losses on the assets and liabilities are
recorded in interest and other income (expense), net and are offs
f et by the gains and losses on the hedges.
We use foreign currency forward and option contracts to hedge a portion of anticipated non-U.S. dollar denominated
revenues and expenses expected to occur within the next 24 months. Gains and losses on these hedging contracts generally
mitigate the effe
f ct of currency movements on our net revenue, cost of products sold, and operating expenses.
We do not use foreign currency forward or option contracts for trading or speculative purposes.
Item 8:
Financ
i
ial Stat
t em
t
ents and Suppl
u
emen
l
tary Data
The consolidated financial statements required by this Item are set forth on the pages indicated at Item 15(a).
Item 9:
Changes in and Disa
i
gr
a
eements with
i
Accountan
t
ts on Accountin
t
g and Financ
i
ial Disc
i
losure
None.
39

Item 9A:
Contro
t
ls and Procedures
Disclosure Controls and Procedures
As of the end of the period covered by this report, our management conducted an evaluation, under the supe
u
rvision and
with the participation of our Chief Executive Offi
f cer and Chief Financial Offi
f cer, of the effe
f ctiveness of our disclosure controls
and procedur
d
es, as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the Exchange Act). Based
upon that evaluation, our Chief Executive Offi
f cer and Chief Financial Offi
f cer concluded that our disclosure controls and
procedur
d
es were effe
f ctive as of the end of the period covered by this report in ensuring that information required to be disclosed
was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to
provide reasonable assurance that information required to be disclosed by us in such reports is accumulated and communicated
to our management, including our Chief Executive Offi
f cer and Chief Financial Offi
f cer, as appropriate to allow timely decisions
regarding required disclosure.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establ
a ishing and maintaining adequate internal control over financial reporting, as
such term is defined in Rule 13a-15(f) of the Exchange Act. Under the supe
u
rvision and with the participation of our Chief
Executive Offi
f cer and Chief Financial Offi
f cer, our management conducted an evaluation of the effe
f ctiveness of our internal
control over financial reporting based upon the framework in “Internal Control — Integrated Framework (2013)” issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded
that our internal control over financial reporting was effe
f ctive as of October 26, 2025.
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included
in this Form 10-K and, as part of the audit, has issued a report, included herein, on the effe
f ctiveness of our internal control over
fin
f ancial reporting as of October 26, 2025.
Changes in Internal Control over Financial Reporting
During the fourth quarter of fiscal 2025, there were no changes in the internal control over financial reporting that
materially affe
f cted, or are reasonably likely to materially affe
f ct, our internal control over financial reporting.
Inherent Limitations of Disclosure Controls and Procedures and Internal Control over Financial Reporting
It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not
absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part
upon certain assumptions about the likelihood of future events.
Item 9B:
Othe
t
r Info
n
rmation
t
During the three months ended October 26, 2025, no director or offi
f cer, as defined in Rule 16a-1(f), adopted or terminated
a “Rul
R e 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.
Item 9C:
Disc
i
losure Regardi
e
ng
i
Foreign
g
Jurisdicti
d
ons that Prevent Inspectio
t ns
Not applicable.
40

PART III
Item 10:
Dire
i
ctor
t
s,
r
Executiv
t e Offi
f cers and Corporatet Governance
Except for the information regarding executive offi
f cers required by Item 401 of Regulation S-K (which is included in
Part I, Item 1 of this Annual Report on Form 10-K, under “Infor
f
mation about our Executive Offi
f cers”), and code of ethics and
insider trading policy (which are set forth below), the information required by this item will be provided in accordance with
Instruction G(3) to Form 10-K no later than February 23, 2026.
We have implemented the Standards of Business Conduct, a code of ethics with which every pe
r
rson who works for us
and every
r member of the Board of Directors is expected to comply. If any subs
u
tantive amendments are made to the Standards of
Business Conduct or any waiver is granted, including any implicit waiver, from a provision of the code to our Chief Executive
Offi
f cer, Chief Financial Offi
f cer or Chief Accounting Offi
f cer, we will disclose the nature of such amendment or waiver on our
website or in a report on Form 8-K. The above information, including the Standards of Business Conduct, is availabl
a e on our
website
under
the
Governance
Documents
section
at
https://www.appliedmaterials.com/us/en
/
/about/c
t orporate-
governance.html.
t
This website address is intended to be an inactive, textual reference only. None of the materials on, or
accessible through, this website is part of this report or is incorporated by reference herein.
We have adopted an Insider Trading Policy governing the purchase, sale, and other dispositions of our securities by our
directors, offi
f cers, employees and other individuals associated with us that we believe is reasonably designed to promote
compliance with insider trading laws, rules and regulations, and listing standards applicable to us. A copy of our Insider
Trading Policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K.
Item 11:
Executive Compensation
The information required by this Item will be provided in accordance with Instruction G(3) to Form 10-K no later than
February 23, 2026.
41

Item 12:
Security
i
Ownership of Certai
t n
i
Benefi
e cial Owners and Manage
a
ment and Related Stockholde
t
r Matters
Except for the information regarding securities authorized for issuance under equity compensation plans (which is set
forth below), the information required by this Item will be provided in accordance with Instruction G(3) to Form 10-K no later
than February 23, 2026.
The following tabl
a e summarizes information with respect to equity awards under our equity compensation plans as of
October 26, 2025:
Equity Compensation Plan Information
Plan Category
(a)
Number of
Securities to be
Issued Upon Exercise
of Outstanding Options,
Warrants and
Rights(1)
(b)
Weighted Average
Exercise Price of
Outstanding Options,
Warrants and
Rights(2)
(c)
Number of Securities
Available for Future
Issuance Under Equity
Compensation Plans
(Excluding Securities
Reflected in
Column(a))
(In millions, except prices)
Equity compensation plans approved by
security holders
9
$
—
25
(3)
Total
9
$
—
25
(1) Includes only restricted stock units and performance share units outstanding under our equity compensation plans, as no
options, stock warrants or other rights were outstanding as of October 26, 2025.
(2) The weighted average exercise price calculation does not take into account any restricted stock units or performance shares.
(3) Includes 8 million shares of our common stock availabl
a e for future issuance under the Applied Materials, Inc. Omnibus
Employees’ Stock Purchase Plan. Of these 8 million shares, 1 million are subj
u ect to purchase during the purchase period in
effe
f ct as of October 26, 2025.
We have the following equity compensation plan that has not been approved by stockholders:
Appl
p ied Materialsl Profit
f
Sharing Scheme. The Applied Materials Profit
f
Sharing Scheme was adopted effe
f ctive July 3,
1996 and amended from time to time to enable employees of Applied Materials Ireland Limited and its participating
subs
u
idiaries to purchase our common stock at 100% of fair market value on the purchase date. Under this plan, eligible
employees may elect to forego a certain portion of their base salary and certain bonuses they have earned and that otherwise
would be payable in cash to purchase shares of our common stock at full fair market value. Since the eligible employees pay
full fair market value for the shares, there is no reserved amount of shares under this plan and, accordingly, the tabl
a e above does
not include any set number of shares availabl
a e for future issuance under the plan.
42

Item 13:
Certai
t n
i
Relationships and
i
Related Transactio
t ns, and
s
Dire
i
ctor
t
Independence
d
The information required by this Item will be provided in accordance with Instruction G(3) to Form 10-K no later than
February 23, 2026.
Item 14:
Principal
i
Accounting
i
Fees and Services
Our independent registered public accounting firm is KPMG LLP, Santa Clara, Californi
f
a, Auditor Firm ID: 185.
The information required by this Item will be provided in accordance with Instruction G(3) to Form 10-K no later than
February 23, 2026.
43

PART IV
Item 15:
Exhibits
i ,s Financ
i
ial Stat
t em
t
ent Schedules
(a) The following documents are filed as part of this Annual Report on Form 10-K:
Page
Number
(1)
Financial Statements:
Report of Independent Registered Public Accounting Firm
45
Consolidated Statements of Operations
47
Consolidated Statements of Comprehensive Income
48
Consolidated Balance Sheets
49
Consolidated Statements of Stockholders’ Equity
50
Consolidated Statements of Cash Flows
51
Notes to Consolidated Financial Statements
53
(2)
Exhibits:
The exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of
this Annual Report on Form 10-K
84
All other schedules are omitted because they are not applicable or the required information is shown in the Consolidated
Financial Statements or Notes thereto.
Item 16:
Form 10-K
-
Summary
None.
44

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and Board of Directors
Applied Materials, Inc.:
Opinions on the Consolidat
d ed Financial Statements and Internal Contro
t
l Over Financial Repor
e
ting
We have audited the accompanying consolidated balance sheets of Applied Materials, Inc. and subs
u
idiaries (the Company) as of
October 26, 2025 and October 27, 2024, the related consolidated statements of operations, comprehensive income,
stockholders’ equity, and cash flows for each of the years in the three-year period ended October 26, 2025, and the related notes
(collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial
reporting as of October 26, 2025, based on criteria establ
a ished in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of October 26, 2025 and October 27, 2024, and the results of its operations and its cash flows for
each of the years in the three-year period ended October 26, 2025, in conformity with U.S. generally accepted accounting
principles. Also in our opinion, the Company maintained, in all material respects, effe
f ctive internal control over financial
reporting as of October 26, 2025 based on criteria establ
a ished in Internal Control – Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effe
f ctive internal
control over financial reporting, and for its assessment of the effe
f ctiveness of internal control over financial reporting, included
in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an
opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Publ
u ic Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effe
f ctive internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included perfor
f
ming procedur
d
es to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedur
d
es that respond to those risks.
Such procedur
d
es included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effe
f ctiveness of internal control based
on the assessed risk. Our audits also included performing such other procedur
d
es as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definitio
e
n and Limitations of Internal Contro
t
l Over Financial Repor
e
ting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliabi
a lity of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedur
d
es
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effe
f ct on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effe
f ctiveness to future periods are subj
u ect to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedur
d
es may deteriorate.
45

Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subj
u ective, or
complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Evaluation of suff
u ic
f iency
c of audit evidence over revenue
As discussed in Notes 1 and 15 to the consolidated financial statements, the Company recorded $28,368 million in net
revenue, for the year ended October 26, 2025. The Company generates revenue by providing manufact
f
ur
t
ing equipment,
services and software to customers in the semiconductor, display and related industries. The Company’s process to account
for and recognize revenue differs across revenue streams.
We identified the evaluation of the sufficiency of audit evidence obtained over net revenue as a critical audit matter.
Evaluating the sufficiency of audit evidence required subj
u ective auditor judgment due to the number of revenue streams
and separate processes to account for and recognize revenue. This included determining the nature and extent of audit
evidence obtained over each revenue stream.
The following are the primary proc
r
edur
d
es we performed to address this critical audit matter. We applied auditor judgment
to determine the revenue streams over which procedur
d
es were performed as well as the nature and extent of such
procedur
d
es. For revenue streams where procedur
d
es were performed, we:
• evaluated the design and tested the operating effe
f ctiveness of certain internal controls over the Company’s revenue
recognition processes, including the Company’s controls over the accurate recording of revenue.
• evaluated the Company’s revenue recognition accounting policies.
• evaluated, for a sample of revenue transactions, (1) the accounting for consistency with the Company’s accounting
policies, as applicable, including timing of revenue recognition, and (2) the recorded amounts by comparing them for
consistency to underlying documentation, including the customer contracts.
In addition, we evaluated the sufficiency of audit evidence obtained by assessing the results of the procedur
d
es perform
f
ed,
including the appropriateness of the nature and extent of audit effort
f
over revenue
/S/
KPMG LLP
KPMG LLP
We have served as the Company’s auditor since 2004.
Santa Clara, California
f
December 12, 2025
46

APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF OPERAT
R
IONS
(In millions, except per share amounts)
Fiscal Year
2025
2024
2023
Net revenue
$
28,368
$
27,176
$
26,517
Cost of products sold
14,560
14,279
14,133
Gross profit
f
13,808
12,897
12,384
Operating expenses:
Research, development and engineering
3,570
3,233
3,102
Marketing and selling
858
836
776
General and administrative
910
961
852
Restructur
t
ing charges
181
—
—
Total operating expenses
5,519
5,030
4,730
Income from operations
8,289
7,867
7,654
Interest expense
269
247
238
Interest and other income (expense), net
1,251
532
300
Income before income taxes
9,271
8,152
7,716
Provision for income taxes
2,273
975
860
Net income
$
6,998
$
7,177
$
6,856
Earnings per share:
Basic
$
8.71
$
8.68
$
8.16
Diluted
$
8.66
$
8.61
$
8.11
Weighted average number of shares:
Basic
804
827
840
Diluted
808
834
845
See accompanying Notes to Consolidated Financial Statements.
47

APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
Fiscal Year
2025
2024
2023
Net income
$
6,998
$
7,177
$
6,856
Other comprehensive income (loss), net of tax:
Change in unrealized gain (loss) on availabl
a e-for-sale investments
18
43
25
Change in unrealized net loss on derivative instruments
53
31
(66)
Change in defined and postretirement benefit plans
(13)
(25)
26
Other comprehensive income (loss), net of tax
58
49
(15)
Comprehensive income
$
7,056
$
7,226
$
6,841
See accompanying Notes to Consolidated Financial Statements.
48

APPLIED MATERIALS, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except per share amounts)
October 26,
2025
October 27,
2024
ASSETS
Current assets:
Cash and cash equivalents
$
7,241
$
8,022
Short-term investments
1,332
1,449
Accounts receivable, net
5,185
5,234
Inventories
5,915
5,421
Other current assets
1,208
1,094
Total current assets
20,881
21,220
Long-term investments
4,327
2,787
Property, plant and equipment, net
4,610
3,339
Goodwill
3,707
3,732
Purchased technology and other intangible assets, net
226
249
Deferred income taxes and other assets
2,548
3,082
Total assets
$
36,299
$
34,409
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabi
a lities:
Short-term debt
$
100
$
799
Accounts payable and accrued expenses
5,333
4,820
Contract liabi
a lities
2,566
2,849
Total current liabilities
7,999
8,468
Long-term debt
6,455
5,460
Income taxes payable
356
670
Other liabi
a lities
1,074
810
Total liabi
a lities
15,884
15,408
Commitments and contingencies (Note 14)
Stockholders’ equity:
Preferred stock: $0.01 par value per share; 1 shares authorized; no shares issued
—
—
Common stock: $0.01 par value per share; 2,500 shares authorized; 793 and 818 shares
outstanding at 2025 and 2024, respectively
8
8
Additional paid-in capi
a tal
10,333
9,660
Retained earnings
55,227
49,651
Treasury stock: 1,241 and 1,211 shares at 2025 and 2024, respectively
(45,043)
(40,150)
Accumulated other comprehensive loss
(110)
(168)
Total stockholders’ equity
20,415
19,001
Total liabi
a lities and stockholders’ equity
$
36,299
$
34,409
See accompanying Notes to Consolidated Financial Statements.
49

APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In millions, except per share amounts)
Common Stock
Additional
Paid-In
Capital
Retained
Earnings
Treasury Stock
Accumulated
Other
Comprehensive
Income (Loss)
Total
Shares
Amount
Shares
Amount
Balance at October 30, 2022
844
$
8
$
8,593
$
37,892
1,173
$ (34,097)
$
(202)
$
12,194
Net income
—
—
—
6,856
—
—
—
6,856
Other comprehensive income (loss),
net of tax
—
—
—
—
—
—
(15)
(15)
Dividends declared
($1.22 per common share)
—
—
—
(1,022)
—
—
—
(1,022)
Share-based compensation
—
—
490
—
—
—
—
490
Net issuance under stock plans
7
—
48
—
—
—
—
48
Common stock repurchases
(18)
—
—
—
18
(2,202)
—
(2,202)
Balance at October 29, 2023
833
$
8
$
9,131
$
43,726
1,191
$ (36,299)
$
(217)
$
16,349
Net income
—
—
—
7,177
—
—
—
7,177
Other comprehensive income (loss),
net of tax
—
—
—
—
—
—
49
49
Dividends declared
($1.52 per common share)
—
—
—
(1,252)
—
—
—
(1,252)
Share-based compensation
—
—
577
—
—
—
—
577
Net issuance under stock plans
5
—
(48)
—
—
—
—
(48)
Common stock repurchases
(20)
—
—
—
20
(3,851)
—
(3,851)
Balance at October 27, 2024
818
$
8
$
9,660
$
49,651
1,211
$ (40,150)
$
(168)
$
19,001
Net income
—
—
—
6,998
—
—
—
6,998
Other comprehensive income (loss),
net of tax
—
—
—
—
—
—
58
58
Dividends declared
($1.78 per common share)
—
—
—
(1,422)
—
—
—
(1,422)
Share-based compensation
—
—
660
—
—
—
—
660
Net issuance under stock plans
5
—
13
—
—
—
—
13
Common stock repurchases
(30)
—
—
—
30
(4,893)
—
(4,893)
Balance at October 26, 2025
793
$
8
$
10,333
$
55,227
1,241
$ (45,043)
$
(110)
$
20,415
See accompanying Notes to Consolidated Financial Statements.
50

Fiscal Year
2025
2024
2023
Cash flows from operating activities:
Net income
$
6,998
$
7,177
$
6,856
Adju
d stments required to reconcile net income to cash provided by operating activities:
Depreciation and amortization
435
392
515
Restruc
r
turing charges
179
—
—
Deferred income taxes
639
(633)
24
(Gain) loss and impairments on investments, net
(792)
(15)
(16)
Share-based compensation
668
577
490
Other
31
62
56
Changes in operating assets and liabilities, net of amounts acquired:
Accounts receivable
49
(69)
903
Inventories
(494)
304
207
Other current and non-current assets
(119)
287
(48)
Accounts payable and accrued
r
expenses
307
281
(138)
Contract liabi
a lities
(283)
(126)
(167)
Income taxes payable
250
389
(20)
Other liabi
a lities
90
51
38
Cash provided by operating activities
7,958
8,677
8,700
Cash flows from investing activities:
Capi
a tal expenditures
(2,260)
(1,190)
(1,106)
Cash paid for acquisitions, net of cash acquired
(29)
—
(25)
Proceeds from asset sale
33
—
—
Proceeds from sales and maturities of investments
5,528
2,451
1,268
Purchases of investments
(6,054)
(3,588)
(1,672)
Cash used in investing activities
(2,782)
(2,327)
(1,535)
Cash flows from financing activities:
Debt borrowings, net of issuance costs
991
694
—
Debt repayments
(700)
—
—
Proceeds from commercial paper
503
401
991
Repayments of commercial paper
(502)
(400)
(900)
Proceeds from common stock issuances
261
243
227
Common stock repurchases
(4,895)
(3,823)
(2,189)
Tax withholding payments for vested equity awards
(248)
(291)
(179)
Payments of dividends to stockholders
(1,384)
(1,192)
(975)
Payments of debt issuance costs
(3)
—
—
Repayments of principals on finance leases
—
(102)
(7)
Cash used in financing activities
(5,977)
(4,470)
(3,032)
Increase (decrease) in cash, cash equivalents and restricted cash equivalents
(801)
1,880
4,133
Cash, cash equivalents and restricted cash equivalents — beginning of period
8,113
6,233
2,100
Cash, cash equivalents and restricted cash equivalents — end of period
$
7,312
$
8,113
$
6,233
Reconciliation of cash, cash equivalents, and restricted cash equivalents
Cash and cash equivalents
$
7,241
$
8,022
$
6,132
Restricted cash equivalents included in deferred income taxes and other assets
71
91
101
Total cash, cash equivalents, and restricted cash equivalents
$
7,312
$
8,113
$
6,233
APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)
(In millions)
51

Fiscal Year
2025
2024
2023
Suppl
u
emental cash flow information:
Cash payments for income taxes
$
1,504
$
957
$
1,006
Cash refunds from income taxes
$
90
$
15
$
53
Cash payments for interest
$
239
$
205
$
205
See accompanying Notes to Consolidated Financial Statements.
APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)
(In millions)
52

Note 1
Summary of Significant Accounting Policies and Recently Adopted Accounting Standards
Summary of Signific
f ant Accounting Policies
Principl
i es of Consolidat
d ion and Basis of Presentation
The consolidated financial statements include the accounts of Applied Materials, Inc. and its subs
u
idiaries (we, us, and
our) afte
f r elimination of intercompany balances and transactions. All references to a fiscal year apply to our fiscal year which
ends on the last Sunday in October. Fiscal 2025, 2024 and 2023 each contained 52 weeks. Each fiscal quarter of 2025, 2024 and
2023 contained 13 weeks.
Certain prior-year amounts have been reclassified to conform to current-year presentation.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States
of America requires management to make judgments, estimates and assumptions that affe
f ct the amounts reported in the
financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis,
we evaluate our estimates, including those related to standalone selling price (SSP) related to revenue recognition, accounts
receivable and sales allowances, fair values of financial instruments, inventories, intangible assets and goodwill, useful
f
lives of
intangible assets and property, plant and equipment, fair values of share-based awards, warranty, and income taxes, among
others. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the
results of which form the basis for making judgments about the carrying values of assets and liabi
a lities.
Cash Equivalents
All highly liquid investments with a remaining maturity of three months or less at the time of purchase are classified as
cash equivalents. Cash equivalents consist primarily of investments in institutional money market funds, treasury bills and
investment grade commercial paper.
Investments
All of our investments, except equity investments, are classified as availabl
a e-for-sale at the respective balance sheet dates.
Investments classified as availabl
a e-for-sale are measured and recorded in the Consolidated Balance Sheets at fair value, and
unrealized gains and losses, net of tax, are reported as a separate component of other comprehensive income. Interest earned on
cash and investments, as well as realized gains and losses on sale of securities, are included in interest and other income, net in
the Consolidated Statements of Operations.
Our equity investments with readily determinable values consist of publicly traded equity securities. These investments
are measured at fair value using quoted prices for identical assets in an active market. Privately held equity investments without
readily determinable fair value are measured at cost, less impairment, adju
d sted by observable price changes. Adju
d stments
resulting from impairments and observable price changes are recorded in interest and other income, net in the Consolidated
Statements of Operations.
Investments with remaining effe
f ctive maturities of 12 months or less from the balance sheet date are classified as short-
term investments. Investments with remaining effe
f ctive maturities of more than 12 months from the balance sheet date are
classified as long-term investments.
Fair Value Measurements
Our financial assets are measured and recorded at fair value on a recurring basis, except for equity investments in
privately held companies. These equity investments are generally accounted for under the measurement alternative, defined as
cost, less impairments, adju
d sted for subs
u
equent observable price changes and are periodically assessed for impairment when
events or circumstances indicate that a decline in value may have occurred. Our nonfin
f ancial assets, such as goodwill,
intangible assets, and property, plant and equipment, are recorded at cost and are assessed for impairment at least annually for
goodwill, or whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverabl
a e.
We use the following hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three
levels and bases the categorization within the hierarchy upon the lowest level of input that is availabl
a e and significant to the fair
value measurement:
•
Level 1 — Quoted prices in active markets for identical assets or liabi
a lities;
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
53

•
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar
assets or liabi
a lities, quoted prices in markets that are not active, or other inputs that are observable or can be
corroborated by observable market data for subs
u
tantially the full term of the assets or liabi
a lities; and
•
Level 3 — Unobservable inputs that are suppor
u
ted by little or no market activity and that are significant to the fair
value of the assets or liabilities.
In determining the fair value of our debt securities investments, we use pricing information from pricing services that
value securities based on quoted market prices and models that utilize observable market inputs. In the event a fair value
estimate is unavailabl
a e from a pricing service, we generally obtain non-binding price quotes from brokers. In addition, to
validate pricing information obtained from pricing services, we periodically perform suppl
u
emental analysis on a sample of
securities. We review any significant unanticipated differences identified through this analysis to determine the appropriate fair
value. As of October 26, 2025, subs
u
tantially all of our availabl
a e-for-sale, short-term, and long-term investments were
recognized at fair value that was determined based upon quoted prices or other observable inputs.
Our equity investments with readily determinable values are measured at fair value using quoted prices for identical
assets in an active market, and the changes in fair value of these equity investments are recognized in the consolidated
statements of operations.
Inventories
Inventories are stated at the lower of cost or net realizable value, with approximate cost determined on a first-in, first-out
(FIFO) basis. We adjust inventory carrying value for estimated obsolescence equal to the difference between the cost of
inventory and the estimated net realizable value based upon assumptions about future demand and market conditions. We fully
write down inventories and noncancelable purchase orders for inventory deemed obsolete. We perform periodic reviews of
inventory items to identify excess inventories on hand by comparing on-hand balances to anticipated usage using recent
historical activity as well as anticipated or forecasted demand. If estimates of customer demand diminish further or market
conditions become less favorable than those projected by us, additional inventory adju
d stments may be required.
Property,
t
Plant and Equipment
Property, plant and equipment is stated at cost. Depreciation is provided over the estimated useful
f
lives of the assets using
the straight-line method. Estimated useful
f
lives of certain assets for financial reporting purposes are as follows: buildings and
improvements, 3 to 30 years; demonstration and manufact
f
ur
t
ing equipment, 5 to 8 years; software, 3 to 5 years; and furniture,
fixtures and other equipment, 3 to 5 years. Land improvements are amortized over the shorter of 15 years or their estimated
useful
f
life.
f
Leasehold improvements are amortized over the shorter of five years or the lease term.
Government Assistance
We receive government assistance from various domestic and foreign governments in the form of cash grants or
refundable tax credits. These arrangements incentivize us to continue growing our capital investments and research and
development activities. Government incentives generally contain conditions that must be met in order for the assistance to be
earned. We recognize the incentives when there is reasonable assurance that we will comply with all conditions specified in the
incentive arrangement and the incentive will be received.
We record capi
a tal expenditure related incentives as an offs
f et to the associated property, plant and equipment, net within
our Consolidated Balance Sheets and recognize a reduction to depreciation expense over the useful
f
lifef of the corresponding
acquired asset. We record incentives related to operating activities as a reduction to expense in the same line item on the
Consolidated Statements of Operations as the expenditure for which the grant is intended to compensate.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
54

Acquisi
i tions
We account for the acquisition of a business using the acquisition method of accounting. Our methodology for allocating
the purchase price relating to purchase acquisitions is determined through establ
a ished and generally accepted valuation
techniques. We allocate the fair value of the purchase consideration of our acquisitions to the tangible assets, liabi
a lities, and
intangible assets acquired, including in-process technology, based on their estimated fair values. Goodwill is measured as the
excess of the purchase price over the sum of the amounts assigned to tangible and identifiabl
a e intangible assets acquired less
liabi
a lities assumed. We assign assets acquired (including goodwill) and liabi
a lities assumed to one or more reporting units as of
the date of acquisition. Typically, acquisitions relate to a single reporting unit and thus do not require the allocation of goodwill
to multiple reporting units. If the products obtained in an acquisition are assigned to multiple reporting units, the goodwill is
distributed to the respective reporting units as part of the purchase price allocation process. The value assigned to intangible
assets is usually based on estimates and judgments regarding expectations for the success and life cycle
f
of produc
d
ts and
technology acquired.
Goodwill and Intangible Assets
Goodwill is not amortized but is reviewed for impairment annually during the fourth quarter of each fiscal year and
whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverabl
a e. The process of
evaluating the potential impairment of goodwill requires judgment.
When reviewing goodwill for impairment, we first perform a qualitative assessment to determine whether it is more
likely than not that the fair value of a reporting unit is less than its carrying value. In performing a qualitative assessment, we
consider business conditions and other factors including, but not limited to (i) adverse industry or
r
economic trends, (ii)
restructur
t
ing actions and lower projections that may impact future operating results, (iii) sustained decline in share price, and
(iv) overall financial performance and other events affe
f cting the reporting units. If we conclude that it is more likely than not
that the fair value of a reporting unit is less than its carrying amount, then a quantitative impairment test is performed by
estimating the fair value of the reporting unit and comparing it to its carrying value. If the carrying value of a reporting unit
exceeds its fair value, we would record an impairment charge equal to the excess of the carrying value of the reporting unit over
its fair value.
In the fourth quarter of fiscal 2025, we perfor
f
med a qualitative assessment to test goodwill for all of our reporting units
for impairment. Based on this assessment, we determined that a quantitative impairment test was required for certain non-
strategic businesses within our Corporate and Other category, primarily due to events related to the exit of one such business
during the quarter. As a result, we recognized goodwill impairment charges of $41 million in general and administrative
expenses in our Consolidated Statements of Operations. No goodwill impairment was recorded during fiscal 2024 and 2023.
Intangible assets with finite lives are presented at cost, net of accumulated amortization, and are amortized over their
estimated useful
f
lives of 1 to 15 years using the straight-line method. We evaluate the useful
f
lives of our intangible assets each
reporting period to determine whether events and circumstances require revising the remaining period of amortization.
Intangible assets with infinite lives are not subj
u ect to amortization and consist primarily of in-process technology, which will be
subj
u ect to amortization upon commercialization. If an in-process technology project is abandoned, the acquired technology
attributable to the project will be written-off.
f
The carrying values of our intangible assets are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverabl
a e.
The balances of our intangible assets were not material as of October 26, 2025 or October 27, 2024 and amortization expenses
were not material for fiscal 2025, 2024 and 2023.
Long-Lived Assets
Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate the carrying value
of an asset or asset group may not be recoverabl
a e. We assess the recoverabi
a lity of the assets by comparing the undiscounted
future cash flow expected to result from the use and eventual disposal of the assets to their respective carrying value. If not
recoverabl
a e, we recognize an impairment loss to the excess of the carrying value over the fair value of those assets and reduce
the carrying value of the assets to their respective fair value. Fair value is determined by availabl
a e market valuations, when
availabl
a e and appropriate, or by discounted cash flows.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
55

Leases
A contract contains a lease when we have the right to control the use of an identified asset for a period of time in
exchange for consideration. We lease certain facilities, vehicles and equipment under non-cancelable operating leases, many of
which include options to renew. Options that are reasonably certain to be exercised are included in the calculation of the right-
of-u
f
se asset and lease liabi
a lity. Our finance leases are those that contain a purchase option which we are reasonably certain to
exercise at the end of the lease term. Our leases do not contain residual value guarantees or significant restrictions that impact
the accounting for leases. As implicit rates are not availabl
a e for the leases, we use the incremental borrowing rate as of the lease
commencement date in order to measure the right-of-use asset and liabi
a lity. Operating lease expense is generally recognized on
a straight-line basis over the lease term. Finance lease expense is generally recognized on a straight-line basis over the lifef of
the underlying leased asset.
We elected the practical expedient to account for lease and non-lease components as a single lease component for all
leases. For leases with a term of one year or less, we elected not to record a right-of-use asset or lease liabi
a lity and to account
for the associated lease payments as they become due.
A majority of our lease arrangements are operating leases. The balances of our operating leases right-of-use assets and
liabi
a lities were not material as of October 26, 2025 or October 27, 2024. Operating lease cost for fiscal 2025, 2024 and 2023
was not material.
Revenue Recognition from Contra
t
ctst with Customers
We recognize revenue when promised goods or services are transfer
f red to a customer in an amount that reflects the
consideration to which we expect to be entitled in exchange for those goods or services. We determine revenue recognition
through the following five steps: (1) identification of the contract(s) with customers, (2) identification of the perform
f
ance
obligations in the contract, (3) determination of the transaction price, (4) allocation of the transaction price to the perform
f
ance
obligations in the contract, and (5) recognition of revenue when, or as, a performance obligation is satisfied.
Iden
d
tifying the contra
t
ct(s) with customers.
r
We sell equipment, services, and spare parts directly to our customers in the
semiconductor, display and related industries. We generally consider written documentation including, but not limited to,
signed purchase orders, master agreements, and sales orders as contracts provided that collection is probable. Collectability is
assessed based on the customer’s creditworthiness determined by reviewing the customer’s published credit and financial
information, historical payment experience, as well as other relevant factors.
Iden
d
tifying the perfor
f
mance obligations. Our performance obligations include delivery of equipment, service agreements,
spare parts, installation, extended warranty and training. Our service agreements are considered one performance obligation and
may include multiple goods and services that we provide to the customer to deliver against a performance metric. Judgment is
used to determine whether multiple promised goods or services in a contract should be accounted for separately or as a group.
Determine the transaction price. The transaction price for our contracts with customers may include fixed and variable
consideration. We include variable consideration in the transaction price to the extent that it is probable that a significant
reversal of revenue will not occur when the uncertainty associated with the variable consideration is subs
u
equently resolved.
Allocate the transaction price to the perfor
f
mance obligations. A contract’s transaction price is allocated to each distinct
performance obligation identifie
f d within the contract. We generally estimate the standalone selling price of a distinct
performance obligation based on historical cost plus an appropriate margin. For contracts with multiple perform
f
ance
obligations, we allocate the contract’s transaction price to each performance obligation using the relative standalone selling
price of each distinct good or service in the contract.
Recognizi
i ng the revenue as perfor
f
mance obligations are satisf
i ie
f d. We recognize revenue from equipment and spares parts
at a point in time when we have satisfied our performance obligation by transfer
f ring control of the goods to the customer, which
typically occurs at shipment or delivery.
r
Revenue from service agreements is recognized over time, typically within 12 months,
as customers receive the benefits of services.
The incremental costs to obtain a contract are not material.
Paymen
a
t Terms. Payment terms vary by contract. Generally, the majority of payments are due within a certain number of
days from shipment of goods or performance of service. The remainder is typically due upon customer technical acceptance. In
certain circumstances we may receive deposits from customers for future deliverables. Our payment terms do not generally
contain a significant financing component.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
56

Shipping and Handling Costs
We account for shipping and handling activities related to contracts with customers as costs to fulfill our promise to
transfer
f
the associated products. Accordingly, amounts billed for shipping and handling costs are recorded as a component of
net revenue and costs as a component of cost of products sold.
Warranty
Our products are generally sold with a warranty for a 12-month period following installation. Parts and labor
a
are covered
under the terms of the warranty agreement. We provide for the estimated cost of warranty when revenue is recognized.
Estimated warranty costs are determined by analyzing specific product, current and historical config
f uration statistics and
regional warranty suppor
u
t costs. Our warranty obligation is affe
f cted by product and component failure rates, material usage and
labor
a
costs incurred in correcting product failures during the warranty period. If actua
t
l warranty costs differ subs
u
tantially from
our estimates, revisions to the estimated warranty liabi
a lity would be required. Quarterly warranty consumption is generally
associated with sales that occurred during the preceding four quarters, and quarterly warranty provisions are generally related to
the current quarter’s sales.
We also sell extended warranty contracts to our customers which provide an extension of the standard warranty coverage
period of up to 2 years. We receive payment at the inception of the contract and recognizes revenue ratably ove
a
r the extended
warranty coverage period, as the customer simultaneously receives and consumes the benefits of the extended warranty.
Our warranty reserves balances and the components of changes in our warranty reserves were not material for all periods
presented.
Sales and Value Added
d
Taxes
a
Taxes collected from customers and remitted to governmental authorities are presented on a net basis in the Consolidated
Statements of Operations.
Research, Developm
o
ent and Engineering Costs
Research, development and engineering costs are expensed as incurred.
Income Taxes
a
We recognize a current tax liabi
a lity for the estimated amount of income tax payable on tax returns for the current fiscal
year. Deferred tax assets and liabilities are recognized for the estimated future tax effe
f cts of temporary di
r
fferences between the
book and tax bases of assets and liabi
a lities. Deferred tax assets are also recognized for net operating loss and tax credit
carryovers. Deferred tax assets are offs
f et by a valuation allowance to the extent it is more likely than not that they are not
expected to be realized. Deferred tax assets and liabi
a lities are measured based on enacted tax rates that are expected to apply in
the period in which the assets are realized or the liabi
a lities are settled. Deferred tax assets and liabi
a lities are adju
d sted for the
effe
f ct of a change in tax rates, laws, or status
t
when the change is enacted.
We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be
sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized
from such positions are estimated based on the largest benefit that has a greater than 50% likelihood of being realized upon
ultimate settlement. Any changes in judgment related to uncertain tax positions are recognized in our provision for income taxes
in the quarter in which such change occurs. Interest and penalties related to uncertain tax positions are recognized in our
provision for income taxes.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
57

Derivative Financial Instruments
We use financial instruments, such as foreign currency forward and option contracts, to hedge a portion of, but not all,
existing and anticipated foreign currency denominated transactions typically expected to occur within 24 months. The purpose
of our foreign currency management is to mitigate the effe
f ct of exchange rate fluctuations on certain foreign currency
denominated revenues, costs and eventual cash flows. In certain cases, we also use interest rate swap or lock agreements to
hedge against the variability of cash flows due to changes in the benchmark interest rate of fixed rate debt. The terms of
derivative financial instruments used for hedging purposes are generally consistent with the timing of the transactions being
hedged. Our derivative financial instruments are recorded as assets or liabi
a lities at fair value and reported gross on our
Consolidated Balance Sheets. However, under master netting agreements in place with our counterpa
r
rties, we may net settle
transactions of the same currency under certain circumstances. For derivative instruments designated and qualifying as cash
flow hedges, the gain or loss is reported as a component of accumulated other comprehensive income (loss) (AOCI) in
stockholders’ equity and is reclassified into earnings when the hedged transaction affe
f cts earnings. Any portion excluded from
the assessment of effe
f ctiveness is recognized in the same line as the hedged transaction but may be recognized in a different
manner, e.g., amortized. If a hedged transaction becomes probable of not occurring according to the original strategy, the hedge
relationship is discontinued, and we recognize the gain or loss on the associated derivative in earnings. For hedges of existing
foreign currency denominated assets or liabi
a lities, the gain or loss is recorded in earnings in the same period to offs
f et the
changes in the fair value of the assets or liabi
a lities being hedged.
Foreign
g Currency
As of October 26, 2025, all of our subs
u
idiaries use the United States dollar as their functional currency. Accordingly,
assets and liabi
a lities of these subs
u
idiaries are remeasured using exchange rates in effe
f ct at the end of the period, except for non-
monetary assets, such as inventories and property, plant and equipment, which are remeasured using historical exchange rates.
Foreign currency-denominated revenues and costs are remeasured using average exchange rates for the period, except for costs
related to non-monetary assets and liabi
a lities, which are remeasured using historical exchange rates. The resulting
remeasurement gains and losses are included in interest and other income, net in the Consolidated Statements of Operations as
incurred.
Concentrations of Credit Risk
i
Financial instruments that potentially subj
u ect us to significant concentrations of credit risk consist principally of cash
equivalents, investments, trade accounts receivable, and derivative financial instruments used in hedging activities. We invest in
a variety of financial instruments, such as, but not limited to, commercial paper, corporate bonds, municipal securities, United
States Treasury and agency securities, and asset-backed and mortgage-backed securities, and by policy, limit the amount of
credit exposure with any one financial institution or commercial issuer. We are exposed to credit-related losses in the event of
nonperformance by counterpa
r
rties to derivative financial instruments but do not expect any counterpa
r
rties to fail to meet their
obligations. We perform ongoing credit evaluations of our customers’ financial condition and generally require no collateral to
secure accounts receivable. We maintain an allowance for potentially uncollectible accounts receivable based on our assessment
of the collectability of accounts receivable. We regularly review the allowance by considering factors such as historical
experience, credit quality, age of the accounts receivable balances, and current economic conditions that may affe
f ct a
customer’s ability to pay. In addition, we utilize deposits and/or letters of credit to mitigate credit risk when considered
appropriate.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
58

Recently
t
Adopt
d
ed
t
Accounting St
i
an
t
dards
Fair Value Measurement of Equity Securities Subject to Contra
t
ctual Sale Restrictions. In June 2022, the Financial
Accounting Standards Board (FASB) issued an accounting standard update which clarifies how the fair value of equity
securities subj
u ect to contractua
t
l sale restrictions is determined (Topic 820). The amendment clarifies that a contractua
t
l sale
restriction should not be considered in measuring fair value. It also requires certain qualitative and quantitative disclosures
related to equity securities subj
u ect to contractua
t
l sale restrictions. We adopted this authoritative guidance in the first quarter of
fiscal 2025. The adoption of this guidance did not have a material impact on our consolidated condensed financial statements.
Improv
m
ements to Repor
e
table Segment Disc
i
losures. In November 2023, the FASB issued an accounting standard update to
improve reportabl
a e segment disclosure requirements, primarily through enhanced disclosures about significant segment
expenses (Topic 280). The standard requires interim and annual disclosure of significant segment expenses that are regularly
provided to the chief operating decision-maker (CODM) and included within the reported measure of a segment’s profit or loss,
requires interim disclosures about a reportabl
a e segment’s profit
f
or loss and assets that are currently required annually, requires
disclosure of the position and title of the CODM, clarifie
f s circumstances in which an entity can disclose multiple segment
measures of profit
f
or loss and contains other disclosure requirements. We adopted this authoritative guidance in the fourth
quarter of fiscal 2025 and expanded the disclosures in our notes to the consolidated financial statements. See Note 15, Indus
d
try
r
Segment Operations, of the Notes to the Consolidated Financial Statements for further information.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
59

Note 2
Earnings Per Share
Basic earnings per share is determined using the weighted average number of common shares outstanding during the
period. Diluted earnings per share is determined using the weighted average number of common shares and potential common
shares (representing the dilutive effe
f ct of restricted stock units and employees’ stock purchase plan shares) outstanding during
the period. Our net income has not been adju
d sted for any period presented for purposes of computing basic or diluted earnings
per share due to our non-complex capital structur
t
e.
Fiscal Year
2025
2024
2023
(In millions, except per share amounts)
Numerator:
Net income
$
6,998
$
7,177
$
6,856
Denominator:
Weighted average common shares outstanding
804
827
840
Effe
f ct of weighted dilutive restricted stock units and employees’ stock purchase
plan shares
4
7
5
Denominator for diluted earnings per share
808
834
845
Basic earnings per share
$
8.16
$
8.68
$
8.71
Diluted earnings per share
$
8.66
$
8.61
$
8.11
Potentially weighted dilutive securities
—
—
—
Excluded from the calculation of diluted earnings per share are securities attributable to outstanding restricted stock units
where the combined exercise price and average unamortized fair value are greater than the average market price of our common
stock, and therefor
f
e their inclusion would be anti-dilutive.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
60

Note 3
Cash, Cash Equivalents and Investments
Summary of Cash, Cash Equivalentst and Investme
t
nts
The following tabl
a es summarize our cash, cash equivalents and investments by security type:
October 26, 2025
,
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
(In millions)
Cash
$
1,419
$
—
$
—
$
1,419
Cash equivalents:
Money market funds*
2,193
—
—
2,193
Bank certificates of deposit and time deposits
180
—
—
180
U.S. Treasury and agency securities
1,196
—
—
1,196
Municipal securities
5
—
—
5
Commercial paper, corporate bonds and medium-term notes
2,248
—
—
2,248
Total cash equivalents
5,822
—
—
5,822
Total cash and cash equivalents
$
7,241
$
—
$
—
$
7,241
Short-term and long-term investments:
Bank certificates of deposit and time deposits
$
4
$
—
$
—
$
4
U.S. Treasury and agency securities
1,229
3
—
1,232
Non-U.S. government securities**
5
—
—
5
Municipal securities
463
5
—
468
Commercial paper, corporate bonds and medium-term notes
848
6
—
854
Asset-backed and mortgage-backed securities
614
4
2
616
Total fixed income securities
3,163
18
2
3,179
Publ
u icly traded equity securities
1,288
824
2
2,110
Equity investments in privately held companies
342
74
46
370
Total equity investments
1,630
898
48
2,480
Total short-term and long-term investments
$
4,793
$
916
$
50
$
5,659
Total cash, cash equivalents and investments
$
12,034
$
916
$
50
$
12,900
_________________________
*Excludes $71 million of restricted cash equivalents invested in money market funds related to deferred compensation plans.
**Includes Canadian provincial government debt.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
61

October 27, 2024
,
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
(In millions)
Cash
$
1,313
$
—
$
—
$
1,313
Cash equivalents:
Money market funds*
3,421
—
—
3,421
Bank certificates of deposit and time deposits
90
—
—
90
U.S. Treasury and agency securities
1,394
—
—
1,394
Municipal securities
19
—
—
19
Commercial paper, corporate bonds and medium-term notes
1,785
—
—
1,785
Total cash equivalents
6,709
—
—
6,709
Total cash and cash equivalents
$
8,022
$
—
$
—
$
8,022
Short-term and long-term investments:
Bank certificates of deposit and time deposits
$
13
$
—
$
—
$
13
U.S. Treasury and agency securities
1,306
—
2
1,304
Non-U.S. government securities**
5
—
—
5
Municipal securities
441
2
2
441
Commercial paper, corporate bonds and medium-term notes
803
4
2
805
Asset-backed and mortgage-backed securities
656
3
5
654
Total fixed income securities
3,224
9
11
3,222
Publ
u icly traded equity securities
543
185
5
723
Equity investments in privately held companies
255
58
22
291
Total equity investments
798
243
27
1,014
Total short-term and long-term investments
$
4,022
$
252
$
38
$
4,236
Total cash, cash equivalents and investments
$
12,044
$
252
$
38
$
12,258
________________________
*Excludes $91 million of restricted cash equivalents invested in money market funds related to deferred compensation plans.
**Includes Canadian provincial government debt.
During fiscal 2025, 2024 and 2023, interest income from our cash, cash equivalents and fixed income securities was $406
million, $486 million and $262 million, respectively.
Maturities of Investme
t
nts
The following tabl
a e summarizes the contractua
t
l maturities of our investments as of October 26, 2025:
Cost
Estimated Fair Value
(In millions)
Due in one year or less
$
1,275
$
1,276
Due afte
f r one through five years
1,274
1,287
No single maturity date*
2,244
3,096
Total
$
4,793
$
5,659
_________________________
*Securities with no single maturity date include publicly traded and privately held equity securities and asset-backed and
mortgage-backed securities.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
62

Gains and Losses on Investme
t
nts
At October 26, 2025, gross unrealized losses related to our fixed income portfol
f io were not material. We regularly review
our fixed income portfol
f io to identify
f and evaluate investments that have indications of possible impairment from credit losses
or other factors. Factors considered in determining whether an unrealized loss is considered to be a credit loss include: the
significance of the decline in value compared to the cost basis; the financial condition, credit quality and near-term prospects of
the investee; and whether it is more likely than not that we will be required to sell the security prior to recovery. Credit losses
related to availabl
a e-for-sale debt securities are recorded as an allowance for credit losses through interest and other income
(expense), net. Any additional changes in fair value that are not related to credit losses are recognized in accumulated other
comprehensive income (loss).
During fiscal 2025, 2024 and 2023, gross realized gains and losses related to our fixed income portfol
f io were not
material.
During fiscal 2025, 2024 and 2023, we did not recognize material credit losses and the ending allowance for credit losses
was not material.
The components of gain (loss) on equity investments recognized in the Consolidated Statements of Operations for each
fiscal year were as follows:
2025
2024
2023
(In millions)
Publ
u icly traded equity securities
Unrealized gain
$
887
$
332
$
193
Unrealized loss
(139)
(287)
(44)
Realized gain on sales and dividends
91
5
9
Realized loss on sales or impairment
—
(1)
(4)
Equity investments in privately held companies
Unrealized gain
20
3
15
Unrealized loss
(13)
(17)
(30)
Realized gain on sales and dividends
10
4
9
Realized loss on sales or impairment
(35)
(19)
(121)
Total gain (loss) on equity investments, net
$
821
$
20
$
27
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
63

Note 4
Fair Value Measurements
Assets Measured at Fair Value on a Recurring Basis
The following tabl
a e presents our fair value hierarchy for our financial assets (excluding cash balances) measured at fair
value on a recurring basis:
October 26, 2025
October 27, 2024
Level 1
Level 2
Total
Level 1
Level 2
Total
(In millions)
Assets:
Availabl
a e-for-sale debt security investments
Money market funds*
$ 2,264
$
—
$ 2,264
$ 3,512
$
—
$ 3,512
Bank certificates of deposit and time deposits
—
184
184
—
103
103
U.S. Treasury and agency securities
2,109
319
2,428
2,684
14
2,698
Non-U.S. government securities
—
5
5
—
5
5
Municipal securities
—
473
473
—
460
460
Commercial paper, corporate bonds and medium-term
notes
—
3,102
3,102
—
2,590
2,590
Asset-backed and mortgage-backed securities
—
616
616
—
654
654
Total availabl
a e-for-sale debt security investments
$ 4,373
$ 4,699
$ 9,072
$ 6,196
$ 3,826
$ 10,022
Equity investments with readily determinable values
Publ
u icly traded equity securities
$ 2,110
$
—
$ 2,110
$
723
$
—
$
723
Total equity investments with readily determinable values
$ 2,110
$
—
$ 2,110
$
723
$
—
$
723
Total
$ 6,483
$ 4,699
$ 11,182
$ 6,919
$ 3,826
$ 10,745
______________________________
*Amounts as of October 26, 2025 and October 27, 2024 include $71 million and $91 million, respectively, invested in money
market funds related to deferred compensation plans. Due to restrictions on the distribution of these funds, they are classified as
restricted cash equivalents and are included in deferred income taxes and other assets in the Consolidated Balance Sheets.
We did not have any financial assets measured at fair value on a recurring basis within Level 3 fair value measurements
as of October 26, 2025 or October 27, 2024.
Assets and Liabilities without Readily Determinable Values Measured on a Non-recurring Basis
Our equity investments without readily determinable values consist of equity investments in privately held companies.
We elected the measurement alternative, defined as cost, less impairments, adju
d sted for subs
u
equent observable price changes on
a prospective basis for certain equity investments without readily determinable fair values and are required to account for any
subs
u
equent observable changes in fair value within the statements of operations. These investments are classified as Level 3
within the fair value hierarchy and periodically assessed for impairment when an event or circumstance indicates that a decline
in value may have occurred. Impairment losses on equity investments in privately held companies, included in the above tabl
a e,
were not material during fiscal 2025 and 2024 and were $121 million during fiscal 2023. These impairment losses are included
in interest and other income (expense), net in the Consolidated Statement of Operations.
Other
t
The carrying amounts of our financial instruments, including cash and cash equivalents, restricted cash equivalents,
accounts receivable, commercial paper notes, and accounts payable and accrued
r
expenses, approximate fair value due to their
short maturities. At October 26, 2025, the aggregate principal amount of long-term senior unsecured notes was $6.5 billion, and
the estimated fair value was $6.2 billion. At October 27, 2024, the aggregate principal amount of long-term senior unsecured
notes was $5.5 billion and the estimated fair value was $5.1 billion. The estimated fair value of long-term senior unsecured
notes is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues. See Note 9
of the Notes to the Consolidated Financial Statements for further detail of existing debt.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
64

Note 5
Derivative Instruments and Hedging Activities
Derivative Financial Instruments
We conduct business in a number of foreign countries, with certain transactions denominated in local currencies, such as
the Japane
a
se yen, Israeli shekel, euro and Taiwanese dollar. We use derivative financial instruments, such as foreign currency
forward and option contracts, to hedge certain forecasted foreign currency denominated transactions expected to occur typically
within the next 24 months. The purpose of our foreign currency management is to mitigate the effe
f ct of exchange rate
fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. The terms of currency
instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged.
We do not use derivative financial instruments for trading or speculative purposes. Derivative instruments and hedging
activities, including foreign exchange and interest rate contracts, are recognized on the balance sheet at fair value. Changes in
the fair value of derivatives that do not qualify
f for hedge accounting treatment are recognized currently in earnings. All of our
derivative financial instruments are recorded at their fair value in other current assets or in accounts payable and accrued
r
expenses.
Hedges related to anticipated transactions are designated and documented at the inception of the hedge as cash flow
hedges and foreign exchange derivatives are typically entered into once per month. Cash flow hedges are evaluated for
effe
f ctiveness quarterly. The effe
f ctive portion of the gain or loss on these hedges is reported as a component of AOCI in
stockholders’ equity and is reclassified into earnings when the hedged transaction affe
f cts earnings. The majority of the afte
f r-tax
net income or loss related to foreign exchange derivative instruments included in AOCI at October 26, 2025 is expected to be
reclassified into earnings within 12 months. Changes in fair value caused by changes in time value of option contracts
designated as cash flow hedges are excluded from the assessment of effe
f ctiveness. The initial value of this excluded component
is amortized on a straight-line basis over the lifef of the hedging instrument and recognized in the financial statement line item to
which the hedge relates. If the transaction being hedged is probable not to occur, we recognize the gain or loss on the associated
financial instrument in the consolidated statement of operations. The amount recognized due to discontinuance of cash flow
hedges that were probable of not occurring by the end of the originally specified time period was not material for fiscal years
2025, 2024 or 2023.
Foreign currency forward contracts are generally used to hedge certain foreign currency denominated assets or liabi
a lities.
Accordingly, changes in the fair value of these hedges are recorded in earnings to offs
f et the changes in the fair value of the
assets or liabi
a lities being hedged.
As of October 26, 2025 and October 27, 2024, the total outstanding notional amount of foreign exchange contracts was
$2.3 billion and $2.0 billion, respectively. The fair values of foreign exchange derivative instruments at October 26, 2025 and
October 27, 2024 were not material.
The gain (loss) on derivatives in cash flow hedging relationships recognized in AOCI for derivatives designated as
hedging instruments were not material for fiscal year 2025, 2024 and 2023.
The effe
f cts of derivative instruments, both those designated as cash flow hedges and those that are not designated, on the
Consolidated Statements of Operations were not material for fiscal 2025, 2024 and 2023.
Credit Risk
i
Contingent Features
If our credit rating were to fall below investment grade, we would be in violation of credit risk contingent provisions of
the derivative instruments discussed above, and certain counterpa
r
rties to the derivative instruments could request immediate
payment on derivative instruments in net liabi
a lity positions. The aggregate fair value of all derivative instruments with credit-
risk related contingent featur
t
es that were in a net liability position was immaterial as of October 26, 2025 and October 27, 2024.
Entering into derivative contracts with banks exposes us to credit-related losses in the event of the banks’
nonperformance. However, our exposure is not considered material.
Note 6
Accounts Receivable, Net
We have agreements with various financial institutions to sell accounts receivable and discount promissory notes from
selected customers. We sell our accounts receivable generally without recourse. From time to time, we also discount letters of
credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors,
including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
65

We sold $501 million, $444 million and $679 million of accounts receivable during fiscal 2025, 2024 and 2023,
respectively. We did not discount letters of credit issued by customers in fiscal 2025, 2024 and 2023. There was no discounting
of promissory notes in each of fiscal 2025, 2024 and 2023. Financing charges on the sale of receivables and discounting of
letters of credit are included in interest expense in the accompanying Consolidated Statements of Operations and were not
material for all years presented.
We maintain an allowance for credit losses for estimated losses resulting from the inability of our customers to make
required payments. This allowance is based on historical experience, credit evaluations, specific customer collection history and
any customer-specific issues we have identified. Changes in circumstances, such as an unexpected material adverse change in a
major customer’s ability to meet its financial obligation to us or its payment trends, may require us to further adju
d st our
estimates of the recoverabi
a lity of amounts due to us. Bad debt expense and any reversals are recorded in marketing and selling
expenses in the Consolidated Statement of Operations.
The balances of allowance for credit losses and changes in allowance for credit losses were not material for fiscal 2025,
2024 and 2023.
We sell our products principally to manufac
f
turers within the semiconductor industry.
r
While we believe that our
allowance for credit losses is adequate and represents our best estimate as of October 26, 2025, we continue to closely monitor
customer liquidity and industry
r and economic conditions, which may result in changes to our estimates.
Note 7
Contract Balances and Perfor
f
mance Obligations
Contra
t
ct Assets and Liabilities
Contract assets primarily result from receivables for goods transfer
f red to customers where payment is conditional upon
technical sign offf and not just the passage of time. Contract liabilities consist of unsatisfied performance obligations related to
advance payments received and billings in excess of revenue recognized. Our contract assets and liabi
a lities are reported in a net
position on a contract-by-contract basis at the end of each reporting period.
Contract assets are generally classified as current and are included in Other Current Assets in the Consolidated Balance
Sheets. Contract liabi
a lities are classified as current or non-current based on the timing of when performance obligations will be
satisfied and associated revenue is expected to be recognized.
Contract balances at the end of each reporting period were as follows:
October 26, 2025
October 27, 2024
(In millions)
Contract assets
$
281
$
269
Contract liabi
a lities
$
2,566
$
2,849
The increase in contract assets during fiscal 2025 was primarily due to an increase in unsatisfied performance obligations
related to goods transfer
f red to customers where payment was conditional upon technical sign off.
f
During fiscal 2025, we recognized revenue of approximately $2.4 billion related to contract liabi
a lities at October 27, 2024.
Contract liabi
a lities decreased during fiscal 2025 due to revenue recognized related to contract liabi
a lities at October 27, 2024,
partially offs
f et by new billings for products and services for which there were unsatisfied performance obligations to customers,
and revenue had not yet been recognized as of October 26, 2025.
There were no credit losses recognized on our accounts receivabl
a es and contract assets during fiscal 2025 and 2024.
Perfor
f
mance Obligat
i
ions
As of October 26, 2025, the amount of remaining unsatisfied perfor
f
mance obligations on contracts, primarily consisting of
written purchase orders received from customers, with an original estimated duration of one year or more was approximately
$1.7 billion, of which approximately 53% is expected to be recognized within 12 months and the remainder is expected to be
recognized within the following 24 months thereafte
f r.
We have elected the availabl
a e practical expedient to exclude the value of unsatisfied performance obligations for contracts
with an original expected duration of one year or less.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
66

Note 8
Balance Sheet Detail
October 26,
2025
October 27,
2024
(In millions)
Inventories
Customer service spares
$
1,786
$
1,742
Raw materials
2,
1,680
007
Work-in-process
914
879
Finished goods
Deferred cost of sales
229
217
Evaluation inventory
474
459
Manufact
f
ur
t
ed on-hand inventory
505
444
Total finished goods
1,208
1,120
Total inventories
$
5,915
$
5,421
October 26,
2025
October 27,
2024
(In millions)
Other Current Assets
Prepaid income taxes and income taxes receivable
$
148
$
120
Prepaid expenses and other
1,060
974
$
1,208
$
1,094
Useful
f
Life
October 26,
2025
October 27,
2024
(In years)
(In millions)
Property, Plant and Equipment, Net
Land and improvements
$
558
$
492
Buildings and improvements
3-30
2,359
2,930
Demonstration and manufac
f
turing equipment
5-8
2,708
2,578
Furniture, fixtures and other equipmen
3
t
-5
782
855
Construc
r
tion in progress
1,460
898
Gross property, plant and equipment
8
7,109
,511
Accumulated depreciation
(3,901)
(3,770)
$
4,610
$
3,339
Depreciation expense was $389 million, $346 million and $471 million for fiscal 2025, 2024 and 2023, respectively.
October 26,
2025
October 27,
2024
(In millions)
Deferred Income Taxes and Other Assets
Non-current deferred income taxes
$
1,233
$
2,393
Operating lease right-of-use assets
509
375
Income tax receivables and other assets
806
314
$
2,548
$
3,082
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
67

October 26,
2025
October 27,
2024
(In millions)
Accounts Payable and Accrued Expenses
Accounts payable
$
1,978
$
1,570
Compensation and employee benefits
1,221
1,188
Warranty
346
364
Dividends payable
365
327
Income taxes payable
380
535
Operating lease liabilities, current
91
87
Restructur
t
ing reserve
165
—
Other
787
749
$
5,333
$
4,820
October 26,
2025
October 27,
2024
(In millions)
Other Liabilities
Defined and postretirement benefit plans
$
151
$
142
Operating lease liabilities, non-current
404
259
Other
519
409
$
1,074
$
810
Government Assistan
t
ce
Capi
a tal expenditure related incentives reduced gross property, plant and equipment, net by $1.2 billion as of October 26,
2025. Contra-depreciation expense was not material in fiscal 2025. Operating incentives recognized as a reduction to research,
development and engineering expense was $31 million in fiscal 2025. Capi
a tal expenditure related incentives reduced our
income taxes payabl
a e by $781 million as of October 26, 2025, of which $233 million is in other current assets and $548 million
is in deferred income taxes and other assets, in our Consolidated Balance Sheets.
Note 9
Borrowing Facilities and Debt
Revolving Credit
d
Facili
i ti
i es
In September 2025, we entered into a $2.0 billion 364-day committed revolving credit agreement (364-Day Credit
Agreement) with a group of banks. The 364-Day Credit Agreement includes a provision under which we may request an
increase in the amount of the facility of up to $1.0 billion for a total commitment of no more than $3.0 billion, subj
u ect to the
receipt of commitments from one or more lenders for any such increase and other customary
r
conditions. The 364-Day Credit
Agreement is scheduled to expire in September 2026, provided, however, if any loans are outstanding on the maturity date, we
may convert all or part of such loans to term loans that will mature in September 2027, subj
u ect to payment of a fee by us and
other customary
r
conditions. The 364-Day Credit Agreement provides for unsecured borrowings that bear interest for each
advance at one of two rates selected by us, plus an applicable margin, which varies according to our public debt credit ratings.
No amounts were outstanding under the 364-Day Credit Agreement as of October 26, 2025.
In February 2025, we entered into a $2.0 billion committed revolving credit agreement (Five-Year Credit Agreement)
with a group of banks. The Five-Year Credit Agreement includes a provision under which we may request an increase in the
amount of the facility of up to $500 million for a total commitment of no more than $2.5 billion, subj
u ect to the receipt of
commitments from one or more lenders for any such increase and other customary
r conditions. The Five-Year Credit Agreement
is scheduled to expire in February 2030, unless extended as permitted under the terms of the agreement. The Five-Year Credit
Agreement provides for borrowings that bear interest for each advance at one of two rates selected by us, plus an applicable
margin, which varies according to our public debt credit ratings. The Five-Year Credit Agreement replaced our prior
$1.5 billion credit agreement, which was scheduled to expire in February 2026.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
68

No amounts were outstanding under the Five-Year Credit Agreement or under the prior revolving credit agreement as of
October 26, 2025 and October 27, 2024, respectively.
In addition, we have revolving credit facilities with Japane
a
se banks pursuant to which we may borrow up to
approximately $53 million in aggregate at any time. Our ability to borrow under these facilities is subj
u ect to bank approval at
the time of the borrowing request, and any advances will be at rates indexed to the banks’ prime reference rate denominated in
Japane
a
se yen. As of October 26, 2025 and October 27, 2024, no amounts were outstanding under these revolving credit
facilities.
Short-t
t er
t
m
r
Commercial Paper
a
We have a short-term commercial paper program under which we may issue unsecured commercial paper notes up to a
total of $4.0 billion. We increased the amount of commercial paper notes we may issue to $4.0 billion in the fourth quarter of
fiscal 2025, subs
u
equent to increasing the amount from $1.5 billion to $2.0 billion in the third quarter of fiscal 2025. The
proceeds from the issuances of commercial paper are used for general corporate purposes. At October 26, 2025, we had $100
million of commercial paper notes outstanding and recorded as short-term debt with a weighted-average interest rate of 4.07%
and maturities of 35 days, and as of October 27, 2024, we had $100 million of commercial paper notes outstanding and
recorded as short-term debt with a weighted-average interest rate of 5.06% and maturities of 63 days.
Senior Unsecured Notes
In September 2025, we issued $550 million aggregate principal amount of 4.000% senior unsecured notes due 2031 and
$450 million aggregate principal amount of 4.600% senior unsecured notes due 2036, in a registered public offeri
f
ng. In October
2025, we used a portion of the net proceeds from the offeri
f
ng to repay the outstanding $700 million in aggregate principal
amount of its 3.900% senior unsecured notes due October 1, 2025. The remaining net proceeds from the issuance of the senior
unsecured notes are intended for general corporate purposes.
Debt outstanding as of October 26, 2025 and October 27, 2024 was as follows:
Principal Amount
October 26,
2025
October 27,
2024
Effe
f ctive
Interest Rate
Interest
Pay Dates
(In millions)
Current portion of long-term debt:
3.900% Senior Notes Due 2025
$
—
$
700
3.944%
April 1, October 1
Total current portion of long-term debt
$
—
$
700
Long-term debt:
3.300% Senior Notes Due 2027
$
1,200
$
1,200
3.342%
April 1, October 1
4.800% Senior Notes Due 2029
700
700
4.844%
June 15, December 15
1.750% Senior Notes Due 2030
750
750
1.792%
June 1, December 1
4.000% Senior Notes Due 2031
550
—
4.070%
January 15, July 15
5.100% Senior Notes Due 2035
500
500
5.127%
April 1, October 1
4.600% Senior Notes Due 2036
450
—
4.632%
January 15, July 15
5.850% Senior Notes Due 2041
600
600
5.879%
June 15, December 15
4.350% Senior Notes Due 2047
1,000
1,000
4.361%
April 1, October 1
2.750% Senior Notes Due 2050
750
750
2.773%
June 1, December 1
6,500
5,500
Total unamortized discount
(12)
(10)
Total unamortized debt issuance costs
(33)
(30)
Total long-term debt
$
6,455
$
5,460
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
69

Note 10
Restructuring Charges
Fisc
i
al 2025 Restructuring Plan
In the fourth quarter of fiscal 2025, we approved a workforce reduction plan (Fiscal 2025 Restructur
t
ing Plan) to position
us for continued growth as a more competitive and productive organization and expect approximately 4% of our global
workforce to be impacted under this plan. The majority of the charges related to the Fiscal 2025 Restructur
t
ing Plan were
recognized in the fourth quarter of fiscal 2025 and consist primarily of severance and other employment termination benefits to
be paid in cash, and other non-cash related charges.
Restructur
t
ing charges related to the Fiscal 2025 Restructur
t
ing Plan were as follows:
2025
(In millions)
Severance and other employee-related charges
$
154
Asset impairments
27
Total
$
181
Changes in restructur
t
ing reserves related to the Fiscal 2025 Restructur
t
ing Plan described above were as follows:
Restructuring Charges Reserves
(In millions)
Balance as of October 27, 2024
$
—
Restructur
t
ing charges
167
Consumption of reserves
(2)
Balance as of October 26, 2025
$
165
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
70

Note 11
Stockholders’ Equity, Comprehensive Income and Share-Based Compensation
Accumulated Othe
t
r Comprehensive Income (Loss)
Changes in the components of accumulated other comprehensive income (loss) (AOCI), net of tax, were as follows:
Unrealized
Gain (Loss)
on
Investments,
Net
Unrealized
Gain (Loss) on
Derivative
Instruments
Qualifyi
f ng as
Cash Flow
Hedges
Defined and
Postretirement
Benefit Plans
Cumulative
Translation
Adju
d
stments
Total
(In millions)
Balance at October 30, 2022
$
(75) $
(52) $
(88) $
13
(202)
Other comprehensive income (loss) before reclassifications
16
(44)
17
—
(11)
Amounts reclassified out of AOCI
9
(22)
9
—
(4)
Other comprehensive income (loss), net of tax
25
(66)
26
—
(15)
Balance at October 29, 2023
$
(50) $
(118) $
(62) $
13
$
(217)
Other comprehensive income (loss) before reclassifications
34
28
—
—
62
Amounts reclassified out of AOCI
9
3
(25)
—
(13)
Other comprehensive income, net of tax
43
31
(25)
—
49
Balance at October 27, 2024
$
(7) $
(87) $
(87) $
13
$
(168)
Other comprehensive income (loss) before reclassifications
17
58
—
—
75
Amounts reclassified out of AOCI
1
(5)
(13)
—
(17)
Other comprehensive income (loss), net of tax
18
53
(13)
—
58
Balance at October 26, 2025
$
11
$
(34) $
(100) $
13
$
(110)
The tax effe
f cts on net income of amounts reclassified from AOCI were not material for the fiscal 2025, 2024 and 2023.
Stock
t
Repu
e
rchase Program
In March 2025, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in
repurchases, which suppl
u
emented the previous $10.0 billion authorization approved in March 2023. At October 26, 2025,
approximately $14.0 billion remained availabl
a e for future stock repurchases under the repurchase program.
The following tabl
a e summarizes our stock repurchases, including and excluding excise tax, for each fiscal year:
2025
2024
2023
(In millions, except per share amounts)
Shares of common stock repurchased
30
20
18
Cost of stock repurchased (including excise tax)*
$
4,893
$
3,851
$
2,202
Average price paid per share (including excise tax)*
$
190.27
$
123.63
$
162.85
Cost of stock repurchased (excluding excise tax)
$
4,853
$
3,823
$
2,189
Average price paid per share (excluding excise tax)
$
122.89
$
188.87
$
161.54
(*) Stock repurchase amounts include the 1% surcharge on stock repurchases under the Inflation Reduction Act’s excise tax. This excise tax is recorded in
equity and reduces the amount availabl
a e under the repurchase program, as applicable.
We record common stock repurchased and held as treasury stock under the cost method using the first-in, first-out (FIFO)
method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If
we reissue treasury stock at an amount below our acquisition cost and additional paid in capital associated with prior treasury
r
stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is
recorded against retained earnings.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
71

Dividends
During fiscal 2025, our Board of Directors declared one quarterly cash dividend of $0.40 per share and three quarterly
cash dividends of $0.46 per share. During fiscal 2024, our Board of Directors declared one quarterly cash dividend of $0.32 per
share and three quarterly cash dividends of $0.40 per share. During fiscal 2023, our Board of Directors declared one quarterly
cash dividend of $0.26 per share and three quarterly cash dividends of $0.32 per share. Dividends paid during fiscal 2025, 2024
and 2023 amounted to $1.4 billion, $1.2 billion and $975 million, respectively. We currently anticipate that cash dividends will
continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of
Directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other
factors, as well as a determination by the Board of Directors that cash dividends are in the best interests of our stockholders.
Share-Based Compensation
We have a stockholder-approved
a
equity plan, the Employee Stock Incentive Plan (ESIP), which permits grants to
employees of share-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units,
performance share units and perfor
f
mance units. In addition, the plan provides for the automatic grant of restricted stock units to
non-employee directors and permits the grant of share-based awards to non-employee directors and consultants. Share-based
awards made under the plan may be subj
u ect to accelerated vesting under certain circumstances, including in the event of a
change in control. In addition, we have an Omnibus Employees’ Stock Purchase Plan (ESPP), which enables eligible employees
to purchase our common stock.
We recognized share-based compensation expense related to share-based awards and ESPP shares. The effe
f ct of share-
based compensation on the results of operations and the related tax benefits for each fiscal year were as follows:
2025
2024
2023
(In millions)
Cost of products sold
$
158
$
134
$
180
Research, development, and engineering
259
219
179
Marketing and selling
85
72
55
General and administrative
166
152
76
Restructur
t
ing charges*
(8)
—
—
Total share-based compensation
$
660
$
577
$
490
Income tax benefits recognized
$
80
$
73
$
63
(*) Amount related to modification of share-based awards associated with the Fiscal 2025 Restructur
t
ing Plan.
The cost associated with share-based awards is typically recognized over the awards’ service period for the entire award
on a straight-line basis, adju
d sting for estimated forfeitur
t
es. However, in the case of share-based awards granted to certain
members of senior management that allow for partial accelerated vesting in the event of a qualifying
f
retirement based on age
and years of service, the compensation expense is recognized once the individual meets the conditions for a qualifying
f
retirement. We calculate estimated forfeiture rate on an annual basis, based on historical forfeiture activities. The cost
associated with share-based awards that include performance and/or market goals, is recognized for each tranche over the
service period. The cost of the portion of share-based awards subj
u ect to performance goals is recognized based on an
assessment of the likelihood that the applicable performance goals will be achieved, and the cost of the portion of share-based
awards subj
u ect to market goals is recognized based on the assumption of 100% achievement of the goal.
At October 26, 2025, we had $947 million in total unrecognized compensation expense, net of estimated forfeitur
t
es,
related to grants of share-based awards under the ESIP and shares issued under the ESPP, which will be recognized over a
weighted average period of 2.4 years. At October 26, 2025, there were 17 million shares availabl
a e for grant of share-based
awards under the ESIP, and an additional 8 million shares availabl
a e for issuance under the ESPP.
Stock
t
Options
Stock options are rights to purchase, at future dates, shares of our common stock. There were no stock options granted
during fiscal 2025, 2024 and 2023 and no outstanding stock options at the end of fiscal 2025.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
72

Restricted Stoc
t
k Units,
t
Restricted
t
Stock,
t
Perfor
f
ma
r
nce Share Unitst and Perfor
f
ma
r
nce Units
Restricted stock units are converted into shares of our common stock upon vesting on a one-for-one basis. Restricted
stock has the same rights as other issued and outstanding shares of our common stock except these shares generally have no
right to dividends and are held in escrow until the award vests. Performance share units and performance units are awards that
result in a payment to a grantee, generally in shares of our common stock on a one-for-one basis, if performance goals, market
goals and/or other vesting criteria are achieved or the awards otherwise vest. Restricted stock units, restricted stock,
performance share units and performance units typically vest over three to four years and vesting is usually subj
u ect to the
grantee’s continued service with us and, in some cases, achievement of specified performance and/or market goals.
The compensation expense related to share-based awards subj
u ect solely to time-based vesting requirements (Service-
Based Awards) is determined using the market value of our common stock, adju
d sted to exclude the present value of expected
dividends during the vesting period. The market value of our common stock is calculated using the closing price of our
common stock on the date of grant, or if the grant date is not a trading date, the average of the closing prices on the trading
dates immediately preceding and following the grant date.
During fiscal 2025, 2024 and 2023, certain members of senior management were granted share-based awards that are
subj
u ect to the achievement of certain levels of specified market and performance goals, in addition to time-based vesting
requirements (Performance-Based Awards). The market goal for Performance-Based Awards granted during fiscal 2025, 2024
and 2023 is targeted levels of total shareholder return (TSR) relative to the TSR of the companies in the Standard & Poor’s 500
Index. The performance goal for Performance-Based Awards granted during fiscal 2025 is non-GAAP economic profit, and the
performance goal for awards granted during fiscal 2024 and 2023 is non-GAAP operating margin. Each of the performance
goal and market goal is weighted 50% and is measured over a three-year period. The number of Performance-Based Awards
that may vest in full afte
f r three years ranges from 0% to 200% of the target amount. The awards become eligible to vest only if
the goals are achieved and will vest only if the grantee remains employed by us through each applicable vesting date, subj
u ect to
a qualifying
f
retirement based on age and years of service. The awards provide for a partial vesting based on actua
t
l performance
at the conclusion of the three-year performance period in the event of a qualifying
f
retirement.
The fair value of the portion of the Performance-Based Awards subj
u ect to targeted levels of relative TSR is estimated on
the date of grant using a Monte Carlo simulation model. Compensation expense is recognized based upon the assumption of
100% achievement of the TSR goal and will not be reversed even if the threshold level of TSR is never achieved, and is
reflected over the service period and reduced for estimated forfei
f tures.
The fair value of the portion of the Performance-Based Awards subj
u ect to targeted levels of non-GAAP economic profit
or non-GAAP operating margin is estimated on the date of grant based on the market value of our common stock, adju
d sted to
exclude the present value of expected dividends during the vesting period. The market value of our common stock is calculated
using the closing price of our common stock on the date of the grant or, if the grant date is not a trading date, the average of the
closing prices on the trading dates immediately preceding and following the grant date. If the performance goals are not met as
of the end of the performance period, no compensation expense is recognized and any previously recognized compensation
expense is reversed. The expected cost is based on the portion of the awards that is probable to vest and is reflected over the
service period and reduced for estimated forfeitures.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
73

The following tabl
a es summarize the assumptions used for the valuation of share-based awards for the periods presented:
2025
2024
2023
Service-Based Awards and the portion of Perfor
f
mance-
Based Awards subject to perfor
f
mance goals:
Grant date market value
$138.24 - $223.91
$148.39 - $241.26
$104.22 - $143.97
Risk-free interest rate
3.56% - 4.52%
3.48% - 5.37%
3.64% - 5.48%
Dividend yield
1.18% - 3.48%
0.72% - 2.62%
0.70% - 3.59%
Fair value
$134.61 - $220.09
$144.79 - $237.94
$102.09 - $141.33
2025
2024
2023
Portion of Perfor
f
mance-Based Awards subject to
market goals:
Grant date market value
$148.39
$169.08
- $173.89
$109.37
Risk-free interest rate
4.24%
4.10%
- 4.30%
4.10%
Dividend yield
0.74%
0.95%
- 0.86%
0.95%
Expected volatility
40.99%
42.65%
- 43.35%
52.38%
Fair value
$183.40
$195.32 - $249.37
$162.72
A summary of the changes in restricted stock units, restricted stock, performance share units and performance units
outstanding under our equity compensation plans during fiscal 2025 is presented below:
Shares
Weighted
Average
Grant Date
Fair Value
Weighted
Average
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(In millions, except per share amounts)
Non-vested restricted stock units, restricted stock, performance share units
and performance units at October 27, 2024
10
$
129.31
Granted
5
$
165.66
Vested
(5) $
126.15
Canceled
(1) $
139.50
Non-vested restricted stock units, restricted stock, performance share units
and performance units at October 26, 2025
9
$
148.43
2.3 years
$
2,086
Non-vested restricted stock units, restricted stock, performance share units
and performance units expected to vest
9
$
148.23
2.2 years
$
2,029
At October 26, 2025, 0.7 million additional performance-based awards could be earned based upon achievement of
certain levels of specifie
f d performance and/or market goals.
A summary of the weighted-average grant date fair value per share of the granted restricted stock units, restricted stock,
performance share units and perfor
f
mance units and total fair value vested awards for indicated periods is presented below:
2025
2024
2023
(In millions, except per share amounts)
Weighted average grant date fair value per share of awards granted
$
165.66
$
149.20
$
104.00
Total fair value of vested awards
$
647
$
527
$
367
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
74

Omnibus Employ
m
ees’ Stock
t
Purchase Plan
l
Under the ESPP, subs
u
tantially all employees may purchase our common stock through payroll deductions at a price equal
to 85 percent of the lower of the fair market value of our common stock at the beginning or end of each 6-month purchase
period, subj
u ect to certain limits. Our purchasing cycles began in March and September of each of fiscal 2025, 2024 and 2023.
We issued 2 million shares in fiscal 2025 at a weighted average price of $131.75 per share, 2 million shares in fiscal 2024 at a
weighted average price of $147.38 per share and 2 million shares in fiscal 2023 at a weighted average price of $87.75 per share,
under the ESPP. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-
Scholes model. Underlying assumptions used in the model are outlined in the following tabl
a e:
2025
2024
2023
ESPP:
Dividend yield
1.19
0
%
.82 %
0.98 %
Expected volatility
42.0
4
%
0.1 %
39.4 %
Risk-free interest rate
4.13
5
%
.03 %
5.29 %
Expected lifef (in years)
0.5
0.5
0.5
Weighted average estimated fair value
$42.04
$52.31
$35.31
Note 12
Employee Benefit Plans
Employ
m
ee Bonus Plans
We have various employee bonus plans. A discretionary bonus plan provides for the distribution of a percentage of pre-
tax income to our employees who are not participants in other performance-based incentive plans, up to a maximum percentage
of eligible compensation. Other plans provide for bonuses to our executives and other key contributors based on the
achievement of profita
f
bi
a lity and/or other specified perfor
f
mance criteria. Charges under these plans for fiscal 2025, 2024 and
2023 were $785 million, $837 million and $702 million, respectively.
Defin
e
ed Benefit
e
Pension Plans of Foreign Subs
g
idiaries and Othe
t
r Postretirement Benefits
e
Several of our foreign subs
u
idiaries have defined benefit pension plans covering subs
u
tantially all of their eligible
employees. Benefits under these plans are typically based on years of service and final average compensation levels. The plans
are managed in accordance with applicable local statut
t es and practices. We deposit funds for certain of these plans with
insurance companies, pension trus
r
tees, government-managed accounts, and/or accrue
r
the expense for the unfunded portion of
the benefit obligation on our Consolidated Financial Statements. Our practice is to fund the various pension plans in amounts
sufficient to meet the minimum requirements as establ
a ished by applicable local governmental oversight and taxing authorities.
Depending on the design of the plan, local custom and market circumstances, the liabi
a lities of a plan may exceed the qualified
plan assets. The differences between the aggregate projected benefit obligations and aggregate plan assets of these plans have
been recorded as liabi
a lities by us and are included in other liabi
a lities and accrued
r
expenses in the Consolidated Balance Sheets.
The net funded status
t
and periodic benefit cost were not material for fiscal 2025, 2024 and 2023.
Our investment strategy for our defined benefit plans is to invest plan assets in a prudent manner, maintaining well-
diversified portfol
f ios with the long-term objective of meeting the obligations of the plans as they come due. Asset allocation
decisions are typically made by plan fiduciaries with input from our international pension committee. Our asset allocation
strategy incorporates a sufficient equity exposure in order for the plans to benefit from the expected better long-term
performance of equities relative to the plans’ liabi
a lities. We retain investment managers, where appropriate, to manage the
assets of the plans. Performance of investment managers is monitored by plan fiduciaries with the assistance of local investment
consultants. The investment managers make investment decisions within the guidelines set forth by plan fiduciaries. Risk
management practices include diversification across asset classes and investment styles and periodic rebalancing toward target
asset allocation ranges. Investment managers may use derivative instruments for effi
f cient portfol
f io management purposes.
Asset return assumptions are derived based on actua
t
rial and statistical methodologies, from analysis of long-term
historical data relevant to the country in which each plan is in effe
f ct and the investments applicable to the corresponding plan.
The discount rate for each plan was derived by reference to appropriate benchmark yields on high quality corporate bonds,
allowing for the approximate duration of both plan obligations and the relevant benchmark yields.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
75

Executive Defe
e rred Compensation Plans
We sponsor two unfunded deferred compensation plans, the Executive Deferred Compensation Plan (Predecessor EDCP)
and the 2016 Deferred Compensation Plan (2016 DCP) (for
f
merly known as the 2005 Executive Deferred Compensation Plan),
under which certain employees may elect to defer a portion of their following year’s eligible earnings. The Predecessor EDCP
was frozen as of December 31, 2004 such that no new deferrals could be made under the plan afte
f r that date and the plan would
qualify
f
for “grandfat
f her” relief under Section 409A of the Code. The Predecessor EDCP participant accounts continue to be
maintained under the plan and credited with deemed interest. The 2016 DCP was originally implemented by us effe
f ctive as of
January 1, 2005, and amended and restated as of October 12, 2015, and is intended to comply with the requirements of
Section 409A of the Code. In addition, we also sponsor a non-qualified deferred compensation plan as a result of a previous
acquisition. Amounts payable for all plans, including accrued deemed interest, totaled $436 million and $357 million at
October 26, 2025 and October 27, 2024, respectively, which were included in other liabi
a lities in the Consolidated Balance
Sheets.
Note 13
Income Taxes
The components of income before income taxes for each fiscal year were as follows:
2025
2024
2023
(In millions)
U.S.
$
833
$
1,234
$
56
Foreign
9,215
7,319
6,482
Total
$
8,152
$
7,716
$
9,271
The components of the provision for income taxes for each fiscal year were as follows:
2025
2024
2023
(In millions)
Current:
U.S.
$
675
$
1,254
$
708
Foreign
366
411
456
State
34
33
54
1,218
1,120
1,653
Deferred:
U.S.
382
(697)
(255)
Foreign
788
30
(61)
State
(17)
(11)
(42)
1,153
(678)
(358)
Total
$
975
$
860
$
2,273
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
76

A reconciliation between the statutory
t
U.S. federal income tax rate and our actua
t
l effe
f ctive income tax rate for each fiscal
year is presented below:
2025
2024
2023
Tax provision at U.S. statutory
t
rate
21.0 %
21.0 %
21.0 %
Effe
f ct of foreign operations taxed at various rates
(7.3)
(7.6)
(8.2)
Changes in prior years’ unrecognized tax benefits
—
—
(0.2)
Resolutions of prior years’ income tax filings
0.2
(0.1)
(0.1)
Research and other tax credits
(1.3)
(1.4)
(1.6)
Remeasurement of deferred tax assets in Singapore
7.1
—
—
Valuation allowance on corporate alternative minimum tax credits
4.4
—
—
Other
0.4
0.1
0.2
Total
24.5 %
12.0 %
11.1 %
Our provision for income taxes and effe
f ctive tax rate are affe
f cted by the geographical composition of pre-tax income
which includes jurisdictions with differing tax rates, conditional reduced tax rates and other income tax incentives. It is also
affe
f cted by events that vary from period to period, such as changes in income tax laws and the resolution of prior years’ income
tax filings.
Our effe
f ctive tax rate for fiscal 2025 was higher than the prior fiscal year primarily due to a $659 million remeasurement
of deferred tax assets resulting from new tax incentive agreements in Singapore and the recognition of a $407 million valuation
allowance against deferred tax assets related to corporate alternative minimum tax (CAMT) credits. These credits are not
expected to be realized as a result of changes in the timing of future tax deductions, following the enactment of the One Big
Beautiful
f
Bill Act. No prudent and feasible tax-planning strategies are currently availabl
a e. The amount of the valuation
allowance may be adju
d sted in future quarters if estimates of future taxable income change.
Our effe
f ctive tax rate for fiscal 2024 was higher than fiscal 2023 primarily due to lower tax credits in fiscal 2024, partially
offs
f et by higher proportion of pre-tax income in lower tax jurisdictions in fiscal 2024.
In the reconciliation between the statutory
t
U.S. federal income tax rate and the effe
f ctive income tax rate, the effe
f ct of
foreign operations taxed at various rates represents the difference between an income tax provision at the U.S. federal statutor
t
y
r
income tax rate and the recorded income tax provision, with the difference expressed as a percentage of worldwide income
before income taxes. This effe
f ct is subs
u
tantially related to the tax effe
f ct of pre-tax income in jurisdictions with lower statutory
t
tax rates. The foreign operations with the most significant effe
f ctive tax rate impact are in Singapore. The statutory
t
tax rate for
fis
f cal 2025 for Singapore is 17%. We have been granted conditional reduced tax rates that expire beginning in fiscal 2030,
excluding potential renewal and subj
u ect to certain conditions with which we expect to comply. The tax benefits arising from
these tax rates were $490 million or $0.61 per diluted share, $393 million or $0.47 per diluted share and $369 million or $0.44
per diluted share for fiscal 2025, 2024 and 2023, respectively.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
77

Deferred tax assets and liabilities are recognized for the estimated future tax effe
f cts of temporary di
r
fferences between the
book and tax bases of assets and liabi
a lities. Deferred tax assets are also recognized for net operating loss and tax credit
carryovers. Deferred tax assets are offs
f et by a valuation allowance to the extent it is more likely than not that they are not
expected to be realized. The components of deferred income tax assets and liabi
a lities were as follows:
October 26,
2025
October 27,
2024
(In millions)
Deferred tax assets:
Corporate Alternative Minimum Tax
$
407
$
410
Capitalized R&D expenses
295
217
Allowance for doubtful accounts
3
4
Inventory reserves and basis difference
145
127
Installation and warranty reserves
42
70
Intangible assets
225
977
Accrued
r
liabi
a lities
29
24
Deferred revenue
61
72
Tax credits
677
592
Deferred compensation
265
261
Share-based compensation
34
44
Property, plant and equipment
192
101
Lease liabi
a lity
104
72
Other
50
79
Gross deferred tax assets
2,529
3,050
Valuation allowance
(1,049)
(569)
Total deferred tax assets
1,480
2,481
Deferred tax liabilities:
Right of use assets
(105)
(76)
Undistributed foreign earnings
(26)
(23)
Investments
(133)
—
Total deferred tax liabilities
(264)
(99)
Net deferred tax assets
$
1,216
$
2,382
A valuation allowance is recorded to reflect the estimated amount of net deferred tax assets that may not be realized.
Changes in the valuation allowance in each fiscal year were as follows:
2025
2024
2023
(In millions)
Beginning balance
$
569
$
530
$
460
Increases
480
39
70
Ending balance
$
1,049
$
569
$
530
At October 26, 2025, we have corporate alternative minimum tax credit carryforwards of $407 million that are carried
over until exhausted. We also have state research and development tax credit carryforwards of $677 million, including $624
million of credits that are carried over until exhausted and $42 million that are carried over for 15 years and begin to expire in
fiscal 2034. It is more likely than not that all tax credit carryforwards, net of valuation allowance, will be utilized.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
78

We maintain liabilities for uncertain tax positions. These liabi
a lities involve considerable judgment and estimation and are
continuously monitored based on the best information availabl
a e. Gross unrecognized tax benefits are classified as non-current
income taxes payable or as a reduction in deferred tax assets. A reconciliation of the beginning and ending balances of gross
unrecognized tax benefits in each fiscal year is as follows:
2025
2024
2023
(In millions)
Beginning balance of gross unrecognized tax benefits
$
544
$
510
$
498
Laps
a
es of statut
t es of limitation
(82)
—
—
Increases in tax positions for current year
26
25
28
Increases in tax positions for prior years
—
13
—
Decreases in tax positions for prior years
(1)
(4)
(16)
Ending balance of gross unrecognized tax benefits
$
487
$
544
$
510
Tax benefit for interest and penalties on unrecognized tax benefits for fiscal 2025 was $63 million and tax expense for
interest and penalties on unrecognized tax benefits for fiscal 2024 and 2023 was $45 million and $34 million, respectively. The
income tax liability for interest and penalties for fiscal 2025, 2024 and 2023 was $118 million, $181 million and $136 million,
respectively, and was classified as non-current income taxes payabl
a e.
Included in the balance of unrecognized tax benefits for fiscal 2025, 2024 and 2023 are $347 million, $397 million, and
$386 million, respectively, of tax benefits that, if recognized, would affe
f ct the effe
f ctive tax rate.
Our tax returns remain subj
u ect to examination by taxing authorities. These include U.S. returns for fiscal 2015 and later
years, and foreign tax returns for fiscal 2011 and later years.
The timing of the resolution of income tax examinations, as well as the amounts and timing of various tax payments that
may be part of the settlement process, is highly uncertain. This could cause fluctuations in our financial condition and results of
operations. We continue to have ongoing negotiations with various taxing authorities throughout the year, and evaluate all
domestic and foreign tax audit issues in the aggregate, along with the expiration of applicable statut
t es of limitations.
We believe it is reasonably possible that the amount of gross unrecognized tax benefits related primarily to foreign
operations could be reduced by approximately $200 million in the next 12 months as a result of the resolution of tax matters or
the laps
a
e of statut
t e of limitations.
Note 14
Guarantees, Commitments and Contingencies
Guarantees
In the ordinary
r
course of business, we provide standby letters of credit or other guarantee instruments to third parties as
required for certain transactions initiated by either us or our subs
u
idiaries. As of October 26, 2025, the maximum potential
amount of future payments that we could be required to make under these guarantee agreements was approximately $350
million. We have not recorded any liabi
a lity in connection with these guarantee agreements beyond that required to appropriately
account for the underlying transaction being guaranteed. We do not believe, based on historical experience and information
currently availabl
a e, that it is probable that any amounts will be required to be paid under these guarantee agreements.
We also have agreements with various banks to facilitate subs
u
idiary banking operations worldwide, including overdraft
arrangements, issuance of bank guarantees, and letters of credit. As of October 26, 2025, we have provided parent guarantees to
banks for approximately $293 million to cover these arrangements.
Legal
e
Matters
From time to time, we receive notification from third parties, including customers and suppl
u
iers, seeking indemnification,
litigation suppor
u
t, payment of money or other actions by us in connection with claims made against them. In addition, from
time to time, we receive notific
f ation from third parties claiming that we may be or are infringing or misusing their intellectua
t
l
property or other rights. We also are subj
u ect to various legal proceedings, government investigations or inquiries, and claims,
both asserted and unasserted, that arise in the ordinary course of business. These matters are subj
u ect to uncertainties, and we
cannot predict the outcome of these matters, or governmental inquiries or proceedings that may occur. Although the outcome of
the above-described matters, claims and proceedings cannot be predicted with certainty, we do not believe at this time that any
of the above-described matters will have a material effe
f ct on our consolidated financial condition or results of operations.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
79

Since 2022, we have received multiple subpoena
u
s from government authorities requesting information relating to certain
China customer shipments and export controls compliance, including from the U.S. Department of Justice, the U.S. Commerce
Department Bureau of Industry
r
and Security, and the U.S. Securities and Exchange Commission. We also have received
subpoena
u
s from the U.S. Department of Justice requesting information related to certain federal award applications and
information subm
u
itted to the federal government. We are cooperating fully with the U.S. government in these matters. We have
continued to receive related subpoe
u
nas, as well as requests for information, and may in the future receive additional related
subpoena
u
s and requests for information from such or other government authorities. Any such matters are subj
u ect to
uncertainties, and we cannot predict the outcome, nor reasonably estimate a range of loss or penalties, if any, relating to these
matters.
Note 15
Industry Segment Operations
Our two reportabl
a e segments are: Semiconductor Systems and Applied Global Services (AGS). The Display operating
segment financial results were included in the Corporate and Other category balances below, as management no longer
considers the Display operating segment a significant operating segment for separate reporting purposes. Segment information
is presented based upon our management organization structur
t
e as of October 26, 2025 and the distinctive nature of each
segment. Future changes to this internal financial structur
t
e may result in changes to our reportabl
a e segments.
The Semiconductor Systems segment includes semiconductor capital equipment to enable materials engineering steps
including etch, rapid
a
thermal processing, deposition, chemical mechanical planarization, metrology and inspection, wafer
packaging, and ion implantation.
The AGS segment provides integrated solutions to optimize equipment and fab pe
a
rformance and productivity, including
spares, upgrades, services, 200 millimeter and other equipment and factory automation software for semiconductor and other
products.
Our President and Chief Executive Offi
f cer is our chief operating decision-maker (CODM). We derive the segment results
directly from our internal management reporting system. The accounting policies we use to derive reportabl
a e segment results
are subs
u
tantially the same as those used for external reporting purposes. Management measures the performance of each
reportabl
a e segment based upon several metrics including orders, net revenue and operating income. Our CODM regularly
reviews segment operating income to evaluate the perfor
f
mance of, and to assign resources to, each of the reportabl
a e segments.
Actual results are compared to budgeted amounts as part of the CODM’s assessment of each segment’s performance and to
make decisions about allocating resources to each segment. Our CODM does not evaluate operating segments using total asset
information.
The Corporate and Other category includes revenues, costs of products and operating expenses from other operating
segments that do not meet the requirements for a reportabl
a e segment. Corporate and Other also includes certain corporate
function operating expenses that are not allocated to our reportabl
a e segments and are managed separately at the corporate level.
In addition, we do not allocate to our reportabl
a e segments charges associated with restructur
t
ing actions, such as employee
severance costs and asset impairment charges, unless the restructur
t
ing actions pertain to a specific reportabl
a e segment. Segment
operating income also excludes interest income/expense and other financial charges and income taxes. Our CODM does not
consider the unallocated costs in measuring the performance of the reportabl
a e segments.
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
80

Information for each reportabl
a e segment for and as of the end of each fiscal year were as follows:
miconductor
Systems
Applied Global
Services
Corporate and
Other
Total
(In millions, except percentages)
2025:
Net revenue
$
20,798
$
6,385
$
1,185
$
28,368
Costs of products sold
9,530
4,251
779
14,560
Gross profit
f
$
11,268
$
2,134
$
406
$
13,808
Gross margin
54.2 %
33.4 %
48.7 %
Operating expenses:
Research, development and engineering
3,042
126
402
3,570
Selling, general and administrative
847
216
705
1,768
Restructur
t
ing charges
—
—
181
181
Operating income (loss)
$
7,379
$
1,792
$
(882) $
8,289
Operating margin
35.5 %
28.1 %
29.2 %
Depreciation and amortization
$
192
$
26
$
217
$
435
Capital expenditures
$
507
$
57
$
1,696
$
2,260
Accounts receivable
$
3,733
$
1,269
$
183
$
5,185
Inventories
$
3,444
$
2,301
$
170
$
5,915
Goodwill
$
2,476
$
1,032
$
199
$
3,707
miconductor
Systems
Applied Global
Services
Corporate and
Other
Total
(In millions, except percentages)
2024
Net revenue
$
19,911
$
6,225
$
1,040
$
27,176
Costs of products sold
9,379
4,088
812
14,279
Gross profit
f
$
10,532
$
2,137
$
228
$
12,897
Gross margin
52.9 %
34.3 %
47.5 %
Operating expenses:
Research, development and engineering
2,684
114
435
3,233
Selling, general and administrative
867
211
719
1,797
Operating income (loss)
$
6,981
$
1,812
$
(926) $
7,867
Operating margin
35.1 %
29.1 %
28.9 %
Depreciation and amortization
$
168
$
22
$
202
$
392
Capital expenditures
$
425
$
35
$
730
$
1,190
Accounts receivable
$
3,816
$
1,297
$
121
$
5,234
Inventories
$
2,988
$
2,306
$
127
$
5,421
Goodwill
$
2,460
$
1,032
$
240
$
3,732
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
81

Semiconductor
Systems
Applied Global
Services
Corporate and
Other
Total
(In millions, except percentages)
2023
Net revenue
$
19,698
$
5,732
$
1,087
$
26,517
Costs of products sold
9,456
3,911
766
14,133
Gross profit
f
$
10,242
$
1,821
$
321
$
12,384
Gross margin
52.0 %
31.8 %
46.7 %
Operating expenses:
Research, development and engineering
2,544
101
457
3,102
Selling, general and administrative
819
191
618
1,628
Operating income (loss)
$
6,879
$
1,529
$
(754) $
7,654
Operating margin
34.9 %
26.7 %
28.9 %
Depreciation and amortization
$
235
$
31
$
249
$
515
Capital expenditures
$
381
$
39
$
686
$
1,106
Accounts receivable
$
3,943
$
1,111
$
111
$
5,165
Inventories
$
3,433
$
2,073
$
219
$
5,725
Goodwill
$
2,460
$
1,032
$
240
$
3,732
Semiconductor Systems revenue is recognized at a point in time. AGS revenue is recognized at a point in time for
tangible goods such as spare parts and equipment, and over time for service agreements. The majority of revenue recognized
over time is recognized within 12 months of the contract inception.
During fiscal 2025, goodwill decreased primarily due to impairment charges recognized during the fourth quarter of fiscal
2025, partially offs
f et by an increase related to preliminary purchase accounting for an acquisition which was not material to our
results of operations or to our balance sheet.
During fiscal 2025, two customers accounted for approximately 19% and 15%, respectively, of our net revenue. During
fiscal 2024, two customers accounted for approximately 12% and 11%, respectively, of our net revenue. During fiscal 2023,
two customers accounted for approximately 19% and 15%, respectively, of our net revenue.
Net revenue for Semiconductor Systems by market for the periods indicated were as follows:
2025
2024
2023
Foundry, logic and other
67 %
68 %
77 %
Dynamic random-access memory (DRAM)
26 %
28 %
17 %
Flash memory (NAND)
7 %
4 %
6 %
100 %
100 %
100 %
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
82

For geographical reporting, revenue by geographic location is determined by the location of customers’ facilities to which
products were shipped and services were performed. Long-lived assets consist primarily of property, plant and equipment and
right-of-use assets and are attributed to the geographic location in which they are located. Net revenue and long-lived assets by
geographic region for and as of each fiscal year were as follows:
2025
2024
2023
(In millions)
Net revenue:
United States
$
3,063
$
3,818
$
4,006
China
8,529
10,117
7,247
Korea
5,608
4,493
4,609
Taiwan
6,857
4,010
5,670
Japan
a
2,273
2,154
2,075
Europe
962
1,443
2,152
Southeast Asia
1,076
1,141
758
Total outside United States
25,305
23,358
22,511
Consolidated total
$
28,368
$
27,176
$
26,517
October 26,
2025
October 27,
2024
(In millions)
Long-lived assets:
United States
$
5,071
$
3,759
China
8
3
Korea
9
9
Taiwan
67
59
Japan
a
6
7
Europe
155
113
Southeast Asia
21
5
Total outside United States
266
196
Consolidated total
$
3,955
$
5,337
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
83

INDEX TO EXHIBITS
These Exhibits are numbered in accordance with the Exhibit Tabl
a e of Item 601 of Regulation S-K:
3.1
Amended and Restated Certificate of Incorporation of Applied
Materials, Inc., as amended and restated through March 16,
2020
8-K
000-06920
3.1
3/16/2020
3.2
Amended and Restated Bylaws of Applied Materials, Inc., as
amended and restated through December 8, 2023
8-K
000-06920
3.2
12/13/2023
4.1
Indenture, dated June 8, 2011, by and between Applied
Materials, Inc. and U.S. Bank National Association, as Trustee
8-K
000-06920
4.1
6/10/2011
4.2
First Supplemental Indenture, dated June 8, 2011, by and
between Applied Materials, Inc. and U.S. Bank National
Association, as Trustee
8-K
000-06920
4.2
6/10/2011
4.3
Second Supplemental Indenture, dated September 24, 2015, by
and between Applied Materials, Inc. and U.S. Bank National
Association, as Trustee
8-K
000-06920
4.1
9/24/2015
4.4
Third Supplemental Indenture, dated March 31, 2017, by and
between Applied Materials, Inc. and U.S. Bank National
Association, as Trustee
8-K
000-06920
4.1
3/31/2017
4.5
Fourth Supplemental Indenture dated May 29, 2020, by and
between Applied Materials, Inc. and U.S. Bank National
Association
8-K
000-06920
4.1
5/29/2020
4.6
Description of Registrant’s Securities Registered Under Section
12 of the Securities Exchange Act of 1934
10-K
000-06920
4.6
12/15/2023
4.7
Indenture, dated as of June 11, 2024, by and between Applied
Materials, Inc. and The Bank of New York Mellon Trust
Company, N.A.
8-K
000-06920
4.1
6/11/2024
4.8
Supplemental Indenture, dated as of June 11, 2024, by and
between Applied Materials, Inc. and The Bank of New York
Mellon Trust Company, N.A.
8-K
000-06920
4.2
6/11/2024
4.9
Second Supplemental Indenture, dated as of September 18,
2025, by and between Applied Materials, Inc. and The Bank of
New York Mellon Trust Company, N.A
8-K
000-06920
4.1
9/19/2025
10.1
Form of Indemnification Agreement between Applied
Materials, Inc. and Directors and certain officers
10-Q
000-06920
10.1
5/23/2024
10.2
Applied Materials, Inc. Profit Sharing Scheme (Ireland)
S-8
333-45011
4.1
1/27/1998
10.3*
Applied Materials Inc. Employee Financial Assistance Plan,
amended and restated as of December 18, 2008
10-Q
000-06920
10.58
3/3/2009
10.4
Deed of Amendment to Applied Materials Profit Sharing
Scheme, dated February 7, 2006, to amend Clause 20 of the
Trust Deed thereunder
10-K
000-06920
10.48
12/12/2008
10.5
Deed of Amendment to Applied Materials Profit Sharing
Scheme, dated February 7, 2006, to amend the definition of
Eligible Employee in the First Schedule to the Trust Deed
thereunder.
10-K
000-06920
10.49
12/12/2008
10.6*
Form of Restricted Stock Unit Agreement for use under the
amended and restated Applied Materials, Inc. Employee Stock
Incentive Plan
10-Q
000-06920
10.3
5/27/2021
10.7*
Form of Restricted Stock Unit Agreement for Nonemployee
Directors for use under the amended and restated Applied
Materials, Inc. Employee Stock Incentive Plan
10-Q
000-06920
10.4
5/27/2021
10.8*
Form of Restricted Stock Agreement for use under the amended
and restated Applied Materials, Inc. Employee Stock Incentive
Plan
10-Q
000-06920
10.3
8/23/2012
Incorporated by Reference
p
y
Exhibit No.
Description
p
Form
File No.
Exhibit No.
Filing Date
g
84

10.9*
Applied Materials, Inc. Omnibus Employees’ Stock Purchase
Plan, effective September 1, 2021
K
000-06920
10.2
3/16/2021
10.10*
Offer Letter, dated August 14, 2013, between Applied
Materials, Inc. and Gary E. Dickerson
10-Q
000-06920
10.2
8/22/2013
10.11*
Form of Non-Qualified Stock Option Agreement for
Employees for use under the Applied Materials, Inc. Employee
Stock Incentive Plan, as amended
Q
000-06920
10.4
8/22/2013
10.12*
Form of Performance Unit Agreement for use under the
Applied Materials, Inc. Employee Stock Incentive Plan, as
amended
10-Q
000-06920
10.2
2/20/2014
10.13*
Applied Materials, Inc. Applied Incentive Plan, amended and
restated effective September 7, 2023
10-K
000-06920
10.13
12/15/2023
10.14*
Applied Materials, Inc. 2016 Deferred Compensation Plan, as
amended and restated on January 1, 2021
K
000-06920
10.15
12/16/2022
10.15*
Applied Materials, Inc. Employee Stock Incentive Plan, as
amended and restated effective March 11, 2021
8-K
000-06920
10.1
3/16/2021
10.16*
Applied Materials, Inc. Senior Executive Bonus Plan, as
amended and restated effective September 8, 2023
10-K
000-06920
10.16
12/15/2023
10.17*
Form of Performance Share Unit Agreement for members of
the Executive Staff for use under the amended and restated
Applied Materials, Inc. Employee Stock Incentive Plan
10-K
000-06920
10.17
12/15/2023
10.18*
Form of Restricted Stock Unit Agreement for members of the
Executive Staff for use under the amended and restated Applied
Materials, Inc. Employee Stock Incentive Plan
10-K
000-06920
10.18
12/15/2023
10.19*
Offer Letter, dated February 26, 2022, between Applied
Materials, Inc. and Brice Hill
10-Q
000-06920
10.1
5/26/2022
10.20
Credit Agreement, dated as of February 24, 2025, among
Applied Materials, Inc., Bank of America, N.A., as
administrative agent, and the other lenders named therein
8-K
000-06920
10.1
2/27/2025
10.21
Credit Agreement, dated as of September 25, 2025, among
Applied Materials, Inc., Bank of America, N.A., as
administrative agent, and the other lenders named therein
8-K
000-06920
10.1
9/26/2025
10.22
Deed of Amendment, dated December 19, 2023, to the Trust
Deed Constituting the Applied Materials Profit Sharing Scheme
10-Q
000-06920
10.1
2/27/2024
19.1
Insider Trading Policy
10-K
000-06920
19.1
12/13/2024
21
Subsidiaries of Applied Materials, Inc.†
Consent of Independent Registered Public Accounting Firm,
KPMG LLP†
24
Power of Attorney (included on the signature page of this
Annual Report on Form 10-K)†
31.1
Certification of Chief Executive Officer Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002†
Certification of Chief Financial Officer Pursuant to Section 302
of the Sarbanes-Oxley Act of 2002†
Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002‡
32.2
Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002‡
97.1
Applied Materials, Inc. Compensation Recovery Policy,
adopted on September 7, 2023
10-K
000-06920
97.1
12/15/2023
101.INS
XBRL Instance Document‡
101.SCH
XBRL Taxonomy Extension Schema Document‡
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document‡
Incorporated by Reference
p
y
Exhibit No.
Description
p
Form
File No.
Exhibit No.
Filing Date
g
85

101.DEF
XBRL Taxonomy Extension Definition Linkbase Document‡
101.LAB XBRL Taxonomy Extension Labe
a
l Linkbase Document‡
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document‡
104
Cover Page Interactive Data File (formatted as inline XBRL)
Incorporated by Reference
p
y
Exhibit No.
Description
p
Form
File No.
Exhibit No.
Filing Date
g
*
Indicates a management contract or compensatory plan or arrangement, as required by Item 15(a)(3).
†
Filed herewith.
‡
Furnished herewith.
86

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
APPLIED MATERIALS, INC.
By:
/s/
GARY E. DICKERSON
Gary E. Dickerson
Presiden
d
t, Chiefe Executive Offi
f cer
Dated: December 12, 2025
87

POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitut
t es and
appoints Gary E. Dickerson, Brice Hill and Teri Little, jointly and severally, his or her attorneys-in-fact, each with the power of
subs
u
titution, for him or her in any and all capacities, to sign any amendments to this Annual Report on Form 10-K, and to file
the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying
f
and confir
f ming all that each of said attorneys-in-fact, or his subs
u
titute or subs
u
titutes, may do or cause to be
done by virtue he
t
reof.
******
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dates indicated.
Title
Date
/s/
GARY E. DICKERSON
President, Chief Executive Offi
f cer and Director
(Principal Executive Offi
f cer)
December 12, 2025
Gary E. Dickerson
/s/
BRICE HILL
Senior Vice President, Chief Financial Offi
f cer
(Principal Financial Offi
f cer)
December 12, 2025
Brice Hill
/s/
ADAM SANDE
A
RS
Vice President,
Corporate Controller and
Chief Accounting Offi
f cer
(Principal Accounting Offi
f cer)
December 12, 2025
Adam Sanders
/S/ THOMAS J. IANNOT
A
TI
Thomas J. Iannotti
Chairman of the Board
December 12, 2025
/S/ JAMES R. ANDERSON
James R. Anderson
Director
December 12, 2025
/S/ RANI
A
BORKAR
K
Rani Borkar
Director
December 12, 2025
/S/ JUDY BRUNER
U
Judy Brune
r
r
Director
December 12, 2025
/S/ XUN CHEN
Xun Chen
Director
December 12, 2025
/S/
AART J. DE GEUS
Aart J. de Geus
Director
December 12, 2025
/S/
ALEXANDER A. KARSNER
Alexander A. Karsner
Director
December 12, 2025
/S/
KEVIN P. MARCH
Kevin P. March
Director
December 12, 2025
/s/
SCOTT A. MCGREGOR
Scott A. McGregor
Director
December 12, 2025
88

Thomas J. Iannotti
Chairman of the Board of Applied Materials, Inc.
Senior Vice President and General Manager,
Enterprise Services
Hewlett-Packard Company (retired)
James R. Anderson
Chief Executive Officer
Coherent Corp.
Rani Borkar
President
Azure Hardware Systems and Infrastructure
Microsoft Corporation
Judy Bruner
Executive Vice President
Administration and Chief Financial Officer
SanDisk Corporation (retired)
Xun (Eric) Chen
Executive Chairman
ParityBit Technologies, Inc.
Aart J. de Geus
Executive Chair of the Board of Directors
Synopsys, Inc.
Gary E. Dickerson
President and Chief Executive Officer
Applied Materials, Inc.
Alexander A. Karsner
Senior Strategist
X (parent company: Alphabet Inc.)
Kevin P. March
Senior Vice President
Chief Financial Officer
Texas Instruments, Incorporated (retired)
Scott A. McGregor
President and Chief Executive Officer
Broadcom Corporation (retired)
Gary E. Dickerson
President and Chief Executive Officer
Brice Hill
Senior Vice President, Chief Financial Officer
and Global Information Services
Prabu Raja
President, Semiconductor Products Group
Timothy M. Deane
Senior Vice President,
Applied Global Services
Teri Little
Senior Vice President, Chief Legal Officer 
and Corporate Secretary
Omkaram Nalamasu
Senior Vice President,
Chief Technology Officer
BOARD OF DIRECTORS
(as of December 31, 2025)
EXECUTIVE OFFICERS
(as of December 31, 2025)

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