Applied Materials (AMAT) Q3 2026 earnings summary

Executive summary

• Achieved record quarterly revenue of $9.12 billion, up 25% year-over-year, with the highest sequential revenue growth in company history, driven by surging AI infrastructure demand and leadership in enabling technologies for AI computing.

• GAAP EPS reached $3.17 (up 43% YoY); non-GAAP EPS hit a record $3.50 (up 41% YoY).

• Customers are providing longer-term commitments and rolling eight-quarter forecasts, increasing demand visibility and supporting confidence in continued multi-year growth.

• Investments in AI, R&D, and capacity expansion, including the EPIC strategy, are accelerating product development and commercialization, positioning the company for sustained leadership.

• The company resolved a major export controls compliance matter with a $253 million legal settlement.

Financial highlights

• Q3/FQ3'26 revenue reached a record $9.12 billion, up 15% sequentially and 25% year-over-year.

• Non-GAAP gross margin rose to 50.4%, up 40 bps sequentially and 150 bps year-over-year; GAAP gross margin was 50.3%.

• Non-GAAP operating margin hit a record 34%, up 190 bps sequentially and 330 bps year-over-year; GAAP operating margin was 33.7%.

• Record non-GAAP EPS of $3.50, up 22% sequentially and 41% year-over-year; GAAP EPS $3.17, up 43% year-over-year.

• Free cash flow was $2.33 billion; $860 million returned to shareholders via dividends and buybacks.

Outlook and guidance

• Q4 revenue guidance: $10.25 billion ±$500 million, up 51% year-over-year; non-GAAP EPS guidance: $4.02 ±$0.20, up 85% year-over-year.

• Semiconductor systems revenue expected at $7.9 billion, up 62% year-over-year; AGS revenue at $1.84 billion, up 22% year-over-year.

• Non-GAAP gross margin expected at 50.4% in Q4, up 230 bps year-over-year.

• Management expects continued quarterly dividends and ongoing share repurchases, with $12.8 billion remaining under the repurchase program.

• Strong multi-year demand visibility, with expectations for another record year in 2027.