Q4 2024 Applied Materials Inc Earnings Call Transcript
Key Points
- Applied Materials Inc (AMAT) delivered record revenue and earnings in the fourth quarter, marking the fifth consecutive year of growth.
- The company achieved double-digit growth in its parts and services business, with a high percentage of revenues coming from long-term agreements.
- AMAT's integrated solutions account for around 30% of semiconductor systems revenue, and this segment is expected to grow further.
- The company is making significant progress in its EPIC collaborative R&D platform, which is designed to accelerate technology development and commercialization.
- AMAT's gross margin improved to 47.6% for the fiscal year, the highest since fiscal 2000, driven by operational improvements and value-based pricing.
- China's revenue contribution declined to 30% in Q4, reflecting a normalization after elevated levels in previous quarters.
- Non-GAAP operating margin for semiconductor systems was down 50 basis points year-over-year due to a normalizing China mix.
- The display business experienced lower investment levels due to ongoing weakness in end market demand.
- There are slower end markets in ICAPS, including automotive, industrial, analog, and image sensors, which could impact future growth.
- Operating margins in the services business are below prior long-term targets, partly due to increased allocation of corporate expenses.
Welcome to the Applied Materials fourth-quarter fiscal 2024 earnings conference call. (Operator Instructions)
I would now like to turn the call over to Liz Morali, Vice President of Investor Relations. Liz, you may begin.
Thank you. Good afternoon, and thank you for joining us for today's call. With me today are Gary Dickerson, President and CEO; and Brice Hill, CFO.
Before we continue, let me remind you that today's discussion contains forward-looking statements within the meaning of the federal securities laws, including predictions, estimates, projections, or other statements about future events. Actual results may differ materially from those mentioned in these forward-looking statements as a result of risks and uncertainties. Information concerning these risks and uncertainties is discussed in our most recent Form 10-Q and 8-K filings with the SEC. We do not intend to update any forward-looking statements.
During today's call, we will also reference non-GAAP
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