Applied Materials, Inc. is a leading provider of materials engineering solutions, instrumental in producing nearly every new semiconductor chip and advanced display globally. The company reported its second quarter fiscal 2025 results, indicating a stable condition with a year-over-year revenue growth of 7%. Total net revenue reached approximately $7.1 billion, an increase from $6.65 billion in the same period last year.

The company achieved a gross margin of 49.1%, compared to 47.4% in the prior year, reflecting a 1.7 percentage point improvement. For the same period, non-GAAP gross margin was reported at 49.2%, up from 47.5%. Operating margin increased to 30.5% from 28.8% year-over-year, with a non-GAAP operating margin of 30.7%, compared to 29.0% previously, indicating strong operational execution.

Earnings per share (EPS) reached a record of $2.63 on a GAAP basis, up 28% from $2.06 year-over-year. Non-GAAP EPS was $2.39, rising 14% from $2.09 in the previous year. Cash flow from operations tallied approximately $1.57 billion, representing 22% of total revenue. The company reported a free cash flow of about $1.06 billion for the quarter.

In terms of segment performance, Semiconductor Systems generated revenues of $5.26 billion, up 7% year-over-year. The foundry and logic sector comprised 65% of this revenue share. DRAM sales constituted 27% of the Semiconductor Systems total, reflecting a decrease from last year’s 32%. Flash memory revenue surged to 8% from 3% year-over-year. The Applied Global Services segment contributed $1.57 billion, marking a 2% increase, while display revenues rose significantly to $259 million, with operating income climbing to $68 million from just $5 million a year ago.

Guidance for the upcoming third quarter indicates expectations of revenue around $7.2 billion, plus or minus $500 million, suggesting a 6% growth at the midpoint year-over-year. Non-GAAP EPS is anticipated to be approximately $2.35, representing an 11% year-over-year increase. The company projects Semiconductor Systems revenues to be around $5.4 billion, indicative of a 10% rise year-over-year, while AGS revenues are expected to decline by 2% to approximately $1.55 billion due to trade restrictions previously mentioned.

The overall financial stability shown by Applied Materials is accompanied by significant shareholder returns; the company distributed $2 billion to shareholders through dividends and share repurchases during the quarter, including $1.67 billion repurchased and $325 million in dividends. As of the end of the quarter, the company held cash and cash equivalents of $6.17 billion against a debt of $6.3 billion.