Semiconductor manufacturing equipment company Applied Materials reported revenue of $9.12 billion for the third quarter of fiscal 2026. According to the company’s official results released on August 13, revenue increased 25% from a year earlier and reached a record. Adjusted earnings were $3.50 per share and the adjusted gross margin was 50.4%. Reuters reported that revenue exceeded analysts’ average estimate of $8.99 billion.
A strong fourth-quarter forecast
Applied Materials expects fiscal fourth-quarter revenue of about $10.25 billion, with a range of $500 million above or below that figure. The company also provided an adjusted earnings outlook centered on $4.02 per share, plus or minus 20 cents. Reuters, citing LSEG data, said market expectations were $9.54 billion for revenue and $3.69 for adjusted earnings per share.
That comparison places the midpoint of both company forecasts above the corresponding market estimates. The forecast is not a completed result, however. The revenue range and earnings outlook reflect current order visibility and business conditions, while the final figures will only be known when the company reports the next quarter.
Key measures from the third quarter
The official release recorded a generally accepted accounting principles gross margin of 50.3%, operating income of $3.08 billion and an operating margin of 33.7%. Cash generated from operations was $3.04 billion. Applied Materials also said it returned a total of $860 million to shareholders through share repurchases and dividends during the quarter. These figures provide a view of profitability and cash generation alongside the revenue increase.
Applied Materials’ adjusted figures are company-defined measures that exclude specified items. The adjusted earnings figure of $3.50 per share is therefore different from the GAAP earnings figure of $3.17 per share in the official statement. Likewise, the 50.4% adjusted gross margin should be distinguished from the 50.3% GAAP gross margin. Keeping those measures separate avoids presenting two accounting bases as if they were interchangeable.
AI investment and advanced packaging
Reuters reported that management now expects advanced packaging revenue to grow by more than 70% in calendar 2026, compared with its previous projection of more than 50%. Chief Financial Officer Brice Hill also said the company expected continued strong revenue growth in the second half of the calendar year, particularly in DRAM, leading-edge foundry-logic and advanced packaging. Those areas are connected to investment in memory and computing capacity used by artificial intelligence systems.
The company supplies equipment for important wafer-fabrication processes, including deposition, chemical mechanical planarization and inspection. Its results are therefore closely watched as one indicator of spending by chip manufacturers. The quarter’s figures show stronger sales, while the forward outlook indicates that management expects demand to continue into the next reporting period.
Market reaction diverged from the results
Reuters said the shares fell more than 5% in extended trading after the report and were down about 4% in early trading on August 14. Its coverage linked that reaction less to a weak forecast than to already elevated expectations across semiconductor-equipment stocks. The financial results and the short-term share move therefore sent different signals: revenue and forecast midpoints were above consensus estimates, while investors appeared to demand faster growth relative to peers.
The release provides a verified account of Applied Materials’ quarterly performance, but it does not guarantee the future direction of the share price. This report is not investment advice. It is a comparison of the company’s official financial disclosure with independent reporting on estimates, business drivers and the immediate market response.
