UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS Three Months Ended Six Months Ended(In millions, except percentages)April 27,2025 April 28,2024 April 27,2025 April 28,2024Non-GAAP Gross Profit GAAP reported gross profit$3,485 $3,153 $6,981 $6,357 Certain items associated with acquisitions1 6 7 13 14 Non-GAAP gross profit$3,491 $3,160 $6,994 $6,371 Non-GAAP gross margin 49.2% 47.5% 49.0% 47.7%Non-GAAP Operating Income GAAP reported operating income$2,169 $1,912 $4,344 $3,879 Certain items associated with acquisitions1 11 10 23 21 Acquisition integration and deal costs — 5 3 8 Non-GAAP operating income$2,180 $1,927 $4,370 $3,908 Non-GAAP operating margin 30.7% 29.0% 30.6% 29.3%Non-GAAP Net Income GAAP reported net income$2,137 $1,722 $3,322 $3,741 Certain items associated with acquisitions1 11 10 23 21 Acquisition integration and deal costs — 5 3 8 Realized loss (gain), dividends and impairments on strategic investments, net (18) (3) (27) (4)Unrealized loss (gain) on strategic investments, net (80) (20) 26 (300)Foreign exchange loss (gain) related to purchase of strategic investment 23 — 23 — Loss (gain) on asset sale (44) — (44) — Income tax effect of share-based compensation2 4 11 (6) (15)Income tax effects related to intra-entity intangible asset transfers3 32 18 706 40 Resolution of prior years’ income tax filings and other tax items (124) — (140) 33 Income tax effect of non-GAAP adjustments4 (1) 1 — 2 Non-GAAP net income$1,940 $1,744 $3,886 $3,526 1 These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. 2 GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis. 3 Amount for the six months ended April 27, 2025, included changes to income tax provision of $62 million from amortization of intangibles and a $644 million remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in the first quarter of fiscal 2025. 4 Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes. APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS Three Months Ended Six Months Ended(In millions, except per share amounts)April 27,2025 April 28,2024 April 27,2025 April 28,2024Non-GAAP Earnings Per Diluted Share GAAP reported earnings per diluted share$2.63 $2.06 $4.08 $4.47 Certain items associated with acquisitions 0.01 0.01 0.02 0.02 Acquisition integration and deal costs — 0.01 — 0.01 Realized loss (gain), dividends and impairments on strategic investments, net (0.02) — (0.03) — Unrealized loss (gain) on strategic investments, net (0.10) (0.02) 0.03 (0.36)Foreign exchange loss (gain) related to purchase of strategic investment 0.03 — 0.03 — Loss (gain) on asset sale (0.05) — (0.05) — Income tax effect of share-based compensation — 0.01 (0.01) (0.02)Income tax effects related to intra-entity intangible asset transfers1 0.04 0.02 0.87 0.05 Resolution of prior years’ income tax filings and other tax items (0.15) — (0.17) 0.04 Non-GAAP earnings per diluted share$2.39 $2.09 $4.77 $4.21 Weighted average number of diluted shares 812 836 815 837 1 Amount for the six months ended April 27, 2025, included changes to income tax provision of $0.08 per diluted share from amortization of intangibles and $0.79 per diluted share from a remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore in the first quarter of fiscal 2025. APPLIED MATERIALS, INC.
Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic, political and industry conditions, including changes in interest rates and prices for goods and services; the implementation of additional export regulations and license requirements and their interpretation, and their impact on our ability to export products and provide services to customers and on our results of operations; global trade issues and changes in trade and export license policies and our ability to obtain licenses or authorizations on a timely basis, if at all; imposition of new or increases in tariffs and any retaliatory measures, including their impact on demand for our products and services; our ability to effectively mitigate the impact of tariffs; the effects of geopolitical turmoil or conflicts; demand for semiconductor chips and electronic devices; customers’ technology and capacity requirements; the introduction of new and innovative technologies, and the timing of technology transitions; our ability to develop, deliver and support new products and technologies; our ability to meet customer demand, and our suppliers’ ability to meet our demand requirements; the concentrated nature of our customer base; our ability to expand our current markets, increase market share and develop new markets; market acceptance of existing and newly developed products; our ability to obtain and protect intellectual property rights in key technologies; cybersecurity incidents affecting our information systems or information contained in them, or affecting our operations, suppliers, customers or vendors; our ability to achieve the objectives of operational and strategic initiatives, align our resources and cost structure with business conditions, and attract, motivate and retain key employees; the effects of regional or global health epidemics; acquisitions, investments and divestitures; changes in income tax laws; the variability of operating expenses and results among products and segments, and our ability to accurately forecast future results, market conditions, customer requirements and business needs; our ability to ensure compliance with applicable law, rules and regulations and other risks and uncertainties described in our SEC filings, including our recent Forms 10-Q and 8-K.
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