UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~July~~January 2725, ~~2025~~2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-06920

Applied Materials, Inc.

(Exact name of registrant as specified in its charter)


Delaware									94-1655526
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

3050 Bowers Avenue, P.O. Box 58039, Santa Clara, California 95052-8039

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (408) 727-5555

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share	AMAT	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Number of shares outstanding of the issuer’s common stock as of January 25, 2026: 793,609,867

Table of Contents

APPLIED MATERIALS, INC.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED ~~JULY~~JANUARY 2725, ~~2025~~2026

TABLE OF CONTENTS

		Page
	PART I. FINANCIAL INFORMATION
Item 1:	Financial Statements (Unaudited)	3
	Consolidated Condensed Statements of Operations for the Three and Nine Months Ended July 27, 2025 and July 28, 2024	3
	Consolidated Condensed Statements of Operations for the Three Months Ended January 25, 2026 and January 26, 2025	3
	Consolidated Condensed Statements of Comprehensive Income for the Three and Nine Months Ended July 27, 2025 and July 28, 2024	4
	Consolidated Condensed Statements of Comprehensive Income for the Three Months Ended January 25, 2026 and January 26, 2025	4
	Consolidated Condensed Balance Sheets as of July 27, 2025 and October 27, 2024	5
	Consolidated Condensed Balance Sheets as of January 25, 2026 and October 26, 2025	5
	Consolidated Condensed Statements of Stockholders’ Equity for the Three and Nine Months Ended July 27, 2025 and July 28, 2024	6
	Consolidated Condensed Statements of Stockholders’ Equity for the Three Months Ended January 25, 2026 and January 26, 2025	6
	Consolidated Condensed Statements of Cash Flows for the Nine Months Ended July 27, 2025 and July 28, 2024	8
	Consolidated Condensed Statements of Cash Flows for the Three Months Ended January 25, 2026 and January 26, 2025	7
	Notes to Consolidated Condensed Financial Statements	98
Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4:	Controls and Procedures	40
	PART II. OTHER INFORMATION
Item 1:	Legal Proceedings	41
Item 1A:	Risk Factors	42
Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	5754
Item 3:	~~Default~~Defaults Upon Senior Securities	5754
Item 4:	Mine Safety Disclosures	5754
Item 5:	Other Information	5754
Item 6:	Exhibits	5855
	Signatures	5956

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

APPLIED MATERIALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

	Three Months Ended				~~Nine Months Ended~~
	July 27,2025		July 28,2024		July 27,2025		July 28,2024
	January 25,2026		January 26,2025
	(Unaudited)
Net revenue	$	7,302	$	6,778	$	21,568	$	20,131
Revenue	$	7,012	$	7,166
Cost of products sold	3,~~740~~577		3,~~573~~670		~~11,025~~		~~10,569~~
Gross profit	3,~~562~~435		3,~~205~~496		~~10,543~~		~~9,562~~
Operating expenses:
Research, development and engineering	~~901~~928		~~836~~859		~~2,653~~		~~2,375~~
Marketing and selling	~~224~~222		~~205~~206		~~646~~		~~621~~
General and administrative	~~204~~189		~~222~~256		~~667~~		~~745~~
Total operating expenses	1,329		1,263		3,966		3,741
Legal settlement	253		—
Income from operations	2,233		1,942		6,577		5,821
Restructuring charges	12		—
Interest expense	66		63		198		181
Total operating expenses	1,604		1,321
Interest and other income (expense), net	396		81		625		617
Income from operations	1,831		2,175
Income before income taxes	2,563		1,960		7,004		6,257
Interest expense	69		64
Provision for income taxes	784		255		1,903		811
Interest and other income (expense), net	566		8
Net income	$	1,779	$	1,705	$	5,101	$	5,446
Income before income taxes	2,328		2,119
Provision for income taxes	302		934
Net income	$	2,026	$	1,185
Earnings per share:
Basic	$	2.2355	$	21.0646	$	~~6.32~~	$	~~6.57~~
Diluted	$	2.2254	$	21.0545	$	~~6.29~~	$	~~6.52~~
Weighted average number of shares:
Basic	~~798~~793		~~826~~814		~~807~~		~~829~~
Diluted	~~802~~799		~~833~~819		~~811~~		~~835~~

See accompanying Notes to Consolidated Condensed Financial Statements.

Table of Contents

APPLIED MATERIALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

	Three Months Ended				~~Nine Months Ended~~
	July 27,2025		July 28,2024		July 27,2025		July 28,2024
	January 25,2026		January 26,2025
	(Unaudited)
Net income	$	12,~~779~~026	$	1,~~705~~185	$	~~5,101~~	$	~~5,446~~
Other comprehensive income (loss), net of tax:
Change in unrealized gain (loss) on available-for-sale investments	2(5)		18(3)		7		36
Change in unrealized net loss on derivative instruments	405		828		59		44
Change in defined and postretirement benefit plans	—		—		—		(9)
Other comprehensive income (loss), net of tax	—		25
Other comprehensive income (loss), net of tax	42		26		66		71
Comprehensive income	$	2,026	$	1,210
Comprehensive income	$	1,821	$	1,731	$	5,167	$	5,517

See accompanying Notes to Consolidated Condensed Financial Statements.

Table of Contents

APPLIED MATERIALS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In millions)

	July 27,2025		October 27,2024
	January 25,2026		October 26,2025
ASSETS
Current assets:
Cash and cash equivalents	$	57,~~384~~218	$	87,~~022~~241
Short-term investments	1,~~630~~293		1,~~449~~332
Accounts receivable, net	54,~~772~~977		5,~~234~~185
Inventories	5,~~807~~997		5,~~421~~915
Other current assets	1,~~125~~564		1,~~094~~208
Total current assets	1921,~~718~~049		2120,~~220~~881
Long-term investments	4,~~133~~968		24,~~787~~327
Property, plant and equipment, net	4,~~124~~949		34,~~339~~610
Goodwill	3,~~748~~707		3,~~732~~707
Purchased technology and other intangible assets, net	~~238~~215		~~249~~226
Deferred income taxes and other assets	2,~~250~~756		32,~~082~~548
Total assets	$	3437,~~211~~644	$	3436,~~409~~299
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	~~799~~100	$	~~799~~100
Accounts payable and accrued expenses	45,~~614~~181		45,~~820~~333
Contract liabilities	2,~~470~~472		2,~~849~~566
Total current liabilities	7,~~883~~753		87,~~468~~999
Long-term debt	56,~~463~~453		56,~~460~~455
Income taxes payable	~~330~~507		~~670~~356
Other liabilities	1,~~031~~214		~~810~~1,074
Total liabilities	1415,~~707~~927		15,~~408~~884
Stockholders’ equity:
Common stock	8		8
Additional paid-in capital	10,~~090~~311		910,~~660~~333
Retained earnings	5356,~~694~~888		4955,~~651~~227
Treasury stock	(4445,~~186~~380)		(4045,~~150~~043)
Accumulated other comprehensive loss	(~~102~~110)		(~~168~~110)
Total stockholders’ equity	1921,~~504~~717		1920,~~001~~415
Total liabilities and stockholders’ equity	$	3437,~~211~~644	$	3436,~~409~~299

Amounts as of ~~July~~January 2725, ~~2025~~2026 are unaudited. Amounts as of October 2726, ~~2024~~2025 are derived from the October 2726, ~~2024~~2025 audited consolidated financial statements.

See accompanying Notes to Consolidated Condensed Financial Statements.

Table of Contents

APPLIED MATERIALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In millions, except per share amounts)

	Common Stock			AdditionalPaid-InCapital		RetainedEarnings		Treasury Stock			AccumulatedOtherComprehensiveIncome (Loss)		Total
Three Months Ended July 27, 2025	Shares	Amount						Shares	Amount
Three Months Ended January 25, 2026	Shares	Amount						Shares	Amount
	(Unaudited)
Balance as of April 27, 2025	802	$	8	$	9,966	$	52,280	1,230	$	(43,149)	$	(144)	$	18,961
Balance as of October 26, 2025	793	$	8	$	10,333	$	55,227	1,241	$	(45,043)	$	(110)	$	20,415
Net income	—	—		—		12,~~779~~026		—	—		—		12,~~779~~026
Other comprehensive income (loss), net of tax	—	—		—		—		—	—		42—		42—
Dividends declared ($0.46 per common share)	—	—		—		(365)		—	—		—		(365)
Share-based compensation	—	—		~~158~~207		—		—	—		—		~~158~~207
Net issuance under stock plans	1	—		(34229)		—		—	—		—		(34229)
Common stock repurchases	(61)	—		—		—		61	(~~1,037~~337)		—		(~~1,037~~337)
Balance as of July 27, 2025	797	$	8	$	10,090	$	53,694	1,236	$	(44,186)	$	(102)	$	19,504
Balance as of January 25, 2026	793	$	8	$	10,311	$	56,888	1,242	$	(45,380)	$	(110)	$	21,717

	Common Stock			AdditionalPaid-InCapital		RetainedEarnings		Treasury Stock			AccumulatedOtherComprehensiveIncome (Loss)		Total
Nine Months Ended July 27, 2025	Shares	Amount						Shares	Amount
Three Months Ended January 26, 2025	Shares	Amount						Shares	Amount
	(Unaudited)
Balance as of October 27, 2024	818	$	8	$	9,660	$	49,651	1,211	$	(40,150)	$	(168)	$	19,001
Net income	—	—		—		51,~~101~~185		—	—		—		51,~~101~~185
Other comprehensive income (loss), net of tax	—	—		—		—		—	—		6625		6625
Dividends declared ($1.32 per common share)	—	—		—		(1,058)		—	—		—		(1,058)
Dividends declared ($0.40 per common share)	—	—		—		(325)		—	—		—		(325)
Share-based compensation	—	—		~~512~~195		—		—	—		—		~~512~~195
Net issuance under stock plans	42	—		(82142)		—		—	—		—		(82142)
Common stock repurchases	(258)	—		—		—		258	(41,~~036~~314)		—		(41,~~036~~314)
Balance as of July 27, 2025	797	$	8	$	10,090	$	53,694	1,236	$	(44,186)	$	(102)	$	19,504
Balance as of January 26, 2025	812	$	8	$	9,713	$	50,511	1,219	$	(41,464)	$	(143)	$	18,625

See accompanying Notes to Consolidated Condensed Financial Statements.

Table of Contents

APPLIED MATERIALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF ~~STOCKHOLDERS’~~CASH ~~EQUITY~~FLOWS ~~- (Continued)~~

(In millions)

(In millions, except per share amounts)


	Three Months Ended
	January 25, 2026		January 26, 2025

	(Unaudited)
Cash flows from operating activities:
Net income	$	2,026	$	1,185
Adjustments required to reconcile net income to cash provided by operating activities:
Depreciation and amortization	127		105



Restructuring charges	12		—
Legal settlement	253		—
(Gain) / loss and impairment on investments	(466)		100


Share-based compensation	207		195

Deferred income taxes	(78)		668
Other	(1)		(5)
Changes in operating assets and liabilities:
Accounts receivable	208		(764)
Inventories	(82)		(80)
Other current and non-current assets	(154)		115

Accounts payable and accrued expenses	(760)		(429)
Contract liabilities	(94)		(397)
Income taxes payable	481		200
Other liabilities	7		32
Cash provided by operating activities	1,686		925
Cash flows from investing activities:
Capital expenditures	(646)		(381)
Cash paid for acquisitions, net of cash acquired	—		(28)


Proceeds from sales and maturities of investments	1,143		1,223
Purchases of investments	(1,277)		(1,711)

Cash used in investing activities	(780)		(897)
Cash flows from financing activities:


Proceeds from issuance of commercial paper	200		200
Repayments of commercial paper	(200)		(200)

Common stock repurchases	(337)		(1,318)

Tax withholding payments for vested equity awards	(229)		(142)
Payments of dividends to stockholders	(365)		(326)


Cash used in financing activities	(931)		(1,786)

Increase (decrease) in cash, cash equivalents and restricted cash equivalents	(25)		(1,758)
Cash, cash equivalents and restricted cash equivalents — beginning of period	7,312		8,113
Cash, cash equivalents and restricted cash equivalents — end of period	$	7,287	$	6,355

Reconciliation of cash, cash equivalents and restricted cash equivalents
Cash and cash equivalents	$	7,218	$	6,264
Restricted cash equivalents included in deferred income taxes and other assets	69		91
Total cash, cash equivalents and restricted cash equivalents	$	7,287	$	6,355

Supplemental cash flow information:
Cash payments for income taxes	$	112	$	70
Cash refunds from income taxes	$	3	$	70
Cash payments for interest	$	65	$	52

See accompanying Notes to Consolidated Condensed Financial Statements.

	Common Stock			AdditionalPaid-InCapital		RetainedEarnings		Treasury Stock			AccumulatedOtherComprehensiveIncome (Loss)		Total
Three Months Ended July 28, 2024	Shares	Amount						Shares	Amount
	(Unaudited)
Balance as of April 28, 2024	828	$	8	$	9,321	$	46,871	1,200	$	(37,829)	$	(172)	$	18,199
Net income	—	—		—		1,705		—	—		—		1,705
Other comprehensive income (loss), net of tax	—	—		—		—		—	—		26		26
Dividends declared ($0.40 per common share)	—	—		—		(329)		—	—		—		(329)
Share-based compensation	—	—		132		—		—	—		—		132
Net issuance under stock plans	—	—		(25)		—		—	—		—		(25)
Common stock repurchases	(4)	—		—		—		4	(868)		—		(868)
Balance as of July 28, 2024	824	$	8	$	9,428	$	48,247	1,204	$	(38,697)	$	(146)	$	18,840

	Common Stock			AdditionalPaid-InCapital		RetainedEarnings		Treasury Stock			AccumulatedOtherComprehensiveIncome (Loss)		Total
Nine Months Ended July 28, 2024	Shares	Amount						Shares	Amount
	(Unaudited)
Balance as of October 29, 2023	833	$	8	$	9,131	$	43,726	1,191	$	(36,299)	$	(217)	$	16,349
Net income	—	—		—		5,446		—	—		—		5,446
Other comprehensive income (loss), net of tax	—	—		—		—		—	—		71		71
Dividends declared ($1.12 per common share)	—	—		—		(925)		—	—		—		(925)
Share-based compensation	—	—		436		—		—	—		—		436
Net issuance under stock plans	4	—		(139)		—		—	—		—		(139)
Common stock repurchases	(13)	—		—		—		13	(2,398)		—		(2,398)
Balance as of July 28, 2024	824	$	8	$	9,428	$	48,247	1,204	$	(38,697)	$	(146)	$	18,840

See accompanying Notes to Consolidated Condensed Financial Statements.

Table of Contents

APPLIED MATERIALS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

	Nine Months Ended
	July 27, 2025		July 28, 2024
	(Unaudited)
Cash flows from operating activities:
Net income	$	5,101	$	5,446
Adjustments required to reconcile net income to cash provided by operating activities:
Depreciation and amortization	321		282
Share-based compensation	512		436
Deferred income taxes	952		(385)
Other	(298)		(199)
Changes in operating assets and liabilities:
Accounts receivable	(538)		195
Inventories	(386)		157
Other current and non-current assets	(36)		353
Accounts payable and accrued expenses	135		(20)
Contract liabilities	(379)		(233)
Income taxes payable	(297)		46
Other liabilities	43		24
Cash provided by operating activities	5,130		6,102
Cash flows from investing activities:
Capital expenditures	(1,475)		(783)
Cash paid for acquisitions, net of cash acquired	(29)		—
Proceeds from asset sale	33		—
Proceeds from sales and maturities of investments	3,937		1,495
Purchases of investments	(5,109)		(1,968)
Cash used in investing activities	(2,643)		(1,256)
Cash flows from financing activities:
Debt borrowings, net of issuance costs	—		694
Proceeds from issuance of commercial paper	400		300
Repayments of commercial paper	(400)		(300)
Proceeds from common stock issuances	129		119
Common stock repurchases	(4,044)		(2,381)
Tax withholding payments for vested equity awards	(210)		(258)
Payments of dividends to stockholders	(1,019)		(863)
Payments of debt issuance costs	(2)		—
Repayments of principal on finance leases	—		(12)
Cash used in financing activities	(5,146)		(2,701)
Increase (decrease) in cash, cash equivalents and restricted cash equivalents	(2,659)		2,145
Cash, cash equivalents and restricted cash equivalents — beginning of period	8,113		6,233
Cash, cash equivalents and restricted cash equivalents — end of period	$	5,454	$	8,378
Reconciliation of cash, cash equivalents and restricted cash equivalents
Cash and cash equivalents	$	5,384	$	8,288
Restricted cash equivalents included in deferred income taxes and other assets	70		90
Total cash, cash equivalents and restricted cash equivalents	$	5,454	$	8,378
Supplemental cash flow information:
Cash payments for income taxes	$	1,269	$	819
Cash refunds from income taxes	$	79	$	7
Cash payments for interest	$	171	$	137

Table of Contents

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

Note 1 Basis of Presentation and Recently Adopted Accounting Standards

Basis of Presentation

In the opinion of our management, the unaudited interim consolidated condensed financial statements of Applied Materials, Inc. and its subsidiaries (we, us, and our) included herein have been prepared on a basis consistent with the October 2726, ~~2024~~2025 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments, necessary to fairly state the information set forth therein. These unaudited interim consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 2726, ~~2024~~2025 (~~2024~~2025 Form 10-K).

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. Our results of operations for the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 are not necessarily indicative of future operating results. Our fiscal year ends on the last Sunday in October of each year. Fiscal ~~2025~~2026 and ~~2024~~2025 contain 52 weeks each and the first ~~nine~~three months of fiscal ~~2025~~2026 and ~~2024~~2025 each contained 3913 weeks.

Certain ~~Recently~~prior-year ~~Adopted~~amounts ~~Accounting~~have ~~Standards~~been reclassified to conform to current-year presentation.

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. In June 2022, the Financial Accounting Standards Board (FASB) issued an accounting standard update which clarifies how the fair value of equity securities subject to contractual sale restrictions is determined (Topic 820). The amendment clarifies that a contractual sale restriction should not be considered in measuring fair value. It also requires certain qualitative and quantitative disclosures related to equity securities subject to contractual sale restrictions. We adopted this authoritative guidance in the first quarter of fiscal 2025. The adoption of this guidance did not have a significant impact on our consolidated condensed financial statements.

Note 2 Earnings Per Share

Basic earnings per share is determined using the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of restricted stock units and employees’ stock purchase plan shares) outstanding during the period. Our net income has not been adjusted for any period presented for purposes of computing basic or diluted earnings per share due to our non-complex capital structure.

	Three Months Ended				~~Nine Months Ended~~
	July 27,2025		July 28,2024		July 27,2025		July 28,2024
	January 25,2026		January 26,2025
	(In millions, except per share amounts)
Numerator:
Net income	$	12,~~779~~026	$	1,~~705~~185	$	~~5,101~~	$	~~5,446~~
Denominator:
Weighted average common shares outstanding	~~798~~793		~~826~~814		~~807~~		~~829~~
Effect of weighted dilutive restricted stock units and employees’ stock purchase plan shares	46		75		4		6
Denominator for diluted earnings per share	~~802~~799		~~833~~819		~~811~~		~~835~~
Basic earnings per share	$	2.2355	$	21.0646	$	~~6.32~~	$	~~6.57~~
Diluted earnings per share	$	2.2254	$	21.0545	$	~~6.29~~	$	~~6.52~~
Potentially weighted dilutive securities	—1		—		—		—

Excluded from the calculation of diluted earnings per share are securities attributable to outstanding restricted stock units where the combined exercise price and average unamortized fair value are greater than the average market price of our common stock, and therefore their inclusion would be anti-dilutive.

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Note 3 Cash, Cash Equivalents and Investments

Summary of Cash, Cash Equivalents and Investments

The following tables summarize our cash, cash equivalents and investments by security type:

July 27, 2025	Cost		GrossUnrealizedGains		GrossUnrealizedLosses		EstimatedFair Value
January 25, 2026	Cost		GrossUnrealizedGains		GrossUnrealizedLosses		EstimatedFair Value
	(In millions)
Cash	$	1,~~437~~541	$	—	$	—	$	1,~~437~~541
Cash equivalents:
Money market funds*	~~924~~3,719		—		—		~~924~~3,719
Bank certificates of deposit and time deposits	60180		—		—		60180
U.S. Treasury and agency securities	~~1,114~~398		—		—		~~1,114~~398
Municipal securities	345		—		—		345
Commercial paper, corporate bonds and medium-term notes	1,~~815~~375		—		—		1,~~815~~375
Total cash equivalents	35,~~947~~677		—		—		35,~~947~~677
Total cash and cash equivalents	$	57,~~384~~218	$	—	$	—	$	57,~~384~~218
Short-term and long-term investments:
Bank certificates of deposit and time deposits	$	61	$	—	$	—	$	61
U.S. Treasury and agency securities	1,~~578~~274		12		—1		1,~~579~~275
Non-U.S. government securities**	53		—		—		53
Municipal securities	~~465~~474		3		1—		~~467~~477
Commercial paper, corporate bonds and medium-term notes	~~831~~984		45		1—		~~834~~989
Asset-backed and mortgage-backed securities	~~623~~568		23		21		~~623~~570
Total fixed income securities	3,~~508~~304		1013		42		3,~~514~~315
Publicly traded equity securities	1,~~438~~287		~~467~~1,290		21		12,~~903~~576
Equity investments in privately held companies	~~315~~346		6990		3866		~~346~~370
Total equity investments	1,~~753~~633		~~536~~1,380		4067		2,~~249~~946
Total short-term and long-term investments	$	54,~~261~~937	$	~~546~~1,393	$	4469	$	56,~~763~~261
Total cash, cash equivalents and investments	$	1012,~~645~~155	$	~~546~~1,393	$	4469	$	1113,~~147~~479

_________________________

*Excludes $7069 million of restricted cash equivalents invested in money market funds related to deferred compensation plans.

**Includes Canadian provincial government debt.

109

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

October 27, 2024	Cost		GrossUnrealizedGains		GrossUnrealizedLosses		EstimatedFair Value
October 26, 2025	Cost		GrossUnrealizedGains		GrossUnrealizedLosses		EstimatedFair Value
	(In millions)
Cash	$	1,~~313~~419	$	—	$	—	$	1,~~313~~419
Cash equivalents:
Money market funds*	32,~~421~~193		—		—		32,~~421~~193
Bank certificates of deposit and time deposits	90180		—		—		90180
U.S. Treasury and agency securities	1,~~394~~196		—		—		1,~~394~~196
Municipal securities	195		—		—		195
Commercial paper, corporate bonds and medium-term notes	12,~~785~~248		—		—		12,~~785~~248
Total cash equivalents	65,~~709~~822		—		—		65,~~709~~822
Total cash and cash equivalents	$	87,~~022~~241	$	—	$	—	$	87,~~022~~241
Short-term and long-term investments:
Bank certificates of deposit and time deposits	$	134	$	—	$	—	$	134
U.S. Treasury and agency securities	1,~~306~~229		—3		2—		1,~~304~~232
Non-U.S. government securities**	5		—		—		5
Municipal securities	~~441~~463		25		2—		~~441~~468
Commercial paper, corporate bonds and medium-term notes	~~803~~848		46		2—		~~805~~854
Asset-backed and mortgage-backed securities	~~656~~614		34		52		~~654~~616
Total fixed income securities	3,~~224~~163		918		112		3,~~222~~179
Publicly traded equity securities	~~543~~1,288		~~185~~824		52		~~723~~2,110
Equity investments in privately held companies	~~255~~342		5874		2246		~~291~~370
Total equity investments	~~798~~1,630		~~243~~898		2748		12,~~014~~480
Total short-term and long-term investments	$	4,~~022~~793	$	~~252~~916	$	3850	$	45,~~236~~659
Total cash, cash equivalents and investments	$	12,~~044~~034	$	~~252~~916	$	3850	$	12,~~258~~900

_________________________

*Excludes $9171 million of restricted cash equivalents invested in money market funds related to deferred compensation plans.

**Includes Canadian provincial government debt.

During the three months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025, interest income from our cash, cash equivalents and fixed income securities was $9297 million and $~~124~~116 million, respectively.

During the nine months ended July 27, 2025 and July 28, 2024, interest income from our cash, cash equivalents and fixed income securities was $309 million and $345 million, respectively.

Maturities of Investments

The following table summarizes the contractual maturities of our investments as of ~~July~~January 2725, ~~2025~~2026:

	Cost		EstimatedFair Value
	(In millions)
Due in one year or less	$	1,~~565~~243	$	1,~~564~~244
Due after one through five years	1,~~317~~488		1,~~324~~497
Due after five years	35		35
No single maturity date*	2,~~376~~201		23,~~872~~515
Total	$	54,~~261~~937	$	56,~~763~~261

_________________________

*Securities with no single maturity date include publicly traded and privately held equity securities and asset-backed and mortgage-backed securities.

1110

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Gains and Losses on Investments

During the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025, gross realized gains and losses on our fixed income portfolio were not material.

As of ~~July~~January 2725, ~~2025~~2026 and October 2726, ~~2024~~2025, gross unrealized losses related to our fixed income portfolio were not material. We regularly review our fixed income portfolio to identify and evaluate investments that have indications of possible impairment from credit losses or other factors. Factors considered in determining whether an unrealized loss is considered to be a credit loss include: the significance of the decline in value compared to the cost basis; the financial condition, credit quality and near-term prospects of the investee; and whether it is more likely than not that we will be required to sell the security prior to recovery. Credit losses related to available-for-sale debt securities are recorded as an allowance for credit losses through interest and other income (expense), net. Any additional changes in fair value that are not related to credit losses are recognized in accumulated other comprehensive income (loss) (AOCI). During the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025, we did not recognize material credit losses and the ending allowance for credit losses was not material to our fixed income portfolio.

The components of gain (loss) on equity investments ~~for~~recognized in the ~~three~~Consolidated ~~and~~Condensed ~~nine~~Statements of Operations for the three months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025 were as follows:

	Three Months Ended				~~Nine Months Ended~~
	July 27,2025		July 28,2024		July 27,2025		July 28,2024
	January 25,2026		January 26,2025
	(In millions)
Publicly traded equity securities
Unrealized gain	$	~~311~~484	$	63	$	~~424~~	$	~~318~~
Unrealized loss	—(16)		(30111)		~~(139)~~		~~(33)~~
Realized gain on sales and dividends	54		3		30		5
Realized loss on sales or impairment	—(2)		—		—		~~(1)~~
Equity investments in privately held companies
Unrealized gain	918		17		16		2
Unrealized loss	(62)		(25)		~~(13)~~		~~(12)~~
Realized gain on sales and dividends	14		—6		8		3
Realized loss on sales or impairment	(2220)		~~(19)~~—		~~(27)~~		~~(19)~~
Total gain (loss) on equity investments, net	$	~~298~~470	$	(4197)	$	~~299~~	$	~~263~~

1211

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Note 4 Fair Value Measurements

Assets Measured at Fair Value on a Recurring Basis

The following table presents our fair value hierarchy for our financial assets (excluding cash balances) measured at fair value on a recurring basis:

	July 27, 2025				October 27, 2024
	January 25, 2026				October 26, 2025
	Level 1		Level 2		Total		Level 1		Level 2		Total
	(In millions)
Assets:
Available-for-sale debt security investments
Money market funds*	$	~~994~~3,788	$	—	$	~~994~~3,788	$	32,~~512~~264	$	—	$	32,~~512~~264
Bank certificates of deposit and time deposits	—		66181		66181		—		~~103~~184		~~103~~184
U.S. Treasury and agency securities	21,~~500~~249		~~193~~424		21,~~693~~673		2,~~684~~109		14319		2,~~698~~428
Non-U.S. government securities	—		53		53		—		5		5
Municipal securities	—		~~501~~482		~~501~~482		—		~~460~~473		~~460~~473
Commercial paper, corporate bonds and medium-term notes	—		2,~~649~~364		2,~~649~~364		—		23,~~590~~102		23,~~590~~102
Asset-backed and mortgage-backed securities	—		~~623~~570		~~623~~570		—		~~654~~616		~~654~~616
Total available-for-sale debt security investments	$	35,~~494~~037	$	4,~~037~~024	$	79,~~531~~061	$	64,~~196~~373	$	34,~~826~~699	$	109,~~022~~072
Equity investments with readily determinable values
Publicly traded equity securities	$	12,~~903~~576	$	—	$	12,~~903~~576	$	~~723~~2,110	$	—	$	~~723~~2,110
Total equity investments with readily determinable values	$	12,~~903~~576	$	—	$	12,~~903~~576	$	~~723~~2,110	$	—	$	~~723~~2,110
Total	$	57,~~397~~613	$	4,~~037~~024	$	911,~~434~~637	$	6,~~919~~483	$	34,~~826~~699	$	1011,~~745~~182

_________________________

*Amounts as of ~~July~~January 2725, ~~2025~~2026 and October 2726, ~~2024~~2025 include $7069 million and $9171 million, respectively, invested in money market funds related to deferred compensation plans. Due to restrictions on the distribution of these funds, they are classified as restricted cash equivalents and are included in deferred income taxes and other assets in the Consolidated Condensed Balance Sheets.

As of ~~July~~January 2725, ~~2025~~2026 and October 2726, ~~2024~~2025, available-for-sale, short-term and long-term investments not recognized at fair value based upon observable inputs or quoted prices were not material.

We did not have any financial assets measured at fair value on a recurring basis within Level 3 fair value measurements as of ~~July~~January 2725, ~~2025~~2026 or October 2726, ~~2024~~2025.

Assets and Liabilities without Readily Determinable Values Measured on a Non-recurring Basis

Our equity investments without readily determinable values consist of equity investments in privately held companies. We elected the measurement alternative, defined as cost, less impairments, adjusted for subsequent observable price changes on a prospective basis for certain equity investments without readily determinable fair values and are required to account for any subsequent observable changes in fair value within the statements of operations. These investments are classified as Level 3 within the fair value hierarchy and periodically assessed for impairment when an event or circumstance indicates that a decline in value may have occurred. Impairment losses on equity investments in privately held companies, ~~are~~ included in ~~interest and other income (expense), net in~~ the ~~Consolidated~~above ~~Condensed~~fair ~~Statement~~value ofhierarchy ~~Operations~~table, ~~and~~ were not material during the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025. These impairment losses are included in interest and other income (expense), net in the Consolidated Condensed Statements of Operations.

~~Other~~12

The carrying amounts of our financial instruments, including cash and cash equivalents, restricted cash equivalents, accounts receivable, commercial paper notes, and accounts payable and accrued expenses, approximate fair value due to their short maturities. As of July 27, 2025, the aggregate principal amount of long-term senior unsecured notes was $5.5 billion and the estimated fair value was $5.0 billion. As of October 27, 2024, the aggregate principal amount of long-term senior unsecured notes was $5.5 billion and the estimated fair value was $5.1 billion. The estimated fair value of long-term senior unsecured notes is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues. See Note 9 of the Notes to the Consolidated Condensed Financial Statements for further detail of existing debt.

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Other

The carrying amounts of our financial instruments, including cash and cash equivalents, restricted cash equivalents, accounts receivable, commercial paper notes, and accounts payable and accrued expenses, approximate fair value due to their short maturities. As of January 25, 2026, the aggregate principal amount of long-term senior unsecured notes issued by us was $6.5 billion, and their estimated fair value, excluding associated interest rate swaps we entered into in the first quarter of fiscal 2026, was $6.1 billion. See Note 5 of the Notes to the Consolidated Condensed Financial Statements for information on our interest rate swaps. As of October 26, 2025, the aggregate principal amount of long-term senior unsecured notes was $6.5 billion and the estimated fair value was $6.2 billion. The estimated fair value of long-term senior unsecured notes issued by us is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues. See Note 9 of the Notes to the Consolidated Condensed Financial Statements for additional information on our senior unsecured notes.

Note 5 Derivative Instruments and Hedging Activities

Derivative Financial Instruments

We conduct business in a number of foreign countries, with certain transactions denominated in local currencies, such as the Japanese yen, Israeli shekel, euro and Taiwanese dollar. We use derivative financial instruments, such as foreign currency forward and option contracts, to hedge certain forecasted foreign currency denominated transactions expected to occur typically within the next 24 months. The purpose of our foreign currency management is to mitigate the effect of exchange rate fluctuations on certain foreign currency denominated revenues, costs and eventual cash flows. The terms of currency instruments used for hedging purposes are generally consistent with the timing of the transactions being hedged.

We do not use derivative financial instruments for trading or speculative purposes. Derivative instruments and hedging activities, including foreign exchange and interest rate contracts, are recognized on the balance sheet at fair value. Changes in the fair value of derivatives that do not qualify for hedge accounting treatment are recognized currently in earnings. All of our derivative financial instruments are recorded at their fair value in other current assets, ~~or in~~ accounts payable and accrued expenses, or long-term debt.

Hedges related to anticipated transactions are designated and documented at the inception of the hedge as cash flow hedges and foreign exchange derivatives are typically entered into once per month. Cash flow hedges are evaluated for effectiveness quarterly. The effective portion of the gain or loss on these hedges is reported as a component of accumulated other comprehensive income (loss) (AOCI) in stockholders’ equity and is reclassified into earnings when the hedged transaction affects earnings. The majority of the after-tax net income or loss related to foreign exchange derivative instruments included in AOCI as of ~~July~~January 2725, ~~2025~~2026 is expected to be reclassified into earnings within 12 months. Changes in fair value caused by changes in time value of option contracts designated as cash flow hedges are excluded from the assessment of effectiveness. The initial value of this excluded component is amortized on a straight-line basis over the life of the hedging instrument and recognized in the financial statement line item to which the hedge relates. If the transaction being hedged is probable not to occur, we recognize the gain or loss on the associated financial instrument in the ~~consolidated~~Consolidated ~~condensed~~Condensed ~~statement~~Statement of ~~operations~~Operations. The amount recognized due to discontinuance of cash flow hedges that were probable of not occurring by the end of the originally specified time period was not ~~significant~~material for the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025.

Foreign currency forward contracts are generally used to hedge certain foreign currency denominated assets or liabilities. Accordingly, changes in the fair value of these hedges are recorded in ~~earnings~~the Consolidated Condensed Statement of Operations to offset the changes in the fair value of the assets or liabilities being hedged.

AsWe ofalso ~~July 27,~~use ~~2025~~interest ~~and~~rate ~~October 27,~~swap ~~2024,~~derivatives ~~the~~to ~~total~~partially offset our business exposure to interest risk associated with our outstanding ~~notional~~fixed ~~amounts~~rate senior unsecured notes. These interest rate swaps are designated as fair value hedges and used to offset changes in the fair value of ~~foreign~~certain ~~exchange~~unsecured ~~contracts~~senior ~~were~~notes $2attributable to changes in the benchmark interest rate.~~1 billion~~ ~~and~~We $2reflect the interest settlement associated with the interest rate swap as cash flows from operating activities in the Consolidated Statements of Cash Flows.~~0 billion~~ During the first quarter of fiscal 2026, ~~respectively~~we entered into a series of interest rate swaps with the aggregate notional amount of $400 million. ~~The~~We record changes in fair ~~values~~value on the swaps in our Consolidated Condensed Statements of ~~foreign~~Operations ~~exchange~~with ~~derivative~~a ~~instruments~~corresponding asoffset to the value of ~~July 27,~~the ~~2025~~hedged ~~and~~senior ~~October 27,~~unsecured ~~2024~~notes. ~~were~~See ~~not~~Note ~~material~~9 of the Notes to the Consolidated Condensed Financial Statements for additional discussion of our senior unsecured notes.

~~The~~As ~~gain~~of ~~(loss)~~January 25, on2026 ~~derivatives~~and inOctober 26, ~~cash~~2025, ~~flow~~the ~~hedging~~total ~~relationships~~outstanding ~~recognized~~notional inamounts ~~AOCI~~of ~~for~~foreign ~~derivatives~~exchange ~~designated~~contracts aswere ~~hedging~~both ~~instruments~~$2.3 billion. ~~were~~The ~~not~~fair ~~material~~values ~~for~~of ~~the~~foreign ~~three~~exchange ~~and~~derivative ~~nine~~instruments ~~months~~as ~~ended~~of ~~July~~January 2725, ~~2025~~2026 and ~~July~~October 2826, ~~2024~~2025 were not material.

The effects of derivative instruments, both those designated as cash flow hedges and those that are not designated, on the Consolidated Condensed Statements of Operations were not material for the three and nine months ended July 27, 2025 and July 28, 2024.13

Credit Risk Contingent Features

If our credit rating were to fall below investment grade, we would be in violation of credit risk contingent provisions of the derivative instruments discussed above, and certain counterparties to the derivative instruments could request immediate payment on derivative instruments in net liability positions. The aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a net liability position was immaterial as of July 27, 2025.

Entering into derivative contracts with banks exposes us to credit-related losses in the event of the banks’ nonperformance. However, our exposure is not considered significant.

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

The gain (loss) on derivatives in cash flow hedging relationships recognized in AOCI for derivatives designated as hedging instruments were not material for the three months ended January 25, 2026 and January 26, 2025.

The effects of derivative instruments, both those designated and not designated as cash flow and fair value hedges, on the Consolidated Condensed Statements of Operations were not material for the three months ended January 25, 2026 and January 26, 2025.

Credit Risk Contingent Features

Entering into derivative contracts with banks exposes us to credit-related losses in the event of the banks’ nonperformance. However, our exposure is not considered material.

Note 6 Accounts Receivable, Net

WeAccounts receivable sold ~~$215 million and $324 million of account receivables~~ during the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025,~~2026 ~~respectively. We sold $131 million~~ and ~~$395 million of account receivables during the three and nine months ended July~~January 2826, ~~2024,~~2025 ~~respectively~~were not material. We did not discount letters of credit issued by customers ~~or discount promissory notes~~ during the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025. Financing charges on the sale of receivables and discounting of letters of credit are included in interest expense in the accompanying Consolidated Condensed Statements of Operations and were not material for all periods presented.

We maintain an allowance for credit losses for estimated losses resulting from the inability of our customers to make required payments. This allowance is based on historical experience, credit evaluations, specific customer collection history and any customer-specific issues we have identified. Changes in circumstances, such as an unexpected material adverse change in a major customer’s ability to meet its financial obligation to us or its payment trends, may require us to further adjust our estimates of the recoverability of amounts due to us. Bad debt expense and any reversals are recorded in marketing and selling expenses in the Consolidated Condensed ~~Statement~~Statements of Operations.

The balances of allowance for credit losses were not material as of ~~July~~January 2725, ~~2025~~2026 and October 2726, ~~2024~~2025, and the changes in allowance for credit losses were not material for the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025.

We sell our products principally to manufacturers within the semiconductor ~~and display industries~~industry. While we believe that our allowance for credit losses is adequate and represents our best estimate as of ~~July~~January 2725, ~~2025~~2026, we continue to closely monitor customer liquidity and industry and economic conditions, which may result in changes to our estimates.

Note 7 Contract Balances and Performance Obligations

Contract Assets and Liabilities

Contract assets primarily result from receivables for goods transferred to customers where payment is conditional upon technical sign off and not just the passage of time. Contract liabilities consist of unsatisfied performance obligations related to advance payments received and billings in excess of revenue recognized. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period.

Contract assets are generally classified as current and are included in Other Current Assets in the Consolidated Condensed Balance Sheets. Contract liabilities are classified as current or non-current based on the timing of when performance obligations will be satisfied and associated revenue is expected to be recognized.

~~Contract balances at the end of each reporting period were as follows:~~14

	July 27, 2025		October 27, 2024
	(In millions)
Contract assets	$	306	$	269
Contract liabilities	$	2,470	$	2,849

The increase in contract assets during the nine months ended July 27, 2025 was primarily due to an increase in unsatisfied performance obligations related to goods transferred to customers where payment was conditional upon technical sign off.

During the nine months ended July 27, 2025, we recognized revenue of approximately $2.2 billion related to contract liabilities at October 27, 2024. Contract liabilities decreased during the nine months ended July 27, 2025 due to revenue recognized related to contract liabilities at October 27, 2024, partially offset by new billings for products and services for which there were unsatisfied performance obligations to customers and revenue had not yet been recognized as of July 27, 2025.

There were no credit losses recognized on our accounts receivables and contract assets during both the nine months ended July 27, 2025 and July 28, 2024.

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Contract balances at the end of each reporting period were as follows:


	January 25, 2026		October 26, 2025
	(In millions)

Contract assets	$	214	$	281
Contract liabilities	$	2,472	$	2,566

The decrease in contract assets during the three months ended January 25, 2026 was primarily due to a decrease in unsatisfied performance obligations related to goods transferred to customers where payment was conditional upon technical sign off.

During the three months ended January 25, 2026, we recognized revenue of approximately $1.0 billion related to contract liabilities at October 26, 2025. Contract liabilities decreased during the three months ended January 25, 2026 due to revenue recognized related to contract liabilities at October 26, 2025, partially offset by new billings for products and services for which there were unsatisfied performance obligations to customers and revenue had not yet been recognized as of January 25, 2026.

There were no credit losses recognized on our accounts receivable and contract assets during both the three months ended January 25, 2026 and January 26, 2025.

Performance Obligations

As of ~~July~~January 2725, ~~2025~~2026, the amount of remaining unsatisfied performance obligations on contracts, primarily consisting of written purchase orders received from customers, with an original estimated duration of one year or more was approximately $21.04 billion, of which approximately 5066% is expected to be recognized within 12 months and the remainder is expected to be recognized within the following 24 months thereafter.

We have elected the available practical expedient to exclude the value of unsatisfied performance obligations for contracts with an original expected duration of one year or less.

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Note 8 Balance Sheet Detail

	July 27,2025		October 27,2024
	January 25,2026		October 26,2025
	(In millions)
Inventories
Customer service spares	$	1,~~761~~794	$	1,~~742~~786
Raw materials	2,~~002~~025		12,~~680~~007
Work-in-process	~~925~~951		~~879~~914
Finished goods
Deferred cost of sales	~~197~~278		~~217~~229
Evaluation inventory	~~520~~461		~~459~~474
Manufactured on-hand inventory	~~402~~488		~~444~~505
Total finished goods	1,~~119~~227		1,~~120~~208
Total inventories	$	5,~~807~~997	$	5,~~421~~915

	July 27,2025		October 27,2024
	January 25,2026		October 26,2025
	(In millions)
Other Current Assets
Prepaid income taxes and income taxes receivable	$	56548	$	~~120~~148
Prepaid expenses and other	1,~~069~~016		~~974~~1,060
	$	1,~~125~~564	$	1,~~094~~208

Useful Life

~~July~~January 2725,~~2025~~2026

October 2726,~~2024~~2025

(In years)

(In millions)

Property, Plant and Equipment, Net

Land and improvements

~~537~~558

~~492~~558

Buildings and improvements

3-30

2,~~662~~993

2,~~359~~930

Demonstration and manufacturing equipment

5-8

2,~~766~~813

2,~~578~~708

Furniture, fixtures and other equipment

3-5

~~830~~885

~~782~~855

Construction in progress

1,~~316~~704

~~898~~1,460

Gross property, plant and equipment

8,~~111~~953

78,~~109~~511

Accumulated depreciation

(34,~~987~~004)

(3,~~770~~901)

4,~~124~~949

34,~~339~~610


	January 25, 2026		October 26, 2025

	(In millions)
Deferred Income Taxes and Other Assets
Non-current deferred income taxes	$	1,178	$	1,233
Operating lease right-of-use assets	649		509

Income tax receivables and other assets	929		806
	$	2,756	$	2,548

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

	July 27,2025		October 27,2024
	January 25,2026		October 26,2025
	(In millions)
Deferred Income Taxes and Other Assets
Accounts Payable and Accrued Expenses
Non-current deferred income taxes	$	1,288	$	2,393
Accounts payable	$	1,924	$	1,978
Operating lease right-of-use assets	519		375
Compensation and employee benefits	727		1,221
Income tax receivables and other assets	443		314
Warranty	329		346
	$	2,250	$	3,082
Dividends payable	365		365
Income taxes payable	710		380
Operating lease liabilities, current	101		91
Restructuring reserve	39		165
Other	986		787
	$	5,181	$	5,333

	July 27,2025		October 27,2024
	January 25,2026		October 26,2025
	(In millions)
Accounts Payable and Accrued Expenses
Other Liabilities
Accounts payable	$	1,769	$	1,570
Defined and postretirement benefit plans	$	139	$	151
Compensation and employee benefits	1,109		1,188
Operating lease liabilities, non-current	536		404
Warranty	363		364
Other	539		519
Dividends payable	366		327
	$	1,214	$	1,074
Income taxes payable	157		535
Operating lease liabilities, current	88		87
Other	762		749
	$	4,614	$	4,820

	July 27,2025		October 27,2024
	(In millions)
Other Liabilities
Defined and postretirement benefit plans	$	152	$	142
Operating lease liabilities, non-current	412		259
Other	467		409
	$	1,031	$	810

Government Assistance

Capital expenditure related incentives reduced gross property, plant and equipment, net by $~~907~~1.4 ~~million~~billion as of ~~July~~January 2725, ~~2025~~2026. ~~Contra-depreciation~~To ~~expense~~the ~~was~~extent ~~not~~the ~~material~~capital ~~during~~expenditure ~~the~~related ~~three~~incentives ~~and~~exceed ~~nine~~our ~~months~~applicable ~~ended~~income ~~July 27~~tax liabilities, ~~2025.~~we ~~Operating~~are ~~incentives~~eligible ~~recognized~~to asreceive a ~~reduction~~refund toin ~~research,~~cash. ~~development~~In ~~and~~our ~~engineering~~Consolidated ~~expense~~Condensed ~~were~~Balance Sheets as of January 25, 2026, we have recorded $6975 million ~~and~~of investment tax credits, of which $24302 million was recorded in ~~the~~other ~~three~~current assets and ~~nine~~will ~~months~~offset ~~ended~~fiscal ~~July 27,~~2026 ~~2025~~income tax liabilities, ~~respectively.~~and ~~Capital~~$673 ~~expenditure~~million ~~related~~was ~~incentives~~recorded ~~reduced~~in ~~our~~deferred income taxes ~~payable~~and byother ~~$463~~assets ~~million~~and asis ofexpected ~~July 27,~~to ~~2025,~~be ofrefunded. ~~which~~Contra ~~$309~~depreciation ~~million~~expense isand inoperating ~~accounts~~incentives ~~payable~~recorded ~~and~~as ~~accrued~~a ~~expenses~~reduction ~~and~~to ~~$154~~expense ~~million~~were isnot inmaterial ~~deferred~~for ~~income~~the ~~taxes~~three ~~and~~months ~~other~~ended ~~assets~~January 25, in2026 ~~our~~and ~~Consolidated~~January 26, ~~Condensed Balance Sheets~~2025.

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Note 9 Borrowing Facilities and Debt

Revolving Credit Facilities

In ~~February~~September 2025, we entered into a $2.0 billion 364-day committed ~~unsecured~~ revolving credit agreement (~~Revolving~~364-Day Credit Agreement) with a group of banks. The ~~Revolving~~364-Day Credit Agreement includes a provision under which we may request an increase in the amount of the facility of up to $~~500~~1.0 ~~million~~billion for a total commitment of no more than $23.50 billion, subject to the receipt of commitments from one or more lenders for any such increase and other customary conditions. The ~~Revolving~~364-Day Credit Agreement is scheduled to expire in ~~February~~September ~~2030~~2026, ~~unless~~provided, ~~extended~~however, asif ~~permitted~~any ~~under~~loans ~~the~~are ~~Revolving~~outstanding ~~Credit~~on ~~Agreement.~~the ~~The~~maturity ~~Revolving~~date, ~~Credit~~we ~~Agreement~~may ~~provides~~convert ~~for~~all ~~borrowings~~or ~~that~~part ~~bear~~of ~~interest~~such ~~for~~loans ~~each~~to ~~advance~~term atloans ~~one~~that ofwill ~~two~~mature ~~rates~~in ~~selected~~September ~~by us~~2027, ~~plus~~subject ~~an applicable margin, which varies according~~ to ~~our~~payment ~~public~~of ~~debt~~a ~~credit~~fee ~~ratings.~~by ~~The~~us ~~Revolving~~and ~~Credit~~other ~~Agreement~~customary ~~replaced the prior $1~~conditions.~~5 billion credit agreement, which was scheduled to expire in February 2026.~~

NoIn ~~amounts~~February ~~were~~2025, ~~outstanding~~we ~~under~~entered ~~the~~into ~~Revolving~~a $2.0 billion committed revolving credit agreement (Five-Year Credit Agreement) aswith a group of ~~July 27,~~banks. ~~2025~~The orFive-Year Credit Agreement includes a provision under which we may request an increase in the ~~prior~~amount ~~revolving~~of ~~credit~~the ~~agreement~~facility asof up to $500 million for a total commitment of ~~October~~no more than $2.5 27billion, ~~2024~~subject to the receipt of commitments from one or more lenders for any such increase and other customary conditions. The Five-Year Credit Agreement is scheduled to expire in February 2030, unless extended as permitted under the terms of the agreement.

InEach ~~addition,~~of wethe ~~have~~364-Day ~~revolving~~Credit ~~credit~~Agreement ~~facilities~~and ~~with~~the ~~Japanese~~Five-Year ~~banks~~Credit ~~pursuant~~Agreement toprovides ~~which~~for weunsecured ~~may~~borrowings ~~borrow~~that upbear tointerest ~~approximately~~for ~~$55~~each ~~million~~advance ~~in aggregate~~ at ~~any~~one ~~time. Our ability to borrow under these facilities is subject to bank approval at the time~~ of ~~the~~two ~~borrowing request, and any advances will be at~~ rates ~~indexed~~selected toby ~~the banks’ prime reference rate denominated in Japanese yen. As of July 27~~us, ~~2025~~plus ~~and~~an ~~October 27,~~applicable ~~2024~~margin, nowhich ~~amounts~~varies ~~were~~according ~~outstanding~~to ~~under~~our ~~these~~public ~~revolving~~debt credit ~~facilities~~ratings.

No amounts were outstanding under the 364-Day Credit Agreement or the Five-Year Credit Agreement as of January 25, 2026 and October 26, 2025.

In addition, we have revolving credit facilities with Japanese banks pursuant to which we may borrow up to approximately $51 million in aggregate at any time. Our ability to borrow under these facilities is subject to bank approval at the time of the borrowing request, and any advances will be at rates indexed to the banks’ prime reference rate denominated in Japanese yen. As of January 25, 2026 and October 26, 2025, no amounts were outstanding under these revolving credit facilities.

Short-term Commercial Paper

We have a short-term commercial paper program under which we may issue unsecured commercial paper notes. Inof ~~June~~up ~~2025,~~to wea ~~increased the~~ total amount of ~~commercial paper notes we may issue under the program from~~ $14.~~5 billion to $2.~~0 billion. The proceeds from the issuances of commercial paper are used for general corporate purposes. As of ~~July~~January 2725, ~~2025~~2026, we had commercial paper notes outstanding with an aggregate principal amount of $100 million, which were recorded as short-term debt with a weighted-average interest rate of 43.3171% and maturities of 7784 days, and as of October 2726, ~~2024~~2025, we had $100 million of commercial paper notes outstanding and recorded as short-term debt with a weighted-average interest rate of 54.0607% and maturities of 6335 days.

Senior Unsecured Notes

Debt outstanding as of July 27, 2025 and October 27, 2024 was as follows:

	Principal Amount
	July 27,2025		October 27,2024		EffectiveInterest Rate	InterestPay Dates
	(In millions)
Current portion of long-term debt:
3.900% Senior Notes Due 2025	$	700	$	700	3.944%	April 1, October 1
Total current portion of long-term debt	$	700	$	700
Long-term debt:
3.300% Senior Notes Due 2027	$	1,200	$	1,200	3.342%	April 1, October 1
4.800% Senior Notes Due 2029	700		700		4.844%	June 15, December 15
1.750% Senior Notes Due 2030	750		750		1.792%	June 1, December 1
5.100% Senior Notes Due 2035	500		500		5.127%	April 1, October 1
5.850% Senior Notes Due 2041	600		600		5.879%	June 15, December 15
4.350% Senior Notes Due 2047	1,000		1,000		4.361%	April 1, October 1
2.750% Senior Notes Due 2050	750		750		2.773%	June 1, December 1
	5,500		5,500
Total unamortized discount	(10)		(10)
Total unamortized debt issuance costs	(27)		(30)
Total long-term debt	$	5,463	$	5,460

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

~~Note~~Senior ~~10 Stockholders’~~Unsecured ~~Equity, Comprehensive Income and Share-Based Compensation~~Notes

Debt outstanding as of January 25, 2026 and October 26, 2025 was as follows:


	Principal Amount
	January 25, 2026		October 26, 2025		Effective Interest Rate	Interest Pay Dates

	(In millions)





Long-term debt:




3.300% Senior Notes Due 2027	$	1,200	$	1,200	3.342%	April 1, October 1
4.800% Senior Notes Due 2029	700		700		4.844%	June 15, December 15
1.750% Senior Notes Due 2030	750		750		1.792%	June 1, December 1
4.000% Senior Notes Due 2031	550		550		4.070%	January 15, July 15
5.100% Senior Notes Due 2035	500		500		5.127%	April 1, October 1
4.600% Senior Notes Due 2036	450		450		4.632%	January 15, July 15
5.850% Senior Notes Due 2041	600		600		5.879%	June 15, December 15
4.350% Senior Notes Due 2047	1,000		1,000		4.361%	April 1, October 1
2.750% Senior Notes Due 2050	750		750		2.773%	June 1, December 1
	6,500		6,500
Total unamortized discount	(12)		(12)
Total unamortized debt issuance costs	(31)		(33)



Fair value of interest rate swaps	(4)		—
Total long-term debt	$	6,453	$	6,455

Note 10 Restructuring Charges

Fiscal 2025 Restructuring Plan

In the fourth quarter of fiscal 2025, we approved a workforce reduction plan (Fiscal 2025 Restructuring Plan) to position us for continued growth as a more competitive and productive organization. The majority of the charges related to the Fiscal 2025 Restructuring Plan were recognized in the fourth quarter of fiscal 2025 and consist primarily of severance and other employment termination benefits to be paid in cash, and other non-cash related charges.

Restructuring charges related to the Fiscal 2025 Restructuring Plan were as follows:


	Three Months Ended
	January 25, 2026		January 26, 2025
	(In millions)
Severance and other employee-related charges	$	12	$	—

Total	$	12	$	—

Changes in restructuring reserves related to the Fiscal 2025 Restructuring Plan described above for the three months ended January 25, 2026 were as follows:


	Restructuring Charges Reserves

	(In millions)
Balance as of October 26, 2025	$	165
Restructuring charges	13
Consumption of reserves	(139)
Balance as of January 25, 2026	$	39

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Note 11 Stockholders’ Equity, Comprehensive Income and Share-Based Compensation

Accumulated Other Comprehensive Income (Loss)

Changes in the components of accumulated other comprehensive income (loss) (AOCI), net of tax, were as follows:

	Unrealized Gain (Loss) on Investments, Net		Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges		Defined and Postretirement Benefit Plans		Cumulative Translation Adjustments		Total
	(in millions)
Balance as of October 27, 2024	$	(7)	$	(87)	$	(87)	$	13	$	(168)
Balance as of October 26, 2025	$	11	$	(34)	$	(100)	$	13	$	(110)
Other comprehensive income (loss) before reclassifications	7(4)		5711		—		—		647
Amounts reclassified out of AOCI	—(1)		2(6)		—		—		2(7)
Other comprehensive income (loss), net of tax	7(5)		595		—		—		66—
Balance as of July 27, 2025	$	—	$	(28)	$	(87)	$	13	$	(102)
Balance as of January 25, 2026	$	6	$	(29)	$	(100)	$	13	$	(110)

	Unrealized Gain (Loss) on Investments, Net		Unrealized Gain (Loss) on Derivative Instruments Qualifying as Cash Flow Hedges		Defined and Postretirement Benefit Plans		Cumulative Translation Adjustments		Total
	(in millions)
Balance as of October 29, 2023	$	(50)	$	(118)	$	(62)	$	13	$	(217)
Balance as of October 27, 2024	$	(7)	$	(87)	$	(87)	$	13	$	(168)
Other comprehensive income (loss) before reclassifications	27(2)		4421		—		—		7119
Amounts reclassified out of AOCI	9(1)		—7		~~(9)~~—		—		—6
Other comprehensive income (loss), net of tax	36(3)		4428		~~(9)~~—		—		7125
Balance as of July 28, 2024	$	(14)	$	(74)	$	(71)	$	13	$	(146)
Balance as of January 26, 2025	$	(10)	$	(59)	$	(87)	$	13	$	(143)

The tax effects on net income of amounts reclassified from AOCI for the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025 were not material.

Stock Repurchase Program

In March 2025, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in repurchases, which supplemented the ~~previously~~previous ~~existing~~ $10.0 billion authorization ~~from~~approved in March 2023. As of ~~July~~January 2725, ~~2025~~2026, approximately $1413.86 billion remained available for future stock repurchases under the repurchase program.

1920

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

The following table summarizes our stock repurchases, including and excluding excise tax, for the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025:

	Three Months Ended				~~Nine Months Ended~~
	July 27,2025		July 28,2024		July 27,2025		July 28,2024
	January 25,2026		January 26,2025
	(in millions, except per share amount)
Shares of common stock repurchased	61		48		25		13
Cost of stock repurchased (including excise tax)*	$	~~1,038~~337	$	~~868~~1,314	$	~~4,037~~	$	~~2,398~~
Average price paid per share (including excise tax)*	$	~~164~~259.4717	$	~~222~~176.8232	$	~~160.95~~	$	~~189.90~~
Cost of stock repurchased (excluding excise tax)	$	~~1,028~~337	$	~~861~~1,305	$	~~4,003~~	$	~~2,381~~
Average price paid per share (excluding excise tax)	$	~~162~~259.9717	$	~~221~~174.2799	$	~~159.60~~	$	~~188.60~~

(*) Stock repurchase amounts include the 1% surcharge on stock repurchases under the Inflation Reduction Act’s excise tax. This excise tax is recorded in equity and reduces the amount available under the repurchase program, as applicable.

We record ~~treasury~~common stock ~~purchases~~repurchased and held as treasury stock under the cost method using the first-in, first-out (FIFO) method. Upon reissuance of treasury stock, amounts in excess of the acquisition cost are credited to additional paid in capital. If we reissue treasury stock at an amount below our acquisition cost and additional paid in capital associated with prior treasury stock transactions is insufficient to cover the difference between the acquisition cost and the reissue price, this difference is recorded against retained earnings.

Dividends

In ~~June~~December 2025, ~~March 2025 and December 2024,~~ our Board of Directors declared a quarterly cash ~~dividends~~dividend payable in March 2026 in the amount of $0.46, ~~$0.46 and $0.40~~ per share~~, respectively~~. ~~The dividend declared in June 2025 is payable in September 2025.~~ Dividends paid during the ~~nine~~three months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025 totaled $~~1.0~~365 ~~billion~~million and $~~863~~326 million, respectively. We currently anticipate that cash dividends will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that cash dividends are in the best interests of our stockholders.

Share-Based Compensation

We have a stockholder-approved equity plan, the Employee Stock Incentive Plan (ESIP), which permits grants to employees of share-based awards, including stock options, stock appreciation rights, restricted stock, restricted stock units, performance share units and performance units. In addition, the plan provides for the automatic grant of restricted stock units to non-employee directors and permits the grant of share-based awards to non-employee directors and consultants. Share-based awards made under the plan may be subject to accelerated vesting under certain circumstances, including in the event of a change in control. In addition, we have an Omnibus Employees’ Stock Purchase Plan (ESPP), which enables eligible employees to purchase our common stock.

During the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025, we recognized share-based compensation expense related to ~~equity~~share-based awards and ESPP shares. The effect of share-based compensation on the results of operations was as follows:

	Three Months Ended				~~Nine Months Ended~~
	July 27,2025		July 28,2024		July 27,2025		July 28,2024
	January 25,2026		January 26,2025
	(In millions)
Cost of products sold	$	4043	$	3338	$	~~118~~	$	98
Research, development and engineering	6573		5367		~~196~~		~~163~~
Marketing and selling	21		1720		63		53
General and administrative	3270		2970		~~135~~		~~122~~
Total share-based compensation	$	~~158~~207	$	~~132~~195	$	~~512~~	$	~~436~~

2021

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

The cost associated with share-based awards is typically recognized over the awards’ service period for the entire award on a straight-line basis, adjusting for estimated forfeitures. However, in the case of share-based awards granted to certain members of senior management that allow for partial accelerated vesting in the event of a qualifying retirement based on age and years of service, the compensation expense is recognized once the individual meets the conditions for a qualifying retirement. We calculate the estimated forfeiture rate on an annual basis, based on historical forfeiture activities. The cost associated with ~~performance~~share-based ~~equity~~ awards, ~~which~~that include performance and/or market goals, is recognized for each tranche over the service period. The cost of the portion of ~~performance~~share-based ~~equity~~ awards subject to performance goals is recognized based on an assessment of the likelihood that the applicable performance goals will be achieved, and the cost of the portion of ~~performance~~share-based ~~equity~~ awards subject to market goals is recognized based on the assumption of 100% achievement of the goal.

As of ~~July~~January 2725, ~~2025~~2026, we had $1.14 billion in total unrecognized compensation expense, net of estimated forfeitures, related to grants of share-based awards under the ESIP and shares issued under the ESPP, which will be recognized over a weighted average period of 23.60 years. As of ~~July~~January 2725, ~~2025~~2026, there were 1715 million shares available for grant of share-based awards under the ESIP, and an additional 98 million shares available for issuance under the ESPP.

Restricted Stock Units, Restricted Stock, Performance Share Units and Performance Units

A summary of the changes in restricted stock units, restricted stock, performance share units and performance units outstanding under our equity compensation plans during the ~~nine~~three months ended ~~July~~January 2725, ~~2025~~2026 is presented below:

	Shares	Weighted AverageGrant Date Fair Value
	(In millions, except per share amounts)
Outstanding as of October 27, 2024	10	$	129.31
Outstanding as of October 26, 2025	9	$	148.43
Granted	43	$	~~166~~265.5944
Vested	(42)	$	~~127~~147.0219
Canceled	—(1)	$	~~137~~147.9911
Outstanding as of July 27, 2025	10	$	145.58
Outstanding as of January 25, 2026	9	$	184.80

As of ~~July~~January 2725, ~~2025~~2026, 0.86 million additional performance-based awards could be earned based upon achievement of certain levels of specified performance and/or market goals.

A summary of the weighted-average grant date fair value per share of the granted restricted stock units, restricted stock, performance share units and performance units and total fair value vested awards for indicated periods is presented below:

	Nine Months Ended
	Three Months Ended
	July 27,2025		July 28,2024
	January 25,2026		January 26,2025
	(In millions, except per share amounts)
Weighted average grant date fair value per share of awards granted	$	~~166~~147.5919	$	~~148~~167.0708
Total fair value of vested awards	$	~~522~~346	$	~~468~~366

During the first quarter of fiscal ~~2025~~2026, certain members of senior management were granted both awards subject solely to time-based vesting requirements and awards that are subject to the achievement of certain levels of specific performance and market goals, in addition to time-based vesting requirements (Performance-Based Awards). These Performance-Based Awards are subject to the achievement of targeted levels of non-GAAP economic profit and targeted levels of total shareholder return (TSR) relative to the TSR of the companies in the Standard & Poor’s 500 Index. Each of these two metrics will be weighted 50% and will be measured over a three-year period.

The number of Performance-Based Awards that may vest in full after three years ranges from 0% to 200% of the target amount. The awards become eligible to vest only if the goals are achieved and will vest only if the grantee remains employed by us through each applicable vesting date, subject to a qualifying retirement based on age and years of service. The awards provide for a partial vesting based on actual performance at the conclusion of the three-year performance period in the event of a qualifying retirement.

2122

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Omnibus Employees’ Stock Purchase Plan

Under the ESPP, substantially all employees may purchase our common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of our common stock at the beginning or end of each 6-month purchase period, subject to certain limits. Our purchasing cycles begin in March and September of each fiscal year. There were no purchases under our ESPP during either of the three months ended January 25, 2026 and January 26, 2025. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model.

~~Under~~Note ~~the~~12 Income ESPP, substantially all employees may purchase our common stock through payroll deductions at a price equal to 85 percent of the lower of the fair market value of our common stock at the beginning or end of each 6-month purchase period, subject to certain limits. Our purchasing cycles begin in March and September of each of fiscal year. We issued a total of 1 million shares in each of the nine months ended July 27, 2025 and July 28, 2024. Compensation expense is calculated using the fair value of the employees’ purchase rights under the Black-Scholes model. Underlying assumptions used in the model are outlined in the following table:Taxes

	Nine Months Ended
	July 27,2025	July 28,2024
Dividend yield	1.21%	0.76%
Expected volatility	42.3%	35.6%
Risk-free interest rate	4.27%	5.27%
Expected life (in years)	0.5	0.5
Weighted average estimated fair value	$41.47	$53.98

Note 11 Income Taxes

Our provision for income taxes and effective tax rate are affected by the geographical composition of pre-tax income which includes jurisdictions with differing tax rates, conditional reduced tax rates and other income tax incentives. It is also affected by events that vary from period to period, such as changes in income tax laws and the resolution of prior years’ income tax filings.

Our effective tax rates for the ~~third~~first quarter of fiscal ~~2025~~2026 and ~~2024~~2025 were 3013.60 percent and 1344.01 percent, respectively. The effective tax rate for the ~~third~~first quarter of fiscal ~~2025~~2026 was ~~higher~~lower ~~than~~compared to the same period in the prior fiscal year, primarily due to the ~~recognition~~immediate expensing of ~~a $410 million valuation allowance against deferred tax assets related to corporate alternative minimum tax (CAMT) credits~~U.S. ~~These~~performed ~~credits~~research ~~are~~costs ~~not~~in ~~expected~~fiscal to2026 beand ~~realized as a result of changes in~~ the ~~timing~~remeasurement of ~~future~~deferred tax ~~deductions,~~assets ~~following~~related ~~the~~to ~~enactment~~new ~~of the One Big Beautiful Bill Act during the quarter. No prudent and feasible~~ tax~~-planning~~ ~~strategies~~incentive ~~are~~agreements ~~currently~~in ~~available.~~Singapore ~~The amount of the valuation allowance may be adjusted~~ in ~~future~~fiscal ~~quarters if estimates of future taxable income change~~2025.

~~Our~~Note ~~effective tax rates for the first nine months of fiscal 2025 and 2024 were 27.2 percent and~~ 13~~.0 percent~~ Guarantees, ~~respectively.~~Commitments The effective tax rate for the first nine months of fiscal 2025 was higher than the same period in the prior fiscal year, primarily due to a remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore and ~~due to the recognition of a valuation allowance related to our CAMT credits, as described above.~~Contingencies

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Note 12 Guarantees, Commitments and Contingencies

Guarantees

In the ordinary course of business, we provide standby letters of credit or other guarantee instruments to third parties as required for certain transactions initiated by either us or our subsidiaries. As of ~~July~~January 2725, ~~2025~~2026, the maximum potential amount of future payments that we could be required to make under these guarantee agreements was approximately $~~376~~341 million. We have not recorded any liability in connection with these guarantee agreements beyond that required to appropriately account for the underlying transaction being guaranteed. We do not believe, based on historical experience and information currently available, that it is probable that any amounts will be required to be paid under these guarantee agreements.

We also have agreements with various banks to facilitate subsidiary banking operations worldwide, including overdraft arrangements, issuance of bank guarantees, and letters of credit. As of ~~July~~January 2725, ~~2025~~2026, we have provided parent guarantees to banks for approximately $~~294~~291 million to cover these arrangements.

Legal Matters

From time to time, we receive notification from third parties, including customers and suppliers, seeking indemnification, litigation support, payment of money or other actions by us in connection with claims made against them. In addition, from time to time, we receive notification from third parties claiming that we may be or are infringing or misusing their intellectual property or other rights. We also are subject to various legal proceedings, government investigations or inquiries, and claims, both asserted and unasserted, that arise in the ordinary course of business. These matters are subject to uncertainties, and we cannot predict the outcome of these matters, or governmental inquiries or proceedings that may occur. Although the outcome of the above-described matters, claims and proceedings cannot be predicted with certainty, we do not believe at this time that any of the above-described matters will have a material effect on our consolidated financial condition or results of operations.

~~Since~~As ~~2022,~~ we have ~~received~~previously ~~multiple~~disclosed, ~~subpoenas~~we ~~from~~have ~~government~~been ~~authorities~~cooperating ~~requesting~~with ~~information~~the ~~relating~~U.S. toDepartment ~~certain~~of ~~China~~Justice ~~customer shipments and export controls compliance~~(DOJ), ~~including from~~ the U.S. ~~Department~~Securities ofand ~~Justice~~Exchange Commission (SEC), and the U.S. Commerce Department Bureau of Industry and Security (BIS) after receiving subpoenas from those agencies. During our first quarter of fiscal 2026, the DOJ and the ~~U.S.~~SEC ~~Securities~~informed us that they have closed their respective inquiries, and ~~Exchange~~no ~~Commission~~enforcement action has been taken by either agency. WeOn ~~also~~February ~~have~~11, ~~received~~2026, ~~subpoenas~~subsequent ~~from~~to the ~~U.S.~~end ~~Department~~ of ~~Justice~~our ~~requesting~~fiscal ~~information~~quarter, ~~related~~we entered into a settlement agreement with BIS to resolve its inquiry relating to certain ~~federal~~China ~~award~~customer ~~applications~~shipments and ~~information~~export ~~submitted~~controls tocompliance ~~the~~and ~~federal~~agreed ~~government.~~to Wepay ~~are~~BIS ~~cooperating~~an ~~fully~~amount ~~with~~of ~~the U~~$253 million.S. ~~government~~The insettlement ~~these~~agreement ~~matters.~~with WeBIS ~~have~~requires ~~continued~~us to ~~receive~~conduct ~~related~~internal ~~subpoenas,~~audits asof ~~well~~our asexport ~~requests~~controls ~~for~~compliance ~~information,~~program and ~~may~~maintain inexport ~~the~~compliance ~~future~~training ~~receive~~and ~~additional~~reporting ~~related~~mechanisms. ~~subpoenas~~The settlement agreement also includes a denial order that is suspended and ~~requests~~will ~~for~~be ~~information~~waived ~~from~~three ~~such~~years orafter ~~other~~the ~~government~~date ~~authorities.~~of ~~Any~~the ~~such~~order ~~matters~~issued ~~are~~under ~~subject~~the tosettlement ~~uncertainties~~agreement, ~~and~~provided that we ~~cannot~~have ~~predict~~made full and timely payments under the ~~outcome,~~settlement ~~nor~~agreement ~~reasonably~~and ~~estimate~~timely completed the audit requirements. We recorded a ~~range~~charge in the amount of ~~loss~~$253 million orduring ~~penalties,~~our iffirst ~~any,~~quarter ~~relating~~of tofiscal ~~these~~2026 ~~matters~~within legal settlement on our Consolidated Condensed Statements of Operations and accrued a corresponding liability within accounts payable and accrued expenses on our Consolidated Condensed Balance Sheets.

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

Note 1314 Industry Segment Operations

Our ~~three~~two reportable segments are: Semiconductor Systems, and Applied Global Services (AGS)~~, and Display~~. As defined under the accounting literature, our chief operating decision-maker has been identified as the President and Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire company. Segment information is presented based upon our management organization structure as of ~~July~~January 2725, ~~2025~~2026 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to our reportable segments.

The Semiconductor Systems ~~reportable~~ segment includes semiconductor capital equipment to enable materials engineering steps including etch, rapid thermal processing, deposition, chemical mechanical planarization, metrology and inspection, ~~advanced~~ wafer packaging, and ion implantation.

The AGS segment provides integrated solutions to optimize equipment and fab performance and productivity, including ~~spares, upgrades,~~ services, ~~200mm~~spares and ~~other equipment and~~ factory automation software for semiconductor, ~~display~~ and other products.

~~The~~Effective ~~Display~~the ~~segment~~first ~~includes~~quarter ~~products~~of ~~for~~fiscal ~~manufacturing~~2026, ~~liquid~~we ~~crystal~~have ~~displays~~moved ~~(LCDs),~~our ~~organic~~200 ~~light-emitting~~millimeter ~~diodes~~ (~~OLEDs~~200mm), equipment ~~upgrades~~business from our AGS segment to our Semiconductor Systems segment. We made this change in order to increase our operational efficiency and consolidate the reporting of our 200mm equipment with the reporting of our other ~~display~~capital ~~technologies~~equipment ~~for~~used ~~TVs,~~to ~~monitors,~~fabricate ~~laptops,~~semiconductor ~~personal~~chips ~~computers~~in our Semiconductor Systems segment. In addition, ~~smart~~effective ~~phones~~in the first quarter of fiscal 2026, ~~other~~we ~~consumer~~are fully allocating corporate support costs to our reportable segments. Prior-~~oriented~~period ~~devices~~segment ~~and~~balances ~~solar~~have ~~energy~~been ~~cells~~recast to conform to the current-year presentation.

~~Each~~Our ~~operating~~President ~~segment~~and Chief Executive Officer is ~~separately~~our ~~managed~~chief ~~and~~operating ~~has~~decision-maker ~~separate~~(CODM). ~~financial~~We ~~results~~derive ~~that~~the ~~are~~segment ~~reviewed~~results bydirectly from our ~~chief~~internal ~~operating~~management ~~decision-maker~~reporting system. ~~Each~~The accounting policies we use to derive reportable segment ~~contains~~results ~~closely~~are ~~related~~substantially ~~products~~the ~~that~~same ~~are~~as ~~unique~~those toused for external reporting purposes. Management measures the ~~particular~~performance of each reportable segment. ~~Segment~~based upon several metrics including orders, revenue and operating income. isOur ~~determined~~CODM ~~based~~regularly ~~upon~~reviews ~~internal~~segment operating income to evaluate the performance ~~measures~~of, ~~used~~and byto ~~our~~assign ~~chief~~resources ~~operating~~to, ~~decision-maker~~each of the reportable segments. ~~The~~Actual ~~chief~~results ~~operating~~are ~~decision-maker~~compared to budgeted amounts as part of the CODM’s assessment of each segment’s performance and to make decisions about allocating resources to each segment. Our CODM does not evaluate operating segments using total asset information.

WeThe ~~derive~~Other ~~the~~category ~~segment~~includes ~~results~~revenues, ~~directly~~costs of products and operating expenses from ~~our~~other ~~internal~~operating ~~management~~segments ~~reporting~~that ~~system.~~do ~~The~~not ~~accounting~~meet ~~policies~~the werequirements ~~use~~for a reportable segment. We do not allocate to ~~derive~~our reportable ~~segment~~segments ~~results~~charges ~~are~~associated ~~substantially~~with ~~the~~restructuring ~~same~~actions, such as ~~those~~employee ~~used~~severance ~~for~~costs ~~external~~and ~~reporting~~asset ~~purposes.~~impairment ~~Management~~charges, ~~measures~~unless the ~~performance~~restructuring ofactions ~~each~~pertain to a specific reportable segment. ~~based~~Segment ~~upon~~operating ~~several~~income ~~metrics~~also ~~including~~excludes ~~net~~interest ~~revenue~~income/expense and ~~operating~~other ~~income.~~financial ~~Management~~charges ~~uses~~and ~~these~~income ~~results~~taxes. toOur ~~evaluate~~CODM ~~the~~does ~~performance~~not ~~of,~~consider ~~and~~the tounallocated ~~assign~~costs ~~resources~~in ~~to,~~measuring ~~each~~the performance of the reportable segments.

The Corporate and Other category includes revenues and costs of products not included in our reportable segments, as well as certain operating expenses that are not allocated to our reportable segments and are managed separately at the corporate level. These operating expenses include costs related to certain management, finance, legal, human resources, and research, development and engineering functions provided at the corporate level; and unabsorbed information technology and occupancy. In addition, we do not allocate to our reportable segments severance, asset impairment and any associated charges related to restructuring actions, unless these actions pertain to a specific reportable segment. Segment operating income also excludes interest income/expense and other financial charges and income taxes. Management does not consider the unallocated costs in measuring the performance of the reportable segments.

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

~~Net~~Information ~~revenue~~for each reportable segment for and ~~operating~~as ~~income~~of ~~(loss)~~the ~~for~~end of each ~~reportable~~reporting ~~segment~~period ~~were~~was as follows:

	Three Months Ended						Nine Months Ended
	Semiconductor Systems			Applied Global Services					Other				Total
	Net Revenue			OperatingIncome (Loss)			Net Revenue				OperatingIncome (Loss)
	(In millions, except percentages)
	(In millions)
Three Months Ended January 25, 2026
July 27, 2025:
Revenue	$	5,141		$	1,559				$	312			$	7,012
Semiconductor Systems	$	5,427		$	1,966		$	16,038			$	5,852
Costs of products sold	2,347			1,022					208				3,577
Applied Global Services	1,600			445			4,760				1,338
Gross profit	$	2,794		$	537				$	104			$	3,435
Display	263			62			705				144
Gross margin	54.3		%	34.4		%							49.0		%
Corporate and Other	12			(240)			65				(757)
Operating expenses:
Total	$	7,302		$	2,233		$	21,568			$	6,577
Research, development and engineering	798			18					112				928
July 28, 2024:
Selling, general and administrative	316			81					14				411
Semiconductor Systems	$	4,924		$	1,712		$	14,734			$	5,157
Legal settlement	253			—					—				253
Applied Global Services	1,580			467			4,586				1,320
Restructuring charges	—			—					12				12
Display	251			16			674				46
Operating income (loss)	$	1,427		$	438				$	(34)			$	1,831
Corporate and Other	23			(253)			137				(702)
Operating margin	27.8		%	28.1		%							26.1		%
Total	$	6,778		$	1,942		$	20,131			$	5,821
Depreciation and amortization	$	81		$	14				$	32			$	127
Capital expenditures	$	76		$	10				$	560			$	646
Balance as of January 25, 2026
Accounts receivable	$	3,687		$	1,203				$	87			$	4,977
Inventories	$	4,047		$	1,826				$	124			$	5,997
Goodwill	$	2,544		$	964				$	199			$	3,707

Semiconductor Systems and Display revenues are recognized at a point in time. AGS revenue is recognized at a point in time for tangible goods such as spare parts and equipment, and over time for service agreements. The majority of revenue recognized over time is recognized within 12 months of the contract inception.


	Semiconductor Systems			Applied Global Services			Other		Total
	(In millions, except percentages)
Three Months Ended January 26, 2025
Revenue	$	5,597		$	1,353		$	216	$	7,166
Costs of products sold	2,611			916			143		3,670
Gross profit	$	2,986		$	437		$	73	$	3,496
Gross margin	53.4		%	32.3		%			48.8		%
Operating expenses:
Research, development and engineering	734			14			111		859
Selling, general and administrative	380			87			(5)		462


Operating income (loss)	$	1,872		$	336		$	(33)	$	2,175
Operating margin	33.4		%	24.8		%			30.4		%
Depreciation and amortization	$	69		$	12		$	24	$	105
Capital expenditures	$	107		$	4		$	270	$	381
Balance as of January 26, 2025
Accounts receivable	$	4,779		$	1,105		$	114	$	5,998
Inventories	$	3,543		$	1,810		$	148	$	5,501
Goodwill	$	2,564		$	964		$	240	$	3,768

Two customers accounted for approximately 19% and 15%, respectively, of our net revenue for the nine months ended July 27, 2025. No other customer accounted for greater than 10% of our net revenue for the nine months ended July 27, 2025.

Details of goodwill by reportable segment as of July 27, 2025 and October 27, 2024 were as follows:

	July 27,2025		October 27,2024
	(In millions)
Goodwill by reportable segment
Semiconductor Systems	$	2,476	$	2,460
Applied Global Services	1,032		1,032
Display	199		199
Corporate and Other	41		41
	$	3,748	$	3,732

From time to time, we acquire companies related to our existing or new markets. During the first nine months of fiscal 2025, goodwill increased primarily due to the preliminary purchase accounting for an acquisition, net of adjustments, which was not material to our results of operations or to our balance sheet.

APPLIED MATERIALS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS - (Continued)

~~Net~~Semiconductor Systems revenue byis ~~geographic~~recognized ~~region,~~at ~~determined~~a bypoint ~~the~~in ~~location~~time. ofAGS ~~customers’~~revenue ~~facilities~~is torecognized ~~which~~at ~~products~~a ~~were~~point ~~shipped~~in ~~and~~time ~~services~~for ~~were~~tangible ~~performed,~~goods ~~was~~such as ~~follows:~~spare parts and equipment, and over time for service agreements. The majority of revenue recognized over time is recognized within 12 months of the contract inception.

	Three Months Ended										Nine Months Ended
	July 27,2025				July 28,2024				Change		July 27,2025				July 28,2024				Change
	(In millions, except percentages)
China	$	2,548	35	%	$	2,153	32	%	18	%	$	6,565	30	%	$	7,981	40	%	(18)	%
Korea	1,160		16	%	1,102		16	%	5	%	4,389		20	%	3,321		16	%	32	%
Taiwan	1,843		25	%	1,148		17	%	61	%	5,023		23	%	2,726		14	%	84	%
Japan	713		10	%	555		8	%	28	%	1,825		9	%	1,573		8	%	16	%
Southeast Asia	195		3	%	428		6	%	(54)	%	616		3	%	827		4	%	(26)	%
Asia Pacific	6,459		89	%	5,386		79	%	20	%	18,418		85	%	16,428		82	%	12	%
United States	683		9	%	1,053		16	%	(35)	%	2,408		11	%	2,665		13	%	(10)	%
Europe	160		2	%	339		5	%	(53)	%	742		4	%	1,038		5	%	(29)	%
Total	$	7,302	100	%	$	6,778	100	%	8	%	$	21,568	100	%	$	20,131	100	%	7	%

Two customers accounted for approximately 19% and 16%, respectively, of our revenue for the three months ended January 25, 2026. No other customer accounted for greater than 10% of our revenue for the three months ended January 25, 2026.

~~Net~~Revenue ~~revenue~~ for Semiconductor Systems by market for the periods presented were as follows:

	Three Months Ended				~~Nine Months Ended~~
	July 27,2025		July 28,2024		July 27,2025		July 28,2024
	January 25,2026		January 26,2025
Foundry, logic and other	6962	%	7269	%	67	%	66	%
Dynamic random-access memory (DRAM)	2234	%	2427	%	26	%	30	%
Flash memory (NAND)	94	%	4	%	7	%	4	%
	100	%	100	%	~~100~~	%	~~100~~	%

~~The~~Revenue ~~reconciling~~by ~~items~~geographic ~~included~~region, indetermined ~~Corporate~~by the location of customers’ facilities to which products were shipped and ~~Other~~services were performed, was as follows:

	Three Months Ended					~~Nine Months Ended~~
	July 27,2025		July 28,2024			July 27,2025		July 28,2024
	January 25,2026					January 26,2025					Change
	(In millions)
	(In millions, except percentages)
Unallocated net revenue	$	12	$	23		$	65	$	137
China	$	2,095	30		%	$	2,243	31		%	(7)	%
Unallocated cost of products sold and expenses	(252)		(276)			(822)		(839)
Korea	1,458		21		%	1,667		23		%	(13)	%
Total	$	(240)	$	(253)		$	(757)	$	(702)
Taiwan	1,722		25		%	1,183		17		%	46	%
Japan	525		7		%	540		8		%	(3)	%
Southeast Asia	335		5		%	286		4		%	17	%
Asia Pacific	6,135		88		%	5,919		83		%	4	%
United States	656		9		%	917		13		%	(28)	%
Europe	221		3		%	330		4		%	(33)	%
Total	$	7,012	100		%	$	7,166	100		%	(2)	%

Table of Contents

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management’s discussion and analysis is provided in addition to the accompanying consolidated condensed financial statements and notes, and for a full understanding of our results of operations and financial condition should be read in conjunction with the consolidated condensed financial statements and notes included in this Form 10-Q and the financial statements and notes for the fiscal year ended October 2726, ~~2024~~2025 contained in our Form 10-K filed on December 1312, ~~2024~~2025.

This report contains forward-looking statements that involve a number of risks and uncertainties. Examples of forward-looking statements include those regarding our future financial or operating results, customer demand and spending, end-user demand, ~~our~~trends and ~~market~~outlooks ~~and~~in ~~industry~~our ~~trends~~markets and ~~outlooks~~industries, cash flows and cash deployment strategies, declaration of dividends, share repurchases, business strategies and priorities, costs and cost controls, products, competitive positions, management’s plans and objectives for future operations, research and development, acquisitions, investments and divestitures, growth opportunities, restructuring and severance activities, backlog, working capital, liquidity, investment portfolio and policies, taxes, supply chain, manufacturing, properties, legal matters, claims and proceedings, and other statements that are not historical facts, as well as their underlying assumptions. Forward-looking statements may contain words such as “may,” “will,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “potential” and “continue,” the negative of these terms, or other comparable terminology. All forward-looking statements are subject to risks and uncertainties and other important factors, including those discussed in Part II, Item 1A, “Risk Factors,” below and elsewhere in this report. These and many other factors could affect our future financial condition and operating results and could cause actual results to differ materially from expectations based on forward-looking statements made in this document or elsewhere by us or on our behalf. Forward-looking statements are based on management’s estimates, projections and expectations as of the date hereof, and we undertake no obligation to revise or update any such statements.

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Overview

We provide equipment, services and software to the semiconductor, ~~display,~~ and related industries. Our customers include manufacturers of semiconductor wafers and chips, ~~liquid crystal~~ and ~~organic light-emitting diode (OLED) displays, and~~ other electronic devices. Our customers’ products are used in a wide variety of products such as personal computing devices, mobile phones, artificial intelligence (AI) and data center servers, automobiles, connected devices, industrial applications and consumer electronics. Each of our segments is subject to variable industry conditions, as demand for equipment and services can change depending on supply and demand for chips, ~~display technologies~~ and other electronic devices, as well as other factors, such as global economic, political and market conditions, and the nature and timing of technological advances in fabrication processes.

Our strategic priorities include developing products that help solve customers’ challenges at technology inflections, growing our service business, and expanding our served market opportunities in the semiconductor ~~and display industries~~industry. Our long-term growth strategy requires continued development of new materials engineering capabilities, including products and platforms that enable expansion into new and adjacent markets. Our significant investments in research, development and engineering (RD&E) are intended to enable us to deliver new products and technologies before the emergence of strong demand, allowing customers to incorporate these products into their manufacturing plans during early-stage technology selection. We collaborate closely with our global customers to design systems and processes to meet their technical and production requirements.

Our future operating results depend to a considerable extent on our ability to maintain a competitive advantage in the equipment and service products we provide. Development cycles depend on whether the product is an enhancement of an existing product, which typically has a shorter development cycle, or a new product, which typically has a longer development cycle. Most of our existing products resulted from internal development activities and innovations involving new technologies, materials and processes. In certain instances, we acquire technologies, either in existing or new product areas, to complement our existing technology capabilities and to reduce time to market. Product development and manufacturing activities occur primarily in the United States, Europe, Israel, and Asia. Our portfolio of equipment and service products ~~are~~is highly technical and ~~are~~is sold primarily through a direct sales force.

We believe that it is critical to make substantial investments in RD&E to assure the availability of innovative technology that meets the current and projected requirements of our customers’ most advanced designs. We have and continue to invest in RD&E in order to continue to offer new products and technologies.

We operate in ~~three~~two reportable segments: Semiconductor Systems, and Applied Global Services® (AGS)~~, and Display~~. A summary of financial information for each reportable segment is found in Note 1314 of Notes to Consolidated Condensed Financial Statements. A discussion of factors that could affect our operations is set forth under “Risk Factors” in Part II, Item 1A, which is incorporated herein by reference.

Our results are driven primarily by customer spending on capital equipment and services to support key technology transitions or to increase production volume in response to worldwide demand for semiconductors ~~and displays~~.

The Semiconductor Systems segment is comprised primarily of capital equipment used to fabricate semiconductor chips. Spending by semiconductor customers, which include companies that operate in the foundry, logic, memory, and other semiconductor chip markets, is driven by demand for products such as smartphones, mobile devices, personal computers (PC), servers for artificial intelligence (AI) and data centers, automobiles, clean energy, storage, and other products, and the nature and timing of technological advances in fabrication processes. The growth of data and emerging end-market drivers such as AI, the internet of things, 5Grobotics ~~networks, electric~~ and ~~autonomous~~smart vehicles ~~and augmented and virtual reality~~ are also creating the next wave of growth for the industry. As a result, products within the Semiconductor Systems segment are subject to significant changes in customer requirements, including transitions to smaller dimensions, increasingly complex chip architectures, new materials and an increasing number of applications. Spending can also depend on customer facility readiness and timeline for installation of capital equipment at customer sites. Development efforts are focused on solving customers’ key technical challenges in patterning, transistor, interconnect, process control, and packaging performance.

Table of Contents

The AGS segment provides services, spares and factory automation software to customer fabrication plants globally to help customers optimize performance of our large, global installed base of semiconductor, ~~display~~ and other ~~equipment~~products. ~~The AGS segment also includes 200mm and other equipment, which is shipped to many customers globally that serve the non-leading-edge end markets.~~ Demand for AGS’ service and spares is driven by our large and growing installed base of manufacturing systems, and customers’ needs to shorten ramp times, improve system performance, and optimize factory output and operating costs. Industry conditions that affect AGS’ sales of spares and services are primarily characterized by changes in semiconductor manufacturers’ wafer starts and utilization rates, growth of the installed base of equipment and growing service intensity of newer tools. Our strategy is to continue to shift the AGS’ service and spares business to a subscription agreement model, improving customer factory performance and optimizing operating costs, and providing us a more predictable revenue stream.

~~The~~Effective ~~Display~~the ~~segment~~first ~~encompasses~~quarter ~~products~~of ~~for~~fiscal ~~manufacturing liquid crystal and OLED displays~~2026, ~~and~~we ~~other~~have ~~display~~moved ~~technologies~~our ~~for~~200 ~~TVs,~~millimeter ~~monitors, laptops, personal computers~~ (PC200mm), ~~tablets,~~equipment ~~smart~~business ~~phones,~~from ~~other~~our ~~consumer-oriented~~Applied ~~devices,~~Global ~~equipment~~Services ~~upgrades~~(AGS) ~~and~~segment ~~solar~~to ~~energy~~our ~~cells.~~Semiconductor ~~The~~Systems segment. isWe ~~focused~~made onthis ~~expanding~~change ~~its~~in ~~presence~~order ~~through~~to ~~technologically-differentiated~~increase ~~equipment~~our ~~and~~operational ~~products~~efficiency ~~that provide customers with improved performance~~ and ~~yields.~~consolidate ~~Display~~the ~~segment~~reporting ~~growth~~of ~~depends~~our ~~primarily~~200mm onequipment ~~consumer~~with ~~demand~~the ~~for~~reporting ~~increasingly~~of ~~larger~~our ~~and~~other ~~more~~capital ~~advanced~~equipment ~~TVs~~used ~~and~~to ~~high-resolution~~fabricate ~~displays~~semiconductor ~~for~~chips ~~mobile~~in ~~devices~~our ~~and~~Semiconductor ~~information~~Systems ~~technology~~segment. ~~(IT)~~In ~~products~~addition, ~~including~~effective ~~laptops,~~in ~~monitors~~the ~~and~~first ~~tablets,~~quarter asof ~~well~~fiscal ~~as new form factors~~2026, ~~including~~we ~~thin,~~are ~~light,~~fully ~~curved~~allocating ~~and~~corporate ~~flexible~~support ~~displays,~~costs ~~and~~to ~~new~~our ~~applications~~reportable ~~such as augmented and virtual reality~~segments. ~~The~~Prior-period ~~timing~~segment ofbalances ~~customer~~have ~~investment~~been inrecast ~~manufacturing~~to ~~equipment~~conform isto ~~also affected by~~ the ~~timing of next~~current-~~generation~~year ~~process development and of capacity expansion to meet end-market demand~~presentation.

The ~~Corporate and~~ Other category includes revenues, ~~and~~ costs of ~~product~~products ~~not~~and ~~included~~operating inexpenses ~~our~~from ~~reportable~~other ~~segments, as well as certain~~ operating ~~expenses~~segments that ~~are~~do not ~~allocated~~meet tothe ~~our~~requirements ~~reportable~~for ~~segments~~a ~~and~~reportable ~~are~~segment. ~~managed~~We ~~separately~~do atnot ~~the~~allocate ~~corporate~~to ~~level.~~our ~~These~~reportable ~~operating~~segments ~~expenses~~charges ~~include~~associated ~~costs~~with ~~for~~restructuring ~~certain management~~actions, ~~finance,~~such ~~legal,~~as ~~human~~employee ~~resources,~~severance costs and ~~RD&E~~asset ~~functions~~impairment ~~performed~~charges, atunless the ~~corporate~~restructuring ~~level;~~actions ~~and~~pertain ~~unabsorbed~~to ~~information~~a ~~technology~~specific ~~and~~reportable ~~occupancy~~segment. InSegment ~~addition,~~operating weincome doalso ~~not~~excludes ~~allocate~~interest toincome/expense ~~our reportable segments severance, asset impairment~~ and ~~any~~other ~~associated~~financial charges ~~related~~and toincome ~~restructuring actions, unless these actions pertain to a specific reportable segment~~taxes.

The United States government has implemented export regulations for U.S. semiconductor technology sold or provided to customers in China, which have limited our ability to provide certain products and services to customers in China, over the past several years. The U.S. government continues to issue new export licensing requirements, and additional updates and other requirements that have had the effect of further limiting our ability to provide certain products and services to customers outside the U.S., including in China. Also, the United States has ~~recently~~ announced changes to its trade policy, including increased tariffs on imports. These actions have caused substantial uncertainty and have resulted in retaliatory measures, including new tariffs on U.S. goods imposed by China and other countries. Some of these actions have been followed by announcements of limited exemptions and temporary pauses. For a description of these risks, see the risk factors entitled “Business and Industry Risks - Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, have adversely impacted and could further adversely impact our business and operations, and reduce the competitiveness of our products and services relative to local and global competitors” and “Business and Industry Risks - We are exposed to risks and uncertainty related to ~~recent~~ changes in trade policies, and increased tariffs and trade disputes ” in Part II, Item 1A, “Risk Factors.”

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Results of Operations

Fiscal ~~2025~~2026 and ~~2024~~2025 each contain 52 weeks and the first ~~nine~~three months of fiscal ~~2025~~2026 and ~~2024~~2025 each contained 3913 weeks.

The following table presents certain significant measurements for the periods presented:

	Three Months Ended						~~Nine Months Ended~~
	July 27,2025			July 28,2024				Change		July 27,2025			July 28,2024			Change
	January 25,2026			January 26,2025				Change
	(In millions, except per share amounts and percentages)
Net revenue	$	7,302		$	6,778			$	524	$	21,568		$	20,131		$	1,437
Revenue	$	7,012		$	7,166			$	(154)
Gross margin	4849.80		%	4748.38		%		10.52 points		~~48.9~~		%	~~47.5~~		%	~~1.4 points~~
Operating income	$	21,~~233~~831		$	12,~~942~~175			$	~~291~~(344)	$	~~6,577~~		$	~~5,821~~		$	~~756~~
Operating margin	3026.61		%	2830.74		%		1(4.93) points		~~30.5~~		%	~~28.9~~		%	~~1.6 points~~
Net income	$	12,~~779~~026		$	1,~~705~~185			$	74841	$	~~5,101~~		$	~~5,446~~		$	~~(345)~~
Earnings per diluted share	$	2.2254		$	21.0545			$	01.1709	$	~~6.29~~		$	~~6.52~~		$	~~(0.23)~~

~~Net revenue by segment for the periods presented were as follows:~~Revenue

	Three Months Ended							Nine Months Ended
	July 27,2025				July 28,2024					Change	July 27,2025				July 28,2024				Change
	(In millions, except percentages)
Semiconductor Systems	$	5,427	74	%		$	4,924	73	%		10	%	$	16,038	75	%	$	14,734	73	%	9	%
Applied Global Services	1,600		22	%		1,580		23	%		1	%	4,760		22	%	4,586		23	%	4	%
Display	263		4	%		251		4	%		5	%	705		3	%	674		3	%	5	%
Corporate and Other	12		—	%		23		—	%		(48)	%	65		—	%	137		1	%	(53)	%
Total	$	7,302	100	%		$	6,778	100	%		8	%	$	21,568	100	%	$	20,131	100	%	7	%

Revenue by segment for the periods presented were as follows:

Net revenue for Semiconductor Systems by market for the periods presented were as follows:


	Three Months Ended
	January 25, 2026				January 26, 2025					Change

	(In millions, except percentages)
Semiconductor Systems	$	5,141	73	%		$	5,597	78	%		(8)	%
Applied Global Services	1,559		22	%		1,353		19	%		15	%

Other	312		5	%		216		3	%		44	%
Total	$	7,012	100	%		$	7,166	100	%		(2)	%

	Three Months Ended		Nine Months Ended
	July 27,2025		July 28,2024		July 27,2025		July 28,2024
Foundry, logic and other	69	%	72	%	67	%	66	%
Dynamic random-access memory (DRAM)	22	%	24	%	26	%	30	%
Flash memory (NAND)	9	%	4	%	7	%	4	%
	100	%	100	%	100	%	100	%

Revenue for Semiconductor Systems by market for the periods presented were as follows:

Net revenue in the three and nine months ended July 27, 2025 increased as compared to the same periods in the prior year. Gross margin in the three months ended July 27, 2025 increased compared to the same period in the prior year, primarily driven by higher net revenue, favorable changes in customer and product mix, and an increase in average selling prices. Gross margin in the nine months ended July 27, 2025 increased compared to the same period in the prior year, primarily driven by higher net revenue, favorable changes in customer and product mix, an increase in average selling prices, and lower material and manufacturing costs.


	Three Months Ended
	January 25, 2026		January 26, 2025
Foundry, logic and other	62	%	69	%
Dynamic random-access memory (DRAM)	34	%	27	%
Flash memory (NAND)	4	%	4	%

	100	%	100	%

Revenue in the three months ended January 25, 2026 decreased as compared to the same period in the prior year. Gross margin in the three months ended January 25, 2026 increased compared to the same period in the prior year, primarily driven by an increase in average selling prices and lower material and manufacturing costs, partially offset by lower revenue and unfavorable changes in customer and product mix.

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The Semiconductor Systems segment continued to represent the largest contributor of ~~net~~ revenue. Semiconductor Systems ~~net~~ revenue ~~increased~~decreased for the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 compared to the same ~~periods~~period in the prior year ~~as customers continued to make strategic investments in new capacity and new technology transitions~~. Foundry and logic customers’ spending ~~increased~~decreased for the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026, compared to the same ~~periods~~period in the prior year ~~driven~~ primarily driven by ~~higher~~reduced ~~customer~~demand ~~investments~~for intrailing ~~leading-~~edge ~~manufacturing~~logic ~~technologies~~systems. Memory customers’ spending in the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 was higher compared to the same ~~periods~~period in the prior year primarily due to increased customer investments in NAND fabrication equipment upgrades. The increase in memory customers’ investments in NAND in the first nine months of fiscal 2025 compared to the same period in the prior year was partially offset by decreased investments in DRAM technology transitions.

Our AGS ~~net~~ revenue increased in the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 ~~increased~~ compared to the same ~~periods~~period in the prior year primarily due to anhigher ~~increase in net revenue associated with~~ long-term service ~~agreements~~agreement revenue and customer spending on spares~~, partially offset by lower customer spending on 200mm equipment~~.

~~Our~~Revenue ~~Display~~by ~~net~~geographic ~~revenue increased in the three and nine months ended July 27~~region, ~~2025~~determined ~~compared~~by to the ~~same~~location ~~periods~~of incustomers’ ~~the~~facilities ~~prior year primarily due~~ to ~~higher~~which ~~customer~~products ~~investments~~were inshipped ~~display fabrication equipment for TVs~~ and ITservices ~~products~~were ~~including laptops~~performed, ~~monitors~~was ~~and~~as ~~tablets, partially offset by lower customer investments in display fabrication equipment for mobile devices.~~ follows:

Net revenue by geographic region, determined by the location of customers’ facilities to which products were shipped and services were performed, was as follows:


	Three Months Ended
	January 25, 2026				January 26, 2025					Change

	(In millions, except percentages)
China	$	2,095	30	%		$	2,243	31	%		(7)	%
Korea	1,458		21	%		1,667		23	%		(13)	%
Taiwan	1,722		25	%		1,183		17	%		46	%
Japan	525		7	%		540		8	%		(3)	%
Southeast Asia	335		5	%		286		4	%		17	%
Asia Pacific	6,135		88	%		5,919		83	%		4	%
United States	656		9	%		917		13	%		(28)	%
Europe	221		3	%		330		4	%		(33)	%
Total	$	7,012	100	%		$	7,166	100	%		(2)	%

	Three Months Ended							Nine Months Ended
	July 27,2025				July 28,2024					Change	July 27,2025				July 28,2024				Change
	(In millions, except percentages)
China	$	2,548	35	%		$	2,153	32	%		18	%	$	6,565	30	%	$	7,981	40	%	(18)	%
Korea	1,160		16	%		1,102		16	%		5	%	4,389		20	%	3,321		16	%	32	%
Taiwan	1,843		25	%		1,148		17	%		61	%	5,023		23	%	2,726		14	%	84	%
Japan	713		10	%		555		8	%		28	%	1,825		9	%	1,573		8	%	16	%
Southeast Asia	195		3	%		428		6	%		(54)	%	616		3	%	827		4	%	(26)	%
Asia Pacific	6,459		89	%		5,386		79	%		20	%	18,418		85	%	16,428		82	%	12	%
United States	683		9	%		1,053		16	%		(35)	%	2,408		11	%	2,665		13	%	(10)	%
Europe	160		2	%		339		5	%		(53)	%	742		4	%	1,038		5	%	(29)	%
Total	$	7,302	100	%		$	6,778	100	%		8	%	$	21,568	100	%	$	20,131	100	%	7	%

Revenue increased from customers in Taiwan and Southeast Asia in the three months ended January 25, 2026 compared to the same period in the prior year primarily due to increased investments in semiconductor equipment.

~~Net~~The ~~revenue~~decreases ~~increased~~in revenue from customers in ~~Korea~~all other regions in the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 compared to the same ~~periods~~period in the prior year was primarily due to decreased investments in semiconductor equipment ~~partially offset by lower customer spending in display fabrication equipment~~.

Net revenue increased from customers in China in the three months ended July 27, 2025 compared to the same period in the prior year primarily due to higher investments in semiconductor equipment and display fabrication equipment.

Net revenue decreased from customers in China in the nine months ended July 27, 2025 compared to the same period in the prior year primarily due to lower investments in semiconductor equipment, partially offset by higher customer spending on spares and services and display fabrication equipment.

Net revenue decreased from customers in the United States and Southeast Asia in the three and nine months ended July 27, 2025 compared to the same periods in the prior year primarily due to decreased investments in semiconductor equipment and decreases in investments in 200mm equipment.

The changes in net revenue from customers in all other regions in the three and nine months ended July 27, 2025 compared to the same periods in the prior year primarily reflected changes in investment in semiconductor equipment and spending on services.

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Operating Expenses

Operating expenses for the periods presented were as follows:

	Three Months Ended				~~Nine Months Ended~~
	July 27,2025		July 28,2024			Change		July 27,2025		July 28,2024		Change
	January 25,2026		January 26,2025			Change
	(In millions)
Research, development and engineering (RD&E)	$	~~901~~928	$	~~836~~859		$	6569	$	~~2,653~~	$	~~2,375~~	$	~~278~~
Marketing and selling	$	~~224~~222	$	~~205~~206		$	1916	$	~~646~~	$	~~621~~	$	25
General and administrative (G&A)	$	~~204~~189	$	~~222~~256		$	(1867)	$	~~667~~	$	~~745~~	$	~~(78)~~
Legal settlement	$	253	$	—		$	253
Restructuring charges	$	12	$	—		$	12

RD&E expenses for the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 increased compared to the same ~~periods~~period in the prior year, primarily due to additional headcount to support our ongoing investments in product development initiatives and higher depreciation expenses, consistent with our growth strategy. We continued to prioritize RD&E investments in technical capabilities and critical RD&E programs in current and new markets.

Marketing and selling expenses for the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 increased compared to the same ~~periods~~period in the prior year primarily due to higher employee related expenses and higher corporate support cost allocations.

~~G&A expenses in the three and nine months ended July 27, 2025 decreased compared to the same periods in the prior year primarily due to lower spending on professional services.~~31

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G&A expenses for the three months ended January 25, 2026 decreased compared to the same period in the prior year primarily due to lower corporate support cost allocations and lower spending on professional services.

In the first quarter of fiscal 2026, we recorded a charge of $253 million related to a previously disclosed export controls compliance matter, and subsequently entered into a settlement agreement to resolve the matter. See the information under the heading “Legal Matters” in Note 13 of the Notes to Consolidated Condensed Financial Statements for information regarding this matter and the settlement agreement.

In the first quarter of fiscal 2026, we recognized $12 million in restructuring charges, consisting primarily of severance and other employment termination benefits incurred in connection with the approved Fiscal 2025 Restructuring Plan.

Interest Expense and Interest and Other Income (expense), net

Interest expense and interest and other income (expense), net for the periods presented were as follows:

	Three Months Ended				~~Nine Months Ended~~
	July 27,2025		July 28,2024			Change		July 27,2025		July 28,2024		Change
	January 25,2026		January 26,2025			Change
	(In millions)
Interest expense	$	6669	$	6364		$	35	$	~~198~~	$	~~181~~	$	17
Interest and other income (expense), net	$	~~396~~566	$	818		$	~~315~~558	$	~~625~~	$	~~617~~	$	8

Interest expense incurred was primarily associated with ~~issued~~our senior unsecured notes. Interest expense in the three months ended ~~July~~January 2725, ~~2025~~2026 ~~remained~~increased ~~relatively flat~~ compared to the same period in the prior year~~. Interest expense in the nine months ended July 27~~, ~~2025~~primarily ~~increased~~due asto aour ~~result of the~~ issuance of senior unsecured notes in ~~June~~September ~~2024, compared to the same period in the prior year~~2025.

Interest and other income (expense), net in the three months ended ~~July~~January 2725, ~~2025~~2026 increased compared to the same period in the prior year, primarily driven by higher net gain on equity investments, partially offset by lower interest income driven by ~~lower cash balances and~~ a decrease in market rates. Interest and other income (expense), net in the nine months ended July 27, 2025 increased slightly compared to the same period in the prior year, primarily driven by a gain on asset sale during the second quarter of fiscal 2025, partially offset by lower interest income driven by lower cash balances and a decrease in market rates.

Income Taxes

Provision for income taxes and effective tax rates for the periods presented were as follows:

Three Months Ended

~~Nine Months Ended~~

July 27,2025

July 28,2024

Change

July 27,2025

July 28,2024

Change

January 25,2026

January 26,2025

Change

(In millions, except percentages)

Provision for income taxes

~~784~~302

~~255~~934

~~529~~(632)

~~1,903~~

~~811~~

~~1,092~~

Effective income tax rate

3013.60

1344.01

17(31.61) points

~~27.2~~

~~13.0~~

~~14.2 points~~

Our provision for income taxes and effective tax rate are affected by the geographical composition of pre-tax income, which includes jurisdictions with differing tax rates, conditional reduced tax rates and other income tax incentives. It is also affected by events that vary from period to period, such as changes in income tax laws and the resolution of prior years’ income tax filings.

Our effective tax rates for the first quarter of fiscal 2026 and 2025 were 13.0 percent and 44.1 percent, respectively. The effective tax rate for the first quarter of fiscal 2026 was lower compared to the same period in the prior fiscal year, primarily due to the immediate expensing of U.S. performed research costs in fiscal 2026 and the remeasurement of deferred tax assets related to new tax incentive agreements in Singapore in fiscal 2025.

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Our effective tax rates for the third quarter of fiscal 2025 and 2024 were 30.6 percent and 13.0 percent, respectively. The effective tax rate for the third quarter of fiscal 2025 was higher than the same period in the prior fiscal year, primarily due to the recognition of a $410 million valuation allowance against deferred tax assets related to corporate alternative minimum tax (CAMT) credits. These credits are not expected to be realized as a result of changes in the timing of future tax deductions, following the enactment of the One Big Beautiful Bill Act during the quarter. No prudent and feasible tax-planning strategies are currently available. The amount of the valuation allowance may be adjusted in future quarters if estimates of future taxable income change.

Our effective tax rates for the first nine months of fiscal 2025 and 2024 were 27.2 percent and 13.0 percent, respectively. The effective tax rate for the first nine months of fiscal 2025 was higher than the same period in the prior fiscal year, primarily due to a remeasurement of deferred tax assets resulting from new tax incentive agreements in Singapore and due to the recognition of a valuation allowance related to our CAMT credits, as described above.

Segment Operating Income (Loss)

Operating income (loss) by segment for the periods presented were as follows:

	Three Months Ended						~~Nine Months Ended~~
	July 27,2025			July 28,2024			Change			July 27,2025		July 28,2024			Change
	January 25,2026			January 26,2025			Change
	(In millions, except percentages and ratios)
Operating income (loss)
Semiconductor Systems	$	1,~~966~~427		$	1,~~712~~872			$	~~254~~(445)	15(24)	%	$	~~5,852~~		$	~~5,157~~		$	~~695~~	13	%
Applied Global Services	~~445~~438			~~467~~336				~~(22)~~102		~~(5)~~30	%	~~1,338~~			~~1,320~~			18		1	%
Display	62			16				46		288	%	144			46			98		213	%
Other	(34)			(33)				(1)		3	%
Corporate and Other	(240)			(253)				13		(5)	%	(757)			(702)			(55)		8	%
Total	$	1,831		$	2,175			$	(344)
Total	$	2,233		$	1,942			$	291			$	6,577		$	5,821		$	756
Operating margin
Semiconductor Systems	3627.28		%	3433.84		%		1(5.46) points				~~36.5~~		%	~~35.0~~		%	~~1.5 points~~
Applied Global Services	2728.81		%	2924.68		%		(13.8)3 points				~~28.1~~		%	~~28.8~~		%	~~(0.7) points~~
Display	23.6		%	6.4		%		17.2 points				20.4		%	6.8		%	13.6 points

Semiconductor ~~System~~Systems’s operating margin for the three months ended ~~July~~January 2725, ~~2025~~2026 ~~increased~~decreased compared to the same period in the prior year primarily driven by ~~higher~~a ~~net~~legal ~~revenue,~~settlement ~~favorable~~charge ~~changes~~related into ~~customer~~a ~~and~~previously ~~product~~disclosed ~~mix,~~export ~~and~~controls ancompliance ~~increase in average selling prices~~matter, ~~partially~~lower ~~offset~~revenue byand increased RD&E expenses~~. Semiconductor System’s operating margin for the nine months ended July 27~~, ~~2025~~partially ~~increased~~offset ~~compared to the same period in the prior year primarily driven~~ by ~~higher net revenue, favorable changes in customer and product mix, lower material and manufacturing costs, and~~ an increase in average selling prices, ~~partially~~and ~~offset~~lower bymaterial ~~increased~~and ~~RD&E~~manufacturing ~~expenses~~costs.

AGS’ operating margin for the three ~~and nine~~ months ended ~~July~~January 2725, ~~2025~~2026 ~~decreased~~increased compared to the same ~~periods~~period in the prior year primarily due to ~~a decrease in 200mm equipment net revenue, and~~ higher ~~excess and obsolete inventory charges, partially offset by higher net~~ revenue from services and spares.

Display’s operating margin for the three and nine months ended July 27, 2025 increased compared to the same periods in the prior year primarily due to the increase in Display net revenue and favorable product mix.

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Recent Accounting Pronouncements

Accounting Standards Not Yet Adopted

~~Measurement~~Accounting ~~of Credit Losses~~ for ~~Accounts~~Government ~~Receivable~~Grants ~~and~~Received ~~Contract~~by ~~Assets~~Business Entities. In ~~July~~December 2025, the Financial Accounting Standards Board (FASB) issued an accounting standard update toestablishing ~~provide~~authoritative aguidance ~~practical~~on ~~expedient that simplifies~~ the ~~calculation~~accounting ~~of expected credit losses (Topic 326). The practical expedient allows an entity to assume that current conditions as of the balance sheet date do not change~~ for ~~the~~government ~~remaining~~grants ~~life~~received ofby ~~the~~business ~~asset~~entities, ~~therefore,~~including angrants ~~entity~~related ~~will no longer need~~ to ~~develop~~an ~~reasonable~~asset and ~~supportable~~grants ~~forecasts~~related ofto ~~future economic conditions~~income. This authoritative guidance will be effective for us beginning with our interim and annual reporting for fiscal year ~~2027~~2030, with early adoption permitted. The standard allows for adoption on a modified prospective, modified retrospective, or full retrospective basis. We are evaluating the effect of this guidance on our consolidated financial statements and related disclosures.

~~Disaggregation~~Targeted ofImprovements ~~Income~~to ~~Statements~~the ~~Expenses~~Accounting for Internal-Use Software. In ~~November~~September ~~2024~~2025, the FASB issued an accounting standard update to ~~improve~~increase ~~income~~the ~~statement~~operability ~~expenses~~of ~~disclosures~~the ~~(Subtopic~~recognition ~~220-40).~~guidance ~~The~~considering ~~standard~~different ~~requires~~methods ~~more~~of ~~detailed~~software ~~information~~development ~~related~~by toreplacing the ~~types~~current ofstage-based ~~expenses,~~capitalization ~~including~~model ~~(among~~with ~~other~~a ~~items)~~principles-based approach. Under the ~~amounts~~new ofguidance, ~~purchases~~costs ofare ~~inventory,~~capitalized ~~employee~~once ~~compensation,~~management ~~depreciation~~authorizes and ~~intangible~~commits ~~asset~~to ~~amortization~~funding ~~included~~the ~~within~~software ~~each~~project, ~~interim~~ and ~~annual~~it ~~income~~is ~~statement’s~~probable ~~expense~~that ~~caption,~~both asthe ~~applicable.~~project ~~This~~will ~~authoritative~~be ~~guidance~~completed ~~can~~and the software will be ~~applied~~used ~~prospectively~~to orperform ~~retrospectively~~the ~~and~~function intended. This authoritative guidance will be effective for us inbeginning ~~fiscal~~with ~~2028~~our ~~for~~interim ~~annual periods~~ and inannual ~~the~~reporting ~~first~~for ~~quarter of~~ fiscal ~~2029~~year ~~for interim periods~~2029, with early adoption permitted. We are evaluating the effect of this guidance on our consolidated financial statements and related disclosures.

~~Improvements~~Measurement toof ~~Income~~Credit ~~Tax~~Losses ~~Disclosures~~for Accounts Receivable and Contract Assets. In ~~December~~July ~~2023~~2025, the FASB issued an accounting standard update to ~~improve~~provide ~~income~~a ~~tax~~practical ~~disclosures~~expedient that simplifies the calculation of expected credit losses (Topic ~~740~~326). The ~~standard~~practical ~~prescribes~~expedient ~~specific~~allows ~~categories~~an ~~for~~entity ~~the~~to ~~components~~assume that current conditions as of the ~~effective~~balance ~~tax~~sheet ~~rate~~date ~~reconciliation,~~do ~~requires~~not ~~disclosure~~change offor ~~income~~the ~~taxes~~remaining ~~paid~~life byof ~~jurisdiction~~the asset, therefore, an entity will no longer need to develop reasonable and ~~modifies~~supportable ~~other~~forecasts ~~income~~of ~~tax-related~~future ~~disclosures~~economic conditions. This authoritative guidance will be effective for us beginning with our interim and annual reporting for fiscal year ~~2026~~2027, with early adoption permitted. WeAlthough ~~are~~this ~~evaluating~~guidance ~~the~~will ~~effect~~simplify our process of calculating expected credit losses on accounts receivable and contract assets, we do not expect this guidance onto materially impact our consolidated financial statements ~~and~~or related disclosures.

~~Improvements~~Disaggregation toof ~~Reportable~~Income ~~Segment~~Statement ~~Disclosures~~Expenses. In November ~~2023~~2024, the FASB issued an accounting standard update to improve ~~reportable~~income ~~segment~~statement ~~disclosure~~expenses ~~requirements, primarily through enhanced~~ disclosures ~~about significant segment expenses~~ (~~Topic~~Subtopic ~~280~~220-40). The standard requires ~~interim~~more ~~and~~detailed ~~annual~~information ~~disclosure~~related ~~of significant segment expenses that are regularly provided~~ to the ~~chief~~types ~~operating~~of ~~decision-maker~~expenses, including (~~CODM)~~among ~~and~~other ~~included~~items) ~~within~~ the ~~reported~~amounts ~~measure~~ of apurchases ~~segment’s~~of ~~profit~~inventory, oremployee ~~loss~~compensation, ~~requires~~depreciation ~~interim~~and ~~disclosures~~intangible ~~about~~asset aamortization ~~reportable~~included ~~segment’s~~within ~~profit~~each orinterim ~~loss~~ and ~~assets~~annual ~~that~~income ~~are~~statement’s ~~currently~~expense ~~required annually~~caption, ~~requires~~as ~~disclosure~~applicable. ofThis ~~the~~authoritative ~~position~~guidance ~~and title of the CODM, clarifies circumstances in which an entity~~ can ~~disclose~~be ~~multiple~~applied ~~segment~~prospectively ~~measures of profit~~ or ~~loss~~retrospectively and ~~contains other disclosure requirements. This authoritative guidance~~ will be effective for us in fiscal ~~2025~~2028 for annual periods and in the first quarter of fiscal ~~2026~~2029 for interim periods, ~~and~~with ~~the~~early adoption ispermitted. ~~expected~~We toare ~~expand~~evaluating the ~~disclosures~~effect inof ~~our~~this ~~notes~~guidance toon ~~the~~our consolidated financial statements and related disclosures.

Improvements to Income Tax Disclosures. In December 2023, the FASB issued an accounting standard update to improve income tax disclosures (Topic 740). The standard prescribes specific categories for the components of the effective tax rate reconciliation, requires disclosure of income taxes paid by jurisdiction, and modifies other income tax-related disclosures. This authoritative guidance will be effective for us beginning with our annual reporting for fiscal year 2026. We are evaluating the effect of this guidance on our consolidated financial statements and related disclosures.

Accounting Standards Adopted

For a description of recently adopted accounting standards, including the date of adoption and the effect, if any, on our consolidated financial statements, see Note 1 “Basis of Presentation and Recently Adopted Accounting Standards,” of the Notes to Consolidated Condensed Financial Statements.

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Financial Condition, Liquidity and Capital Resources

Our cash, cash equivalents and investments consisted of the following:

	July 27,2025		October 27,2024
	January 25,2026		October 26,2025
	(In millions)
Cash and cash equivalents	$	57,~~384~~218	$	87,~~022~~241
Short-term investments	1,~~630~~293		1,~~449~~332
Long-term investments	4,~~133~~968		24,~~787~~327
Total cash, cash-equivalents and investments	$	11,147	$	12,258
Total cash, cash equivalents and investments	$	13,479	$	12,900

Sources and Uses of Cash

A summary of cash provided by (used in) operating, investing, and financing activities was as follows:

	Nine Months Ended
	Three Months Ended
	July 27, 2025		July 28, 2024
	January 25, 2026		January 26, 2025
	(In millions)
Cash provided by operating activities	$	51,~~130~~686	$	~~6,102~~925
Cash used in investing activities	$	(~~2,643~~780)	$	(~~1,256~~897)
Cash used in financing activities	$	(~~5,146~~931)	$	(21,~~701~~786)

Operating Activities

Cash from operating activities for the ~~nine~~three months ended ~~July~~January 2725, ~~2025~~2026 was $5.1.7 billion, which reflects net income adjusted for the effect of non-cash charges and changes in working capital components. Significant non-cash charges included depreciation, amortization, gain or loss on investments or asset sale, share-based compensation, ~~and~~ deferred income taxes, legal settlement and restructuring charges. Cash provided by operating activities ~~decreased~~increased in the first ~~nine~~three months of fiscal ~~2025~~2026 compared to the same period in the prior year primarily due to ~~lower~~higher collections of customer receivable balances, partially offset by higher payments for income taxes and higher vendor payments.

We have ~~agreements~~an agreement with ~~various~~a financial ~~institutions~~institution to sell accounts receivable ~~and discount promissory notes~~ from selected customers. We sell our accounts receivable generally without recourse. From time to time, we also discount letters of credit issued by customers through various financial institutions. The discounting of letters of credit depends on many factors, including the willingness of financial institutions to discount the letters of credit and the cost of such arrangements. WeAccounts receivable sold ~~$324 million and $395 million of account receivables~~ during the ~~nine~~three months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025, ~~respectively~~were not material. We did not discount letters of credit issued by customers ~~or discount promissory notes~~ during the ~~nine~~three months ended ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025, respectively.

Our working capital was $1113.83 billion as of ~~July~~January 2725, ~~2025~~2026 and $12.89 billion as of October 2726, ~~2024~~2025.

Days sales outstanding of our accounts receivable at ~~July~~January 2725, ~~2025~~2026 and ~~July~~January 2826, ~~2024~~2025 were 7265 days and 6776 days, respectively. Days sales outstanding varies due to the timing of shipments and payment terms. The ~~increase~~decrease in days sales outstanding was primarily ~~due~~driven toby ~~higher~~favorable ~~accounts~~collection ~~receivable balance as a result of the timing of customer payments, and unfavorable revenue linearity~~performance.

Investing Activities

We used $~~2.6~~780 ~~billion~~million of cash in investing activities during the ~~nine~~three months ended ~~July~~January 2725, ~~2025~~2026. Capital expenditures totaled $~~1.5~~646 ~~billion,~~million and purchases of investments, net of proceeds from sales and maturities of investments, were $~~1.2~~134 ~~billion, net proceeds from asset sale were $33~~ million, ~~and net cash paid for acquisition was $29 million,~~ during the ~~nine~~three months ended ~~July~~January 2725, ~~2025~~2026.

Our investment portfolio consists principally of investment grade money market mutual funds, U.S. Treasury and agency securities, municipal bonds, corporate bonds and mortgage-backed and asset-backed securities, as well as equity securities. We regularly monitor the credit risk in our investment portfolio and take appropriate measures, which may include the sale of certain securities, to manage such risks prudently in accordance with our investment policies.

Financing Activities

We used $931 million of cash in financing activities during the three months ended January 25, 2026, consisting primarily of cash used for repurchases of common stock of $337 million, cash dividends paid to stockholders totaling $365 million, and tax withholding payments for vested equity awards of $229 million.

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Financing Activities

We used $5.1 billion of cash in financing activities during the nine months ended July 27, 2025, consisting primarily of cash used for repurchases of common stock of $4.0 billion, cash dividends paid to stockholders totaling $1.0 billion, and tax withholding payments for vested equity awards of $210 million, partially offset by proceeds received from common stock issuances of $129 million under our employee’ stock purchase plan.

We currently anticipate that cash dividends will continue to be paid on a quarterly basis, although the declaration of any future cash dividend is at the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that cash dividends are in the best interests of our stockholders.

We have credit facilities for unsecured borrowings in various currencies of up to an aggregate amount of $24.1 billion,. These credit facilities consist of ~~which~~a $2.0 billion isfive-year ~~comprised~~committed revolving credit agreement with a group of banks (Five-Year Credit Agreement), a $2.0 billion 364-day committed revolving credit agreement with a group of banks (~~Revolving~~364-Day Credit Agreement), ~~with~~and arevolving ~~group~~credit offacilities with Japanese banks pursuant to which we may borrow up to approximately $51 million in aggregate at any time. The ~~Revolving~~Five-Year Credit Agreement is scheduled to expire in February 2030, unless extended as permitted under the ~~Revolving~~terms of the agreement. The 364-Day Credit Agreement is scheduled to expire in September 2026, provided, however, if any loans are outstanding on the maturity date, we may convert all or part of such loans to term loans that will mature in September 2027, subject to payment of a fee by us and other customary conditions. The ~~Revolving~~Five-Year Credit Agreement and the 364-Day Credit Agreement each includes financial and other covenants with which we were in compliance as of ~~July~~January 2725, ~~2025~~2026. No amounts were outstanding under ~~the~~any ~~Revolving Credit Agreement as~~ of ~~July 27,~~these ~~2025 or under the prior revolving~~ credit ~~agreement~~facilities as of ~~October~~January 2725, ~~2024~~2026. See Note 9, Borrowing Facilities and Debt, of the Notes to the Consolidated Condensed Financial Statements for further discussion related to our Revolving Credit Agreement and other credit facilities.

We have a short-term commercial paper program under which we may ~~from time to time~~ issue unsecured commercial paper notes. Inup ~~June~~to ~~2025,~~a ~~we increased the~~ total ~~amount~~ of ~~commercial paper notes we may issue under the program from~~ $14.~~5 billion to $2.~~0 billion. The proceeds from the issuances of commercial paper are used for general corporate purposes. As of ~~July~~January 2725, ~~2025~~2026, we had commercial paper notes outstanding with an aggregate principal amount of $100 million.

We had senior unsecured notes in the aggregate principal amount of $6.25 billion outstanding as of ~~July~~January 2725, ~~2025~~2026. See Note 9 of the Notes to the Consolidated Condensed Financial Statements for additional discussion of existing debt.

We may seek to refinance our existing debt and may incur additional indebtedness depending on our capital requirements, general corporate purposes and the availability of financing.

In the ordinary course of business, we provide standby letters of credit or other guarantee instruments to third parties as required for certain transactions initiated by either us or our subsidiaries. We also have agreements with various banks to facilitate subsidiary banking operations worldwide, including overdraft arrangements, issuance of bank guarantees, and letters of credit. See Note 1213 of the Notes to the Consolidated Condensed Financial Statements for additional discussion related to our guarantee agreements and arrangements.

~~Others~~Other

On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (Tax Act). The Tax Act requires a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries. The transition tax expense ishas ~~payable~~been paid in installments ~~over eight years, with eight percent due in each of the first five years~~ starting with fiscal 2018., Asand as of ~~July~~January 2725, ~~2025~~2026, we ~~have~~had one remaining payment of $255 million, payable in February of 2026.

On August 9, 2022, the U.S. government enacted the U.S. CHIPS and Science Act (CHIPS Act). The CHIPS Act creates a 25% investment tax credit for certain investments in domestic semiconductor manufacturing. The credit is provided for qualifying property, which is placed in service after December 31, 2022, for which construction begins before January 1, 2027, and is treated as a government grant recognized against property, plant and equipment and a reduction of income taxes payable or an increase to taxes receivable for any credit expected to be refunded. We recognize this investment tax credit when there is reasonable assurance that we will qualify for the credit and the benefit will be received. As of ~~July~~January 2725, ~~2025~~2026, ~~our~~we ~~current~~have ~~income~~recorded ~~taxes~~$975 ~~payable~~million ~~was~~of ~~reduced~~investment bytax credits, of which $~~309~~302 million ~~and~~was ~~future~~recorded ~~income~~in ~~taxes~~other ~~payable~~current assets and will beoffset ~~reduced~~fiscal by2026 income tax liabilities, and $~~154~~673 million, ~~both~~was ofrecorded ~~which~~in ~~are~~deferred ~~due~~income totaxes ~~the~~and ~~investment~~other ~~tax~~assets ~~credit~~and is expected to be refunded.

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On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (OBBBA). The OBBBA includes a broad range of tax reform provisions including extending and modifying certain key Tax Act provisions and expanding certain ~~Chips~~CHIPS Act incentives. These changes include full expensing of domestic research costs, immediate expensing of qualifying property and increasing the investment tax credit for certain investments in domestic semiconductor manufacturing from 25% to 35%. Key tax provisions of the OBBBA are designed to accelerate tax deductions but that may have a detrimental impact on our ability to use certain tax credits. The use of certain tax credits may not be economically viable if it requires electing to forgo significant tax deductions. Most of the provisions are effective beginning in fiscal years 2026 or 2027,. ~~with~~The most impactful provisions in fiscal year 2026 include immediate expensing of ~~qualifying~~U.S. ~~property~~performed ~~being~~research ~~effective~~costs inand ~~fiscal~~the ~~2025.~~increase Wein ~~will~~the ~~continue~~investment totax ~~evaluate~~credit ~~the~~from ~~full~~25% ~~impact~~to of35% ~~these~~for ~~legislative~~qualifying ~~changes~~property asplaced ~~more~~in ~~guidance~~service ~~becomes~~after ~~available~~December 31, 2025.

Various countries where we do business have enacted or plan to enact new tax laws to implement the global minimum tax regimes based on the Organization for Economic Cooperation and Development Base Erosion and Profit Shifting Project, and where enacted, the rules began to be effective in fiscal 2025. The ~~impact of the~~ currently enacted legislation is ~~not~~ expected to bematerially ~~material~~increase to our foreign taxes beginning in the first quarter of fiscal ~~2025~~2026, ~~financial~~primarily ~~results~~due to the implementation of the global minimum tax regime in Singapore. We continue to monitor developments and evaluate impacts, if any, of these rules on our results of operations and cash flows. Tax authorities and standard-setting bodies continue to issue new guidance, and the ultimate impact of these rules remains subject to ongoing interpretation and implementation. The adoption and effective dates of these rules vary by country and could increase tax complexity and uncertainty and may adversely affect our provision for income taxes, in future years.

We have been granted additional conditional reduced tax rates in Singapore that expire beginning in fiscal 2030.

Although cash requirements will fluctuate based on the timing and extent of factors such as those discussed above, our management believes that cash generated from operations, together with the liquidity provided by existing cash balances and borrowing capability, will be sufficient to satisfy our liquidity requirements for the next 12 months. For further details regarding our operating, investing and financing activities, see the Consolidated Condensed Statements of Cash Flows in this report.

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Critical Accounting Estimates

The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported.

Estimates and assumptions about future events and their effects cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under the circumstances. These estimates may change as new events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included in the consolidated financial statements as soon as they became known. In addition, management is periodically faced with uncertainties, the outcomes of which are not within our control and will not be known for prolonged periods of time. These uncertainties include those discussed in Part II, Item 1A, “Risk Factors.”

~~Management~~Consistent with what we disclosed in Item 7 of our fiscal 2025 Form 10-K that was filed on December 12, 2025, management believes that ~~the~~Income ~~following~~Taxes isare a critical accounting estimate:.

Income Taxes

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. The calculation of our provision for income taxes and effective tax rate involves significant judgment in estimating the impact of uncertainties in the application of complex and evolving tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations could have a material impact on our results of operations and financial condition. We recognize a current tax liability for the estimated amount of income taxes payable on tax returns for the current fiscal year. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the book and tax bases of assets and liabilities. Deferred tax assets are also recognized for net operating loss and tax credit carryovers. Deferred tax assets and liabilities are adjusted to reflect the effects of enacted changes in tax rates, laws and status, including changes in tax incentives. We record a valuation allowance against deferred tax assets when it is more likely than not that some portion, or all, of the assets will not be realized. In making this assessment, we weigh all available positive and negative evidence, including expected future taxable income, existing taxable temporary differences, carryback potential and prudent and feasible tax-planning strategies.

The acceleration of tax deductions for U.S. tax purposes, under the One Big Beautiful Bill Act, limits our ability to use our corporate minimum tax credits. As a result, we have recorded a full valuation allowance against this deferred tax asset. We reviewed potential tax-planning strategies to accelerate income recognition within a reasonable time, but none were prudent and feasible. We will continue to evaluate new strategies as additional One Big Beautiful Bill Act guidance is issued.

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Item 3: Quantitative and Qualitative Disclosures About Market Risk

We are exposed to financial market risks, including fluctuations in interest rate and foreign currency exchange rates. For information about our exposure to market risks as of October 2726, ~~2024~~2025, see Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the fiscal year ended October 2726, ~~2024~~2025.

Interest Rate Risk

Available-for-sale Debt Securities -– We are subject to interest rate risk related to our investments in debt securities. The market value of our investments in available-for-sale securities was approximately $3.53 billion at ~~July~~January 2725, ~~2025~~2026. An immediate hypothetical 100 basis point increase in interest rates would result in a decrease in the fair value of investments as of ~~July~~January 2725, ~~2025~~2026 of approximately $37 million.

Debt - We are subject to interest rate volatility with regard to existing and future issuances of debt. At ~~July~~January 2725, ~~2025~~2026, the aggregate principal amount of long-term senior unsecured notes issued by us was $56.5 billion with an estimated fair value, excluding the associated interest rate swaps, of $56.01 billion. A hypothetical decrease in interest rates of 100 basis points would result in an increase in the fair value of our long-term senior ~~notes~~note issuances of approximately $~~389~~444 million at ~~July~~January 2725, ~~2025~~2026. From time to time, we use interest rate swaps or rate lock agreements to mitigate the potential impact of changes in benchmark interest rates on interest expense and cash flows. A hypothetical 100 basis point increase in interest rates would result in a decrease in the fair value of these hedging contracts of $29 million at January 25, 2026.

Foreign Currency Risk

Certain of our operations are conducted in foreign currencies, such as Japanese yen, Israeli shekel, euro and Taiwanese dollar. Hedges are used to reduce, but not eliminate, the impact of foreign currency exchange rate movements on the consolidated balance sheet, statement of operations, and statement of cash flows. A hypothetical 10% adverse change in foreign currency exchange rates relative to the U.S. Dollar would result in a decrease in the fair value of these hedging contracts of $182 million at January 25, 2026.

We use primarily foreign currency forward contracts to offset the impact of foreign exchange movements on non-U.S. dollar denominated monetary assets and liabilities. The foreign exchange gains and losses on the assets and liabilities are recorded in interest and other income (expense), net and are offset by the gains and losses on the hedges.

We use foreign currency forward and option contracts to hedge a portion of anticipated non-U.S. dollar denominated revenues and expenses expected to occur within the next 24 months. Gains and losses on these hedging contracts generally mitigate the effect of currency movements on our ~~net~~ revenue, cost of products sold, and operating expenses. A hypothetical 10% adverse change in foreign currency exchange rates relative to the U.S. Dollar would result in a decrease in the fair value of these hedging contracts of $181 million at July 27, 2025.

We do not use foreign currency forward or option contracts for trading or speculative purposes.

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, our management conducted an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as such term is defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report in ensuring that information required to be disclosed was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and to provide reasonable assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

During the ~~third~~first quarter of fiscal ~~2025~~2026, there were no changes in the internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Disclosure Controls and Procedures and Internal Control over Financial Reporting

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information set forth under “Legal Matters” in Note 1213 in Notes to Consolidated Condensed Financial Statements is incorporated herein by reference. See also “Risk Factors – Legal, Compliance, and Other Risks – We are exposed to risks related to legal proceedings, claims and investigations.” in Part II, Item 1A, “Risk Factors.”

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Item 1A: Risk Factors

The risk factors set forth below include any material changes to, and supersede the description of, the risk factors disclosed in Part III, Item 1A of our most recent Form 10-QK. These factors could materially and adversely affect our business, financial condition or results of operations and cause reputational harm, and should be carefully considered in evaluating our business, in addition to other information presented elsewhere in this report.

Business and Industry Risks

The industries we serve can be volatile and difficult to predict.

WeThe ~~are~~industries ain ~~supplier~~which towe operate, including the global semiconductor ~~and display and related industries~~industry, ~~which~~have historically ~~have~~ been cyclical and are subject to volatility in customer demand. ~~Factors~~Demand ~~that impact demand~~ for our products and services ~~include~~is impacted by technology inflections and advances in fabrication processes, new and emerging technologies and market drivers, ~~such as demand for high-bandwidth memory and other forms of advanced packaging and technologies related to artificial intelligence and data center computing,~~ production capacity relative to demand for semiconductor chips and electronic devices, end-user demand, the timing of customers’ investment in new or expanded fabrication plants, customers’ capacity utilization, production volumes, access to affordable capital, business and consumer buying patterns and general economic and political conditions. Artificial intelligence (AI) and technologies related to AI are a significant demand driver for the industries we serve. AI is evolving rapidly and the expected timing and amount of investments related to ~~artificial~~AI ~~intelligence~~ can change significantly. As a result, it is difficult to accurately forecast demand for our products related to ~~artificial intelligence~~AI. Changes in demand can affect the timing and amounts of customer investments in technology and manufacturing equipment and can significantly impact our operating results. The amount and mix of our customers’ capital equipment spending between different products and technologies can also significantly impact our operating results.

To meet rapidly changing demand, we must accurately forecast demand and effectively manage our resources, investments, production capacity, supply chain, workforce, inventory, and other components of our business. We may incur unexpected or additional costs to align our business operations with changes in demand. If we do not effectively manage these challenges, our business performance and operating results may be adversely impacted. Even with effective allocation of resources and management of costs, our gross and operating margins, cash flows and earnings may be adversely impacted during periods of changing demand.

We are exposed to risks associated with an uncertain global economy.

~~Uncertain~~Our orbusiness and the industries we serve are subject to uncertain and adverse economic and business conditions, including ~~uncertainties and~~ volatility in ~~the~~ financial markets, national debt, fiscal or monetary concerns, inflation, ~~and~~ changes in interest rates, bank failures, tariffs and trade policies, and economic recession~~, could materially and adversely impact our operating results~~. ~~Markets~~These ~~for our products and services depend largely on demand for semiconductor chips and electronic devices. Uncertain or adverse economic and business~~ conditions have caused, and may in the future cause, our customers to delay, cancel or ~~refrain~~reduce ~~from~~purchases ~~purchasing~~of our equipment or services. Customers may also scale back operations, ~~which~~exit ~~could~~businesses, ~~negatively~~consolidate, ~~impact~~or ~~demand~~file for ~~our~~bankruptcy. ~~products~~Consolidation ~~and~~or ~~services,~~strategic ~~reduce~~alliances ~~our~~among ~~backlog,~~other ~~increase~~equipment ~~our~~manufacturers ~~inventory,~~could ~~and~~also ~~materially~~intensify competition and adversely ~~impact~~affect our ~~operating~~market ~~results~~position. ~~Uncertain~~These orconditions ~~adverse~~make ~~economic~~it more difficult to forecast operating and ~~business~~financial ~~conditions~~results ~~may~~and ~~also~~make ~~cause~~business ~~customers~~and toinvestment ~~scale~~decisions. ~~back~~We ~~operations,~~may ~~exit~~be ~~businesses,~~required ~~merge~~to ~~with~~implement ~~other~~additional ~~manufacturers,~~cost orreduction ~~file~~efforts, ~~for~~including ~~bankruptcy~~restructuring ~~protection~~activities, which ~~can~~could ~~reduce~~impair our ~~revenue~~ability ~~and~~to ~~result~~capitalize inon ~~additional~~opportunities. ~~inventory~~Even during periods of economic uncertainty or ~~bad~~lower ~~debt~~demand, ~~expense.~~we ~~These~~must ~~conditions~~continue ~~may~~to ~~also~~invest ~~lead~~in research and development and maintain a global business infrastructure to ~~consolidation~~compete oreffectively ~~strategic~~and ~~alliances~~support ~~among~~our ~~other~~customers. ~~equipment~~The ~~manufacturers,~~consequences ~~which~~of these conditions could ~~adversely~~have ~~affect~~an adverse effect on our ~~ability~~business, tofinancial ~~compete~~condition ~~effectively~~and results of operations.

Our ~~Volatility~~investment inportfolio ~~demand~~is ~~for~~subject ~~semiconductor~~to ~~chips~~general ~~and~~credit, ~~electronic~~liquidity, ~~devices~~market ~~have~~and ininterest ~~the~~rate ~~past caused~~risks, ~~and~~which may inbe ~~the~~exacerbated ~~future~~by ~~cause~~inflation, arising ~~shortage~~interest ofrates, ~~parts~~bank ~~and~~failures ~~materials~~or ~~needed~~economic ~~to manufacture our products~~recession. ~~Such~~These ~~shortages,~~factors ~~and~~could ~~shipment~~reduce ~~delays~~the ~~due~~value toor ~~transportation~~liquidity ~~capacity~~of ~~and~~our ~~interruptions~~investments ~~may~~or ~~adversely~~pension ~~impact~~assets ~~our~~and ~~suppliers’~~result ~~ability~~in toimpairment ~~meet our requirements~~charges. ~~Accelerated~~We ~~digital~~also ~~transformation~~maintain ~~may~~cash ~~further~~balances ~~increase~~at ~~demand~~financial ~~and~~institutions ~~exacerbate~~worldwide, ~~shortages~~ and ~~strain~~the ~~our~~insolvency ~~manufacturing~~of ~~capacity,~~any ~~which~~such ~~may~~institution ~~adversely~~could ~~impact~~restrict ~~our~~access ~~ability~~ to ~~meet~~our ~~customer~~cash ~~demand~~ and ~~have~~adversely anaffect ~~adverse impact on~~ our ~~revenues,~~ability ~~operating~~to ~~results~~manage ~~and financial condition~~operations.

Uncertain economic and industry conditions and supply chain challenges make it more difficult to accurately forecast operating and financial results and make business and investment decisions. If we do not appropriately manage our business operations it could have a material and adverse impact on our business performance and financial condition. We ~~may~~are beexposed ~~required~~ to ~~implement~~the ~~additional~~risks ~~cost reduction efforts, including restructuring activities, which may adversely impact our ability to capitalize on opportunities. Even during periods~~ of ~~economic~~operating ~~uncertainty or lower demand, we must continue to invest in research and development and maintain~~ a global business ~~infrastructure to compete effectively and support our customers, which can have a negative impact on our operating results~~.

We ~~maintain~~have anproduct ~~investment~~development, ~~portfolio~~engineering, ~~that~~manufacturing, issales ~~subject~~and toother ~~general~~operations ~~credit~~distributed throughout many countries, ~~liquidity~~and some of our business activities are concentrated in certain geographic areas. In the three-month period ended January 25, ~~market~~2026, ~~and~~approximately ~~interest~~91% ~~rate~~of ~~risks~~our revenue was from customers in regions outside the United States. ~~The~~As ~~risks~~a toresult of the global nature of our ~~investment~~operations, ~~portfolio~~we ~~may~~are besubject ~~exacerbated~~to ifa number of factors that could have an adverse impact on our business, financial ~~market~~condition and results of operations. These factors include global political and social conditions, ~~deteriorate~~such ~~due~~as topolicies ~~rising~~or ~~inflation~~regulations within countries, ~~rising~~including ~~interest~~in ~~rates~~China, ~~bank~~the ~~failures~~United orStates ~~economic~~and ~~recession~~countries in Europe and Asia, that favor domestic companies over non-domestic companies, including efforts to promote the ~~value~~development and ~~liquidity~~growth of ~~the~~local ~~investment~~competitors ~~portfolio~~to us, or regarding national, commercial or security issues. Other factors include geopolitical turmoil, acts of war or social unrest; our ability to maintain appropriate business processes, procedures and ~~returns~~internal controls in our geographically diverse operations; delays or restrictions on ~~pension~~personnel ~~assets~~travel and in shipping materials or products; our ability to develop relationships with local

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~~could~~customers, besuppliers ~~negatively~~and ~~impacted~~governments; ~~and~~performance ~~lead~~of toour ~~impairment~~geographically ~~charges.~~diverse Wethird-party ~~also~~providers; ~~maintain~~impacts ~~cash~~of ~~balances~~regional or global health epidemics, natural disasters and extreme and chronic weather events; fluctuations in ~~various~~interest ~~bank~~rates ~~accounts~~and ~~globally~~currency toexchange ~~fund~~rates; ~~normal~~as ~~operations.~~well Ifas ~~any~~other factors discussed in this Risk Factors section. Any of these ~~financial~~factors ~~institutions~~may ~~become~~have ~~insolvent,~~an itadverse ~~could~~impact ~~limit~~on our ~~ability~~business toand ~~access~~manufacturing ~~cash~~operations inor ~~the~~demand ~~affected~~for ~~accounts,~~our ~~which~~products ~~could~~and ~~affect~~services, and our ~~ability~~performance toand ~~manage~~results ~~our~~of operations may be adversely affected.

WeGlobal ~~are~~trade ~~exposed~~issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, have adversely impacted and could further adversely impact our business and operations, and reduce the ~~risks~~competitiveness of ~~operating~~our aproducts and services relative to local and global ~~business~~competitors.

WeA ~~have~~majority ~~product~~of ~~development,~~our ~~engineering~~products and services are delivered to customers in jurisdictions outside of the United States, ~~manufacturing~~including China, ~~sales~~Taiwan and ~~other~~Korea. ~~operations~~We ~~distributed~~also ~~throughout~~purchase ~~many~~a ~~countries,~~significant portion of equipment and ~~some~~supplies from suppliers outside of ~~our~~the ~~business~~United ~~activities~~States. ~~are~~There ~~concentrated~~is ininherent ~~certain~~risk, ~~geographic~~based ~~areas.~~on Inthe complex relationships among the ~~three-month~~United ~~period~~States ~~ended~~and ~~July 27~~the countries in which we conduct our business, ~~2025~~that political, ~~approximately~~diplomatic ~~91%~~and ofnational ~~our~~security ~~net~~factors ~~revenue~~can ~~was~~lead to ~~customers~~global trade restrictions and changes in ~~regions~~trade ~~outside~~policies and export regulations that affect the semiconductor industry. The United States. Asand other countries have imposed and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods and could significantly increase or impose new tariffs on a ~~result~~broad array of ~~the~~goods. ~~global~~Trade ~~nature~~restrictions and export regulations, or increased or new tariffs and additional taxes, including any retaliatory measures, can negatively impact end-user demand and customer investment in semiconductor equipment, increase our supply chain complexity and our manufacturing costs, decrease margins, reduce the competitiveness of our ~~operations~~products, or restrict our ~~business~~ability ~~performance~~to sell products, provide services or purchase necessary equipment and ~~results~~supplies, ofany ~~operations~~or ~~may~~all beof ~~adversely~~which ~~affected~~could byhave a ~~number~~material and adverse effect on our business, results of ~~factors~~operations, ~~including:~~or financial condition.

•For example, certain international sales depend on our ability to obtain export licenses, and our inability to obtain such licenses has limited and could further limit our markets and negatively impact our business. Over the past several years, the U.S. government announced additional export regulations for U.S. semiconductor technology sold in China, including wafer fabrication equipment and related parts and services, with disparate impact on companies in different jurisdictions, which have limited the market for certain of our products and services, adversely impacted our revenues and increased our exposure to foreign and Chinese domestic competition. The U.S. Department of Commerce expanded export license requirements for U.S. companies that sell certain products or provide certain services to entities in China whose actions or functions are intended to support military end uses, eliminated certain export license exceptions for exports of certain items to China, added certain Chinese companies to its “Entity List,” making those companies subject to additional licensing requirements, and expanded licensing requirements for exports to China of items for use in the development or production of integrated circuits and certain technologies. These regulations require us to obtain additional export licenses to supply certain of our products or provide services to certain customers in China. Obtaining export licenses may be difficult and time-consuming, and there is no assurance we will be issued licenses on a timely basis or at all. Our inability to obtain such licenses could limit our sales in China, may cause us to be displaced by foreign and Chinese domestic companies and adversely affect our results of operations. The implementation and interpretation of these complex rules and other regulatory actions taken by the U.S. government are uncertain and evolving and may make it more challenging for us to manage our operations and forecast our operating results. The U.S. and other governments may promulgate new or ~~adverse~~additional ~~global~~export ~~economic~~licensing or other requirements that have the effect of further limiting our ability to provide certain products and services to customers outside the U.S., ~~political~~including China. The U.S. government may also revise or expand existing requirements or issue guidance clarifying the scope and application of these requirements, which could change the impact of these rules on our business ~~conditions~~and manufacturing operations. The U.S. government may also continue to add customers to its “Entity List,” promulgate additional restrictions, or take measures that could disrupt our product shipments or the provision of services to certain customers. These and ~~demand;~~other potential future regulatory changes could materially and adversely affect our business, results of operations or financial condition.

•As a global ~~trade~~business ~~issues~~with customers, suppliers and ~~changes~~operations in many countries around the world, from time to time we may receive inquiries from government authorities about transactions between us and ~~uncertainties~~certain foreign entities. For example, we have previously received subpoenas from government authorities requesting information relating to export controls compliance. On February 11, 2026, we entered into a settlement agreement with ~~respect~~the U.S. Commerce Department Bureau of Industry and Security (BIS) to ~~trade~~resolve its inquiry relating to certain China customer shipments and export ~~regulations~~controls compliance and agreed to pay BIS $253 million, ~~trade~~as ~~policies~~well as conduct certain internal audits and ~~sanctions,~~maintain ~~tariffs,~~export compliance training and ~~international~~reporting ~~trade~~mechanisms. ~~disputes~~Our failure to comply with the terms of the settlement agreement could result in significant penalties, including ~~new~~the ~~and~~loss ~~changing~~of ~~export~~the ~~regulations~~suspension of the denial order which would prohibit us from exporting certain of our products outside of the United States. Any inquiries we may receive are subject to uncertainties, and ~~their~~we ~~impact~~cannot onpredict the outcome of any governmental inquiries or proceedings that may occur. Any violation or alleged violation of law or regulations could result in significant legal costs or in legal proceedings in which we or our ~~ability~~employees tocould ~~export~~be ~~products~~subjected to fines and ~~provide~~penalties ~~services~~and tocould ~~customers;~~

•positions taken by the United States, Chinese and other governmental agencies regarding national, commercial or security issues posed by the development, sale or export of certain products, technologies and raw materials, including critical materials and critical minerals;

•political instability, social unrest, terrorism, acts of war or other geopolitical turmoil, such as the conflict in the Middle East, in locations where we have operations, suppliers or sales, or that may influence the value chain of the industries we serve;

•cybersecurity incidents;

•political and social attitudes, laws, rules, regulations and policies within countries, including in China, the United States, and countries in Europe and Asia, that favor domestic companies over non-domestic companies, including efforts to promote the development and growth of local competitors and reduce dependence on foreign semiconductor equipment and manufacturing capabilities through policies and financial incentives;

•efforts to influence us to conduct more or less of our operations and sourcing in a particular country;

•different and changing local, regional, national or international laws and regulations, including contract, intellectual property, cybersecurity, data privacy, labor, tax, and import/export laws, and the interpretation and application of laws and regulations;

•ineffective or inadequate legal protection of intellectual property rights in certain countries;

•interruptions to our or our suppliers’ supply chain;

•the availability of raw materials, including critical materials and critical minerals, and increases and volatility of commodity, energy and shipping costs;

•delays or restrictions on personnel travel and in shipping materials or products;

•geographically diverse operations and projects, and our ability to maintain appropriate business processes, procedures and internal controls, and comply with environmental, health and safety, anti-corruption and other regulatory requirements;

•challenges in hiring and integrating workers in different countries, and in effectively managing a diverse workforce with different experience levels, languages, cultures, customs, business practices and worker expectations, and differing employment practices and labor issues;

•the ability to develop relationships with local customers, suppliers and governments;

•fluctuations in interest rates and currency exchange rates, including the relative strength or weakness of the U.S. dollar against the Japanese yen, Israeli shekel, euro, Taiwanese dollar, Singapore dollar, Chinese yuan or Korean won;

•the need to provide technical support in different locations around the world;

•performance of geographically diverse third-party providers, including certain engineering, software development, manufacturing, information technology and other functions;

•service interruptions from utilities, transportation, data hosting or telecommunications providers;

•impacts of regional or global health epidemics and natural disasters and extreme and chronic weather events on our operations and those of our customers and suppliers, which may be exacerbated by climate change;

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~~•the~~result ~~increasing~~in ~~need~~restrictions ~~for~~on aour ~~mobile~~business ~~workforce~~ and ~~travel~~damage to ~~different~~our ~~regions;~~global brand and reputation, and could have a material and adverse impact on our business operations, financial condition and results of operations.

•uncertainties with respect to economic growth rates in various countries, including for the manufacture and sale of semiconductors and displays in the developing economies of certain countries.

Global trade issues and changes in and uncertainties with respect to trade policies and export regulations, including import and export license requirements, trade sanctions, tariffs and international trade disputes, have adversely impacted and could further adversely impact our business and operations, and reduce the competitiveness of our products and services relative to local and global competitors.

A majority of our products and services are delivered to customers in jurisdictions outside of the United States, including China, Taiwan and Korea. We also purchase a significant portion of equipment and supplies from suppliers outside of the United States. There is inherent risk, based on the complex relationships among the United States and the countries in which we conduct our business, that political, diplomatic, and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that affect the semiconductor industry. The United States and other countries have imposed and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods, and could significantly increase or impose new tariffs on a broad array of goods. Trade restrictions and export regulations, or increased or new tariffs and additional taxes, including any retaliatory measures, can negatively impact end-user demand and customer investment in semiconductor equipment, increase our supply chain complexity and our manufacturing costs, decrease margins, reduce the competitiveness of our products, or restrict our ability to sell products, provide services or purchase necessary equipment and supplies, any or all of which could have a material and adverse effect on our business, results of operations, or financial condition.

For example, certain international sales depend on our ability to obtain export licenses, and our inability to obtain such licenses has limited and could further limit our markets and negatively impact our business. Over the past several years, the U.S. government announced additional export regulations for U.S. semiconductor technology sold in China, including wafer fabrication equipment and related parts and services, with disparate impact on companies in different jurisdictions, which have limited the market for certain of our products and services, adversely impacted our revenues, and increased our exposure to foreign and Chinese domestic competition. The U.S. Department of Commerce expanded export license requirements for U.S. companies that sell certain products or provide certain services to entities in China whose actions or functions are intended to support military end uses, eliminated certain export license exceptions for exports of certain items to China, added certain Chinese companies to its “Entity List,” making those companies subject to additional licensing requirements, and expanded licensing requirements for exports to China of items for use in the development or production of integrated circuits and certain technologies. These regulations require us to obtain additional export licenses to supply certain of our products or provide services to certain customers in China. Obtaining export licenses may be difficult and time-consuming, and there is no assurance we will be issued licenses on a timely basis or at all. Our inability to obtain such licenses could limit our sales in China, may cause us to be displaced by foreign and Chinese domestic companies and adversely affect our results of operations. The implementation and interpretation of these complex rules and other regulatory actions taken by the U.S. government are uncertain and evolving and may make it more challenging for us to manage our operations and forecast our operating results. The U.S. and other governments may promulgate new or additional export licensing or other requirements that have the effect of further limiting our ability to provide certain products and services to customers outside the U.S., including China. The U.S. government may also revise or expand existing requirements or issue guidance clarifying the scope and application of these requirements, which could change the impact of these rules on our business and manufacturing operations. The U.S. government may also continue to add customers to its “Entity List” or promulgate additional restrictions, or take measures that could disrupt our product shipments or the provision of services to certain customers. These and other potential future regulatory changes could materially and adversely affect our business, results of operations or financial condition.

As a global business with customers, suppliers and operations in many countries around the world, from time to time we may receive inquiries from government authorities about transactions between us and certain foreign entities. For example, since 2022, we have received multiple subpoenas from government authorities requesting information relating to certain China customer shipments and export controls compliance, including from the U.S. Department of Justice, the U.S. Commerce Department Bureau of Industry and Security, and the U.S. Securities and Exchange Commission. We are cooperating fully with the U.S. government in these matters. We have continued to receive related subpoenas, as well as requests for information, and may in the future receive additional related subpoenas and requests for information from such or other government authorities. Any such inquiries are subject to uncertainties, and we cannot predict the outcome of these inquiries, or any other governmental inquires or proceedings that may occur. Any violation or alleged violation of law or regulations could result in significant legal costs or in legal proceedings in which we or our employees could be subjected to fines and penalties and could result in restrictions on our business and damage to our global brand and reputation, and could have a material and adverse impact on our business operations, financial condition and results of operations.

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Furthermore, government authorities may take retaliatory actions, impose conditions that require the use of local suppliers or partnerships with local companies, require the license or other transfer of sensitive data or intellectual property, or engage in other efforts to promote local businesses and local competitors, which could have a material and adverse impact on our business. Many of these challenges are present in China and Korea, markets that represent a significant portion of our business.

We are exposed to risks and uncertainty related to ~~recent~~ changes in trade policies, and increased tariffs and trade disputes.

Our business, financial condition and results of operations may be adversely affected by uncertainty and changes in trade policies, including tariffs, and trade disputes between the United States and other countries. The United States has ~~recently~~ announced changes to its trade policy, including increased tariffs on imports. These actions have caused substantial uncertainty and have resulted in retaliatory measures, including new tariffs on U.S. goods imposed by China and other countries. Some of these actions have been followed by announcements of limited exemptions and temporary pauses and trade frameworks with certain countries.

A significant number of our customers and suppliers are located outside of the United States. Increases in tariffs increase our costs and can negatively impact our margins and reduce the competitiveness of our products due to the increase in the cost of importing materials, parts and components used in manufacturing our products. Tariffs can also increase supply chain complexity and may make it more difficult to purchase necessary equipment and supplies to manufacture our products. Increases in tariffs, including reciprocal and sector-based tariffs, also increase the cost to our customers of importing our products, which could harm customer demand for our products. Uncertainty or volatility with respect to tariffs and trade disputes may also make it difficult for us and our customers and suppliers to make and execute business and capital equipment investment plans; lead to global or regional inflation and economic recession, and reduce demand for semiconductor chips and electronic devices; cause our customers to delay or cancel orders or negatively impact our competitive position; impede our ability to purchase materials, including critical materials and ~~critical~~ minerals, and disrupt supply chain and logistics. For example, in 2025 the Chinese government implemented export controls on the export of rare earth minerals that are used in certain of our products and may implement additional controls in the future. We may take actions to mitigate the impact of increases in tariffs and changes in trade policies, but there can be no assurance that we will be successful, and any such actions could result in additional costs, manufacturing delays or other difficulties, as well as additional risks, and may not be effective. Any or all of these factors may have a material and adverse impact on our business, financial condition and results of operations.

We are exposed to risks associated with a highly concentrated customer base.

A relatively limited number of customers account for a substantial portion of our business. ~~Our customer base is geographically concentrated, particularly in China, Taiwan and Korea.~~ As a result, the actions of even a single customer have exposed and can further expose our business and operating results to greater volatility. ~~Export~~Our customer base is geographically concentrated, particularly in China, Taiwan and Korea, and export regulations that apply to customers in certain countries, such as those in China, ~~also~~ have exposed and can further expose ~~our~~us ~~business and operating results~~ to greater volatility. The geographic concentration of our customer base could shift over time as a result of changes in technology and competitive landscape, as well as government policy and incentives to develop regional semiconductor industries. ~~The~~Sales ~~mix~~to ~~and~~individual ~~type of~~ customers, and ~~sales~~the tomix ~~any~~and ~~single~~type ~~customer, including as a result~~ of ~~changes~~customers ~~in government policy,~~ have varied and may ~~vary~~continue ~~significantly from quarter~~ to ~~quarter~~vary ~~and from year to year~~significantly, ~~and~~which ~~have~~can ~~had,~~materially ~~and~~affect ~~may continue to have, a significant impact on~~ our operating results. Our products are configured to customer specifications, and changing, rescheduling or canceling orders may result in significant, non-recoverable costs. If customers do not place orders, or they substantially reduce, delay or cancel orders, we may ~~not~~ be ~~able~~unable to replace the business, which ~~may~~could ~~have~~materially ~~a material~~ and ~~adverse~~adversely impact on our results of operations ~~and financial condition~~. ~~The~~In ~~concentration~~addition, ~~of our~~ customer ~~base~~concentration increases our ~~risks~~exposure ~~related~~ to the financial condition of our customers, and ~~the~~any deterioration in ~~financial condition of~~ a ~~single~~ customer’s orfinancial ~~the~~condition, ~~failure~~liquidity, ofor aability ~~single customer~~ to perform its obligations ~~could have a material and adverse effect on our results of operations and cash flow. To the extent our customers experience liquidity constraints~~, weor ~~may~~efforts ~~incur~~by ~~bad debt expense, which may have~~ a ~~significant~~customer ~~impact~~to onobtain ~~our results of operations. Major customers may seek~~ pricing, payment, intellectual property-related, or other commercial terms that are less favorable to us, ~~which~~could ~~may~~ have a ~~negative~~material ~~impact~~and adverse effect on our ~~business,~~results ~~cash~~of ~~flow,~~operations ~~revenue~~ and ~~gross~~financial ~~margins~~condition.

Supply chain disruptions, manufacturing interruptions or delays, or the failure to accurately forecast customer demand, could affect our ability to meet customer demand, lead to higher costs, or result in excess or obsolete inventory.

Our business depends on our timely supply of products and services to meet the changing requirements of our customers, which depends in part on the timely delivery of parts, materials and services from suppliers and contract manufacturers. Volatility in demand for our products and worldwide demand for semiconductor chips and electronic devices can impact our suppliers’ ability to meet our demand requirements, and ~~may~~has ~~from~~in ~~time~~the topast ~~time~~resulted ~~result~~ in a shortage of parts, materials and services needed to manufacture our products. ~~Such~~These shortages, as well as delays in and unpredictability of shipments due to transportation interruptions, may adversely impact our manufacturing operations and our ability to meet customer demand. Supply chain constraints may increase costs of logistics and parts for our products and may cause us to pass on increased costs to our customers, which may lead to reduced demand for our products. Supply chain disruptions have in the past caused, and

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~~to our customers, which~~ may ~~lead to reduced demand for our products and materially and adversely impact our operating results. Supply chain disruptions have in the past caused, and may~~ from time to time cause, delays in our equipment production and delivery schedules, which can lead to our business performance becoming significantly dependent on quarter-end production and delivery schedules~~, and could have an adverse impact on our operating and financial results~~.

Cybersecurity incidents affecting our suppliers have caused, and may from time to time cause, difficulties and delays in our ability to obtain parts, materials and services needed to manufacture our products and provide services, and have adversely impacted, and may from time to time adversely impact, our manufacturing operations, our ability to meet customer demand, and our operating results. Failure to timely recover from such delays could materially and adversely affect our business, financial condition and results of operations, and may also cause our business and financial outlook to be inaccurate.

We may further experience supply chain disruptions, significant interruptions of our manufacturing operations, delays in our ability to deliver or install products or services, increased costs, customer order cancellations or reduced demand for our products as a result of:

•global trade issues and changes in and uncertainties with respect to trade and export regulations, trade policies and sanctions, tariffs, international trade disputes, particularly those relating to exports of certain technologies to China, where a significant portion of our supply chain is located, and any retaliatory measures, that adversely impact us or our direct or sub-tier suppliers;

•political instability, social unrest, terrorism, acts of war or other geopolitical turmoil, ~~such as the conflict~~ in ~~the Middle East, in~~ locations where we or our customers or suppliers have ~~manufacturing, research, engineering or other~~ operations;

•the failure or inability to accurately forecast demand and obtain quality parts on a cost-effective basis;

•cybersecurity incidents affecting our supply chain;

•volatility in the availability and cost of parts, commodities, energy and shipping related to our products, including increased costs due to rising inflation or interest rates or other market conditions, as well as uncertainties arising from the imposition of tariffs and any retaliatory measures;

•difficulties or delays in obtaining required import or export licenses and approvals;

•shipment delays due to transportation interruptions or capacity constraints;

•a worldwide shortage of semiconductor components as a result of sharp increases in demand for semiconductor products in general;

•limited availability of critical materials and ~~critical~~minerals, including due to any Chinese government restrictions on the export of rare earth minerals, and limited feasible alternatives to materials subject to existing or proposed regulations to limit their use (such as hydrofluorocarbons and per- and polyfluoroalkyl substances), which are found in parts, components, process chemicals and other materials supplied to us or used in the manufacturing or operations of our products; and

•impacts of natural disasters, extreme and chronic weather events ~~(which may be exacerbated by climate change)~~, regional or global health epidemics, or other events beyond our control ~~(such as earthquakes, utility interruptions, tsunamis, hurricanes, typhoons, floods, storms or fires)~~.

If a supplier fails to meet our requirements concerning quality, cost, intellectual property protection, ~~socially-responsible and sustainable business practices,~~ or other performance factors, or does not meet regulatory requirements applicable to our supply chain, we may transfer our business to alternative sources, which could result in manufacturing delays, additional costs or other difficulties, and impair our ability to protect, enforce and extract the full value of our intellectual property rights and the intellectual property rights of our customers and other third parties. These outcomes could have a material and adverse impact on our business and competitive position and subject us to legal proceedings and claims. If we are unable to meet our customers’ demand for a prolonged period due to our inability to obtain certain parts or components from suppliers on a timely basis or at all, our business, results of operations and customer relationships could be adversely impacted.

If we need to rapidly increase our business and manufacturing capacity to meet increases in demand or expedited shipment schedules, this may strain our manufacturing and supply chain operations, and negatively impact our working capital. If we are unable to accurately forecast demand for our products, we may purchase more or fewer parts than necessary or incur costs for canceling, postponing or expediting delivery of parts. If we purchase or commit to purchase inventory in anticipation of customer demand that does not materialize, or ~~such~~the inventory is rendered obsolete by the rapid pace of technological change, or if customers reduce, delay or cancel orders, we may incur excess or obsolete inventory charges.

WeAny ~~are~~of ~~exposed~~these toevents ~~various~~impacting ~~factors~~our ~~that~~supply ~~impact~~chain ~~the~~could ~~industries~~affect our ability to meet our customers’ demand, result in ~~which~~higher wecosts ~~operate~~to us and have an adverse effect on customer relationships and our business, financial condition and results of operations.

~~The~~We ~~global semiconductor, display and related industries~~ are ~~characterized~~exposed byto various factors that impact ~~demand for and~~ the ~~profitability~~industries ofin ~~our~~which ~~products~~we ~~and~~operate, ~~services~~including ~~and~~factors ~~our~~specific ~~operating~~to ~~results,~~the ~~including:~~semiconductor industry.

46The industries in which we operate are characterized by factors that impact demand for and the profitability of our products and services and our operating results. The largest proportion of our revenue and profitability is derived from our Semiconductor Systems segment’s sale of a wide range of equipment used to fabricate semiconductor chips, and a majority of the revenue of Applied Global Services is from sales to semiconductor manufacturers. The semiconductor industry and other industries in which we operate are characterized by factors particular to these industries that impact demand for and the profitability of our products and services, including:

•changes in demand for semiconductor chips and electronic devices, including those related to fluctuations in consumer buying patterns tied to general economic or geopolitical conditions, seasonality or product introductions;

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•the ~~nature~~frequency, ~~timing~~complexity and ~~degree~~timing of ~~visibility~~technology oftransitions ~~changes in demand for semiconductor chips~~ and ~~electronic devices~~inflections, ~~including~~and ~~those~~our ~~related~~ability to ~~fluctuations~~anticipate inand ~~consumer~~adapt ~~buying patterns tied~~ to ~~general economic or geopolitical conditions, seasonality or the introduction of new products, and the effects of these changes on customers’ businesses and on demand for our products~~them;

•~~increasing~~changes ~~capital~~in ~~requirements~~demand for ~~building~~semiconductor ~~and~~chips ~~operating~~due ~~new~~to ~~fabrication~~changes ~~plants~~in ~~and~~the ~~customers’~~timing ~~ability~~of, tolevel ~~raise~~of investment in, or technologies used in the ~~necessary~~buildout ~~capital~~of data centers;

•~~trade~~increasing costs and complexity in research and development, ~~regulatory~~including due to shrinking geometries, ~~tax~~new ormaterials ~~government~~and ~~incentives~~device ~~impacting~~structures, ~~the~~more ~~timing~~applications ofand ~~customers’~~process ~~investment~~steps, inchip ~~new~~design orcosts, ~~expanded~~and ~~fabrication~~integrated ~~plants~~manufacturing processes;

•differences and volatility in growth rates among the semiconductor, display and related industries in which we operate;

•the importance of establishing, improving and maintaining strong relationships with customers;

•the cost and complexity for customers to move from product design to volume manufacturing, which may slow the adoption rate of new manufacturing technology;

•the importance of reducing the total cost of manufacturing system ownership;

•the importance to customers of system reliability and productivity and the effect on demand for fabrication systems as a result of their increasing productivity, device yield and reliability;

•manufacturers’ ability to reconfigure and re-use fabrication systems which can reduce demand for new equipment;

•the importance of developing products with sufficient differentiation to influence customers’ purchasing decisions;

•requirements for shorter cycle times for the development, manufacture and installation of our equipment;

•price and performance trends for semiconductor devices and displays, and the impact on demand for such products;

•the importance of the availability of spare parts to maximize the time that customers’ systems are available for production;

•government incentives for local suppliers and domestic semiconductor research and development, and increased investment in manufacturing capabilities;

•the increasing role for and complexity of software in our products; and

•the focus on reducing energy usage and improving the environmental impact and sustainability associated with manufacturing operations, and the availability of adequate and reliable sources of energy.

If we do not effectively address these factors, our business and results of operations may be materially and adversely impacted.

We are exposed to factors specific to the semiconductor industry.

The largest proportion of our consolidated net revenue and profitability is derived from our Semiconductor Systems segment’s sale of a wide range of equipment used to fabricate semiconductor chips to the global semiconductor industry, and a majority of the revenues of Applied Global Services is from sales to semiconductor manufacturers. The semiconductor industry is characterized by factors particular to this industry that impact demand for and the profitability of our semiconductor manufacturing equipment and service products, including:

•the frequency and complexity of technology transitions and inflections, and our ability to timely and effectively anticipate and adapt to these changes;

•the cost of research and development due to many factors, including shrinking geometries, the use of new materials, new and more complex device structures, more applications and process steps, increasing chip design costs, and the cost and complexity of integrated manufacturing processes;

•the need to reduce product development time and meet technical challenges;

•the number of types and varieties of semiconductors and number of applications;

•~~the~~high ~~cost~~capital ~~and~~requirements ~~complexity~~ for ~~semiconductor~~building ~~manufacturers~~and tooperating ~~move~~fabrication ~~more~~plants ~~technically advanced capability~~ and ~~smaller~~customers’ ~~geometries~~ability to ~~volume~~obtain ~~manufacturing, and the impact on investment in capital equipment~~funding;

•~~semiconductor~~trade, ~~manufacturers’~~regulatory, ~~levels~~tax ofor ~~capital~~government ~~expenditures~~incentives ~~and~~impacting ~~the~~customers’ ~~allocation of capital~~ investment toin ~~market~~new ~~segments that we do not serve, such as lithography,~~ or ~~segments~~expanded ~~where~~fabrication ~~our~~plants ~~products~~and ~~have~~semiconductor ~~lower~~research ~~relative~~and ~~market presence~~development;

47•the cost and complexity for customers to move from product design to volume manufacturing, and the impact on investment in capital equipment;

~~Table~~•growth rates in the semiconductor industry and variability in semiconductor manufacturers’ capital expenditures, including allocation of ~~Contents~~capital to market segments we do not serve, such as lithography, or where our products have lower relative market presence;

•delays in installation of our equipment delivered to customers;

•the importance of increasing market positions in segments with growing demand;

•~~semiconductor manufacturers~~customers’ ability to reconfigure ~~and~~or ~~re-use~~reuse existing equipment, ~~resulting~~reducing indemand ~~diminished~~for ~~need to purchase~~ new equipment and services ~~from us,~~ and increasing challenges in ~~providing~~ parts ~~for reused equipment~~availability;

•~~shorter~~the ~~cycle~~availability ~~times between order placements by customers and product shipment require greater reliance on forecasting~~ of ~~customer~~spare ~~investment,~~parts ~~which may lead~~ to ~~inventory~~maximize ~~write-offs~~the ~~and~~time ~~manufacturing~~that ~~inefficiencies~~customers’ ~~that~~systems ~~decrease~~are ~~gross~~available ~~margin~~for production;

•~~competitive~~shorter ~~factors~~order placement and shipment cycle times that ~~make~~increase itreliance ~~difficult~~on toforecasting ~~enhance~~customer ~~position~~investment, ~~including~~which ~~challenges~~may inlead ~~securing~~to ~~development~~inventory write-~~tool-of-record~~offs ~~(DTOR)~~ and ~~production-tool-of-record~~manufacturing ~~(PTOR)~~inefficiencies ~~positions~~that ~~with~~decrease ~~customers~~gross margin;

•~~consolidation~~competitive infactors ~~the~~that ~~semiconductor~~make ~~industry~~it difficult to enhance position, including ~~among~~total ~~semiconductor~~cost ~~manufacturers~~of manufacturing system ownership and ~~among~~other ~~semiconductor~~challenges ~~equipment~~in ~~suppliers~~securing development-tool-of-record (DTOR) and production-tool-of-record (PTOR) positions with customers;

•consolidation among semiconductor manufacturers and semiconductor equipment suppliers;

•shifts in sourcing strategies by computer and electronics companies, and manufacturing processes for advanced circuit technologies, that impact the equipment requirements of our foundry customers;

•~~the~~fragmentation ~~concentration~~ of ~~new~~semiconductor ~~wafer~~markets, ~~starts~~including inmarkets ~~Korea~~too ~~and~~small ~~Taiwan,~~to ~~where~~support ~~our~~new ~~service~~fabrication ~~penetration~~plants ~~and~~or ~~service-revenue-per-wafer-start~~that ~~have~~require ~~been~~less ~~lower~~technologically ~~than~~advanced ~~in other regions~~products;

•the increasing fragmentation of semiconductor markets, leading certain markets to become too small to support the cost of a new fabrication plant, while others require less technologically advanced products; the continuing importance of specialty markets (such as internet of things, communications, automotive, power and sensors) that use process technologies that have a low barrier to entry; ~~and~~

•the ~~importance~~increasing ofrole ~~advanced~~for ~~packaging~~and tocomplexity ~~artificial~~of ~~intelligence~~software ~~computing.~~in our products;

If•the wefocus doon ~~not~~reducing ~~accurately~~energy ~~forecast~~usage and ~~allocate~~improving ~~appropriate~~the ~~resources~~environmental ~~and~~impact ~~investment towards addressing key technology changes~~ and ~~inflections,~~sustainability ~~successfully~~associated ~~develop~~with ~~and~~manufacturing ~~commercialize products to meet demand for new technologies~~operations, and ~~effectively~~the ~~address~~availability ~~industry~~of ~~trends,~~adequate ~~our business~~ and ~~results~~reliable sources of ~~operations~~energy; ~~may be materially~~ and ~~adversely impacted.~~

We•the ~~are~~importance ~~exposed~~of toadvanced ~~factors~~packaging ~~specific~~ to ~~the~~AI ~~display industry~~computing.

~~The~~If ~~global~~we ~~display~~do ~~industry~~not ~~has~~effectively ~~experienced~~address ~~considerable~~these ~~volatility in capital equipment investment levels~~factors, ~~due~~accurately inforecast ~~part~~and toallocate ~~the~~appropriate ~~limited~~resources ~~number of display manufacturers, the concentrated nature of end-use applications, production capacity relative to end-use demand, the speed of adopting new technologies into production,~~ and ~~panel~~investment ~~manufacturer~~towards ~~profitability.~~addressing ~~Industry~~key ~~growth~~technology ~~depends~~changes ~~primarily on consumer demand for increasingly larger~~ and ~~more advanced TVs~~inflections, ~~and~~successfully ondevelop ~~demand for advanced smartphones~~ and ~~mobile~~commercialize ~~device~~products ~~displays,~~to ~~which~~meet demand isfor ~~highly~~new ~~sensitive to cost and improvements in~~ technologies, and ~~features.~~effectively ~~The~~address ~~display~~ industry istrends, ~~characterized~~our bybusiness ~~factors particular to this industry that impact demand for~~ and ~~the~~results ~~profitability~~ of ~~our~~operations ~~display~~may ~~products~~be materially and ~~services,~~adversely ~~including:~~impacted.

•the importance of new types of display technologies, such as organic light-emitting diode (OLED), low temperature polysilicon (LTPS) and metal oxide transistor backplanes, flexible displays, and new touch panel films;

•the increasing cost of research and development, and complexity of technology transitions and inflections, and our ability to timely and effectively anticipate and adapt to these changes;

•the timing and extent of an expansion of manufacturing facilities in China, which may be affected by changes in economic conditions and governmental regulations, including trade policies and export regulations;

•the importance of increasing market positions in products and technologies with growing demand;

•the rate of transition to new display technologies for TVs, information technology products and mobile applications, and augmented and virtual reality applications, and the resulting effect on capital intensity in the industry and on our product differentiation, gross margin and return on investment;

•the concentration of display manufacturer customers, and fluctuations in customer spending quarter over quarter and year over year for display fabrication equipment; and

•the dependence on a limited number of display manufacturer customers’ selection of new technologies, and their ability to successfully commercialize new products and technologies, and uncertainty with respect to future display technology end-use applications and growth drivers.

The display industry has experienced decreased levels of investment in display fabrication equipment. If we do not successfully develop and commercialize products to meet demand for new and emerging display technologies, or if industry

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demand for display fabrication equipment and technologies does not grow, our business and our operating results may continue to be adversely impacted.

The industries in which we operate are highly competitive and subject to rapid technological and market changes.

We operate in a highly competitive environment in which innovation is critical, and our future success depends on ~~many factors, including the development of new technologies and effective commercialization and customer acceptance of~~ our ~~equipment,~~ability ~~services~~to ~~and~~anticipate ~~related products,~~ and ~~our~~respond ~~ability~~ to ~~increase~~technology ~~our~~inflections, ~~position~~evolving incustomer ~~our current markets~~requirements, ~~expand~~competitor ~~into adjacent and new markets~~innovations, and ~~optimize~~changes ~~operational~~in ~~performance~~market demand. The development, introduction and support of products in a geographically diverse and competitive environment requires collaboration with customers and other industry participants, which has grown more complex and ~~expensive over time~~costly. New or improved products may entail higher costs, and longer development cycles, ~~lower profits~~ and may have unforeseen product design or manufacturing defects. To compete successfully, we must:

~~•identify and address technology inflections, market changes, competitor innovations, new applications, customer requirements and end-use demand in a timely and effective manner;~~46

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•develop new products and disruptive technologies, improve and develop new applications for existing products, and adapt products for use by customers in different applications and markets with varying technical requirements;

•complete our new Equipment and Process Innovation and Commercialization Center and other major infrastructure projects on schedule and on budget, and realize the anticipated benefits of those projects;

•differentiate our products from those of competitors, meet customers’ performance specifications, ~~(including those related to energy consumption~~ and ~~environmental~~successfully ~~impact~~commercialize ~~more~~our ~~broadly), appropriately price~~ products, and achieve market acceptance;

•maintain operating flexibility to enable responses to changing markets, applications and customer requirements;

•enhance our worldwide operations across our businesses to reduce cycle time, enable continuous quality improvement, reduce costs, and enhance design for manufacturability and serviceability;

•focus on product development and sales and marketing strategies that address customers’ high value problems and strengthen customer relationships;

•effectively allocate resources between our existing products and markets, the development of new products, and expanding into new and adjacent markets;

•improve the productivity of capital invested in ~~R&D~~research and development activities;

•accurately forecast demand, work with suppliers and meet production schedules for our products, improve our manufacturing processes and achieve cost efficiencies across product offerings; and

•~~improve~~implement changes in our ~~manufacturing~~design ~~processes~~engineering methodology to reduce material costs and ~~achieve~~cycle ~~cost~~time ~~efficiencies~~and ~~across~~improve product ~~offerings;~~life cycle management.

~~•adapt~~If we fail to ~~changes~~anticipate inor ~~value~~respond ~~offered~~effectively byto ~~companies~~technology ininflections ~~different~~or ~~parts~~competitive ofor ~~the~~market ~~supply~~developments, ~~chain;~~or if we are unable to successfully develop and commercialize new products, our business performance and operating results may be materially and adversely impacted.

•qualify products for evaluation and volume manufacturing with our customers; and

•implement changes in our design engineering methodology to reduce material costs and cycle time, increase commonality of platforms and types of parts used in different systems, and improve product life cycle management.

If we do not successfully anticipate technology inflections, develop and commercialize new products and technologies, and respond to changes in customer requirements and market trends, our business performance and operating results may be materially and adversely impacted.

We are exposed to risks related to government incentives and other agreements that may involve government entities.

From time to time, we enter into agreements with government entities for grants, tax benefits and other incentives, or other funding related to our investment, research and development and production activities, or for sale of our products to government entities or government-funded programs. These agreements typically include terms that are not common in similar agreements with non-governmental entities, including representations and warranties, covenants and certifications, and record-keeping, accounting, audit, intellectual property rights-sharing, information handling, supply chain management, headcount, security, disclosure and other requirements. These agreements may also require us to achieve or maintain certain levels of investment, capital spending and performance milestones. Compliance with these requirements may add complexity to our operations and increase our costs, and a failure to comply could result in ~~cancelation~~cancellation of agreements or transactions, investigations, civil and criminal penalties, forfeiture of profits, reduction, termination or clawback of any funding, suspension or debarment from doing business with the government, or other penalties, any of which could have a material and adverse effect on our business, financial condition and results of operations.

49We are exposed to factors specific to the display industry.

~~Table~~We are a supplier to the global display industry, which has experienced considerable volatility in capital equipment investment levels, due in part to the limited number of ~~Contents~~display manufacturers, the concentrated nature of end-use applications, production capacity relative to end-use demand, the speed of adopting new technologies and panel manufacturer profitability. Industry growth depends primarily on consumer demand for increasingly larger and more advanced TVs, and on demand for advanced smartphones and mobile device displays, which demand is highly sensitive to cost and improvements in technologies and features. Demand for and the profitability of our display products and services is impacted by the foregoing industry factors, as well as the introduction of and rate of transition to new types of display technologies, our ability to anticipate and adapt to technology transitions and inflections, and the expansion of display manufacturing facilities in China. If we do not successfully develop and commercialize products to meet demand for new and emerging display technologies, or if industry demand for display fabrication equipment and technologies does not grow, our business and our operating results may be adversely impacted.

We are exposed to risks associated with expanding into new and related markets and industries.

As part of our growth strategy, we seek to continue to expand into related or new markets and industries, either with our existing products or with new products developed internally, or those developed in collaboration with third parties, or obtained ~~through acquisitions. Our ability to successfully expand our business into new and related markets and industries may be adversely affected by a number of factors, including:~~

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through acquisitions. Our ability to successfully expand our business into new and related markets and industries may be adversely affected by a number of factors, including:

•the need to devote additional resources to develop new products for, and operate in, new markets;

•the need to develop new sales and technical marketing strategies, and to develop relationships with new customers;

•differing rates of profitability and growth among multiple businesses;

•our ability to anticipate demand, capitalize on opportunities, and avoid or minimize risks;

•the complexity of managing multiple businesses with variations in production planning, execution, supply chain management and logistics;

•the adoption of new business models, business processes and systems;

•the complexity of entering into and effectively managing strategic alliances or partnering opportunities;

•new materials, processes and technologies;

•the need to attract, motivate and retain employees with skills and expertise in these new areas;

•new and more diverse customers and suppliers, including some with limited operating histories, uncertain or limited funding, evolving business models or locations in regions where we do not have, or have limited, operations;

•new or different competitors with potentially more financial or other resources, industry experience and established customer relationships;

•entry into new industries and countries, with differing levels of government involvement, laws and regulations, and business, employment and safety practices and requirements;

•third parties’ intellectual property rights; and

•the need to comply with, or work to establish, industry standards and practices.

We ~~are~~may ~~exposed~~invest tosignificant ~~risks~~resources towards expanding into related or new markets and industries, and there can be no assurance that our products and services will achieve market acceptance or be profitable. Demand for our products and services depends on the success of the markets and industries we seek to expand into, and the ~~use~~failure of ~~artificial~~any ~~intelligence~~of bythose usmarkets and industries could have an adverse effect on our ~~competitors.~~business, financial condition and results of operations.

We are ~~increasingly~~exposed incorporating artificial intelligence capabilities into the development of technologies and our business operations, and into our products and services. Artificial intelligence technology is complex and rapidly evolving, and may subject us to ~~significant competitive, legal, regulatory, operational and other~~ risks. The implementation of artificial intelligence can be costly, and there is no guarantee that our use of artificial intelligence will enhance our technologies, benefit our business operations, or produce products and services that are preferred by our customers. Our competitors may be more successful in their artificial intelligence strategy and develop superior products and services with the aid of artificial intelligence technology. Additionally, artificial intelligence algorithms or training methodologies may be flawed, and datasets may contain irrelevant, insufficient or biased information, which can cause errors in outputs. This may give rise to legal liability, damage our reputation, and materially harm our business. The use of artificial intelligence in the development of our products and services could also cause loss of intellectual property, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy and cybersecurity. Additionally, artificial intelligence technology may also create ethical issues, which could impair market adoption of such technology and impair demand for our products and services. Furthermore, the ~~United States and other countries may adopt laws and regulations related to artificial intelligence. Such laws and regulations could cause us to incur greater compliance costs and limit the~~ use of ~~artificial~~AI ~~intelligence in the development of our products and services. Any failure or perceived failure~~ by us ~~to comply with such regulatory requirements could subject us to legal liabilities, damage our reputation, or otherwise have a material~~ and ~~adverse impact on~~ our ~~business~~competitors.

We are increasingly incorporating AI capabilities into the development of technologies, our business operations and our products and services. AI technology is complex and rapidly evolving and may subject us to significant competitive, legal, regulatory, operational and other risks. The implementation of AI can be costly, and there is no guarantee that our use of AI will enhance our technologies, benefit our business operations, or produce products and services that are preferred by our customers. Our competitors may be more successful in their AI strategy and develop superior products and services with the aid of AI technology. Additionally, AI algorithms or training methodologies may be flawed, and datasets may contain irrelevant, insufficient or biased information, which can cause errors in outputs. This may give rise to legal liability, damage our reputation, and materially harm our business. The use of AI in the development of our products and services could also cause loss of intellectual property, as well as subject us to risks related to intellectual property infringement or misappropriation, data privacy and cybersecurity. We also utilize third-party providers of AI capabilities, and our ability to implement AI successfully in our business operations relies on our continued access to third-party providers and safeguards implemented by them. Additionally, AI technology may also create ethical issues, which could impair market adoption of such technology and impair demand for our products and services. Furthermore, the United States and other countries may adopt laws and regulations related to AI. These laws and regulations could cause us to incur greater compliance costs and limit the use of AI in the development of our products and services. Any failure or perceived failure by us to comply with these regulatory requirements could subject us to legal liabilities, damage our reputation, or otherwise have a material and adverse impact on our business.

Operational and Financial Risks

We are exposed to risks related to protection and enforcement of intellectual property rights.

Our success depends on the protection of our technology using patents, trade secrets, copyrights and other intellectual property rights. Infringement or misappropriation of our intellectual property rights, such as the manufacture or sale of equipment or spare parts that use our technology without authorization, could result in uncompensated lost market and revenue opportunities. ~~Monitoring~~Detecting and ~~detecting~~preventing ~~any~~misuse ~~unauthorized access, use or disclosure~~ of our intellectual property is difficult and costly, and we cannot be certain that ~~the~~our protective measures ~~we have implemented~~ will ~~completely~~be ~~prevent misuse~~successful. Our ability to enforce our intellectual property rights is subject to litigation risks and uncertainty as to the protection and enforceability of those rights in some countries. Enforcement efforts may be subject to

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~~those rights in some countries. If we seek to enforce our intellectual property rights, we may be subject to~~ claims that ~~those~~our rights are invalid or unenforceable, and ~~others~~ may ~~seek~~result in counterclaims against us, which could have a negative impact on our business. If we are unable to enforce and protect intellectual property rights, or if they are circumvented, rendered obsolete, invalidated by the rapid pace of technological change, or stolen or misappropriated by employees or third parties, it could have an adverse impact on our competitive position and business. Changes in intellectual property laws or their interpretation may impact our ability to protect and assert our intellectual property rights, increase costs and uncertainties in the prosecution of patent applications or related enforcement actions, and diminish the value and competitive advantage conferred by our intellectual property assets.

From time to time third parties have asserted, and may continue to assert, intellectual property claims against us and our products. Claims that our products infringe the rights of others, whether or not meritorious, can be expensive and time-consuming to defend and resolve, and may divert the efforts and attention of management and personnel. The inability to obtain rights to use third-party intellectual property on commercially reasonable terms could have an adverse impact on our business. We may face claims based on the theft or unauthorized use or disclosure of third-party trade secrets and other confidential business information. Any ~~such~~of these incidents and claims could severely harm our business and reputation, result in significant expenses, harm our competitive position, and prevent us from selling certain products, all of which could have a material and adverse impact on our business and results of operations.

We are exposed to cybersecurity threats and incidents.

In the conduct of our business, we ~~collect,~~ use, ~~transmit, store, and otherwise process data using~~ information technology systems, including systems owned and maintained by us or our third-party providers., ~~These~~to collect, transmit, store and otherwise process data, ~~include~~including confidential information and intellectual property belonging to us or our customers or other business partners, and personal information of individuals. ~~All~~These ~~information~~technologies ~~technology systems~~ are subject to disruptions, outages, failures, and ~~security~~cybersecurity breaches or incidents, ~~which~~arising ~~may~~from ~~be caused by~~ a variety of ~~internal~~factors, and ~~external~~we ~~factors. We~~ and our third-party providers ~~have experienced, and~~ expect to continue to experience, ~~cybersecurity~~such incidents. Cybersecurity incidents may ~~range~~include ~~from~~ physical attacks on ~~our~~ computer ~~system~~systems or network infrastructure,; to employee or contractor error, or misuse or unauthorized ~~use~~access; ~~of information technology systems or confidential information, to individual~~ attempts to gain unauthorized access to ~~these~~systems ~~information~~or ~~systems,~~data; toas ~~sophisticated~~well ~~cybersecurity~~as ~~attacks,~~sophisticated cyberattacks or advanced persistent threats, any of which may ~~target or~~ impact us directly or ~~indirectly~~ through our third-party providers and global supply chain. Threat actors may ~~also~~seek ~~attempt~~ to ~~influence~~manipulate our employees, suppliers, ~~and other~~ third-party providers, or customers to ~~disclose sensitive information in order to~~ gain access to our, our customers’ or business partners’ data. Cybersecurity attacks are increasing ~~in number~~ and ~~the~~ attackers are increasingly organized and well-financed, or at times supported by state actors. Geopolitical tensions or conflicts, ~~such as Russia’s invasion of Ukraine and increasing tension with China,~~ may ~~create~~further aincrease ~~heightened risk of~~ cybersecurity ~~attacks~~risk. ToThreat ~~the~~actors’ ~~extent~~techniques ~~artificial~~evolve ~~intelligence~~rapidly ~~capabilities improve~~ and ~~are~~may increasingly ~~adopted~~incorporate bynew ~~threat actors~~technologies, ~~they~~including ~~may~~AI ~~be used to identify vulnerabilities~~ and ~~craft~~quantum ~~increasingly sophisticated cybersecurity attacks~~computing. ~~Artificial~~AI ~~intelligence~~ and deepfake technologies ~~could~~may beenable ~~used to attack information systems by creating~~ more effective phishing, ~~emails or~~ social engineering ~~and~~or byexploitation ~~exploiting~~of ~~vulnerabilities in~~ electronic security programs utilizing false image or voice recognition. Vulnerabilities, technical errors and other risks may be introduced through the use of ~~artificial~~AI ~~intelligence~~ by us, our customers, suppliers and other business partners and third-party providers, or through the use of third-party hardware and software. Advances in quantum computing could undermine current encryption standards and allow threat actors to bypass security measures. Although we are not aware of any cybersecurity incidents impacting our information systems that have ~~been~~had ~~determined to have~~ a material impact on us to date, we continue to devote significant resources to network security, data encryption, and other measures to protect our systems and data from unauthorized access or misuse, and we may be required to expend greater resources in the future, especially in the face of evolving and increasingly sophisticated cybersecurity threats and laws, regulations, and other actual and asserted obligations to which we are or may become subject relating to privacy, data protection, and cybersecurity. We may be unable to anticipate, prevent, or remediate future ~~attacks, vulnerabilities, breaches, or~~ incidents, and in some instances, we may be unaware of ~~vulnerabilities or cybersecurity breaches or~~ incidents or their ~~magnitude and effects~~scope, particularly as attackers ~~are~~may ~~increasingly~~evade ~~able to circumvent~~ controls ~~and~~or remove forensic evidence. Cybersecurity incidents, ~~including cybersecurity incidents on third-party provider networks,~~ may result in ~~business~~delays ~~disruption; delay~~ in ~~the~~our product development and delivery ~~of our products~~; ~~disruption~~disruptions ofto our manufacturing ~~processes~~, ~~internal~~ communications, ~~interactions with customers~~ and ~~suppliers and processing and~~ reporting of financial results; ~~the~~ theft or misappropriation of intellectual property or critical data belonging to us or our customers; corruption, loss of, or inability to access (e.g., through ransomware or denial of service) confidential information and critical data ~~(i.e., that of our company and our third-party providers and customers)~~; reputational damage; private claims, demands, ~~and~~ litigation orand regulatory ~~investigations~~inquiries, enforcement actions, or other proceedings ~~related to contractual or regulatory privacy, cybersecurity, data protection, or other confidentiality obligations~~; diminution in the value of our investment in research, development and engineering; and increased costs associated with ~~the implementation of~~ cybersecurity ~~measures to detect~~detection, ~~deter,~~prevention ~~protect against,~~ and ~~recover from such incidents~~remediation. ~~Our~~We ~~efforts~~are tosubject ~~comply with, and changes~~ to, changing laws, regulations, and contractual and other ~~actual and asserted~~ obligations concerning privacy, cybersecurity, and data protection, including ~~developing~~ restrictions on cross-border data ~~transfer~~transfers and data localization, ~~could~~as ~~result~~well inas increasingly rigorous contractual provisions demanded by our customers and third-party providers. Compliance with these obligations may require significant ~~expense~~expenditures, and any actual or alleged failure to comply could result in inquiries, enforcement actions and other proceedings by regulators or other third parties.

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inquiries, investigations, and other proceedings against us by regulatory authorities or other third parties. Customers and third-party providers increasingly demand rigorous contractual provisions regarding privacy, cybersecurity, data protection, confidentiality, and intellectual property, which may increase our overall compliance burden.

We are exposed to risks associated with business combinations, acquisitions, strategic investments and divestitures.

We may engage in acquisitions of or investments in companies, technologies or products in existing, related or new markets. Business combinations, acquisitions and investments involve numerous risks to our business, financial condition and operating results, including:

•inability to complete proposed transactions timely or at all due to the failure to obtain regulatory or other approvals, including through expanding global national security regimes that impose prohibitions on foreign investments in or acquisitions of local businesses; litigation or other disputes, and any ensuing obligation to pay a termination fee;

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•diversion of management’s attention and disruption of ongoing businesses;

•the failure to realize expected revenues, gross and operating margins, net income and other returns from acquired businesses;

•requirements imposed by government regulators in connection with their review of a transaction, including post-closing investigations of non-notified transactions, which may include, among other things, divestitures and restrictions on the conduct of our existing business or the acquired business;

•following completion of acquisitions, ineffective integration of businesses, operations, systems, digital and physical security, technologies, products, employees, compliance programs, changes in laws or regulations, including tax laws, or other factors, may impact the ability to realize anticipated synergies or other benefits;

•failure to commercialize technologies from acquired businesses or developed through strategic investments;

•dependence on unfamiliar supply chains or relatively small supply partners;

•inability to capitalize on characteristics of new markets that may be significantly different from our existing markets and where competitors may have stronger market positions and customer relationships;

•failure to retain and motivate key employees of acquired businesses;

•the impact of the announcement or consummation of a proposed transaction on relationships with third parties;

•changes in our credit rating, which could adversely impact our access to and cost of capital;

•increases in debt obligations to finance activities associated with a transaction, which increase interest expense, and reductions in cash balances, which reduce the availability of cash flow for general corporate or other purposes, including share repurchases and dividends;

•exposure to new operational risks, rules, regulations, worker expectations, customs and practices to the extent acquired businesses are located in regions where we have not historically conducted business;

•challenges associated with managing new, more diverse and more widespread operations, projects and people;

•inability to obtain and protect intellectual property rights in key technologies;

•inadequacy or ineffectiveness of an acquired company’s internal financial controls, disclosure controls and procedures, cybersecurity, privacy policies and compliance programs, trade control processes or programs, or environmental, health and safety, anti-corruption, human resource, or other policies or practices;

•impairment of acquired intangible assets and goodwill as a result of changing business conditions, technological advancements or worse-than-expected performance of the segment;

•the risk of litigation, government enforcement actions or claims associated with a proposed or completed transaction;

•unknown, underestimated, undisclosed or undetected commitments or liabilities, including potential intellectual property infringement claims, or non-compliance with laws, regulations or policies; and

•the inappropriate scale of acquired entities’ critical resources or facilities for business needs.

We make investments in other companies, including companies formed as joint ventures, which may decline in value or not meet desired objectives. The success of these investments depends on various factors over which we may have limited or no control and, particularly with respect to joint ventures, requires ongoing and effective cooperation with partners. In addition, new legislation, additional regulations or global economic or political conditions may affect or impair our ability to invest in certain countries or require us to obtain regulatory approvals to do so. We may not receive the necessary regulatory approvals, or the approvals may come with significant conditions or obligations. The risks to our investment portfolio may be exacerbated by unfavorable financial market and macroeconomic conditions, and as a result, the value of the investment portfolio could be negatively impacted and lead to impairment charges.

52We may seek to divest portions of our business that are not deemed to fit with our strategic plan. Divestitures involve additional risks and uncertainties, such as our ability to sell these businesses at a price and on terms that are satisfactory and in a timely manner or at all, disruption to other parts of the businesses and distraction of management, allocation of internal resources that would otherwise be devoted to completing strategic acquisitions or other strategic projects or initiatives, loss of key employees or customers, loss of access by retained business units to critical intellectual property or other assets transferred with the divested business, exposure to unanticipated liabilities or ongoing obligations to support the businesses following these divestitures and other adverse financial impacts.

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or the approvals may come with significant conditions or obligations. The risks to our investment portfolio may be exacerbated by unfavorable financial market and macroeconomic conditions and, as a result, the value of the investment portfolio could be negatively impacted and lead to impairment charges.

We may seek to divest portions of our business that are not deemed to fit with our strategic plan. Divestitures involve additional risks and uncertainties, such as ability to sell such businesses on satisfactory price and terms and in a timely manner, or at all, disruption to other parts of the businesses and distraction of management, allocation of internal resources that would otherwise be devoted to completing strategic acquisitions or other strategic projects or initiatives, loss of key employees or customers, loss of access by retained business units to critical intellectual property or other assets transferred with the divested business, exposure to unanticipated liabilities or ongoing obligations to support the businesses following such divestitures, and other adverse financial impacts.

The ability to attract, retain and motivate key employees is vital to our success.

Our success depends in large part on our ability to attract, retain and motivate qualified employees and leaders with the necessary expertise and capabilities, representing diverse backgrounds and experiences. Achieving this objective may be difficult due to many factors, including fluctuations in global economic and industry conditions, management or organizational changes, ongoing competition for talent, the availability of qualified employees, the ability to obtain necessary authorizations for workers to provide services outside their home countries, challenges in hiring and integrating workers in different countries, the attractiveness of our compensation and benefit programs, our career growth and development opportunities, and our employment policies. If we are unable to attract, retain and motivate qualified employees and leaders, we may be unable to fully capitalize on current and new market opportunities, which could adversely impact our business and results of operations. The loss of knowledgeable and experienced employees may result in unexpected costs, reduced productivity, or difficulties with respect to internal processes and controls.

We operate in jurisdictions with complex and changing tax laws.

We are subject to income taxes in the United States and foreign jurisdictions. Significant judgment is required to determine and estimate worldwide tax liabilities. Our provision for income taxes and effective tax rates could be affected by numerous factors, including changes in applicable tax laws, interpretations of applicable tax laws, amount and composition of pre-tax income in jurisdictions with differing tax rates, and valuation of deferred tax assets.

There have been a number of enacted and proposed changes in the tax laws that could have a material impact on our provision for income taxes and effective tax rate. An increase in our provision for income taxes and effective tax rate could, in turn, have a material and adverse impact on our results of operations and financial condition. For example, various countries where we do business have enacted or plan to enact new tax laws to implement the global minimum tax regimes based on the Organization for Economic Cooperation and Development Base Erosion and Profit Shifting Project,. ~~and~~The ~~where~~currently enacted, ~~the~~global ~~rules~~minimum ~~began~~tax tolaws bematerially ~~effective~~increase inour ~~fiscal~~foreign ~~2025.~~taxes ~~Additionally,~~beginning onin ~~July~~the 4,first ~~2025,~~quarter ~~the~~of Ufiscal 2026.S. ~~government~~Additionally, ~~enacted~~ the One Big Beautiful Bill Act ~~(OBBBA).~~enacted ~~Key~~in ~~tax~~the ~~provisions~~U.S. ofcontains ~~the~~provisions ~~OBBBA~~that are designed to accelerate tax deductions, but that have had and may in the future have a detrimental impact on our ability to use certain deferred tax assets~~. For example~~, asincluding ~~a result of the acceleration of certain tax deductions under the OBBBA, we are unable to forecast utilization of~~ our ~~existing~~ corporate alternative minimum tax ~~(CAMT)~~ credit deferred tax asset. We have recorded a full valuation allowance against the CAMT credit deferred tax asset, which increased our effective tax rate and provision for income taxes in fiscal 2025. The amount of the valuation allowance may be adjusted in future quarters if estimates of our future taxable income change. We continue to monitor developments and evaluate the impact, if any, of enacted and proposed changes in the tax laws on our results of operations and cash flows. The adoption and effective dates of changes in the tax laws vary by country and could increase tax complexity and uncertainty and may adversely affect our provision for income taxes in future years.

We have been granted additional conditional reduced tax rates in Singapore that expire beginning in fiscal 2030. There is risk our conditional reduced tax rates may not be renewed.

Consistent with the international nature of our business, we conduct certain manufacturing, supply chain, and other operations in Asia, bringing these activities closer to customers and reducing operating costs. In some foreign jurisdictions, we must meet certain requirements to continue to qualify for tax incentives. There is no assurance we will be able to meet such requirements in the future to fully realize benefits from these incentives. Furthermore, the proposed plans to implement global minimum tax regimes could reduce or eliminate the benefits of our tax incentives.

We are subject to examination by the U.S. Internal Revenue Service and other tax authorities, and from time to time amend previously filed tax returns. We regularly assess the likelihood of favorable or unfavorable outcomes resulting from these examinations and amendments to determine the adequacy of our provision for income taxes, which requires estimates and judgments. Although we believe our tax estimates are reasonable, there can be no assurance the tax authorities will agree with such estimates. We may have to engage in litigation to achieve the results reflected in the estimates, which may be time-consuming and expensive. There can be no assurance that we will be successful or that any final determination will not be materially different from the treatment reflected in our historical income tax provisions and effective tax rates

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consuming and expensive. There can be no assurance that we will be successful or that any final determination will not be materially different from the treatment reflected in our historical income tax provisions and effective tax rates.

Our indebtedness and debt covenants could adversely affect our financial condition and business.

As of ~~July~~January 2725, ~~2025~~2026 we had $6.25 billion ~~in aggregate principal amount~~ of senior unsecured notes outstanding. ~~Under~~and, ~~the~~pursuant ~~indenture~~to ~~governing~~their ~~the senior unsecured notes~~terms, we may be required to offer to repurchase the notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest, if we experience a change of control and a contemporaneous downgrade of the notes below investment grade. We also have inrevolving ~~place~~credit afacilities ~~$2.0 billion~~that ~~revolving~~allow ~~credit~~us ~~facility~~to borrow up to approximately $4.1 billion. While no amounts were outstanding under ~~this~~these credit ~~facility~~facilities as of ~~July~~January 2725, ~~2025~~2026, we may borrow amounts in the future under ~~this~~these ~~credit~~facilities ~~facility~~ or enter into new financing arrangements. Our ability to satisfy our debt obligations is dependent upon the results of our business operations and subject to other risks discussed in this section. If we fail to satisfy our debt obligations, or comply with financial and other debt covenants, we may be in default and any borrowings may become immediately due and payable, and such default may constitute a default under our other obligations. There can be no assurance that we would have sufficient financial resources or be able to arrange financing to repay any borrowings at such time. Significant changes in our credit rating, disruptions in the global financial markets, or incurrence of new or refinancing of existing indebtedness at higher interest rates could have a material and adverse impact on our access to and cost of capital for future financings, and financial condition.

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global financial markets, or incurrence of new or refinancing of existing indebtedness at higher interest rates could have a material and adverse impact on our access to and cost of capital for future financings and our financial condition.

Our business depends on the successful implementation and proper functioning of information systems we use.

Our business depends on certain information systems, including, enterprise resource planning, product research and development, financial reporting, information technology network management, and telecommunications. These systems may be maintained by us or by our third-party vendors. Failures of ~~information~~these systems ~~we use~~ could disrupt our operations, impede our ability to timely and accurately process and report financial results, and adversely impact our business, financial condition and results of operations.

We periodically implement new or enhanced information systems. Implementation of new business processes and information systems requires the commitment of significant personnel, training and financial resources, and entails risks to our business operations. If the implementation or improvement of information systems is delayed or unsuccessful, we may not realize anticipated productivity improvements or cost efficiencies, and may experience interruptions in service and operational difficulties, which could result in quality issues, reputational harm, lost market and revenue opportunities, and otherwise adversely affect our business, financial condition and results of operations.

We may incur impairment charges related to goodwill or long-lived assets.

We have a significant amount of goodwill and other acquired intangible assets related to acquisitions. Goodwill and purchased intangible assets with indefinite useful lives are not amortized but are reviewed for impairment annually during the fourth quarter of each fiscal year, and more frequently when events or changes in circumstances indicate the carrying value of an asset may not be recoverable. The review compares the fair value for each of our reporting units to its associated carrying value, including goodwill. Factors that could lead to impairment of goodwill and intangible assets include adverse industry or economic trends, reduced estimates of future cash flows, declines in the market price of our common stock, changes in our strategies or product portfolio, and restructuring activities. Our valuation methodology for assessing impairment requires management to make judgments and assumptions based on historical experience and projections of future operating performance. We have recorded charges to earnings, and may in the future be required to record ~~future~~ charges to earnings, ~~during~~when ~~the~~impairments ~~period in which an impairment~~ of goodwill or intangible assets ishave been determined to exist.

We may not continue to declare cash dividends or repurchase our shares.

Our ability to continue to pay quarterly dividends and to repurchase our shares is subject to capital availability and periodic determinations by our Board of Directors that cash dividends and share repurchases are in the best interest of our stockholders and are in compliance with applicable laws and agreements. Future dividends and share repurchases may be affected by, among other factors, our cash flow; potential future capital requirements for investments, acquisitions, infrastructure projects, and research and development; changes in applicable tax, corporate, or other laws; contractual restrictions, such as financial or operating covenants in our debt arrangements; and changes to our business model. Our dividend payments and share repurchases may change from time to time, and we cannot provide assurance that we will continue to declare dividends or repurchase shares in any particular amounts or at all. A reduction or suspension in our dividend payments or share repurchases could have a negative effect on the price of our common stock.

54Legal, Compliance and Other Risks

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Legal, Compliance, and Other Risks

We are exposed to risks related to legal proceedings, claims and investigations.

From time to time we are, and in the future may be, involved in legal proceedings or claims regarding patent infringement, trade secret misappropriation, other intellectual property rights, trade compliance, including import, export and customs, antitrust, anti-corruption, compliance with government contracting requirements, environmental regulations, cybersecurity, privacy, data protection, securities, contracts, product performance, product liability, unfair competition, employment, workplace safety, and other matters. We may receive, and have received, inquiries, warrants, subpoenas, and other requests for information in connection with government investigations of potential or suspected violations of law or regulations by our company ~~and/~~or our employees. For example, we have received subpoenas from government authorities requesting information relating to China customer shipments, export controls compliance, certain federal award applications and information submitted to the federal government. We also on occasion receive notifications from customers who believe we owe them indemnification, product warranty or have other obligations related to claims made against such customers by third parties.

Legal proceedings, claims, and government investigations, whether with or without merit, and internal investigations, have been and in the future may be time-consuming and expensive to prosecute, defend or conduct; divert management’s attention and our other resources; constrain our ability to sell our products and services; result in adverse judgments for damages, injunctive relief, penalties and fines; and negatively affect our business. We cannot predict the outcome of current or future legal proceedings, claims or investigations.

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We are exposed to risks related to the global regulatory environment.

We are subject to the laws of the United States and multiple foreign jurisdictions and the rules and regulations of various governing bodies, ~~which may differ among jurisdictions,~~ including those related to financial and other disclosures, accounting standards, securities, corporate governance, public procurement and public funding, intellectual property, tax, trade (including import, export and customs regulations), antitrust, cybersecurity, environment ~~(including those relating to sustainability and climate)~~, health and safety, employment, immigration and travel regulations, human rights, privacy, data protection and localization, and anti-corruption. Changing, inconsistent or conflicting laws, rules and regulations, and ambiguities in their interpretation and application create uncertainty and challenges, and compliance ~~with laws, rules and regulations~~ may be onerous and expensive, divert management time and attention ~~from revenue-generating activities,~~ and otherwise adversely impact our business operations. Violations of ~~law~~these laws, rules and regulations, including, among others, those related to financial and other disclosures, trade (including import and export regulations), antitrust, environment, health and safety, privacy, data protection, and anti-corruption, could result in fines, criminal penalties, restrictions on our business, and damage to our reputation, and could have an adverse impact on our business operations, financial condition and results of operations.

Implementation and reporting on our sustainability strategies and targets could result in additional costs, and our inability to achieve them could have an adverse impact on our reputation and performance.

We periodically communicate our strategies and targets related to sustainability matters. These strategies and targets, and their underlying assumptions, reflect our current plans and aspirations, and we may be unable to achieve them. Changing customer and shareholder sustainability expectations, including increasing customer demand for sustainable products, and regulatory requirements, as well as actions taken to achieve our sustainability targets, could cause us to incur substantial expense and alter our manufacturing, operations or equipment designs and processes. Any failure or perceived failure to timely meet these sustainability requirements, expectations or targets, or a failure to realize the anticipated benefits of planned investments and technology innovations related to sustainability, could adversely impact the demand for our products and subject us to significant costs and liabilities and reputational risks that could in turn adversely affect our business, financial condition and results of operations. In addition, standards and processes for measuring and reporting greenhouse gas emissions and other sustainability metrics may change over time, and may result in inconsistent data, increase our costs, result in significant revisions to our strategies and targets, or impact our ability to achieve them. We also are or may become subject to new climate and sustainability laws and regulations, such as the State of California’s ~~new~~ climate change disclosure rules, ~~and~~ the European Union’s Corporate Sustainability Reporting Directive and International Sustainability Standards Board standards. Compliance with such laws and regulations, as well as increased scrutiny from regulators, customers and other stakeholders on our sustainability practices, could result in additional costs and expose us to new risks. Any scrutiny of our greenhouse gas emissions or other sustainability disclosures, our failure to achieve related strategies and targets, or our failure to disclose our sustainability measures consistent with applicable laws and regulations or to the satisfaction of regulators or our stakeholders could negatively impact our reputation or performance.

We are subject to risks associated with environmental, health and safety regulations.

We are subject to environmental, health and safety regulations in connection with our global business operations, including but not limited to: regulations related to the design, manufacture, sale, shipping, import, export and use of our products; use, handling, discharge, recycling, transportation and disposal of hazardous materials used in our products or in producing our products; the operation of our facilities; and the use of our real property, including in connection with construction of our infrastructure projects. The failure or inability to comply with existing or future environmental, health and safety regulations could result in: significant remediation or other legal liabilities; the imposition of penalties and fines; restrictions on the development, manufacture, sale, shipping, import, export or use of certain of our products; limitations on the operation of our facilities or ability to use our real property; and a decrease in the value of our real property. We could be required to alter our product design, manufacturing and operations and incur substantial expense to comply with environmental, health and safety regulations, including reporting requirements. Any failure to comply with these regulations could subject us to significant costs and liabilities that could materially and adversely affect our business, financial condition and results of operations.

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products; use, handling, discharge, recycling, transportation and disposal of hazardous materials used in our products or in producing our products; the operation of our facilities; and the use of our real property, including in connection with construction of our infrastructure projects. The failure or inability to comply with existing or future environmental, health and safety regulations could result in: significant remediation or other legal liabilities; the imposition of penalties and fines; restrictions on the development, manufacture, sale, shipping or use of certain of our products; limitations on the operation of our facilities or ability to use our real property; and a decrease in the value of our real property. We could be required to alter our product design, manufacturing, and operations, and incur substantial expense in order to comply with environmental, health and safety regulations, including reporting requirements. Any failure to comply with these regulations could subject us to significant costs and liabilities that could materially and adversely affect our business, financial condition and results of operations.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

In March 2025, our Board of Directors approved a common stock repurchase program authorizing $10.0 billion in repurchases, which supplemented the ~~previously~~previous ~~existing~~ $10.0 billion authorization approved ~~from~~in March 2023. As of ~~July~~January 2725, ~~2025~~2026, approximately $1413.86 billion remained available for future stock repurchases under the repurchase program.

Period	Total Number ofShares Purchased	AveragePrice Paidper Share *		AggregatePrice Paid*		Total Number ofShares Purchased asPart of PubliclyAnnounced Program	Maximum DollarValue of SharesThat May Yet bePurchased Underthe Program*
	(In millions, except per share amounts)
Month #1
(April 28, 2025 to May 25, 2025)	3.7	$	159.65	$	586	3.7	$	15,284
(October 27, 2025 to November 23, 2025)	0.4	$	230.64	$	82	0.4	$	13,894
Month #2
(May 26, 2025 to June 22, 2025)	2.1	$	166.37	345		2.1	$	14,939
(November 24, 2025 to December 21, 2025)	0.4	$	256.99	115		0.4	$	13,779
Month #3
(June 23, 2025 to July 27, 2025)	0.5	$	188.76	107		0.5	$	14,832
(December 22, 2025 to January 25, 2026)	0.5	$	281.46	140		0.5	$	13,639
Total	61.3	$	~~164~~259.4717	$	~~1,038~~337	61.3

___________________________

* Amounts include the 1% surcharge on stock repurchases under the Inflation Reduction Act’s excise tax. This excise tax is recorded in equity and reduces the amount available under the repurchase program, as applicable.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended ~~July~~January 2725, ~~2025~~2026, no director or officer, as defined in Rule 16a-1(f), adopted or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408.

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Item 6. Exhibits

Exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K:

Incorporated by Reference

ExhibitNo.

Description

Form

File No.

Exhibit No.

Filing Date

10.1

Form of Performance Share Unit Agreement for members of the Executive Staff for use under the amended and restated Applied Materials, Inc. Employee Stock Incentive Plan†

10.2

Form of Restricted Stock Unit Agreement for members of the Executive Staff for use under the amended and restated Applied Materials, Inc. Employee Stock Incentive Plan†

10.3

First Amendment to the Applied Materials, Inc. 2016 Deferred Compensation Plan (as amended and restated on January 1, 2021), dated as of January 6, 2026†

31.1

Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†

31.2

Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002†

32.1

Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002‡

32.2

Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002‡

101.SCH

Inline XBRL Taxonomy Extension Schema Document‡

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document‡

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document‡

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document‡

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document‡

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

† Filed herewith.

‡ Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		APPLIED MATERIALS, INC.
August 21, 2025	By:	/s/ BRICE HILL
February 19, 2026	By:	/s/ BRICE HILL
		Brice Hill
		Senior Vice President, Chief Financial Officer(Principal Financial Officer)

August 21, 2025	By:	/s/ ADAM SANDERS
February 19, 2026	By:	/s/ ADAM SANDERS
		Adam Sanders
		Vice President,Corporate Controller and Chief Accounting Officer(Principal Accounting Officer)

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