Applied Materials Reports FQ3 After Today's Close: What the 30% Equipment Year Has to Prove

by Leah Avraham · August 13, 2026

Previews Correspondent, Earnings Dispatch

Applied Materials reports fiscal third quarter results after the US market closes on Thursday, August 13, with a conference call scheduled for 4:30 p.m. ET, according to the company's investor relations announcement issued on July 23. Nothing has been released yet. What follows is a preview of the bar the company set for itself three months ago and the industry claims that tonight's numbers will either support or undercut.

The guidance is specific. On the fiscal second quarter call on May 14, chief financial officer Brice Hill told investors: "We expect company revenue of $8.95 billion ± $500 million, which is up nearly 23% year-over-year." On the earnings line he said: "We expect non-GAAP EPS of $3.36 ± $0.20, which is up nearly 36% year-over-year." Sell-side estimates sit at or just above the midpoint — Benzinga cited consensus of roughly $9bn in revenue and $3.39 in EPS, while Vantage Markets put the adjusted EPS range of estimates at $3.36 to $3.42.

The starting point is a July-quarter comparison against a fiscal second quarter that was itself a record. Applied posted revenue of $7.91bn in FQ2, up 11% year over year. GAAP gross margin was 49.9% against 49.1%, with non-GAAP gross margin at 50.0% versus 49.2%. GAAP operating margin came in at 31.9% against 30.5%, and non-GAAP operating margin at 32.1% versus 30.7%. GAAP diluted EPS was $3.51, up 33%, while non-GAAP diluted EPS was $2.86, up 20% — a quarter in which the GAAP figure exceeded the adjusted one, so the two measures are not interchangeable when framing tonight's comparison.

By segment in FQ2, Semiconductor Systems delivered $5,965m, which Hill described in prepared remarks as record revenue "up 16% sequentially and up 10% year-over-year" — the sequential figure is the flattering one and should not be read as an annual rate. Applied Global Services delivered $1,665m, also a record, up 17% year over year. The Other category, which includes Display, accounted for the remaining $280m. Those three lines are where the guided step up to $8.95bn has to come from, and the mix between systems and the more annuity-like services business is one of the details worth reading in the segment table rather than the headline.

The larger claim under test is the industry one. Chief executive Gary Dickerson told investors in May that Applied now expects its semiconductor equipment business to grow more than 30% in the current calendar year, and that leading-edge foundry-logic, DRAM and advanced packaging together should account for more than 80% of the year-on-year growth in total wafer fab equipment spending in 2026. He also said the company expects to grow packaging revenues more than 50% in calendar 2026. Those are calendar-year statements, which means Applied's July and October quarters carry most of the burden of delivering them.

Some supporting detail from the same call gives the claim texture. Hill said DRAM revenue of $1.7bn grew 18% year over year in FQ2. On geography he said China represented 24% of Semiconductor Systems plus Applied Global Services revenue, and guided that "We expect our business in China, and our ICAPS business worldwide, to be flat to slightly higher in the calendar year." A China line that runs materially below that framing, or an ICAPS trend that turns down, would complicate the arithmetic behind the 30%-plus figure even if the headline quarter lands.

In the FQ2 release, Dickerson said: "The rapid global build-out of AI computing infrastructure combined with Applied's strong leadership positions in leading-edge logic, DRAM and advanced packaging provide an exceptionally strong foundation for sustained, multi-year revenue and profit growth." Hill, in the same release, said: "As the largest process equipment company in the fastest growing markets, our top priority is ensuring we have the operational and supply chain readiness to support our customers' growth." That framing points to capacity and supply chain investment, which is one reason cash conversion has become a talking point — several previews, including Blockonomi's, flagged FQ2 free cash flow of $210m against $1.06bn a year earlier.

The October-quarter guide is arguably the more consequential number than the July quarter itself, because it is the first outlook that overlaps the back half of the calendar-year growth target. Vantage Markets noted that Citi expects October-quarter guidance above Street expectations, though no numerical figure was attached. Applied has not issued an FQ4 outlook, and any range published tonight will be new information.

Positioning into the print is unsettled. Vantage Markets put Applied at $548.34 ahead of the regular Nasdaq session on Thursday, down $0.27 or 0.05% at a 04:45 UTC cut-off, consolidating in a $540 to $550 band. The same analysis noted the stock was down 25% from June all-time highs but still up 105% year to date — both halves of that comparison matter. It put the options-implied earnings move at roughly 14%, or about $75 at the $548 reference price — an unusually wide expected reaction for a company that has already published a revenue and EPS range for the quarter, which suggests the market is pricing the guide and the calendar-year commentary rather than the July results.

Three things to check when the release lands: whether revenue clears the $8.95bn midpoint or merely stays inside the $500m band; whether non-GAAP EPS lands above the $3.36 midpoint and how far GAAP diverges from it; and whether management repeats, raises or softens the more-than-30% calendar-2026 equipment growth statement and the more-than-50% packaging figure. Those last two are the sentences with read-through beyond Applied's own P&L.