Applied Materials Inc., adjustment to net income

US$ in millions

12 months ended:	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
Net income (as reported)	6,856)	6,525)	5,888)	3,619)	2,706)	3,313)
Add: Change in unrealized gain (loss) on available-for-sale investments	25)	(74)	(21)	9)	21)	(51)
Net income (adjusted)	6,881)	6,451)	5,867)	3,628)	2,727)	3,262)

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Applied Materials Inc., adjusted profitability ratios

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
Net Profit Margin
Reported net profit margin	25.86%	25.31%	25.53%	21.04%	18.52%	19.20%
Adjusted net profit margin	25.95%	25.02%	25.44%	21.09%	18.67%	18.91%
Return on Equity (ROE)
Reported ROE	41.94%	53.51%	48.08%	34.21%	32.94%	48.44%
Adjusted ROE	42.09%	52.90%	47.91%	34.30%	33.20%	47.70%
Return on Assets (ROA)
Reported ROA	22.31%	24.41%	22.80%	16.19%	14.22%	18.64%
Adjusted ROA	22.39%	24.14%	22.72%	16.23%	14.33%	18.35%

Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Applied Materials Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	Applied Materials Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	Applied Materials Inc. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

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	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	6,856)	6,525)	5,888)	3,619)	2,706)	3,313)
Net sales	26,517)	25,785)	23,063)	17,202)	14,608)	17,253)
Profitability Ratio
Net profit margin¹	25.86%	25.31%	25.53%	21.04%	18.52%	19.20%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income	6,881)	6,451)	5,867)	3,628)	2,727)	3,262)
Net sales	26,517)	25,785)	23,063)	17,202)	14,608)	17,253)
Profitability Ratio
Adjusted net profit margin²	25.95%	25.02%	25.44%	21.09%	18.67%	18.91%

2023 Calculations

¹ Net profit margin = 100 × Net income ÷ Net sales
= 100 × 6,856 ÷ 26,517 = 25.86%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × 6,881 ÷ 26,517 = 25.95%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	Applied Materials Inc. adjusted net profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	6,856)	6,525)	5,888)	3,619)	2,706)	3,313)
Stockholders’ equity	16,349)	12,194)	12,247)	10,578)	8,214)	6,839)
Profitability Ratio
ROE¹	41.94%	53.51%	48.08%	34.21%	32.94%	48.44%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income	6,881)	6,451)	5,867)	3,628)	2,727)	3,262)
Stockholders’ equity	16,349)	12,194)	12,247)	10,578)	8,214)	6,839)
Profitability Ratio
Adjusted ROE²	42.09%	52.90%	47.91%	34.30%	33.20%	47.70%

2023 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 6,856 ÷ 16,349 = 41.94%

² Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × 6,881 ÷ 16,349 = 42.09%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by shareholders’ equity.	Applied Materials Inc. adjusted ROE improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019	Oct 28, 2018
As Reported
Selected Financial Data (US$ in millions)
Net income	6,856)	6,525)	5,888)	3,619)	2,706)	3,313)
Total assets	30,729)	26,726)	25,825)	22,353)	19,024)	17,773)
Profitability Ratio
ROA¹	22.31%	24.41%	22.80%	16.19%	14.22%	18.64%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income	6,881)	6,451)	5,867)	3,628)	2,727)	3,262)
Total assets	30,729)	26,726)	25,825)	22,353)	19,024)	17,773)
Profitability Ratio
Adjusted ROA²	22.39%	24.14%	22.72%	16.23%	14.33%	18.35%

2023 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 6,856 ÷ 30,729 = 22.31%

² Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × 6,881 ÷ 30,729 = 22.39%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by total assets.	Applied Materials Inc. adjusted ROA improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Applied Materials Inc. (NASDAQ:AMAT)

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