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Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Applied Materials Inc., adjustment to net income
US$ in millions
Based on: 10-K (reporting date: 2025-10-26), 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25).
- Net Income Trends
- The reported net income shows consistent growth from 2020 to 2024, increasing from 3,619 million US dollars in 2020 to a peak of 7,177 million in 2024. However, there is a slight decline in 2025, where the net income decreases to 6,998 million.
- The adjusted net income follows a very similar trend, beginning at 3,628 million US dollars in 2020 and rising steadily to a maximum of 7,220 million in 2024. Like the reported figures, the adjusted net income experiences a minor decrease to 7,016 million in 2025.
- Comparison Between Reported and Adjusted Net Income
- The adjusted net income figures are closely aligned with the reported net income for all the years under review, with differences being minimal. This indicates that the adjustments made do not significantly alter the trend or the overall magnitude of net income reported.
- Both reported and adjusted net incomes mirror each other's trend, reinforcing the reliability of the financial reporting and adjustment processes.
- Summary of Financial Performance
- The company’s financial performance, as measured by net income, broadly improved over the years 2020 to 2024, reflecting successful operations or favorable market conditions during this period.
- The slight downturn in net income in 2025 warrants attention, as it marks a departure from the otherwise upward trajectory. This decline could suggest emerging challenges or increased expenses impacting profitability.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Applied Materials Inc., adjusted profitability ratios
Based on: 10-K (reporting date: 2025-10-26), 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25).
The analysis of the financial performance over the six-year period reveals several notable trends and fluctuations in key profitability and efficiency metrics.
- Net Profit Margin
- The reported net profit margin exhibited a general upward trend from 21.04% in 2020 to a peak of 26.41% in 2024, indicating improving profitability. The adjusted net profit margin follows a similar trajectory, increasing from 21.09% in 2020 to 26.57% in 2024. However, both reported and adjusted margins show a decline in 2025, falling to 24.67% and 24.73% respectively, suggesting a recent softening in profitability.
- Return on Equity (ROE)
- Return on equity demonstrated a strong increase from 34.21% reported in 2020 to a high of 53.51% in 2022, signaling enhanced shareholder value generation. This peak is also observed in the adjusted ROE at 52.9%. Subsequently, ROE declined to 34.28% reported and 34.37% adjusted by 2025. This reduction following the peak may reflect diminished operational leverage or shifts in capital structure.
- Return on Assets (ROA)
- Return on assets followed a consistent upwards pattern from 16.19% reported in 2020 to 24.41% in 2022, indicating improved asset efficiency during this period. Adjusted ROA showed a comparable trend. After 2022, ROA gradually decreased to 19.28% reported and 19.33% adjusted by 2025, consistent with the trend in ROE albeit on a different scale, implying reduced asset profitability in recent years.
Overall, the financial data reflects a period of sustained growth in profitability and efficiency up to 2022-2024, followed by a notable decline in 2025 across most metrics. The patterns between reported and adjusted figures are closely aligned, suggesting that adjustments did not significantly alter the underlying financial trends. The recent declines may warrant further investigation to identify operational or external factors impacting performance.
Applied Materials Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2025-10-26), 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25).
2025 Calculations
1 Net profit margin = 100 × Net income ÷ Net revenue
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net revenue
= 100 × ÷ =
- Net Income Trends
- The reported net income exhibited an overall increasing trend from 3619 million US dollars in 2020 to a peak of 7177 million US dollars in 2024, followed by a slight decline to 6998 million US dollars in 2025. Adjusted net income followed a parallel pattern, rising from 3628 million US dollars in 2020 to 7220 million US dollars in 2024, then decreasing marginally to 7016 million US dollars in 2025.
- Net Profit Margin Analysis
- Reported net profit margin increased from 21.04% in 2020 to a high of 26.41% in 2024, indicating enhanced profitability over this period. However, in 2025, it decreased to 24.67%, suggesting some pressure on profit margins. Similarly, adjusted net profit margin rose from 21.09% in 2020 to 26.57% in 2024 before declining to 24.73% in 2025, closely mirroring the trend in the reported figures.
- Comparative Observations Between Reported and Adjusted Data
- The figures for reported and adjusted net income and profit margins closely align, with only slight differences, suggesting that adjustments made for investment-related items or other non-operational factors have a minimal impact on the overall profitability metrics.
- Summary of Financial Performance Patterns
- The company demonstrated steady growth in net income and profitability from 2020 through 2024, reflecting improved operational efficiency or favorable market conditions during this period. The modest decline in both net income and profit margin in 2025 indicates a potential shift in operational challenges or market dynamics that may warrant further investigation. The consistent margins above 20% throughout the timeframe underscore relatively strong profitability levels.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2025-10-26), 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25).
2025 Calculations
1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × ÷ =
- Net Income Trends
- The reported net income exhibited a general upward trend from 2020 through 2024, increasing from 3,619 million USD to 7,177 million USD. However, there was a slight decline in 2025 to 6,998 million USD. The adjusted net income closely mirrored this pattern, rising steadily from 3,628 million USD in 2020 to 7,220 million USD in 2024, before a marginal decrease to 7,016 million USD in 2025. This alignment suggests consistent adjustments without significant distortion of the overall profitability trend.
- Return on Equity (ROE) Trends
- Both the reported and adjusted ROE percentages peaked in 2022, reaching values above 52%. Following this peak, there was a noticeable decline each year; by 2025, the reported ROE dropped to 34.28% and the adjusted ROE to 34.37%. Despite the decline, the ROE values in 2025 remain comparable to the levels observed in 2020, indicating a return to earlier profitability efficiency standards after a period of heightened performance.
- Relationship Between Net Income and ROE
- While net income increased steadily during the initial years, ROE demonstrated a peak followed by decline, indicating that the growth in net income was not proportionately reflected in shareholder equity returns after 2022. This could suggest changes in equity base size or capital structure affecting returns, or shifts in profit margins relative to equity invested.
- Overall Financial Performance Insights
- The company experienced substantial growth in profitability up to 2024, with record net income and high returns on equity. The slight declines in net income and ROE in the most recent year warrant attention, as they may signal emerging challenges in sustaining previous growth rates or efficiency levels. Nonetheless, the strong performance over the period indicates solid financial health and effective management of earnings relative to invested equity.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2025-10-26), 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25).
2025 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × ÷ =
- Net Income Trends
- Reported net income demonstrated a steady increase from 3,619 million US dollars in 2020 to 7,177 million US dollars in 2024, representing a near doubling over the five-year period. However, there was a slight decline observed in 2025, where net income decreased to 6,998 million US dollars. Adjusted net income mirrored this pattern closely, showing consistent growth from 3,628 million US dollars in 2020 to 7,220 million US dollars in 2024, followed by a modest decline to 7,016 million US dollars in 2025.
- Return on Assets (ROA) Analysis
- Both reported and adjusted ROA exhibited an upward trend from 2020 through 2022, increasing from approximately 16.2% to over 24%, indicating improving efficiency in asset utilization during these years. After reaching the peak in 2022, ROA declined gradually over the next three years, falling to around 19.3% as of 2025. The close alignment of reported and adjusted ROA percentages suggests consistent adjustments without significant impact on overall asset profitability metrics.
- Overall Insights
- The data reflects strong growth in profitability and asset efficiency from 2020 to 2022, with net income and ROA both reaching their highest levels. The subsequent decline in 2023 to 2025 indicates a slow-down phase but remains above the 2020 baseline, suggesting the company maintains a relatively healthy financial position despite recent softening. Adjustments made for net income and ROA do not appear to significantly alter the fundamental trend or financial health portrayal.