Common-Size Income Statement
Quarterly Data
Applied Materials Inc., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2026-04-26), 10-Q (reporting date: 2026-01-25), 10-K (reporting date: 2025-10-26), 10-Q (reporting date: 2025-07-27), 10-Q (reporting date: 2025-04-27), 10-Q (reporting date: 2025-01-26), 10-K (reporting date: 2024-10-27), 10-Q (reporting date: 2024-07-28), 10-Q (reporting date: 2024-04-28), 10-Q (reporting date: 2024-01-28), 10-K (reporting date: 2023-10-29), 10-Q (reporting date: 2023-07-30), 10-Q (reporting date: 2023-04-30), 10-Q (reporting date: 2023-01-29), 10-K (reporting date: 2022-10-30), 10-Q (reporting date: 2022-07-31), 10-Q (reporting date: 2022-05-01), 10-Q (reporting date: 2022-01-30), 10-K (reporting date: 2021-10-31), 10-Q (reporting date: 2021-08-01), 10-Q (reporting date: 2021-05-02), 10-Q (reporting date: 2021-01-31), 10-K (reporting date: 2020-10-25), 10-Q (reporting date: 2020-07-26), 10-Q (reporting date: 2020-04-26), 10-Q (reporting date: 2020-01-26).
The analysis of the common-size income statement reveals a general trajectory of expanding margins and improved operational efficiency over the observed period, punctuated by specific non-recurring expenses and significant shifts in non-operating income.
- Gross Profitability Trends
- Gross profit margins exhibit a steady upward trend, rising from approximately 44% in early 2020 to a peak of 49.90% by April 2026. This improvement is driven by a consistent reduction in the cost of products sold, which declined from a high of 55.80% to 50.10%. The data indicates a sustained improvement in production efficiency or pricing power over the six-year span.
- Operating Expense Management
- Operating expenses generally fluctuate between 15% and 20% of revenue. Research, development, and engineering costs remain the largest component, typically ranging between 10% and 13%. Marketing and selling expenses have remained remarkably stable, hovering between 2.5% and 3.2%. General and administrative costs show more volatility, with a notable increase to 4.12% in January 2024 before declining to 2.07% by April 2026.
- Impact of Non-Recurring Items
- Profitability was periodically affected by one-time charges. A deal termination fee of 2.76% was recorded in May 2021, and restructuring charges appeared sporadically, most notably in January 2021 (2.94%) and October 2025 (2.66%). A significant legal settlement of 3.61% was recorded in January 2026, which contributed to a temporary spike in total operating expenses to 22.88% during that period.
- Operating and Pre-tax Income Performance
- Income from operations demonstrates strength, transitioning from a baseline of roughly 25% in 2020 to consistently remaining near or above 28% for most of the subsequent years, reaching 31.90% in the final quarter. Pre-tax income was further bolstered by a dramatic increase in net interest and other income, which grew from negligible levels to 9.75% of revenue by April 2026, suggesting a substantial increase in non-operating gains or interest earnings.
- Net Income Volatility
- Net income margins show significant fluctuations primarily due to the volatility of tax provisions. While net margins typically range between 23% and 30%, sharp declines were observed in January 2024 (16.54%) and July 2024, coinciding with tax provisions of 13.03% and 10.74% of revenue, respectively. Despite these fluctuations, the period concludes with a peak net income margin of 35.47% in April 2026.
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