Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Applied Materials Inc., 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 annual financial data reveals several key trends in profitability and efficiency ratios over the given periods.
- Gross Profit Margin
- The gross profit margin shows a generally positive upward trend, increasing from 44.72% in 2020 to 48.67% in 2025. This indicates improvements in production efficiency or favorable pricing strategies that have enhanced the company's core profitability before operating expenses.
- Operating Profit Margin
- The operating profit margin also exhibits growth, rising from 25.37% in 2020 to a peak near 30.2% in 2022, before slightly declining and stabilizing around 29% in the subsequent years. This pattern suggests that operating efficiency improved notably during the initial years, with marginal fluctuations thereafter, reflecting stable control over operating costs relative to revenue.
- Net Profit Margin
- Net profit margin has increased from 21.04% in 2020 to a high point of 26.41% in 2024, followed by a slight decrease to 24.67% in 2025. This indicates an overall strengthening of the company's bottom-line profitability, although the recent dip may warrant attention for potential factors such as increased interest costs, taxes, or one-time charges.
- Return on Equity (ROE)
- ROE shows significant volatility over the period, peaking at 53.51% in 2022 after a strong ascent from 34.21% in 2020. However, it declines sharply in the following years, reaching 34.28% in 2025. This variation suggests that while shareholder returns were exceptionally high mid-period, challenges in maintaining those levels have led to a reduction, possibly due to changes in net income, equity base, or capital structure.
- Return on Assets (ROA)
- ROA follows a similar pattern to ROE but with less pronounced fluctuations. It increased from 16.19% in 2020 to 24.41% in 2022, then gradually decreased to 19.28% by 2025. This indicates that asset utilization efficiency improved significantly but has moderated in recent years, suggesting a cautious approach to asset management or changing asset productivity.
Overall, the company demonstrates solid profitability improvements in the earlier part of the timeline, followed by indications of stabilization or mild regression in some key performance metrics toward the end. The trends in ROE and ROA suggest a need for ongoing focus on sustaining efficient use of equity and assets to maintain high returns.
Return on Sales
Return on Investment
Gross Profit Margin
Applied Materials Inc., gross profit margin calculation, comparison to benchmarks
| Oct 26, 2025 | Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross profit | 13,808) | 12,897) | 12,384) | 11,993) | 10,914) | 7,692) | |
| Net revenue | 28,368) | 27,176) | 26,517) | 25,785) | 23,063) | 17,202) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 48.67% | 47.46% | 46.70% | 46.51% | 47.32% | 44.72% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Advanced Micro Devices Inc. | — | 49.35% | 46.12% | 44.93% | 48.25% | 44.53% | |
| Analog Devices Inc. | 61.47% | 57.08% | 64.01% | 62.70% | 61.83% | 65.87% | |
| Broadcom Inc. | 67.77% | 63.03% | 68.93% | 66.55% | 61.36% | 56.58% | |
| Intel Corp. | 34.77% | 32.66% | 40.04% | 42.61% | 55.45% | — | |
| KLA Corp. | 60.91% | 59.97% | 59.81% | 61.00% | 59.93% | 57.81% | |
| Lam Research Corp. | 48.71% | 47.32% | 44.62% | 45.69% | 46.53% | 45.88% | |
| Micron Technology Inc. | 39.79% | 22.35% | -9.11% | 45.18% | 37.62% | 30.57% | |
| NVIDIA Corp. | 74.99% | 72.72% | 56.93% | 64.93% | 62.34% | 61.99% | |
| Qualcomm Inc. | 55.43% | 56.21% | 55.70% | 57.84% | 57.51% | 60.67% | |
| Texas Instruments Inc. | — | 58.14% | 62.90% | 68.76% | 67.47% | 64.10% | |
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).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Net revenue
= 100 × 13,808 ÷ 28,368 = 48.67%
2 Click competitor name to see calculations.
- Gross Profit Trend
- The gross profit has shown a consistent upward trajectory over the assessed periods. Starting from 7,692 million USD, it increased steadily each year, reaching 13,808 million USD by the final period. This indicates a strengthening ability to generate profit from core operations before accounting for other expenses.
- Net Revenue Trend
- Net revenue has similarly exhibited continuous growth throughout the years analyzed. Beginning at 17,202 million USD in the initial period, revenue expanded to 28,368 million USD by the last recorded period. This suggests effective market expansion or sales growth, contributing to enhanced top-line performance.
- Gross Profit Margin Analysis
- The gross profit margin percentage displayed a generally positive trend. From 44.72% at the start, it increased to 48.67% in the final year, showing improved efficiency in managing the cost of goods sold relative to revenue. Although there was a slight dip from 47.32% to 46.51% between consecutive years, the margin rebounded and maintained an upward trajectory overall.
- Overall Insights
- The parallel growth in both gross profit and net revenue, coupled with the rising gross profit margin, reflects operational improvements and possibly enhanced pricing power or cost control measures. The sustained increase in gross profit margin suggests that the company has been able to either optimize production costs or leverage product mix advantages. The data portrays a financially healthier position year over year, with expanding profitability and revenue bases.
Operating Profit Margin
Applied Materials Inc., operating profit margin calculation, comparison to benchmarks
| Oct 26, 2025 | Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Income from operations | 8,289) | 7,867) | 7,654) | 7,788) | 6,889) | 4,365) | |
| Net revenue | 28,368) | 27,176) | 26,517) | 25,785) | 23,063) | 17,202) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 29.22% | 28.95% | 28.86% | 30.20% | 29.87% | 25.37% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Advanced Micro Devices Inc. | — | 7.37% | 1.77% | 5.36% | 22.20% | 14.02% | |
| Analog Devices Inc. | 26.61% | 21.56% | 31.07% | 27.29% | 23.12% | 26.74% | |
| Broadcom Inc. | 39.89% | 26.10% | 45.25% | 42.84% | 31.03% | 16.80% | |
| Intel Corp. | -4.19% | -21.99% | 0.17% | 3.70% | 24.62% | — | |
| KLA Corp. | 39.28% | 34.10% | 38.06% | 39.67% | 35.97% | 25.87% | |
| Lam Research Corp. | 32.01% | 28.61% | 29.69% | 31.24% | 30.64% | 26.62% | |
| Micron Technology Inc. | 26.14% | 5.19% | -36.97% | 31.54% | 22.68% | 14.01% | |
| NVIDIA Corp. | 62.42% | 54.12% | 15.66% | 37.31% | 27.18% | 26.07% | |
| Qualcomm Inc. | 27.90% | 25.85% | 21.74% | 35.88% | 29.16% | 26.58% | |
| Texas Instruments Inc. | — | 34.94% | 41.85% | 50.63% | 48.84% | 40.76% | |
| Operating Profit Margin, Sector | |||||||
| Semiconductors & Semiconductor Equipment | — | 21.36% | 18.50% | 27.34% | 28.30% | — | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | — | 26.60% | 24.42% | 26.32% | 26.64% | — | |
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).
1 2025 Calculation
Operating profit margin = 100 × Income from operations ÷ Net revenue
= 100 × 8,289 ÷ 28,368 = 29.22%
2 Click competitor name to see calculations.
The annual financial data indicates a consistent upward trend in both net revenue and income from operations over the examined periods. Net revenue increased steadily from $17,202 million in 2020 to $28,368 million in 2025, demonstrating sustained growth across the years. Income from operations also followed a positive trajectory, rising from $4,365 million in 2020 to $8,289 million in 2025, although with slight fluctuations in the intermediate years.
The operating profit margin has remained relatively stable throughout the periods, maintaining a range between 25.37% and 30.2%. The margin peaked in 2022 at 30.2%, followed by a modest decline to 28.86% in 2023, then showing a slight recovery to 29.22% by 2025. This stability suggests effective cost management and operational efficiency amid growing revenue.
- Net Revenue
- Demonstrates continuous growth, increasing by approximately 65% from 2020 to 2025, indicating strong sales performance and market demand.
- Income from Operations
- Exhibits a similar upward pattern, nearly doubling over the six-year span, reflecting effective scaling of operational activities and profitability enhancement.
- Operating Profit Margin
- Remains consistently high, with only slight variations, reflecting a sustained ability to convert revenue into operating profit efficiently despite potential market or cost pressures.
Overall, the data reflects a robust financial performance characterized by solid growth in revenues and operating income, alongside stable profitability margins. These trends suggest strong operational control and a favorable market position over the examined periods.
Net Profit Margin
Applied Materials Inc., net profit margin calculation, comparison to benchmarks
| Oct 26, 2025 | Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 6,998) | 7,177) | 6,856) | 6,525) | 5,888) | 3,619) | |
| Net revenue | 28,368) | 27,176) | 26,517) | 25,785) | 23,063) | 17,202) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 24.67% | 26.41% | 25.86% | 25.31% | 25.53% | 21.04% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Advanced Micro Devices Inc. | — | 6.36% | 3.77% | 5.59% | 19.24% | 25.50% | |
| Analog Devices Inc. | 20.58% | 17.35% | 26.94% | 22.88% | 19.00% | 21.79% | |
| Broadcom Inc. | 36.20% | 11.43% | 39.31% | 34.62% | 24.54% | 12.39% | |
| Intel Corp. | -0.51% | -35.32% | 3.11% | 12.71% | 25.14% | — | |
| KLA Corp. | 33.41% | 28.15% | 32.27% | 36.06% | 30.04% | 20.96% | |
| Lam Research Corp. | 29.06% | 25.68% | 25.88% | 26.73% | 26.72% | 22.42% | |
| Micron Technology Inc. | 22.84% | 3.10% | -37.54% | 28.24% | 21.16% | 12.54% | |
| NVIDIA Corp. | 55.85% | 48.85% | 16.19% | 36.23% | 25.98% | 25.61% | |
| Qualcomm Inc. | 12.51% | 26.03% | 20.19% | 29.27% | 26.94% | 22.09% | |
| Texas Instruments Inc. | — | 30.68% | 37.16% | 43.68% | 42.35% | 38.69% | |
| Net Profit Margin, Sector | |||||||
| Semiconductors & Semiconductor Equipment | — | 14.94% | 17.06% | 25.54% | 25.83% | — | |
| Net Profit Margin, Industry | |||||||
| Information Technology | — | 20.64% | 20.33% | 22.35% | 23.54% | — | |
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).
1 2025 Calculation
Net profit margin = 100 × Net income ÷ Net revenue
= 100 × 6,998 ÷ 28,368 = 24.67%
2 Click competitor name to see calculations.
The financial data reveals several key trends for the company over the specified years. Net revenue shows a consistent upward trajectory, increasing from 17,202 million US dollars in 2020 to 28,368 million US dollars in 2025. This steady growth in revenue suggests expanding business operations or improvements in sales performance.
Net income also follows an overall upward trend, rising from 3,619 million US dollars in 2020 to a peak of 7,177 million US dollars in 2024, before experiencing a slight decrease to 6,998 million US dollars in 2025. The growth in net income generally aligns with the increase in net revenue, indicating effective cost management and profitability improvements over the period. However, the small decline in the final year may warrant further investigation into potential causes such as increased expenses or market challenges.
The net profit margin percentage reflects the company's profitability relative to revenue and shows some fluctuation. Starting at 21.04% in 2020, it increases to above 25% from 2021 through 2024, peaking at 26.41% in 2024. The margin decreases slightly in 2025 to 24.67%. These figures indicate that the company has maintained strong profitability levels, with some variability possibly due to changes in cost structure, pricing strategies, or external market conditions.
- Net Revenue
- Exhibited continuous growth from 17,202 million USD in 2020 to 28,368 million USD in 2025.
- Net Income
- Increased substantially from 3,619 million USD in 2020 to a peak of 7,177 million USD in 2024, followed by a minor decline to 6,998 million USD in 2025.
- Net Profit Margin
- Generally improved from 21.04% in 2020 to around 25-26% in the subsequent years with a slight reduction in 2025 to 24.67%.
Overall, the company demonstrates robust financial performance with growing revenue and income streams supported by stable profitability ratios. Attention should be directed toward understanding the small decline in net income and profit margin in the latest year to ensure continued positive performance.
Return on Equity (ROE)
Applied Materials Inc., ROE calculation, comparison to benchmarks
| Oct 26, 2025 | Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 6,998) | 7,177) | 6,856) | 6,525) | 5,888) | 3,619) | |
| Stockholders’ equity | 20,415) | 19,001) | 16,349) | 12,194) | 12,247) | 10,578) | |
| Profitability Ratio | |||||||
| ROE1 | 34.28% | 37.77% | 41.94% | 53.51% | 48.08% | 34.21% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Advanced Micro Devices Inc. | — | 2.85% | 1.53% | 2.41% | 42.18% | 42.66% | |
| Analog Devices Inc. | 6.70% | 4.65% | 9.32% | 7.54% | 3.66% | 10.17% | |
| Broadcom Inc. | 28.45% | 8.71% | 58.70% | 50.62% | 26.99% | 12.40% | |
| Intel Corp. | -0.23% | -18.89% | 1.60% | 7.90% | 20.83% | — | |
| KLA Corp. | 86.56% | 82.00% | 116.01% | 237.04% | 61.53% | 45.65% | |
| Lam Research Corp. | 54.33% | 44.82% | 54.94% | 73.35% | 64.85% | 43.53% | |
| Micron Technology Inc. | 15.76% | 1.72% | -13.22% | 17.41% | 13.34% | 6.89% | |
| NVIDIA Corp. | 91.87% | 69.24% | 19.76% | 36.65% | 25.64% | 22.91% | |
| Qualcomm Inc. | 26.13% | 38.60% | 33.51% | 71.81% | 90.88% | 85.54% | |
| Texas Instruments Inc. | — | 28.39% | 38.53% | 60.02% | 58.27% | 60.90% | |
| ROE, Sector | |||||||
| Semiconductors & Semiconductor Equipment | — | 11.77% | 13.30% | 22.70% | 25.79% | — | |
| ROE, Industry | |||||||
| Information Technology | — | 29.36% | 31.85% | 38.86% | 42.21% | — | |
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).
1 2025 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 6,998 ÷ 20,415 = 34.28%
2 Click competitor name to see calculations.
- Net Income
- There is a clear upward trend in net income over the six-year period from 2020 to 2025. Starting at 3,619 million USD in 2020, net income increased significantly to 5,888 million USD by 2021. The upward trajectory continued steadily, reaching a peak of 7,177 million USD in 2024 before slightly declining to 6,998 million USD in 2025. This pattern suggests overall profitability growth with a minor reduction in the final year under review.
- Stockholders’ Equity
- Stockholders’ equity also exhibited growth throughout the period, starting at 10,578 million USD in 2020 and rising to 20,415 million USD by 2025. The increase was relatively steady, although there was a noticeable acceleration in growth between 2022 and 2023 when equity rose from 12,194 million USD to 16,349 million USD. This reflects enhanced capitalization and retained earnings over the years.
- Return on Equity (ROE)
- ROE showed variability despite the increases in both net income and equity. It began at 34.21% in 2020, reaching its highest point of 53.51% in 2022, indicating exceptional profitability efficiency relative to equity at that time. However, from 2023 onwards, ROE declined steadily to 34.28% by 2025. This downward trend in ROE despite increasing equity and relatively high net income suggests that the growth in equity outpaced earnings growth in the later years, slightly diminishing return efficiency.
- Overall Insights
- The company demonstrated substantial growth in both net income and stockholders’ equity, highlighting strong financial development and stability. However, the decline in ROE after 2022 indicates a shifting balance between income generation and equity size. While profitability continues at high levels, the efficiency of equity in generating returns may require attention to sustain or improve investor value. These trends suggest a maturing phase where capital base expansion may be diluting return rates, emphasizing the need for strategies that enhance earnings leverage relative to equity.
Return on Assets (ROA)
Applied Materials Inc., ROA calculation, comparison to benchmarks
| Oct 26, 2025 | Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 6,998) | 7,177) | 6,856) | 6,525) | 5,888) | 3,619) | |
| Total assets | 36,299) | 34,409) | 30,729) | 26,726) | 25,825) | 22,353) | |
| Profitability Ratio | |||||||
| ROA1 | 19.28% | 20.86% | 22.31% | 24.41% | 22.80% | 16.19% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Advanced Micro Devices Inc. | — | 2.37% | 1.26% | 1.95% | 25.46% | 27.78% | |
| Analog Devices Inc. | 4.72% | 3.39% | 6.79% | 5.46% | 2.66% | 5.69% | |
| Broadcom Inc. | 13.52% | 3.56% | 19.33% | 15.69% | 8.91% | 3.90% | |
| Intel Corp. | -0.13% | -9.55% | 0.88% | 4.40% | 11.80% | — | |
| KLA Corp. | 25.28% | 17.90% | 24.07% | 26.37% | 20.23% | 13.11% | |
| Lam Research Corp. | 25.10% | 20.42% | 24.02% | 26.78% | 24.59% | 15.47% | |
| Micron Technology Inc. | 10.31% | 1.12% | -9.08% | 13.11% | 9.96% | 5.01% | |
| NVIDIA Corp. | 65.30% | 45.28% | 10.61% | 22.07% | 15.05% | 16.15% | |
| Qualcomm Inc. | 11.05% | 18.39% | 14.17% | 26.39% | 21.93% | 14.60% | |
| Texas Instruments Inc. | — | 13.51% | 20.12% | 32.16% | 31.48% | 28.91% | |
| ROA, Sector | |||||||
| Semiconductors & Semiconductor Equipment | — | 6.42% | 7.41% | 12.68% | 13.62% | — | |
| ROA, Industry | |||||||
| Information Technology | — | 11.95% | 12.47% | 14.49% | 14.60% | — | |
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).
1 2025 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 6,998 ÷ 36,299 = 19.28%
2 Click competitor name to see calculations.
The financial analysis reveals several noteworthy trends over the examined periods.
- Net Income
- Net income exhibits an overall upward trajectory from 3,619 million US dollars to a peak of 7,177 million US dollars before experiencing a slight decline to 6,998 million US dollars in the most recent period. This indicates sustained profitability growth with a minor correction at the end of the timeframe.
- Total Assets
- Total assets demonstrate consistent expansion over the periods, increasing from 22,353 million US dollars to 36,299 million US dollars. This steady asset growth suggests ongoing investment and capital accumulation.
- Return on Assets (ROA)
- The return on assets ratio reflects an initial rise from 16.19% to a high of 24.41%, followed by a gradual decline to 19.28%. This pattern indicates that while asset profitability improved markedly in earlier years, efficiency in utilizing assets to generate profits has somewhat diminished more recently, though ROA remains above the starting point.
In summary, the financial data points to a company experiencing growth in both net income and asset base, accompanied by a strong but slightly tapering return on assets. The mild dip in net income and ROA in the latest period may warrant further analysis to determine causes and guide strategic decisions.