Analysis of Reportable Segments
Applied Materials Inc. operates in 3 segments: Semiconductor Systems; Applied Global Services (AGS); and Display.
Segment Profit Margin
Applied Materials Inc., profit margin by reportable segment
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor Systems | 35.06% | 35.99% | 37.08% | 38.75% | 32.67% | 27.30% |
| Applied Global Services (AGS) | 29.11% | 28.91% | 29.97% | 30.08% | 27.12% | 28.57% |
| Display | 5.76% | 15.32% | 19.53% | 19.22% | 18.11% | 17.81% |
Based on: 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), 10-K (reporting date: 2019-10-27).
- Semiconductor Systems Segment Profit Margin Trend
- The profit margin in the Semiconductor Systems segment demonstrated a consistent upward trend from 2019 to 2021, increasing from 27.3% to a peak of 38.75%. After 2021, a gradual decline is evident, with margins decreasing to 35.06% by 2024. Despite this decline, the profit margin remains substantially higher than the 2019 level, indicating sustained profitability albeit with some margin compression in recent years.
- Applied Global Services (AGS) Segment Profit Margin Trend
- The AGS segment profit margin showed variability with a slight decrease between 2019 and 2020, dropping from 28.57% to 27.12%. Subsequently, the margin improved to 30.08% in 2021 before experiencing marginal declines and fluctuations, stabilizing around 29% in 2023 and 2024. The overall pattern reflects relative stability with minor fluctuations around a mid-to-high 20% range, suggesting steady but modestly variable profitability.
- Display Segment Profit Margin Trend
- The Display segment experienced moderate growth in profit margins from 2019 through 2022, increasing from 17.81% to 19.53%. However, a significant downturn occurred starting in 2023, where margins dropped sharply to 15.32%, followed by a further steep decline to 5.76% in 2024. This dramatic decrease indicates considerable pressure on profitability in this segment during the last two reported periods.
- Overall Insights
- The Semiconductor Systems segment remains the most profitable with relatively high and stable margins, despite slight declines after 2021. The AGS segment exhibits moderate and stable profitability with limited volatility. In contrast, the Display segment faces pronounced challenges, with profit margins deteriorating substantially in recent years, signaling potential operational or market difficulties that may warrant focused strategic attention.
Segment Profit Margin: Semiconductor Systems
Applied Materials Inc.; Semiconductor Systems; segment profit margin calculation
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | 6,981) | 7,090) | 6,969) | 6,311) | 3,714) | 2,464) |
| Net revenue | 19,911) | 19,698) | 18,797) | 16,286) | 11,367) | 9,027) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 35.06% | 35.99% | 37.08% | 38.75% | 32.67% | 27.30% |
Based on: 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), 10-K (reporting date: 2019-10-27).
1 2024 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Net revenue
= 100 × 6,981 ÷ 19,911 = 35.06%
The financial data for the Semiconductor Systems segment over the period from October 2019 to October 2024 demonstrates notable growth and variations in performance metrics.
- Net Revenue
- Net revenue increased consistently each year, advancing from $9,027 million in October 2019 to $19,911 million in October 2024. This reflects a cumulative growth of more than 100% over the five-year span, indicating strong and continuous demand within the segment.
- Operating Income (Loss)
- Operating income showed a markedly positive trend, rising from $2,464 million in October 2019 to a peak of $7,090 million in October 2023. Although there was a slight decrease to $6,981 million in October 2024, the overall increase illustrates enhanced operating efficiency and profitability. The minor decline in the final year may suggest emerging pressures or investment impacts but does not detract significantly from the overall upward trajectory.
- Segment Profit Margin
- The segment profit margin improved substantially from 27.3% in 2019 to a high of 38.75% in 2021, indicating increased profitability relative to revenue. Subsequently, profit margins experienced a gradual decline each year, reaching 35.06% in 2024. Despite this decrease, the margin remains notably higher than at the beginning of the period, suggesting sustained strong profitability even with some margin compression.
In summary, the Semiconductor Systems segment exhibits robust revenue growth accompanied by significant increases in operating income and profit margins early in the period. Although profit margins compressed somewhat after peaking, the segment maintains a healthy level of profitability. The slight dip in operating income in the most recent year merits monitoring but does not overshadow the general trend of sound financial performance and expansion over the analyzed timeframe.
Segment Profit Margin: Applied Global Services (AGS)
Applied Materials Inc.; Applied Global Services (AGS); segment profit margin calculation
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | 1,812) | 1,657) | 1,661) | 1,508) | 1,127) | 1,101) |
| Net revenue | 6,225) | 5,732) | 5,543) | 5,013) | 4,155) | 3,854) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 29.11% | 28.91% | 29.97% | 30.08% | 27.12% | 28.57% |
Based on: 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), 10-K (reporting date: 2019-10-27).
1 2024 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Net revenue
= 100 × 1,812 ÷ 6,225 = 29.11%
The Applied Global Services (AGS) segment demonstrates a generally positive financial performance over the periods analyzed, with evolving trends in operating income, net revenue, and segment profit margin.
- Operating Income (Loss)
- The operating income of the segment shows a consistent upward trajectory from US$1,101 million in 2019 to US$1,812 million in 2024. Notable growth appears particularly between 2020 and 2021, where operating income increased from US$1,127 million to US$1,508 million. The performance stabilizes at a high level from 2021 onwards, with only slight fluctuations observed from 2022 to 2023 before rising again in 2024.
- Net Revenue
- Net revenue exhibits steady growth throughout the period, increasing from US$3,854 million in 2019 to US$6,225 million in 2024. The revenue increment year-over-year is continuous, with no periods of decline or stagnation, indicating strong demand or expanded service offerings within the segment. The largest incremental change occurs between 2020 and 2021, consistent with the rise in operating income.
- Segment Profit Margin
- The segment profit margin shows variability but remains relatively stable overall, fluctuating between approximately 27% and 30%. It peaked in 2021 at 30.08%, suggesting optimal operational efficiency during that year. Following this peak, the margin declines slightly but remains close to 29% through 2024, indicating sustained profitability despite growing revenue and operating costs potentially associated with scaling operations.
Overall, the segment shows a strong growth pattern in both revenue and operating income, with profit margins maintaining a healthy level. This suggests effective management of costs and successful scaling of services within the analyzed timeframe.
Segment Profit Margin: Display
Applied Materials Inc.; Display; segment profit margin calculation
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | 51) | 133) | 260) | 314) | 291) | 294) |
| Net revenue | 885) | 868) | 1,331) | 1,634) | 1,607) | 1,651) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 5.76% | 15.32% | 19.53% | 19.22% | 18.11% | 17.81% |
Based on: 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), 10-K (reporting date: 2019-10-27).
1 2024 Calculation
Segment profit margin = 100 × Operating income (loss) ÷ Net revenue
= 100 × 51 ÷ 885 = 5.76%
- Net Revenue
- The net revenue demonstrates a declining trend over the analyzed periods. Beginning at $1,651 million in 2019, it slightly decreased to $1,607 million in 2020 and showed a marginal increase to $1,634 million in 2021. However, from 2021 onward, there is a pronounced decline to $1,331 million in 2022, followed by a significant drop to $868 million in 2023, and a slight recovery to $885 million in 2024.
- Operating Income (Loss)
- Operating income exhibits a decreasing trajectory across the years. It started at $294 million in 2019, remaining relatively stable through 2020 and 2021 at $291 million and $314 million respectively. From 2022, operating income fell substantially to $260 million and continued to decrease sharply to $133 million in 2023, further dropping to $51 million in 2024. This indicates diminishing profitability from core operations over time.
- Segment Profit Margin
- The segment profit margin initially showed stability and slight improvement, increasing from 17.81% in 2019 to 19.53% in 2022. Nevertheless, the margin substantially decreased thereafter, dropping to 15.32% in 2023 and plummeting to a low of 5.76% in 2024. This reflects reduced efficiency and profitability relative to revenue in the most recent periods.
- Overall Analysis
- Overall, the segment presents a downturn in both revenue and profitability metrics starting from 2022. Although the early years show steady or slightly improving margins and income, the latter years are marked by significant declines in net revenue, operating income, and profit margins. This pattern suggests challenges in maintaining revenue growth and operational profitability within the segment during the most recent years.
Segment Capital Expenditures to Depreciation
Applied Materials Inc., capital expenditures to depreciation by reportable segment
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor Systems | 2.53 | 1.62 | 1.23 | 1.18 | 1.03 | 0.83 |
| Applied Global Services (AGS) | 1.59 | 1.26 | 1.23 | 0.91 | 0.88 | 1.88 |
| Display | 2.42 | 0.68 | 0.97 | 1.19 | 0.94 | 1.95 |
Based on: 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), 10-K (reporting date: 2019-10-27).
- Semiconductor Systems
- The capital expenditures to depreciation ratio for this segment shows a consistent upward trend over the six-year period. Starting at 0.83 in 2019, the ratio increased gradually each year, reaching 1.23 in 2022. Thereafter, a more pronounced rise is visible, with the ratio reaching 1.62 in 2023 and further escalating to 2.53 in 2024. This pattern suggests an accelerating pace of investment relative to asset depreciation, indicating an emphasis on expanding or upgrading assets in this segment in recent years.
- Applied Global Services (AGS)
- The AGS segment exhibits a more variable trend. The ratio begins at 1.88 in 2019, followed by a sharp decline to 0.88 in 2020. Subsequently, the ratio remains relatively stable but modestly low at 0.91 in 2021, before increasing steadily over the next three years to reach 1.59 by 2024. This reflects an initial period of subdued capital expenditure relative to depreciation, transitioning into a phase of increased investment activity.
- Display
- The Display segment's ratio demonstrates considerable fluctuations. Starting at 1.95 in 2019, it sharply decreases to 0.94 in 2020, recovers somewhat to 1.19 in 2021, and then declines to 0.97 in 2022. The ratio further declines to 0.68 in 2023, indicating capital expenditures were significantly lower than depreciation in that year. However, a notable reversal occurs in 2024, where the ratio surges to 2.42. This volatility suggests irregular investment patterns, with substantial capital expenditure reductions in the middle years, followed by an aggressive investment increase in the latest year.
Segment Capital Expenditures to Depreciation: Semiconductor Systems
Applied Materials Inc.; Semiconductor Systems; segment capital expenditures to depreciation calculation
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Capital expenditures | 425) | 381) | 249) | 228) | 226) | 168) |
| Depreciation/amortization | 168) | 235) | 203) | 194) | 219) | 202) |
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | 2.53 | 1.62 | 1.23 | 1.18 | 1.03 | 0.83 |
Based on: 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), 10-K (reporting date: 2019-10-27).
1 2024 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation/amortization
= 425 ÷ 168 = 2.53
The analysis of the Semiconductor Systems segment's capital expenditures, depreciation/amortization, and their ratio over the six-year period from October 2019 to October 2024 reveals distinct trends and shifts in investment and asset management.
- Capital expenditures
- Capital expenditures have shown a generally upward trajectory across the observed periods. Starting at $168 million in 2019, expenditures increased steadily each year, reaching $425 million in 2024. The most significant increases occurred between 2022 and 2023 (from $249 million to $381 million) and then continued to $425 million in 2024, indicating a heightened investment effort in recent years.
- Depreciation and amortization
- Depreciation and amortization expenses exhibited a less consistent trend. The value rose slightly from $202 million in 2019 to $219 million in 2020 but then declined to $194 million in 2021. It rebounded moderately to $235 million by 2023 but dropped substantially to $168 million in 2024. This fluctuation may indicate changes in asset base, asset life adjustments, or shifts in accounting policies related to asset depreciation.
- Segment capital expenditures to depreciation ratio
- The ratio of capital expenditures to depreciation/amortization has increased markedly, from 0.83 in 2019 to 2.53 in 2024. This indicates that capital investments have increasingly outpaced asset depreciation, particularly strong after 2022. The ratio's rise suggests that the segment is expanding or upgrading its asset base at a faster rate than the rate at which assets are being consumed or expensed.
Overall, the data suggests a strategic emphasis on growth and asset expansion within the Semiconductor Systems segment, with escalating capital investments and a declining relative depreciation expense, reflecting either newer assets with longer useful lives or reduced depreciation rates. The increased capital expenditure to depreciation ratio is consistent with proactive capacity building or modernization efforts in recent years.
Segment Capital Expenditures to Depreciation: Applied Global Services (AGS)
Applied Materials Inc.; Applied Global Services (AGS); segment capital expenditures to depreciation calculation
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Capital expenditures | 35) | 39) | 38) | 29) | 30) | 47) |
| Depreciation/amortization | 22) | 31) | 31) | 32) | 34) | 25) |
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | 1.59 | 1.26 | 1.23 | 0.91 | 0.88 | 1.88 |
Based on: 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), 10-K (reporting date: 2019-10-27).
1 2024 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation/amortization
= 35 ÷ 22 = 1.59
- Capital Expenditures
- The capital expenditures exhibit a declining trend from 2019 to 2021, decreasing from $47 million to $29 million. Subsequently, there is a moderate recovery observed in 2022 and 2023 where expenditures rise to $38 million and $39 million respectively. However, in 2024, capital expenditures decline slightly to $35 million, indicating a stabilization phase albeit at lower levels compared to 2019.
- Depreciation and Amortization
- Depreciation and amortization expenses increased significantly from 2019 to 2020, rising from $25 million to $34 million. Following this peak, the values gradually decreased each year, settling at $22 million by 2024. This downward trend after 2020 may reflect either a reduction in depreciable assets or changes in depreciation policies.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of segment capital expenditures to depreciation starts high at 1.88 in 2019 before dropping sharply to below 1 in both 2020 (0.88) and 2021 (0.91), indicating that capital spending was less than depreciation for these years. From 2022 onwards, the ratio has been increasing steadily, reaching 1.59 by 2024. This rise suggests an increased level of investment relative to the depreciation charges, potentially signaling renewal or expansion of capital assets within the segment.
- Overall Insights
- The data suggests a period of capital expenditure reduction followed by gradual recovery, while depreciation and amortization followed an inverse pattern, peaking early then decreasing. The improving ratio of capital expenditures to depreciation post-2021 aligns with strategic asset management activities, perhaps aiming to refresh or grow asset bases after a prior phase of contraction or lower investment.
Segment Capital Expenditures to Depreciation: Display
Applied Materials Inc.; Display; segment capital expenditures to depreciation calculation
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Capital expenditures | 29) | 13) | 30) | 32) | 29) | 43) |
| Depreciation/amortization | 12) | 19) | 31) | 27) | 31) | 22) |
| Segment Financial Ratio | ||||||
| Segment capital expenditures to depreciation1 | 2.42 | 0.68 | 0.97 | 1.19 | 0.94 | 1.95 |
Based on: 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), 10-K (reporting date: 2019-10-27).
1 2024 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation/amortization
= 29 ÷ 12 = 2.42
- Capital Expenditures
- The capital expenditures for the segment showed a fluctuating trend over the six-year period. Starting at 43 million USD in 2019, there was a decline to 29 million USD in 2020, followed by slight variations around the 30 million USD mark until 2023, where a notable low of 13 million USD was recorded. In the latest period, 2024, capital expenditures increased again to 29 million USD, suggesting a potential renewed investment focus.
- Depreciation and Amortization
- Depreciation and amortization expenses exhibited a generally declining pattern over the period reviewed. The amount rose from 22 million USD in 2019 to a peak of 31 million USD in 2020 and 2022, before gradually decreasing to 19 million USD in 2023 and further down to 12 million USD in 2024. This downward trend in depreciation/amortization may indicate a decrease in the depreciable asset base or changes in asset valuation methods.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of segment capital expenditures to depreciation reveals significant variability. Initially, the ratio was relatively high at 1.95 in 2019, implying capital expenditures significantly exceeded depreciation expenses. This ratio declined sharply to below 1 in 2020 and remained near or below that level through 2023, reaching a low point of 0.68, signaling that capital expenditures were less than depreciation. Notably, in 2024, the ratio increased substantially to 2.42, indicating a considerable rise in capital investment relative to depreciation.
- Overall Analysis
- The data indicate that capital spending cycles have experienced ups and downs, with a marked reduction in 2023 followed by a rebound in 2024. Meanwhile, depreciation expenses have generally trended downward after a peak in 2020 and 2022. The capital expenditures to depreciation ratio underscores this dynamic, showing periods where capital investment lagged behind asset depreciation, potentially pointing to reduced asset replacement or expansion activities, followed by a recent surge in investment efforts. These patterns suggest strategic adjustments in the management of the segment’s asset base over the analyzed time frame.
Net revenue
Applied Materials Inc., net revenue by reportable segment
US$ in millions
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor Systems | 19,911) | 19,698) | 18,797) | 16,286) | 11,367) | 9,027) |
| Applied Global Services (AGS) | 6,225) | 5,732) | 5,543) | 5,013) | 4,155) | 3,854) |
| Display | 885) | 868) | 1,331) | 1,634) | 1,607) | 1,651) |
| Corporate and Other | 155) | 219) | 114) | 130) | 73) | 76) |
| Total | 27,176) | 26,517) | 25,785) | 23,063) | 17,202) | 14,608) |
Based on: 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), 10-K (reporting date: 2019-10-27).
- Semiconductor Systems
- The segment shows a consistent upward trend over the six-year period. Starting at 9,027 million USD in 2019, revenue increased each year, reaching 19,911 million USD by 2024. This represents more than a doubling in revenue, indicating strong growth and possibly expanding demand or market share within this segment.
- Applied Global Services (AGS)
- This segment also exhibits steady growth year over year. Beginning at 3,854 million USD in 2019, revenues climbed to 6,225 million USD in 2024. The increase is less pronounced than in the Semiconductor Systems segment but still shows consistent expansion, reflecting stable performance in the services area.
- Display
- The Display segment displays a declining trend. Initial revenue of 1,651 million USD in 2019 remained relatively stable through 2021 but decreased notably from 2022 onward, dropping to 885 million USD by 2024. This decline suggests contraction or decreased investment in this segment.
- Corporate and Other
- This category shows volatility with no clear trend. Revenues fluctuate between 73 million USD and 219 million USD over the period, ending at 155 million USD in 2024. The variability may be due to non-core activities or miscellaneous items affecting the segment’s revenue recognition.
- Total
- Total segment revenue increases steadily from 14,608 million USD in 2019 to 27,176 million USD in 2024. The growth aligns largely with the performance in Semiconductor Systems and AGS segments, which contribute the majority of the company’s overall revenue expansion. The decline in Display revenue has a limited negative impact on the aggregate total.
Operating income (loss)
Applied Materials Inc., operating income (loss) by reportable segment
US$ in millions
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor Systems | 6,981) | 7,090) | 6,969) | 6,311) | 3,714) | 2,464) |
| Applied Global Services (AGS) | 1,812) | 1,657) | 1,661) | 1,508) | 1,127) | 1,101) |
| Display | 51) | 133) | 260) | 314) | 291) | 294) |
| Corporate and Other | (977) | (1,226) | (1,102) | (1,244) | (767) | (509) |
| Total | 7,867) | 7,654) | 7,788) | 6,889) | 4,365) | 3,350) |
Based on: 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), 10-K (reporting date: 2019-10-27).
The annual reportable segment operating income (loss) data reveals distinct trends across the various segments over the six-year period analyzed.
- Semiconductor Systems
- This segment exhibits a consistent upward trajectory from 2019 through 2023, with operating income increasing from 2,464 million USD in 2019 to a peak of 7,090 million USD in 2023. However, there is a slight decline in 2024, with the amount decreasing to 6,981 million USD. Despite the modest decrease in the last year, the overall trend indicates significant growth over the period.
- Applied Global Services (AGS)
- The AGS segment shows a steady increase in operating income throughout the entire period. The values rise from 1,101 million USD in 2019 to 1,812 million USD in 2024, demonstrating incremental growth year over year, without any noted reversals or volatility.
- Display
- The Display segment reflects a declining pattern over time. Starting at 294 million USD in 2019, the segment's operating income gradually decreases each year, falling sharply after 2021. By 2024, the segment reports an operating income of only 51 million USD, indicating a significant contraction and possible challenges in this business area.
- Corporate and Other
- This category represents operating losses throughout the period analyzed. The losses deepen from -509 million USD in 2019 to a peak negative value of -1,244 million USD in 2021. After 2021, the losses diminish somewhat, improving to -977 million USD in 2024, but the segment remains a consistent drag on overall profitability.
- Total Operating Income
- The aggregate total operating income mirrors the growth seen primarily in Semiconductor Systems and AGS. The total increases from 3,350 million USD in 2019 to 7,867 million USD in 2024. There is a noticeable acceleration in growth between 2020 and 2022, followed by minor fluctuations, with a slight decrease in 2023 and a recovery in 2024. This overall upward trend indicates strong performance despite the negative contributions from the Corporate and Other segment and the declining Display segment.
Depreciation/amortization
Applied Materials Inc., depreciation/amortization by reportable segment
US$ in millions
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor Systems | 168) | 235) | 203) | 194) | 219) | 202) |
| Applied Global Services (AGS) | 22) | 31) | 31) | 32) | 34) | 25) |
| Display | 12) | 19) | 31) | 27) | 31) | 22) |
| Corporate and Other | 190) | 230) | 179) | 141) | 92) | 114) |
| Total | 392) | 515) | 444) | 394) | 376) | 363) |
Based on: 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), 10-K (reporting date: 2019-10-27).
The depreciation and amortization expenses across the reportable segments exhibit varying trends over the six-year period examined.
- Semiconductor Systems
- This segment's depreciation and amortization values fluctuate moderately without a consistent upward or downward trend. The expense rose from 202 million USD in 2019 to 219 million USD in 2020, followed by a decrease to 194 million USD in 2021. It then increased to a peak of 235 million USD in 2023 before declining sharply to 168 million USD in 2024. Overall, this segment presents volatility with a notable dip in the final year.
- Applied Global Services (AGS)
- The depreciation and amortization amounts in this segment show a modest increase from 25 million USD in 2019 to a high of 34 million USD in 2020. It remained relatively stable around 31-32 million USD from 2021 through 2023 and then saw a significant decline to 22 million USD in 2024. The data suggests a period of stability followed by a marked reduction in the latest year.
- Display
- This segment exhibits a generally declining trend in depreciation and amortization expenses over the period. Starting at 22 million USD in 2019, the expense increased temporarily to 31 million USD in 2020, then decreased to 27 million USD in 2021 and stabilized at 31 million USD in 2022. Subsequent years show a sharp decrease to 19 million USD in 2023 and further down to 12 million USD in 2024, indicating a consistent reduction in asset-related charges.
- Corporate and Other
- This category demonstrates a rising trend overall. Depreciation and amortization expenses decreased from 114 million USD in 2019 to 92 million USD in 2020 but then increased substantially to 141 million USD in 2021. This upward pattern continued with notable increases to 179 million USD in 2022 and peaking at 230 million USD in 2023. The amount then decreased to 190 million USD in 2024, yet remains significantly higher than at the beginning of the period.
- Total
- The aggregate depreciation and amortization expenses illustrate a clear increasing trend between 2019 and 2023, rising from 363 million USD to a peak of 515 million USD. However, in 2024, there is a considerable decline to 392 million USD. This pattern reflects the combined impact of segment-level fluctuations, with the overall expenses reaching their highest level in 2023 before receding.
Capital expenditures
Applied Materials Inc., capital expenditures by reportable segment
US$ in millions
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor Systems | 425) | 381) | 249) | 228) | 226) | 168) |
| Applied Global Services (AGS) | 35) | 39) | 38) | 29) | 30) | 47) |
| Display | 29) | 13) | 30) | 32) | 29) | 43) |
| Corporate and Other | 701) | 673) | 470) | 379) | 137) | 183) |
| Total | 1,190) | 1,106) | 787) | 668) | 422) | 441) |
Based on: 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), 10-K (reporting date: 2019-10-27).
- Semiconductor Systems
- Capital expenditures in this segment show a consistent upward trend over the examined period. Starting at $168 million in 2019, expenditures increased steadily each year, reaching $425 million by 2024. This represents a significant growth of over 150%, indicating a strong and sustained investment focus in this area.
- Applied Global Services (AGS)
- Expenditures in this segment exhibit a fluctuating pattern. Beginning at $47 million in 2019, there was a sharp decline to $30 million in 2020, followed by relatively stable expenditures around $29 to $39 million between 2021 and 2023. A slight decrease to $35 million is noted in 2024. Overall, the spending in AGS remains comparatively low and relatively stable after an initial decrease.
- Display
- This segment shows a general decline in capital expenditures over the period. Starting at $43 million in 2019, expenditures dropped to $29 million in 2020 and hovered around the low 30s until 2022, then fell sharply to $13 million in 2023. A partial recovery to $29 million occurs in 2024, though levels remain below those seen in the early years of the period.
- Corporate and Other
- Capital expenditures in the corporate and other category have increased significantly during the period. From $183 million in 2019, expenditures slightly decreased to $137 million in 2020, then rose sharply to $379 million in 2021. This upward trajectory continued with $470 million in 2022 and further substantial increases in 2023 and 2024, culminating at $701 million. This suggests growing investments or costs categorized as corporate and other over recent years.
- Total
- The total capital expenditures reveal a strong overall upward trend, rising from $441 million in 2019 to $1.19 billion in 2024. This more than doubling of total expenditures over the six-year span reflects substantial increases in spending across multiple segments, particularly in Semiconductor Systems and Corporate and Other categories. The growth in total capital outlays indicates an expansionary investment strategy and prioritization of capital assets within the company.