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Applied Materials Announces Second Quarter 2024 Results

Applied Materials, Inc.
Applied Materials, Inc.
  • Revenue $6.65 billion, flat year over year

  • GAAP operating margin 28.8 percent and non-GAAP operating margin 29.0 percent, flat and down 0.1 point year over year, respectively

  • GAAP EPS $2.06 and non-GAAP EPS $2.09, up 11 percent and 5 percent year over year, respectively

  • Generated $1.39 billion in cash from operations

SANTA CLARA, Calif., May 16, 2024 (GLOBE NEWSWIRE) --  Applied Materials, Inc. (NASDAQ: AMAT) today reported results for its second quarter ended Apr. 28, 2024.

Second Quarter Results

Applied generated revenue of $6.65 billion. On a GAAP basis, the company reported gross margin of 47.4 percent, operating income of $1.91 billion or 28.8 percent of net revenue, and earnings per share (EPS) of $2.06.

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On a non-GAAP basis, the company reported gross margin of 47.5 percent, operating income of $1.93 billion or 29.0 percent of net revenue, and EPS of $2.09.

The company generated $1.39 billion in cash from operations and distributed $1.09 billion to shareholders including $820 million in share repurchases and $266 million in dividends.

“Applied Materials continues to deliver strong performance in 2024, with fiscal second quarter revenue and earnings towards the high end of our guided range,” said Gary Dickerson, President and CEO. “Applied Materials has the most enabling portfolio of materials engineering technologies for chips that underpin tectonic shifts in technology including AI, IoT, electric vehicles and clean energy, which puts us in a great position to grow along with these long-term, secular trends.”


Results Summary

 

 

 

 

 

 

Q2 FY2024

 

Q2 FY2023

 

Change

 

(In millions, except per share amounts and percentages)

Net revenue

$

6,646

 

 

$

6,630

 

 

 

Gross margin

 

47.4%

 

 

 

46.7%

 

 

0.7 points

Operating margin

 

28.8%

 

 

 

28.8%

 

 

 

Net income

$

1,722

 

 

$

1,575

 

 

9

%

Diluted earnings per share

$

2.06

 

 

$

1.86

 

 

11

%

Non-GAAP Results

 

 

 

 

 

Non-GAAP gross margin

 

47.5%

 

 

 

46.8%

 

 

0.7 points

Non-GAAP operating margin

 

29.0%

 

 

 

29.1%

 

 

(0.1) point

Non-GAAP net income

$

1,744

 

 

$

1,692

 

 

3

%

Non-GAAP diluted EPS

$

2.09

 

 

$

2.00

 

 

5

%

Non-GAAP free cash flow

$

1,135

 

 

$

2,037

 

 

(44

)%


A reconciliation of the GAAP and non-GAAP results is provided in the financial tables included in this release. See also “Use of Non-GAAP Financial Measures” section.

Business Outlook

In the third quarter of fiscal 2024, Applied expects net revenue to be approximately $6.65 billion, plus or minus $400 million. Non-GAAP diluted EPS is expected to be in the range of $1.83 to $2.19.

This outlook for non-GAAP diluted EPS excludes known charges related to completed acquisitions of $0.01 per share and includes the normalized tax benefit of share-based compensation of $0.01 per share and includes a net income tax benefit related to intra-entity intangible asset transfers of $0.02 per share, but does not reflect any items that are unknown at this time, such as any additional charges related to acquisitions or other non-operational or unusual items, as well as other tax-related items, which we are not able to predict without unreasonable efforts due to their inherent uncertainty.

Second Quarter Reportable Segment Information

Effective in the first quarter of fiscal 2024, management began including share-based compensation expense in the evaluation of reportable segments' performance. Prior-year numbers have been recast to conform to the current-year presentation.

Semiconductor Systems

Q2 FY2024

 

Q2 FY2023

 

(In millions, except percentages)

Net revenue

$

4,901

 

 

$

4,977

 

Foundry, logic and other

 

65%

 

 

 

84%

 

DRAM

 

32%

 

 

 

11%

 

Flash memory

 

3%

 

 

 

5%

 

Operating income

$

1,701

 

 

$

1,715

 

Operating margin

 

34.7%

 

 

 

34.5%

 

Non-GAAP Results

 

 

Non-GAAP operating income

$

1,711

 

 

$

1,725

 

Non-GAAP operating margin

 

34.9%

 

 

 

34.7%

 


Applied Global Services

Q2 FY2024

 

Q2 FY2023

 

(In millions, except percentages)

Net revenue

$

1,530

 

 

$

1,428

 

Operating income

$

436

 

 

$

384

 

Operating margin

 

28.5

%

 

 

26.9

%

Non-GAAP Results

 

 

Non-GAAP operating income

$

436

 

 

$

384

 

Non-GAAP operating margin

 

28.5

%

 

 

26.9

%


Display and Adjacent Markets

Q2 FY2024

 

Q2 FY2023

 

(In millions, except percentages)

Net revenue

$

179

 

 

$

168

 

Operating income

$

5

 

 

$

16

 

Operating margin

 

2.8

%

 

 

9.5

%

Non-GAAP Results

 

 

Non-GAAP operating income

$

5

 

 

$

16

 

Non-GAAP operating margin

 

2.8

%

 

 

9.5

%


Corporate and Other

 

 

 

(In millions)

Q2 FY2024

 

Q2 FY2023

Unallocated net revenue

$

36

 

 

$

57

 

Unallocated cost of products sold and expenses

 

(266

)

 

 

(261

)

Total

$

(230

)

 

$

(204

)

 

Use of Non-GAAP Financial Measures

Applied provides investors with certain non-GAAP financial measures, which are adjusted for the impact of certain costs, expenses, gains and losses, including certain items related to mergers and acquisitions; restructuring and severance charges and any associated adjustments; impairments of assets; gain or loss, dividends and impairments on strategic investments; certain income tax items and other discrete adjustments. On a non-GAAP basis, the tax effect related to share-based compensation is recognized ratably over the fiscal year. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this release.

Management uses these non-GAAP financial measures to evaluate the company’s operating and financial performance and for planning purposes, and as performance measures in its executive compensation program. Applied believes these measures enhance an overall understanding of its performance and investors’ ability to review the company’s business from the same perspective as the company’s management, and facilitate comparisons of this period’s results with prior periods on a consistent basis by excluding items that management does not believe are indicative of Applied's ongoing operating performance. There are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, may be different from non-GAAP financial measures used by other companies, and may exclude certain items that may have a material impact upon our reported financial results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.

Webcast Information

Applied Materials will discuss these results during an earnings call that begins at 1:30 p.m. Pacific Time today. A live webcast and related slide presentation will be available at www.appliedmaterials.com. A replay will be available on the website beginning at 5:00 p.m. Pacific Time today.

Forward-Looking Statement

This press release contains forward-looking statements, including those regarding anticipated growth and trends in our businesses and markets, industry outlooks and demand drivers, technology transitions, our business and financial performance and market share positions, our capital allocation and cash deployment strategies, our investment and growth strategies, our development of new products and technologies, our business outlook for the third quarter of fiscal 2024 and beyond, and other statements that are not historical facts. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. Factors that could cause actual results to differ materially from those expressed or implied by such statements include, without limitation: the level of demand for our products; global economic, political and industry conditions, including rising inflation and interest rates; the implementation and interpretation of export regulations and license requirements, and their impact on our ability to export products and provide services to customers and on our results of operations; global trade issues and changes in trade and export license policies; our ability to obtain licenses or authorizations on a timely basis, if at all; the effects of geopolitical turmoil or conflicts; consumer demand for electronic products; the demand for semiconductors; customers’ technology and capacity requirements; the introduction of new and innovative technologies, and the timing of technology transitions; our ability to develop, deliver and support new products and technologies; our ability to meet customer demand, and our suppliers' ability to meet our demand requirements; the concentrated nature of our customer base; our ability to expand our current markets, increase market share and develop new markets; market acceptance of existing and newly developed products; our ability to obtain and protect intellectual property rights in key technologies; our ability to achieve the objectives of operational and strategic initiatives, align our resources and cost structure with business conditions, and attract, motivate and retain key employees; the effects of regional or global health epidemics; acquisitions, investments and divestitures; changes in income tax laws; the variability of operating expenses and results among products and segments, and our ability to accurately forecast future results, market conditions, customer requirements and business needs; our ability to ensure compliance with applicable law, rules and regulations and other risks and uncertainties described in our SEC filings, including our recent Forms 10-Q and 8-K. All forward-looking statements are based on management’s current estimates, projections and assumptions, and we assume no obligation to update them.

About Applied Materials

Applied Materials, Inc. (Nasdaq: AMAT) is the leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Our expertise in modifying materials at atomic levels and on an industrial scale enables customers to transform possibilities into reality. At Applied Materials, our innovations make possible a better future. Learn more at www.appliedmaterials.com.

Contact:

Ricky Gradwohl (editorial/media) 408.235.4676
Michael Sullivan (financial community) 408.986.7977


APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

 

 

Three Months Ended

 

Six Months Ended

(In millions, except per share amounts)

April 28,
2024

 

April 30,
2023

 

April 28,
2024

 

April 30,
2023

Net revenue

$

6,646

 

$

6,630

 

 

$

13,353

 

$

13,369

 

Cost of products sold

 

3,493

 

 

3,536

 

 

 

6,996

 

 

7,130

 

Gross profit

 

3,153

 

 

3,094

 

 

 

6,357

 

 

6,239

 

Operating expenses:

 

 

 

 

 

 

 

Research, development and engineering

 

785

 

 

775

 

 

 

1,539

 

 

1,546

 

Marketing and selling

 

209

 

 

194

 

 

 

416

 

 

391

 

General and administrative

 

247

 

 

214

 

 

 

523

 

 

421

 

Total operating expenses

 

1,241

 

 

1,183

 

 

 

2,478

 

 

2,358

 

Income from operations

 

1,912

 

 

1,911

 

 

 

3,879

 

 

3,881

 

Interest expense

 

59

 

 

61

 

 

 

118

 

 

120

 

Interest and other income (expense), net

 

141

 

 

(73

)

 

 

536

 

 

(23

)

Income before income taxes

 

1,994

 

 

1,777

 

 

 

4,297

 

 

3,738

 

Provision for income taxes

 

272

 

 

202

 

 

 

556

 

 

446

 

Net income

$

1,722

 

$

1,575

 

 

$

3,741

 

$

3,292

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

2.08

 

$

1.87

 

 

$

4.50

 

$

3.90

 

Diluted

$

2.06

 

$

1.86

 

 

$

4.47

 

$

3.88

 

Weighted average number of shares:

 

 

 

 

 

 

 

Basic

 

830

 

 

843

 

 

 

831

 

 

844

 

Diluted

 

836

 

 

847

 

 

 

837

 

 

848

 


APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS

 

(In millions)

April 28,
2024

 

October 29,
2023

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

7,085

 

$

6,132

Short-term investments

 

472

 

 

737

Accounts receivable, net

 

4,778

 

 

5,165

Inventories

 

5,691

 

 

5,725

Other current assets

 

1,239

 

 

1,388

Total current assets

 

19,265

 

 

19,147

Long-term investments

 

2,983

 

 

2,281

Property, plant and equipment, net

 

2,958

 

 

2,723

Goodwill

 

3,732

 

 

3,732

Purchased technology and other intangible assets, net

 

273

 

 

294

Deferred income taxes and other assets

 

2,738

 

 

2,552

Total assets

$

31,949

 

$

30,729

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Short-term debt

$

99

 

$

100

Accounts payable and accrued expenses

 

4,174

 

 

4,297

Contract liabilities

 

2,611

 

 

2,975

Total current liabilities

 

6,884

 

 

7,372

Long-term debt

 

5,463

 

 

5,461

Income taxes payable

 

656

 

 

833

Other liabilities

 

747

 

 

714

Total liabilities

 

13,750

 

 

14,380

Total stockholders’ equity

 

18,199

 

 

16,349

Total liabilities and stockholders’ equity

$

31,949

 

$

30,729


APPLIED MATERIALS, INC.
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

 

(In millions)

Three Months Ended

 

Six Months Ended

April 28,
2024

 

April 30,
2023

April 28,
2024

 

April 30,
2023

Cash flows from operating activities:

 

 

 

 

 

 

 

Net income

$

1,722

 

 

$

1,575

 

 

$

3,741

 

 

$

3,292

 

Adjustments required to reconcile net income to cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

96

 

 

 

129

 

 

 

187

 

 

 

249

 

Share-based compensation

 

134

 

 

 

113

 

 

 

304

 

 

 

261

 

Deferred income taxes

 

(134

)

 

 

(115

)

 

 

(206

)

 

 

(136

)

Other

 

(12

)

 

 

167

 

 

 

(247

)

 

 

174

 

Net change in operating assets and liabilities

 

(414

)

 

 

423

 

 

 

(62

)

 

 

722

 

Cash provided by operating activities

 

1,392

 

 

 

2,292

 

 

 

3,717

 

 

 

4,562

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Capital expenditures

 

(257

)

 

 

(255

)

 

 

(486

)

 

 

(542

)

Cash paid for acquisitions, net of cash acquired

 

 

 

 

2

 

 

 

 

 

 

(18

)

Proceeds from sales and maturities of investments

 

582

 

 

 

255

 

 

 

1,113

 

 

 

669

 

Purchases of investments

 

(474

)

 

 

(324

)

 

 

(1,223

)

 

 

(730

)

Cash used in investing activities

 

(149

)

 

 

(322

)

 

 

(596

)

 

 

(621

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from issuance of commercial paper

 

100

 

 

 

297

 

 

 

200

 

 

 

595

 

Repayments of commercial paper

 

(100

)

 

 

(300

)

 

 

(200

)

 

 

(400

)

Proceeds from common stock issuances

 

119

 

 

 

111

 

 

 

119

 

 

 

111

 

Common stock repurchases

 

(820

)

 

 

(800

)

 

 

(1,520

)

 

 

(1,050

)

Tax withholding payments for vested equity awards

 

(41

)

 

 

(18

)

 

 

(233

)

 

 

(154

)

Payments of dividends to stockholders

 

(266

)

 

 

(219

)

 

 

(532

)

 

 

(439

)

Repayments of principal on finance leases

 

(14

)

 

 

1

 

 

 

(13

)

 

 

(9

)

Cash used in financing activities

 

(1,022

)

 

 

(928

)

 

 

(2,179

)

 

 

(1,346

)

Increase (decrease) in cash, cash equivalents and restricted cash equivalents

 

221

 

 

 

1,042

 

 

 

942

 

 

 

2,595

 

Cash, cash equivalents and restricted cash equivalents—beginning of period

 

6,954

 

 

 

3,653

 

 

 

6,233

 

 

 

2,100

 

Cash, cash equivalents and restricted cash equivalents — end of period

$

7,175

 

 

$

4,695

 

 

$

7,175

 

 

$

4,695

 

 

 

 

 

 

 

 

 

Reconciliation of cash, cash equivalents, and restricted cash equivalents

 

 

 

 

 

 

 

Cash and cash equivalents

$

7,085

 

 

$

4,588

 

 

$

7,085

 

 

$

4,588

 

Restricted cash equivalents included in deferred income taxes and other assets

 

90

 

 

 

107

 

 

 

90

 

 

 

107

 

Total cash, cash equivalents, and restricted cash equivalents

$

7,175

 

 

$

4,695

 

 

$

7,175

 

 

$

4,695

 

 

 

 

 

 

 

 

 

Supplemental cash flow information:

 

 

 

 

 

 

 

Cash payments for income taxes

$

467

 

 

$

152

 

 

$

606

 

 

$

221

 

Cash refunds from income taxes

$

3

 

 

$

47

 

 

$

5

 

 

$

51

 

Cash payments for interest

$

68

 

 

$

68

 

 

$

102

 

 

$

102

 


Additional Information

 

 

 

 

Q2 FY2024

 

Q2 FY2023

Net Revenue by Geography (In millions)

 

United States

$

853

 

 

$

1,113

 

% of Total

 

13

%

 

 

17

%

Europe

$

289

 

 

$

477

 

% of Total

 

4

%

 

 

7

%

Japan

$

453

 

 

$

460

 

% of Total

 

7

%

 

 

7

%

Korea

$

988

 

 

$

1,583

 

% of Total

 

15

%

 

 

24

%

Taiwan

$

1,019

 

 

$

1,435

 

% of Total

 

15

%

 

 

22

%

Southeast Asia

$

213

 

 

$

157

 

% of Total

 

3

%

 

 

2

%

China

$

2,831

 

 

$

1,405

 

% of Total

 

43

%

 

 

21

%

 

 

 

 

Employees(In thousands)

 

 

 

Regular Full Time

 

34.8

 

 

 

34.2

 


APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS

 

 

Three Months Ended

 

Six Months Ended

(In millions, except percentages)

April 28,
2024

 

April 30,
2023

 

April 28,
2024

 

April 30,
2023

Non-GAAP Gross Profit

 

 

 

 

 

 

 

GAAP reported gross profit

$

3,153

 

 

$

3,094

 

 

$

6,357

 

 

$

6,239

 

Certain items associated with acquisitions1

 

7

 

 

 

7

 

 

 

14

 

 

 

14

 

Non-GAAP gross profit

$

3,160

 

 

$

3,101

 

 

$

6,371

 

 

$

6,253

 

Non-GAAP gross margin

 

47.5

%

 

 

46.8

%

 

 

47.7

%

 

 

46.8

%

Non-GAAP Operating Income

 

 

 

 

 

 

 

GAAP reported operating income

$

1,912

 

 

$

1,911

 

 

$

3,879

 

 

$

3,881

 

Certain items associated with acquisitions1

 

10

 

 

 

11

 

 

 

21

 

 

 

22

 

Acquisition integration and deal costs

 

5

 

 

 

8

 

 

 

8

 

 

 

14

 

Non-GAAP operating income

$

1,927

 

 

$

1,930

 

 

$

3,908

 

 

$

3,917

 

Non-GAAP operating margin

 

29.0

%

 

 

29.1

%

 

 

29.3

%

 

 

29.3

%

Non-GAAP Net Income

 

 

 

 

 

 

 

GAAP reported net income

$

1,722

 

 

$

1,575

 

 

$

3,741

 

 

$

3,292

 

Certain items associated with acquisitions1

 

10

 

 

 

11

 

 

 

21

 

 

 

22

 

Acquisition integration and deal costs

 

5

 

 

 

8

 

 

 

8

 

 

 

14

 

Realized loss (gain), dividends and impairments on strategic investments, net

 

(3

)

 

 

117

 

 

 

(4

)

 

 

113

 

Unrealized loss (gain) on strategic investments, net

 

(20

)

 

 

11

 

 

 

(300

)

 

 

7

 

Income tax effect of share-based compensation2

 

11

 

 

 

3

 

 

 

(15

)

 

 

(11

)

Income tax effects related to intra-entity intangible asset transfers

 

18

 

 

 

(1

)

 

 

40

 

 

 

16

 

Resolution of prior years’ income tax filings and other tax items

 

 

 

 

(27

)

 

 

33

 

 

 

(32

)

Income tax effect of non-GAAP adjustments3

 

1

 

 

 

(5

)

 

 

2

 

 

 

(5

)

Non-GAAP net income

$

1,744

 

 

$

1,692

 

 

$

3,526

 

 

$

3,416

 

 

1 These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.

 

2 GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis.

 

3 Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes.

 


APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS

 

 

Three Months Ended

 

Six Months Ended

(In millions, except per share amounts)

April 28,
2024

 

April 30,
2023

 

April 28,
2024

 

April 30,
2023

Non-GAAP Earnings Per Diluted Share

 

 

 

 

 

 

 

GAAP reported earnings per diluted share

$

2.06

 

 

$

1.86

 

 

$

4.47

 

 

$

3.88

 

Certain items associated with acquisitions

 

0.01

 

 

 

0.01

 

 

 

0.02

 

 

 

0.03

 

Acquisition integration and deal costs

 

0.01

 

 

 

0.01

 

 

 

0.01

 

 

 

0.01

 

Realized loss (gain), dividends and impairments on strategic investments, net

 

 

 

 

0.14

 

 

 

 

 

 

0.13

 

Unrealized loss (gain) on strategic investments, net

 

(0.02

)

 

 

0.01

 

 

 

(0.36

)

 

 

0.01

 

Income tax effect of share-based compensation

 

0.01

 

 

 

 

 

 

(0.02

)

 

 

(0.01

)

Income tax effects related to intra-entity intangible asset transfers

 

0.02

 

 

 

 

 

 

0.05

 

 

 

0.02

 

Resolution of prior years’ income tax filings and other tax items

 

 

 

 

(0.03

)

 

 

0.04

 

 

 

(0.04

)

Non-GAAP earnings per diluted share

$

2.09

 

 

$

2.00

 

 

$

4.21

 

 

$

4.03

 

Weighted average number of diluted shares

 

836

 

 

 

847

 

 

 

837

 

 

 

848

 


APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP RESULTS

 

 

Three Months Ended

 

Six Months Ended

(In millions, except percentages)

April 28,
2024

 

April 30,
2023

 

April 28,
2024

 

April 30,
2023

Semiconductor Systems Non-GAAP Operating Income

 

 

 

 

 

 

 

GAAP reported operating income

$

1,701

 

 

$

1,715

 

 

$

3,445

 

 

$

3,570

 

Certain items associated with acquisitions1

 

10

 

 

 

10

 

 

 

20

 

 

 

19

 

Non-GAAP operating income

$

1,711

 

 

$

1,725

 

 

$

3,465

 

 

$

3,589

 

Non-GAAP operating margin

 

34.9

%

 

 

34.7

%

 

 

35.3

%

 

 

35.4

%

Applied Global Services Non-GAAP Operating Income

 

 

 

 

 

 

 

GAAP reported operating income

$

436

 

 

$

384

 

 

$

853

 

 

$

729

 

Non-GAAP operating income

$

436

 

 

$

384

 

 

$

853

 

 

$

729

 

Non-GAAP operating margin

 

28.5

%

 

 

26.9

%

 

 

28.4

%

 

 

26.1

%

Display and Adjacent Markets Non-GAAP Operating Income

 

 

 

 

 

 

 

GAAP reported operating income

$

5

 

 

$

16

 

 

$

30

 

 

$

19

 

Non-GAAP operating income

$

5

 

 

$

16

 

 

$

30

 

 

$

19

 

Non-GAAP operating margin

 

2.8

%

 

 

9.5

%

 

 

7.1

%

 

 

5.7

%

 

1 These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets.

 

Note: The reconciliation of GAAP and non-GAAP segment results above does not include certain revenues, costs of products sold and operating expenses that are reported within corporate and other and included in consolidated operating income.


APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE

 

 

Three Months Ended

(In millions, except percentages)

April 28, 2024

 

 

GAAP provision for income taxes(a)

$

272

 

Income tax effect of share-based compensation

 

(11

)

Income tax effects related to intra-entity intangible asset transfers

 

(18

)

Income tax effect of non-GAAP adjustments

 

(1

)

Non-GAAP provision for income taxes(b)

$

242

 

 

 

GAAP income before income taxes(c)

$

1,994

 

Certain items associated with acquisitions

 

10

 

Acquisition integration and deal costs

 

5

 

Realized loss (gain), dividends and impairments on strategic investments, net

 

(3

)

Unrealized loss (gain) on strategic investments, net

 

(20

)

Non-GAAP income before income taxes(d)

$

1,986

 

 

 

GAAP effective income tax rate(a/c)

 

13.6

%

 

 

Non-GAAP effective income tax rate(b/d)

 

12.2

%


UNAUDITED RECONCILIATION OF NON-GAAP FREE CASH FLOW

 

 

Three Months Ended

 

Six Months Ended

(In millions)

April 28,
2024

 

April 30,
2023

 

April 28,
2024

 

April 30,
2023

Cash provided by operating activities

$

1,392

 

 

$

2,292

 

 

$

3,717

 

 

$

4,562

 

Capital expenditures

 

(257

)

 

 

(255

)

 

 

(486

)

 

 

(542

)

Non-GAAP free cash flow

$

1,135

 

 

$

2,037

 

 

$

3,231

 

 

$

4,020