Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Applied Materials Inc., income tax expense (benefit), continuing operations

US$ in millions

12 months ended:	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
U.S.	1,254)	708)	590)	462)	196)	240)
Foreign	366)	456)	275)	344)	263)	260)
State	33)	54)	14)	17)	20)	12)
Current	1,653)	1,218)	879)	823)	479)	512)
U.S.	(697)	(255)	(62)	(3)	(3)	8)
Foreign	30)	(61)	265)	67)	76)	46)
State	(11)	(42)	(8)	(4)	(5)	(3)
Deferred	(678)	(358)	195)	60)	68)	51)
Provision for income taxes	975)	860)	1,074)	883)	547)	563)

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).

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Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Applied Materials Inc. current increased from 2022 to 2023 and from 2023 to 2024.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Applied Materials Inc. deferred decreased from 2022 to 2023 and from 2023 to 2024.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Applied Materials Inc. provision for income taxes decreased from 2022 to 2023 but then increased from 2023 to 2024 not reaching 2022 level.

Applied Materials Inc., effective income tax rate (EITR) reconciliation

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
Statutory U.S. federal income tax rate	21.00%	21.00%	21.00%	21.00%	21.00%	21.00%
Effect of foreign operations taxed at various rates	-7.60%	-8.20%	-4.40%	-7.00%	-5.90%	-5.90%
Changes in prior years’ unrecognized tax benefits	0.00%	-0.20%	-0.90%	0.20%	0.50%	2.60%
Resolutions of prior years’ income tax filings	-0.10%	-0.10%	-0.20%	-0.10%	-1.00%	-0.10%
Research and other tax credits	-1.40%	-1.60%	-1.00%	-0.90%	-1.30%	-1.10%
Other	0.10%	0.20%	-0.40%	-0.20%	-0.20%	0.70%
Effective income tax rate	12.00%	11.10%	14.10%	13.00%	13.10%	17.20%

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).

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Item	Description	The company
Effective income tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Applied Materials Inc. effective income tax rate decreased from 2022 to 2023 but then slightly increased from 2023 to 2024.

Applied Materials Inc., components of deferred tax assets and liabilities

US$ in millions

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
Corporate Alternative Minimum Tax	410)	—)	—)	—)	—)	—)
Capitalized R&D expenses	217)	83)	—)	—)	—)	—)
Allowance for doubtful accounts	4)	4)	5)	4)	4)	8)
Inventory reserves and basis difference	127)	125)	131)	112)	119)	117)
Installation and warranty reserves	70)	35)	29)	29)	14)	11)
Intangible assets	977)	1,031)	984)	1,281)	1,355)	1,472)
Accrued liabilities	24)	19)	35)	31)	24)	15)
Deferred revenue	72)	72)	82)	25)	32)	36)
Tax credits	592)	536)	453)	369)	326)	264)
Deferred compensation	261)	217)	125)	133)	130)	98)
Share-based compensation	44)	50)	42)	34)	30)	36)
Property, plant and equipment	101)	9)	—)	—)	—)	—)
Lease liability	72)	98)	81)	61)	55)	—)
Other	79)	96)	67)	89)	96)	58)
Gross deferred tax assets	3,050)	2,375)	2,034)	2,168)	2,185)	2,115)
Valuation allowance	(569)	(530)	(460)	(361)	(314)	(257)
Deferred tax assets	2,481)	1,845)	1,574)	1,807)	1,871)	1,858)
Property, plant and equipment	—)	—)	(111)	(93)	(76)	(65)
Right of use assets	(76)	(103)	(80)	(62)	(54)	—)
Undistributed foreign earnings	(23)	(23)	(39)	(37)	(39)	(38)
Deferred tax liabilities	(99)	(126)	(230)	(192)	(169)	(103)
Net deferred tax assets (liabilities)	2,382)	1,719)	1,344)	1,615)	1,702)	1,755)

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).

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Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Applied Materials Inc. gross deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Applied Materials Inc. deferred tax assets increased from 2022 to 2023 and from 2023 to 2024.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Applied Materials Inc. net deferred tax assets (liabilities) increased from 2022 to 2023 and from 2023 to 2024.

Applied Materials Inc., deferred tax assets and liabilities, classification

US$ in millions

		Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
	Non-current deferred tax assets (included in Deferred income taxes and other assets)	2,393)	1,729)	1,395)	1,623)	1,711)	1,766)
	Non-current deferred tax liabilities (included in Other liabilities)	11)	10)	51)	8)	9)	11)

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).

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Item	Description	The company
Non-current deferred tax assets (included in Deferred income taxes and other assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Applied Materials Inc. non-current deferred tax assets (included in Deferred income taxes and other assets) increased from 2022 to 2023 and from 2023 to 2024.
Non-current deferred tax liabilities (included in Other liabilities)	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Applied Materials Inc. non-current deferred tax liabilities (included in Other liabilities) decreased from 2022 to 2023 but then slightly increased from 2023 to 2024.

Applied Materials Inc., adjustments to financial statements

US$ in millions

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
Adjustment to Total Assets
Total assets (as reported)	34,409)	30,729)	26,726)	25,825)	22,353)	19,024)
Less: Noncurrent deferred tax assets, net	2,393)	1,729)	1,395)	1,623)	1,711)	1,766)
Total assets (adjusted)	32,016)	29,000)	25,331)	24,202)	20,642)	17,258)
Adjustment to Total Liabilities
Total liabilities (as reported)	15,408)	14,380)	14,532)	13,578)	11,775)	10,810)
Less: Noncurrent deferred tax liabilities, net	11)	10)	51)	8)	9)	11)
Total liabilities (adjusted)	15,397)	14,370)	14,481)	13,570)	11,766)	10,799)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	19,001)	16,349)	12,194)	12,247)	10,578)	8,214)
Less: Net deferred tax assets (liabilities)	2,382)	1,719)	1,344)	1,615)	1,702)	1,755)
Stockholders’ equity (adjusted)	16,619)	14,630)	10,850)	10,632)	8,876)	6,459)
Adjustment to Net Income
Net income (as reported)	7,177)	6,856)	6,525)	5,888)	3,619)	2,706)
Add: Deferred income tax expense (benefit)	(678)	(358)	195)	60)	68)	51)
Net income (adjusted)	6,499)	6,498)	6,720)	5,948)	3,687)	2,757)

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).

Applied Materials Inc., Financial Data: Reported vs. Adjusted

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Applied Materials Inc., adjusted financial ratios

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
Net Profit Margin
Reported net profit margin	26.41%	25.86%	25.31%	25.53%	21.04%	18.52%
Adjusted net profit margin	23.91%	24.51%	26.06%	25.79%	21.43%	18.87%
Total Asset Turnover
Reported total asset turnover	0.79	0.86	0.96	0.89	0.77	0.77
Adjusted total asset turnover	0.85	0.91	1.02	0.95	0.83	0.85
Financial Leverage
Reported financial leverage	1.81	1.88	2.19	2.11	2.11	2.32
Adjusted financial leverage	1.93	1.98	2.33	2.28	2.33	2.67
Return on Equity (ROE)
Reported ROE	37.77%	41.94%	53.51%	48.08%	34.21%	32.94%
Adjusted ROE	39.11%	44.42%	61.94%	55.94%	41.54%	42.68%
Return on Assets (ROA)
Reported ROA	20.86%	22.31%	24.41%	22.80%	16.19%	14.22%
Adjusted ROA	20.30%	22.41%	26.53%	24.58%	17.86%	15.98%

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).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Applied Materials Inc. adjusted net profit margin ratio deteriorated from 2022 to 2023 and from 2023 to 2024.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Applied Materials Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 and from 2023 to 2024.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Applied Materials Inc. adjusted financial leverage ratio decreased from 2022 to 2023 and from 2023 to 2024.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Applied Materials Inc. adjusted ROE deteriorated from 2022 to 2023 and from 2023 to 2024.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Applied Materials Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Applied Materials Inc., Financial Ratios: Reported vs. Adjusted

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	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income	7,177)	6,856)	6,525)	5,888)	3,619)	2,706)
Net revenue	27,176)	26,517)	25,785)	23,063)	17,202)	14,608)
Profitability Ratio
Net profit margin¹	26.41%	25.86%	25.31%	25.53%	21.04%	18.52%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	6,499)	6,498)	6,720)	5,948)	3,687)	2,757)
Net revenue	27,176)	26,517)	25,785)	23,063)	17,202)	14,608)
Profitability Ratio
Adjusted net profit margin²	23.91%	24.51%	26.06%	25.79%	21.43%	18.87%

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).

2024 Calculations

¹ Net profit margin = 100 × Net income ÷ Net revenue
= 100 × 7,177 ÷ 27,176 = 26.41%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Net revenue
= 100 × 6,499 ÷ 27,176 = 23.91%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Applied Materials Inc. adjusted net profit margin ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
As Reported
Selected Financial Data (US$ in millions)
Net revenue	27,176)	26,517)	25,785)	23,063)	17,202)	14,608)
Total assets	34,409)	30,729)	26,726)	25,825)	22,353)	19,024)
Activity Ratio
Total asset turnover¹	0.79	0.86	0.96	0.89	0.77	0.77
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net revenue	27,176)	26,517)	25,785)	23,063)	17,202)	14,608)
Adjusted total assets	32,016)	29,000)	25,331)	24,202)	20,642)	17,258)
Activity Ratio
Adjusted total asset turnover²	0.85	0.91	1.02	0.95	0.83	0.85

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).

2024 Calculations

¹ Total asset turnover = Net revenue ÷ Total assets
= 27,176 ÷ 34,409 = 0.79

² Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= 27,176 ÷ 32,016 = 0.85

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Applied Materials Inc. adjusted total asset turnover ratio deteriorated from 2022 to 2023 and from 2023 to 2024.

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets	34,409)	30,729)	26,726)	25,825)	22,353)	19,024)
Stockholders’ equity	19,001)	16,349)	12,194)	12,247)	10,578)	8,214)
Solvency Ratio
Financial leverage¹	1.81	1.88	2.19	2.11	2.11	2.32
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	32,016)	29,000)	25,331)	24,202)	20,642)	17,258)
Adjusted stockholders’ equity	16,619)	14,630)	10,850)	10,632)	8,876)	6,459)
Solvency Ratio
Adjusted financial leverage²	1.93	1.98	2.33	2.28	2.33	2.67

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).

2024 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 34,409 ÷ 19,001 = 1.81

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 32,016 ÷ 16,619 = 1.93

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Applied Materials Inc. adjusted financial leverage ratio decreased from 2022 to 2023 and from 2023 to 2024.

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income	7,177)	6,856)	6,525)	5,888)	3,619)	2,706)
Stockholders’ equity	19,001)	16,349)	12,194)	12,247)	10,578)	8,214)
Profitability Ratio
ROE¹	37.77%	41.94%	53.51%	48.08%	34.21%	32.94%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	6,499)	6,498)	6,720)	5,948)	3,687)	2,757)
Adjusted stockholders’ equity	16,619)	14,630)	10,850)	10,632)	8,876)	6,459)
Profitability Ratio
Adjusted ROE²	39.11%	44.42%	61.94%	55.94%	41.54%	42.68%

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).

2024 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 7,177 ÷ 19,001 = 37.77%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 6,499 ÷ 16,619 = 39.11%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Applied Materials Inc. adjusted ROE deteriorated from 2022 to 2023 and from 2023 to 2024.

	Oct 27, 2024	Oct 29, 2023	Oct 30, 2022	Oct 31, 2021	Oct 25, 2020	Oct 27, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income	7,177)	6,856)	6,525)	5,888)	3,619)	2,706)
Total assets	34,409)	30,729)	26,726)	25,825)	22,353)	19,024)
Profitability Ratio
ROA¹	20.86%	22.31%	24.41%	22.80%	16.19%	14.22%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	6,499)	6,498)	6,720)	5,948)	3,687)	2,757)
Adjusted total assets	32,016)	29,000)	25,331)	24,202)	20,642)	17,258)
Profitability Ratio
Adjusted ROA²	20.30%	22.41%	26.53%	24.58%	17.86%	15.98%

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).

2024 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 7,177 ÷ 34,409 = 20.86%

² Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 6,499 ÷ 32,016 = 20.30%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Applied Materials Inc. adjusted ROA deteriorated from 2022 to 2023 and from 2023 to 2024.

Applied Materials Inc. (NASDAQ:AMAT)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Applied Materials Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Applied Materials Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)