| Q1 FY2021 | Q1 FY2020 | Change | |||||||||||||||
| (In millions, except per share amounts and percentages) | |||||||||||||||||
| Net sales | $ | 5,162 | $ | 4,162 | 24% | ||||||||||||
| Gross margin | 45.5 | % | 44.6 | % | 0.9 points | ||||||||||||
| Operating margin | 24.9 | % | 25.0 | % | (0.1) points | ||||||||||||
| Net income | $ | 1,130 | $ | 892 | 27% | ||||||||||||
| Diluted earnings per share | $ | 1.22 | $ | 0.96 | 27% | ||||||||||||
| Non-GAAP Adjusted Results | |||||||||||||||||
| Non-GAAP adjusted gross margin | 45.9 | % | 44.9 | % | 1.0 points | ||||||||||||
| Non-GAAP adjusted operating margin | 29.0 | % | 25.7 | % | 3.3 points | ||||||||||||
| Non-GAAP adjusted net income | $ | 1,282 | $ | 904 | 42% | ||||||||||||
| Non-GAAP adjusted diluted EPS | $ | 1.39 | $ | 0.98 | 42% | ||||||||||||
| Semiconductor Systems | Q1 FY2021 | Q1 FY2020 | |||||||||
| (In millions, except percentages) | |||||||||||
| Net sales | $ | 3,553 | $ | 2,814 | |||||||
| Foundry, logic and other | 58 | % | 68 | % | |||||||
| DRAM | 17 | % | 15 | % | |||||||
| Flash memory | 25 | % | 17 | % | |||||||
| Operating income | 1,261 | 915 | |||||||||
| Operating margin | 35.5 | % | 32.5 | % | |||||||
| Non-GAAP Adjusted Results | |||||||||||
| Non-GAAP adjusted operating income | $ | 1,281 | $ | 925 | |||||||
| Non-GAAP adjusted operating margin | 36.1 | % | 32.9 | % | |||||||
| Applied Global Services | Q1 FY2021 | Q1 FY2020 | |||||||||
| (In millions, except percentages) | |||||||||||
| Net sales | $ | 1,155 | $ | 997 | |||||||
| Operating income | 332 | 278 | |||||||||
| Operating margin | 28.7 | % | 27.9 | % | |||||||
| Non-GAAP Adjusted Results | |||||||||||
| Non-GAAP adjusted operating income | $ | 340 | $ | 278 | |||||||
| Non-GAAP adjusted operating margin | 29.4 | % | 27.9 | % | |||||||
| Display and Adjacent Markets | Q1 FY2021 | Q1 FY2020 | |||||||||
| (In millions, except percentages) | |||||||||||
| Net sales | $ | 411 | $ | 332 | |||||||
| Operating income | 65 | 38 | |||||||||
| Operating margin | 15.8 | % | 11.4 | % | |||||||
| Non-GAAP Adjusted Results | |||||||||||
| Non-GAAP adjusted operating income | $ | 75 | $ | 41 | |||||||
| Non-GAAP adjusted operating margin | 18.2 | % | 12.3 | % | |||||||
| Three Months Ended | |||||||||||
| (In millions, except per share amounts) | January 31, 2021 | January 26, 2020 | |||||||||
| Net sales | $ | 5,162 | $ | 4,162 | |||||||
| Cost of products sold | 2,813 | 2,304 | |||||||||
| Gross profit | 2,349 | 1,858 | |||||||||
| Operating expenses: | |||||||||||
| Research, development and engineering | 606 | 552 | |||||||||
| Marketing and selling | 147 | 135 | |||||||||
| General and administrative | 161 | 129 | |||||||||
| Severance and related charges | 152 | — | |||||||||
| Total operating expenses | 1,066 | 816 | |||||||||
| Income from operations | 1,283 | 1,042 | |||||||||
| Interest expense | 61 | 59 | |||||||||
| Interest and other income, net | 18 | 22 | |||||||||
| Income before income taxes | 1,240 | 1,005 | |||||||||
| Provision for income taxes | 110 | 113 | |||||||||
| Net income | $ | 1,130 | $ | 892 | |||||||
| Earnings per share: | |||||||||||
| Basic | $ | 1.23 | $ | 0.97 | |||||||
| Diluted | $ | 1.22 | $ | 0.96 | |||||||
| Weighted average number of shares: | |||||||||||
| Basic | 915 | 916 | |||||||||
| Diluted | 925 | 927 | |||||||||
| (In millions) | January 31, 2021 | October 25, 2020 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 6,213 | $ | 5,351 | |||||||
| Short-term investments | 410 | 387 | |||||||||
| Accounts receivable, net | 3,045 | 2,963 | |||||||||
| Inventories | 3,925 | 3,904 | |||||||||
| Other current assets | 676 | 764 | |||||||||
| Total current assets | 14,269 | 13,369 | |||||||||
| Long-term investments | 1,601 | 1,538 | |||||||||
| Property, plant and equipment, net | 1,638 | 1,604 | |||||||||
| Goodwill | 3,479 | 3,466 | |||||||||
| Purchased technology and other intangible assets, net | 140 | 153 | |||||||||
| Deferred income taxes and other assets | 2,178 | 2,223 | |||||||||
| Total assets | $ | 23,305 | $ | 22,353 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable and accrued expenses | $ | 2,932 | $ | 3,138 | |||||||
| Contract liabilities | 1,572 | 1,321 | |||||||||
| Total current liabilities | 4,504 | 4,459 | |||||||||
| Long-term debt, net of current portion | 5,449 | 5,448 | |||||||||
| Income taxes payable | 1,210 | 1,206 | |||||||||
| Other liabilities | 669 | 662 | |||||||||
| Total liabilities | 11,832 | 11,775 | |||||||||
| Total stockholders’ equity | 11,473 | 10,578 | |||||||||
| Total liabilities and stockholders’ equity | $ | 23,305 | $ | 22,353 | |||||||
| (In millions) | Three Months Ended | ||||||||||
| January 31, 2021 | January 26, 2020 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 1,130 | $ | 892 | |||||||
| Adjustments required to reconcile net income to cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 94 | 94 | |||||||||
| Severance and related charges | 148 | — | |||||||||
| Share-based compensation | 107 | 93 | |||||||||
| Deferred income taxes | 28 | 30 | |||||||||
| Other | — | 15 | |||||||||
| Net change in operating assets and liabilities | (86) | (137) | |||||||||
| Cash provided by operating activities | 1,421 | 987 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (121) | (102) | |||||||||
| Cash paid for acquisitions, net of cash acquired | (12) | — | |||||||||
| Proceeds from sales and maturities of investments | 358 | 368 | |||||||||
| Purchases of investments | (441) | (428) | |||||||||
| Cash used in investing activities | (216) | (162) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from common stock issuances | — | 15 | |||||||||
| Common stock repurchases | — | (200) | |||||||||
| Tax withholding payments for vested equity awards | (142) | (153) | |||||||||
| Payments of dividends to stockholders | (201) | (192) | |||||||||
| Cash used in financing activities | (343) | (530) | |||||||||
| Increase in cash, cash equivalents and restricted cash equivalents | 862 | 295 | |||||||||
| Cash, cash equivalents and restricted cash equivalents—beginning of period | 5,466 | 3,129 | |||||||||
| Cash, cash equivalents and restricted cash equivalents — end of period | $ | 6,328 | $ | 3,424 | |||||||
| Reconciliation of cash, cash equivalents, and restricted cash equivalents | |||||||||||
| Cash and cash equivalents | $ | 6,213 | $ | 3,424 | |||||||
| Restricted cash equivalents included in deferred income taxes and other assets | 115 | — | |||||||||
| Total cash, cash equivalents, and restricted cash equivalents | $ | 6,328 | $ | 3,424 | |||||||
| Supplemental cash flow information: | |||||||||||
| Cash payments for income taxes | $ | 110 | $ | 82 | |||||||
| Cash refunds from income taxes | $ | 19 | $ | 1 | |||||||
| Cash payments for interest | $ | 35 | $ | 34 | |||||||
| (In millions) | Q1 FY2021 | Q1 FY2020 | |||||||||
| Unallocated net sales | $ | 43 | $ | 19 | |||||||
| Unallocated cost of products sold and expenses | (167) | (115) | |||||||||
| Share-based compensation | (107) | (93) | |||||||||
| Severance and related charges | (144) | — | |||||||||
| Total | $ | (375) | $ | (189) | |||||||
| Q1 FY2021 | Q1 FY2020 | ||||||||||
Net Sales by Geography (In millions) | |||||||||||
| United States | 343 | 441 | |||||||||
| % of Total | 6 | % | 10 | % | |||||||
| Europe | 299 | 153 | |||||||||
| % of Total | 6 | % | 4 | % | |||||||
| Japan | 458 | 351 | |||||||||
| % of Total | 9 | % | 8 | % | |||||||
| Korea | 1,289 | 508 | |||||||||
| % of Total | 25 | % | 12 | % | |||||||
| Taiwan | 1,200 | 1,365 | |||||||||
| % of Total | 23 | % | 33 | % | |||||||
| Southeast Asia | 190 | 72 | |||||||||
| % of Total | 4 | % | 2 | % | |||||||
| China | 1,383 | 1,272 | |||||||||
| % of Total | 27 | % | 31 | % | |||||||
Employees (In thousands) | |||||||||||
| Regular Full Time | 24.2 | 22.3 | |||||||||
| Three Months Ended | |||||||||||
| (In millions, except percentages) | January 31, 2021 | January 26, 2020 | |||||||||
| Non-GAAP Adjusted Gross Profit | |||||||||||
| Reported gross profit - GAAP basis | $ | 2,349 | $ | 1,858 | |||||||
Certain items associated with acquisitions1 | 8 | 9 | |||||||||
Certain incremental expenses related to COVID-192 | 12 | — | |||||||||
| Non-GAAP adjusted gross profit | $ | 2,369 | $ | 1,867 | |||||||
| Non-GAAP adjusted gross margin | 45.9 | % | 44.9 | % | |||||||
| Non-GAAP Adjusted Operating Income | |||||||||||
| Reported operating income - GAAP basis | $ | 1,283 | $ | 1,042 | |||||||
Certain items associated with acquisitions1 | 13 | 13 | |||||||||
| Acquisition integration and deal costs | 24 | 13 | |||||||||
Certain incremental expenses related to COVID-192 | 24 | — | |||||||||
Severance and related charges3 | 152 | — | |||||||||
| Non-GAAP adjusted operating income | $ | 1,496 | $ | 1,068 | |||||||
| Non-GAAP adjusted operating margin | 29.0 | % | 25.7 | % | |||||||
| Non-GAAP Adjusted Net Income | |||||||||||
| Reported net income - GAAP basis | $ | 1,130 | $ | 892 | |||||||
Certain items associated with acquisitions1 | 13 | 13 | |||||||||
| Acquisition integration and deal costs | 24 | 13 | |||||||||
Certain incremental expenses related to COVID-192 | 24 | — | |||||||||
Severance and related charges3 | 152 | — | |||||||||
| Realized loss (gain) on strategic investments, net | (2) | 2 | |||||||||
| Unrealized loss (gain) on strategic investments, net | (6) | 2 | |||||||||
Income tax effect of share-based compensation4 | (29) | (33) | |||||||||
| Income tax effects related to intra-entity intangible asset transfers | 20 | 21 | |||||||||
| Resolution of prior years’ income tax filings and other tax items | (3) | (1) | |||||||||
Income tax effect of non-GAAP adjustments5 | (41) | (5) | |||||||||
| Non-GAAP adjusted net income | $ | 1,282 | $ | 904 | |||||||
| 1 | These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. | ||||
| 2 | Temporary incremental employee compensation during the COVID-19 pandemic. | ||||
| 3 | The severance and related charges primarily related to a one-time voluntary retirement program offered to certain eligible employees. | ||||
| 4 | GAAP basis tax benefit related to share-based compensation is recognized ratably over the fiscal year on a non-GAAP basis. | ||||
| 5 | Adjustment to provision for income taxes related to non-GAAP adjustments reflected in income before income taxes. | ||||
| Three Months Ended | |||||||||||
| (In millions, except per share amounts) | January 31, 2021 | January 26, 2020 | |||||||||
| Non-GAAP Adjusted Earnings Per Diluted Share | |||||||||||
| Reported earnings per diluted share - GAAP basis | $ | 1.22 | $ | 0.96 | |||||||
| Certain items associated with acquisitions | 0.01 | 0.01 | |||||||||
| Acquisition integration and deal costs | 0.02 | 0.01 | |||||||||
| Certain incremental expenses related to COVID-19 | 0.02 | — | |||||||||
| Severance and related charges | 0.13 | — | |||||||||
| Income tax effect of share-based compensation | (0.03) | (0.03) | |||||||||
| Income tax effects related to intra-entity intangible asset transfers | 0.02 | 0.03 | |||||||||
| Non-GAAP adjusted earnings per diluted share | $ | 1.39 | $ | 0.98 | |||||||
| Weighted average number of diluted shares | 925 | 927 | |||||||||
| Three Months Ended | |||||||||||
| (In millions, except percentages) | January 31, 2021 | January 26, 2020 | |||||||||
| Semiconductor Systems Non-GAAP Adjusted Operating Income | |||||||||||
| Reported operating income - GAAP basis | $ | 1,261 | $ | 915 | |||||||
Certain items associated with acquisitions1 | 10 | 10 | |||||||||
| Acquisition integration costs | (2) | — | |||||||||
Certain incremental expenses related to COVID-192 | 12 | — | |||||||||
| Non-GAAP adjusted operating income | $ | 1,281 | $ | 925 | |||||||
| Non-GAAP adjusted operating margin | 36.1 | % | 32.9 | % | |||||||
| AGS Non-GAAP Adjusted Operating Income | |||||||||||
| Reported operating income - GAAP basis | $ | 332 | $ | 278 | |||||||
Certain incremental expenses related to COVID-192 | 8 | — | |||||||||
| Non-GAAP adjusted operating income | $ | 340 | $ | 278 | |||||||
| Non-GAAP adjusted operating margin | 29.4 | % | 27.9 | % | |||||||
| Display and Adjacent Markets Non-GAAP Adjusted Operating Income | |||||||||||
| Reported operating income - GAAP basis | $ | 65 | $ | 38 | |||||||
Certain items associated with acquisitions1 | 1 | 3 | |||||||||
Certain incremental expenses related to COVID-192 | 1 | — | |||||||||
Severance and related charges3 | 8 | — | |||||||||
| Non-GAAP adjusted operating income | $ | 75 | $ | 41 | |||||||
| Non-GAAP adjusted operating margin | 18.2 | % | 12.3 | % | |||||||
| 1 | These items are incremental charges attributable to completed acquisitions, consisting of amortization of purchased intangible assets. | ||||
| 2 | Temporary incremental employee compensation during the COVID-19 pandemic. | ||||
| 3 | The severance and related charges related to workforce reduction actions globally across the Display and Adjacent Markets business. | ||||
| Three Months Ended | |||||
| (In millions, except percentages) | January 31, 2021 | ||||
Provision for income taxes - GAAP basis (a) | $ | 110 | |||
| Income tax effect of share-based compensation | 29 | ||||
| Income tax effects related to intra-entity intangible asset transfers | (20) | ||||
| Resolutions of prior years’ income tax filings and other tax items | 3 | ||||
| Income tax effect of non-GAAP adjustments | 41 | ||||
Non-GAAP adjusted provision for income taxes (b) | $ | 163 | |||
Income before income taxes - GAAP basis (c) | $ | 1,240 | |||
| Certain items associated with acquisitions | 13 | ||||
| Acquisition integration and deal costs | 24 | ||||
| Certain incremental expenses related to COVID-19 | 24 | ||||
Severance and related charges | 152 | ||||
| Realized loss (gain) on strategic investments, net | (2) | ||||
| Unrealized loss (gain) on strategic investments, net | (6) | ||||
Non-GAAP adjusted income before income taxes (d) | $ | 1,445 | |||
Effective income tax rate - GAAP basis (a/c) | 8.9 | % | |||
Non-GAAP adjusted effective income tax rate (b/d) | 11.3 | % | |||