AMAT · 10-Q · 2026Q3 · Full report

Income Tax Rate Changes

APPLIED MATERIALS INC /DE · 2026-08-20 · Importance 77 · Surprise 82 · No source text

The effective tax rate declined to 12.7% in the third quarter from 30.6% in the prior-year quarter, reducing the rate by 17.9 percentage points. For the first nine months, the effective tax rate declined to 12.9% from 27.2%, a 14.3-point decrease. The nine-month reduction primarily reflected remeasurement of deferred tax assets from new Singapore tax-incentive agreements and a prior-year valuation allowance on CAMT-credit deferred tax assets. Applied Materials recorded $1.2 billion of CHIPS Act investment tax credits as of July 26, 2026, including $1.2 billion expected to be refunded.

Key facts

• Provision for income taxes for the nine months ended July 26, 2026 decreased by $813 million versus prior period (provision shown as $(415) for current and $1,903 prior), and effective tax rate for nine months ended July 26, 2026: 12.9% versus 27.2% prior year (decrease of 14.3 points). source
• Effective tax rate for the third quarter of fiscal 2026: 12.7%; for third quarter of fiscal 2025: 30.6% (decrease of 17.9 points), primarily due to recognition of a valuation allowance against deferred tax assets related to CAMT credits in fiscal 2025. source
• Effective tax rate for the first nine months of fiscal 2026: 12.9%; first nine months of fiscal 2025: 27.2% (decrease primarily due to a remeasurement of deferred tax assets from new tax incentive agreements in Singapore and recognition of valuation allowance related to CAMT credits in fiscal 2025). source
• We have been granted additional conditional reduced tax rates in Singapore that expire beginning in fiscal 2030. source
• The Tax Cuts and Jobs Act transition tax expense has been fully paid in fiscal 2026. source

Impact estimates