AMAT · 10-Q · 2026Q3 · Full report

Gross Margin Drivers

APPLIED MATERIALS INC /DE · 2026-08-20 · Importance 49 · Surprise 32

Third-quarter gross margin increased 1.5 percentage points year over year to 50.3%, while nine-month gross margin increased 0.9 points to 49.8%. The improvement was primarily driven by higher revenue, higher average selling prices, and lower material and manufacturing costs. Third-quarter margin also benefited from favorable product mix changes. Semiconductor Systems’ third-quarter operating margin expanded 4.7 points to 37.7%, reflecting mix, pricing, and cost benefits partly offset by higher RD&E.

Key facts

• Semiconductor Systems operating margin increased for the three months ended July 26, 2026 primarily driven by higher revenue, favorable product mix, increases in average selling prices and lower material and manufacturing costs, partially offset by increased RD&E expenses. source
• Gross margin for the three months ended July 26, 2026: 50.3%. source
• Gross margin for the nine months ended July 26, 2026: 49.8%. source