Record Third Quarter Performance: Applied Materials reported a record revenue of approximately $7.3 billion in Q3 FY2025, up 8% year-over-year, driven by strong demand in semiconductor systems and services, particularly from foundry/logic and DRAM customers. Non-GAAP gross margin also reached 48.9%, a 150 basis point year-over-year improvement.

Fourth Quarter Guidance and Revenue Expectations: The company anticipates a sequential decline in revenue and earnings in Q4 FY2025, projecting total revenue of around $6.7 billion (down approximately 4.9% year-over-year) and non-GAAP EPS of $2.11 (down 9% year-over-year). The challenges stem from softening demand in China and leading-edge customers¡¯ spending patterns.

China Business Impact: The forecast for Q4 includes a drop in China revenue to about 29% of total revenue, down from approximately 35% in Q3, reflecting ongoing capacity digestion and a backlog of export license applications. The company has taken a conservative approach and is not including potential revenues from pending licenses in its guidance.