Applied Materials Increases Quarterly Cash Dividend by 15 Percent and Announces New $10 Billion Share Repurchase Authorization

Rhea-AI Summary

Applied Materials (AMAT) has announced two significant shareholder-friendly moves: a 15% increase in quarterly cash dividend to $0.46 per share, and a new $10 billion share repurchase authorization. The dividend will be payable on June 12, 2025, to shareholders of record as of May 22, 2025.

This marks the company's eighth consecutive year of dividend increases. The new buyback program supplements the existing authorization, which had approximately $7.6 billion remaining at the end of Q1 fiscal 2025. According to CFO Brice Hill, the company has distributed nearly 90% of free cash flow to shareholders over the past 10 fiscal years.

Positive

• 15% increase in quarterly dividend to $0.46 per share
• New $10 billion share repurchase authorization
• $7.6 billion still remaining from previous buyback authorization
• 90% of free cash flow distributed to shareholders over past 10 years
• Eight consecutive years of dividend increases

Negative

• Share repurchases dependent on market conditions and funding requirements
• Future dividend payments subject to Board discretion and business conditions

Insights

Financial Analyst

Applied Materials' announcement of a 15% dividend increase and new $10 billion share repurchase program represents a substantial capital return initiative with immediate benefits for shareholders. The dividend hike to $0.46 per share marks the company's eighth consecutive year of dividend growth, displaying remarkable consistency in an industry known for cyclicality.

What's particularly noteworthy is the scale of potential buybacks. The new $10 billion authorization combines with $7.6 billion remaining from the previous program, creating a $17.6 billion total capacity - representing about 14% of AMAT's current market capitalization. This could meaningfully reduce the share count and potentially boost EPS metrics.

The company's historical pattern of distributing nearly 90% of free cash flow to shareholders demonstrates an exceptionally shareholder-friendly capital allocation strategy. While most semiconductor equipment companies return capital, few do so at this magnitude or consistency.

This aggressive capital return strategy likely indicates two things: management views current share prices as undervalued relative to long-term prospects, and they anticipate robust free cash flow generation despite the capital-intensive nature of the semiconductor equipment business.

Corporate Strategy Expert

This capital return expansion reveals Applied Materials' strategic position at an interesting inflection point. The simultaneous announcement of both dividend growth and expanded share repurchases indicates management is prioritizing immediate shareholder returns while maintaining flexibility in capital allocation mechanisms.

The combined $17.6 billion buyback capacity gives leadership considerable optionality - they can accelerate repurchases opportunistically during market volatility or pace them more gradually. This dual-track approach (dividends plus buybacks) suggests confidence in cash flow stability while hedging against industry cyclicality.

What's strategically significant is that AMAT is doubling down on capital returns rather than signaling major acquisition plans or dramatically increased R&D investment. In the mature semiconductor equipment space, this indicates a strategy focused on operational excellence and market share defense rather than transformative growth initiatives.

The CFO's statement specifically links these actions to "excess cash" distribution, suggesting AMAT remains committed to maintaining adequate liquidity for core operations and organic growth initiatives. This balanced approach to capital allocation - meeting both shareholder return expectations while preserving strategic flexibility - represents sophisticated financial management in a capital-intensive technology sector.

SANTA CLARA, Calif., March 10, 2025 (GLOBE NEWSWIRE) -- Applied Materials, Inc. today announced that its Board of Directors has approved a 15-percent increase in the quarterly cash dividend, marking eight consecutive years of higher dividends. The increase results in a quarterly dividend of $0.46 per share payable on June 12, 2025 to shareholders of record as of May 22, 2025.

The Board also approved a new share repurchase authorization enabling Applied to buy back an additional $10 billion of its shares over time. This supplements the previous authorization which had approximately $7.6 billion remaining at the end of the first quarter of fiscal 2025.

“Over the past 10 fiscal years, Applied Materials has distributed nearly 90 percent of free cash flow to shareholders,” said Brice Hill, Senior Vice President and CFO. “The dividend increase and new share repurchase authorization we are announcing today indicate our confidence in Applied’s business prospects and bolster our ability to distribute excess cash to shareholders in the coming years.”

Forward-Looking Statements
This press release may contain forward-looking statements, express or implied, regarding future rates of cash dividends, our share repurchase program, and our business prospects and ability to outperform the market. These statements and their underlying assumptions are subject to risks and uncertainties and are not guarantees of future performance. While we expect to continue to pay dividends in the future, the declaration of any future dividends or dividends at any particular rate is subject to the discretion of the Board of Directors and will depend on our financial condition, results of operations, capital requirements, business conditions and other factors, as well as a determination by the Board of Directors that dividends are in the best interests of our stockholders. The timing and amount of share repurchases will depend on market conditions, our other funding requirements and other considerations. Additional factors that could cause actual results to differ materially from those expressed or implied by such statements are described in our SEC filings, including our recent Forms 10-K, 10-Q and 8-K. All forward-looking statements are based on management’s current estimates, projections and assumptions, and we assume no obligation to update them.

Use of Non-GAAP Financial Measure
For reconciliation of the GAAP to non-GAAP financial measure related to free cash flow, see non-GAAP reconciliation materials on the Investor Relations website at ir.appliedmaterials.com.

About Applied Materials
Applied Materials, Inc. (Nasdaq: AMAT) is the leader in materials engineering solutions used to produce virtually every new chip and advanced display in the world. Our expertise in modifying materials at atomic levels and on an industrial scale enables customers to transform possibilities into reality. At Applied Materials, our innovations make possible a better future. Learn more at www.appliedmaterials.com.

Contact:
Ricky Gradwohl (editorial/media) 408.235.4676
Liz Morali (financial community) 408.986.7977

FAQ

What is the new quarterly dividend amount for Applied Materials (AMAT) stock?

Applied Materials' new quarterly dividend is $0.46 per share, representing a 15% increase from the previous amount.

How much is Applied Materials' (AMAT) new share repurchase authorization?

Applied Materials approved a new $10 billion share repurchase authorization, in addition to the $7.6 billion remaining from the previous authorization.

When will AMAT's increased dividend be payable to shareholders?

The increased dividend will be payable on June 12, 2025, to shareholders of record as of May 22, 2025.

What percentage of free cash flow has AMAT returned to shareholders in the past decade?

Applied Materials has distributed nearly 90% of free cash flow to shareholders over the past 10 fiscal years.

How many consecutive years has Applied Materials (AMAT) increased its dividend?

Applied Materials has increased its dividend for eight consecutive years.