Change | |||||||||||||||||||||||||||||||||||
Q4 FY2021 | Q4 FY2020 | FY2021 | FY2020 | Q4 FY2021 vs. Q4 FY2020 | FY2021 vs. FY2020 | ||||||||||||||||||||||||||||||
(In millions, except per share amounts and percentages) | |||||||||||||||||||||||||||||||||||
Net sales | $ | 6,123 | $ | 4,688 | $ | 23,063 | $ | 17,202 | 31% | 34% | |||||||||||||||||||||||||
Gross margin | 48.1 | % | 45.4 | % | 47.3 | % | 44.7 | % | 2.7 points | 2.6 points | |||||||||||||||||||||||||
Operating margin | 32.9 | % | 27.4 | % | 29.9 | % | 25.4 | % | 5.5 points | 4.5 points | |||||||||||||||||||||||||
Net income | $ | 1,712 | $ | 1,131 | $ | 5,888 | $ | 3,619 | 51% | 63% | |||||||||||||||||||||||||
Diluted earnings per share | $ | 1.89 | $ | 1.23 | $ | 6.40 | $ | 3.92 | 54% | 63% | |||||||||||||||||||||||||
Non-GAAP Adjusted Results | |||||||||||||||||||||||||||||||||||
Non-GAAP adjusted gross margin | 48.2 | % | 45.7 | % | 47.5 | % | 45.1 | % | 2.5 points | 2.4 points | |||||||||||||||||||||||||
Non-GAAP adjusted operating margin | 33.1 | % | 28.3 | % | 31.7 | % | 26.3 | % | 4.8 points | 5.4 points | |||||||||||||||||||||||||
Non-GAAP adjusted net income | $ | 1,756 | $ | 1,148 | $ | 6,287 | $ | 3,845 | 53% | 64% | |||||||||||||||||||||||||
Non-GAAP adjusted diluted EPS | $ | 1.94 | $ | 1.25 | $ | 6.84 | $ | 4.17 | 55% | 64% |
Semiconductor Systems | Q4 FY2021 | Q4 FY2020 | FY2021 | FY2020 | |||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||
Net sales | $ | 4,307 | $ | 3,070 | $ | 16,286 | $ | 11,367 | |||||||||||||||
Foundry, logic and other | 63 | % | 58 | % | 60 | % | 59 | % | |||||||||||||||
DRAM | 23 | % | 21 | % | 19 | % | 20 | % | |||||||||||||||
Flash memory | 14 | % | 21 | % | 21 | % | 21 | % | |||||||||||||||
Operating income | $ | 1,723 | $ | 1,059 | 6,311 | 3,714 | |||||||||||||||||
Operating margin | 40.0 | % | 34.5 | % | 38.8 | % | 32.7 | % | |||||||||||||||
Non-GAAP Adjusted Results | |||||||||||||||||||||||
Non-GAAP adjusted operating income | $ | 1,732 | $ | 1,073 | $ | 6,362 | $ | 3,778 | |||||||||||||||
Non-GAAP adjusted operating margin | 40.2 | % | 35.0 | % | 39.1 | % | 33.2 | % |
Applied Global Services | Q4 FY2021 | Q4 FY2020 | FY2021 | FY2020 | |||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||
Net sales | $ | 1,369 | $ | 1,106 | $ | 5,013 | $ | 4,155 | |||||||||||||||
Operating income | $ | 425 | $ | 320 | 1,508 | 1,127 | |||||||||||||||||
Operating margin | 31.0 | % | 28.9 | % | 30.1 | % | 27.1 | % | |||||||||||||||
Non-GAAP Adjusted Results | |||||||||||||||||||||||
Non-GAAP adjusted operating income | $ | 425 | $ | 320 | $ | 1,517 | $ | 1,135 | |||||||||||||||
Non-GAAP adjusted operating margin | 31.0 | % | 28.9 | % | 30.3 | % | 27.3 | % |
Display and Adjacent Markets | Q4 FY2021 | Q4 FY2020 | FY2021 | FY2020 | |||||||||||||||||||
(In millions, except percentages) | |||||||||||||||||||||||
Net sales | $ | 417 | $ | 485 | $ | 1,634 | $ | 1,607 | |||||||||||||||
Operating income | $ | 85 | $ | 95 | 314 | 291 | |||||||||||||||||
Operating margin | 20.4 | % | 19.6 | % | 19.2 | % | 18.1 | % | |||||||||||||||
Non-GAAP Adjusted Results | |||||||||||||||||||||||
Non-GAAP adjusted operating income | $ | 86 | $ | 98 | $ | 327 | $ | 304 | |||||||||||||||
Non-GAAP adjusted operating margin | 20.6 | % | 20.2 | % | 20.0 | % | 18.9 | % |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
(In millions, except per share amounts) | October 31, 2021 | October 25, 2020 | October 31, 2021 | October 25, 2020 | |||||||||||||||||||
Net sales | $ | 6,123 | $ | 4,688 | $ | 23,063 | $ | 17,202 | |||||||||||||||
Cost of products sold | 3,178 | 2,558 | 12,149 | 9,510 | |||||||||||||||||||
Gross profit | 2,945 | 2,130 | 10,914 | 7,692 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Research, development and engineering | 622 | 560 | 2,485 | 2,234 | |||||||||||||||||||
Marketing and selling | 155 | 131 | 609 | 526 | |||||||||||||||||||
General and administrative | 155 | 156 | 620 | 567 | |||||||||||||||||||
Severance and related charges | (1) | — | 157 | — | |||||||||||||||||||
Deal termination fee | — | — | 154 | — | |||||||||||||||||||
Total operating expenses | 931 | 847 | 4,025 | 3,327 | |||||||||||||||||||
Income from operations | 2,014 | 1,283 | 6,889 | 4,365 | |||||||||||||||||||
Interest expense | 57 | 59 | 236 | 240 | |||||||||||||||||||
Interest and other income, net | 49 | 19 | 118 | 41 | |||||||||||||||||||
Income before income taxes | 2,006 | 1,243 | 6,771 | 4,166 | |||||||||||||||||||
Provision for income taxes | 294 | 112 | 883 | 547 | |||||||||||||||||||
Net income | $ | 1,712 | $ | 1,131 | $ | 5,888 | $ | 3,619 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 1.91 | $ | 1.24 | $ | 6.47 | $ | 3.95 | |||||||||||||||
Diluted | $ | 1.89 | $ | 1.23 | $ | 6.40 | $ | 3.92 | |||||||||||||||
Weighted average number of shares: | |||||||||||||||||||||||
Basic | 898 | 914 | 910 | 916 | |||||||||||||||||||
Diluted | 907 | 921 | 919 | 923 |
(In millions) | October 31, 2021 | October 25, 2020 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 4,995 | $ | 5,351 | |||||||
Short-term investments | 464 | 387 | |||||||||
Accounts receivable, net | 4,953 | 2,963 | |||||||||
Inventories | 4,309 | 3,904 | |||||||||
Other current assets | 1,386 | 764 | |||||||||
Total current assets | 16,107 | 13,369 | |||||||||
Long-term investments | 2,055 | 1,538 | |||||||||
Property, plant and equipment, net | 1,934 | 1,604 | |||||||||
Goodwill | 3,479 | 3,466 | |||||||||
Purchased technology and other intangible assets, net | 104 | 153 | |||||||||
Deferred income taxes and other assets | 2,146 | 2,223 | |||||||||
Total assets | $ | 25,825 | $ | 22,353 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued expenses | $ | 4,268 | $ | 3,138 | |||||||
Contract liabilities | 2,076 | 1,321 | |||||||||
Total current liabilities | 6,344 | 4,459 | |||||||||
Long-term debt | 5,452 | 5,448 | |||||||||
Income taxes payable | 1,090 | 1,206 | |||||||||
Other liabilities | 692 | 662 | |||||||||
Total liabilities | 13,578 | 11,775 | |||||||||
Total stockholders’ equity | 12,247 | 10,578 | |||||||||
Total liabilities and stockholders’ equity | $ | 25,825 | $ | 22,353 |
(In millions) | Three Months Ended | Twelve Months Ended | |||||||||||||||||||||
October 31, 2021 | October 25, 2020 | October 31, 2021 | October 25, 2020 | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||
Net income | $ | 1,712 | $ | 1,131 | $ | 5,888 | $ | 3,619 | |||||||||||||||
Adjustments required to reconcile net income to cash provided by operating activities: | |||||||||||||||||||||||
Depreciation and amortization | 105 | 97 | 394 | 376 | |||||||||||||||||||
Severance and related charges | (1) | — | 148 | — | |||||||||||||||||||
Share-based compensation | 74 | 73 | 346 | 307 | |||||||||||||||||||
Deferred income taxes | 36 | (18) | 80 | 80 | |||||||||||||||||||
Other | (40) | 5 | (70) | 60 | |||||||||||||||||||
Net change in operating assets and liabilities | (738) | 27 | (1,344) | (638) | |||||||||||||||||||
Cash provided by operating activities | 1,148 | 1,315 | 5,442 | 3,804 | |||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Capital expenditures | (206) | (162) | (668) | (422) | |||||||||||||||||||
Cash paid for acquisitions, net of cash acquired | — | — | (12) | (107) | |||||||||||||||||||
Proceeds from sales and maturities of investments | 447 | 366 | 1,471 | 1,754 | |||||||||||||||||||
Purchases of investments | (828) | (345) | (2,007) | (1,355) | |||||||||||||||||||
Cash used in investing activities | (587) | (141) | (1,216) | (130) | |||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Debt borrowings, net of issuance costs | — | — | — | 2,979 | |||||||||||||||||||
Debt repayments | — | — | — | (2,882) | |||||||||||||||||||
Proceeds from common stock issuances | 89 | 83 | 175 | 174 | |||||||||||||||||||
Common stock repurchases | (1,500) | (50) | (3,750) | (649) | |||||||||||||||||||
Tax withholding payments for vested equity awards | (7) | (6) | (178) | (172) | |||||||||||||||||||
Payments of dividends to stockholders | (216) | (200) | (838) | (787) | |||||||||||||||||||
Cash used in financing activities | (1,634) | (173) | (4,591) | (1,337) | |||||||||||||||||||
Increase (decrease) in cash, cash equivalents and restricted cash equivalents | (1,073) | 1,001 | (365) | 2,337 | |||||||||||||||||||
Cash, cash equivalents and restricted cash equivalents—beginning of period | 6,174 | 4,465 | 5,466 | 3,129 | |||||||||||||||||||
Cash, cash equivalents and restricted cash equivalents — end of period | $ | 5,101 | $ | 5,466 | $ | 5,101 | $ | 5,466 | |||||||||||||||
Reconciliation of cash, cash equivalents, and restricted cash equivalents | |||||||||||||||||||||||
Cash and cash equivalents | $ | 4,995 | $ | 5,351 | $ | 4,995 | $ | 5,351 | |||||||||||||||
Restricted cash equivalents included in deferred income taxes and other assets | 106 | 115 | 106 | 115 | |||||||||||||||||||
Total cash, cash equivalents, and restricted cash equivalents | $ | 5,101 | $ | 5,466 | $ | 5,101 | $ | 5,466 | |||||||||||||||
Supplemental cash flow information: | |||||||||||||||||||||||
Cash payments for income taxes | $ | 210 | $ | 23 | $ | 851 | $ | 542 | |||||||||||||||
Cash refunds from income taxes | $ | 1 | $ | 63 | $ | 27 | $ | 68 | |||||||||||||||
Cash payments for interest | $ | 68 | $ | 68 | $ | 205 | $ | 219 |
(In millions) | Q4 FY2021 | Q4 FY2020 | FY2021 | FY2020 | |||||||||||||||||||
Unallocated net sales | $ | 30 | $ | 27 | $ | 130 | $ | 73 | |||||||||||||||
Unallocated cost of products sold and expenses | (176) | (145) | (725) | (533) | |||||||||||||||||||
Share-based compensation | (74) | (73) | (346) | (307) | |||||||||||||||||||
Severance and related charges | 1 | — | (149) | — | |||||||||||||||||||
Deal termination fee | — | — | (154) | — | |||||||||||||||||||
Total | $ | (219) | $ | (191) | $ | (1,244) | $ | (767) |
Q4 FY2021 | Q4 FY2020 | FY2021 | FY2020 | ||||||||||||||||||||
Net Sales by Geography (In millions) | |||||||||||||||||||||||
United States | $ | 673 | $ | 448 | $ | 2,038 | $ | 1,619 | |||||||||||||||
% of Total | 11 | % | 10 | % | 9 | % | 10 | % | |||||||||||||||
Europe | $ | 331 | $ | 206 | $ | 1,097 | $ | 736 | |||||||||||||||
% of Total | 5 | % | 4 | % | 5 | % | 4 | % | |||||||||||||||
Japan | $ | 613 | $ | 706 | $ | 1,962 | $ | 1,996 | |||||||||||||||
% of Total | 10 | % | 15 | % | 8 | % | 11 | % | |||||||||||||||
Korea | $ | 1,004 | $ | 719 | $ | 5,012 | $ | 3,031 | |||||||||||||||
% of Total | 17 | % | 15 | % | 22 | % | 18 | % | |||||||||||||||
Taiwan | $ | 1,240 | $ | 872 | $ | 4,742 | $ | 3,953 | |||||||||||||||
% of Total | 20 | % | 19 | % | 20 | % | 23 | % | |||||||||||||||
Southeast Asia | $ | 205 | $ | 161 | $ | 677 | $ | 411 | |||||||||||||||
% of Total | 3 | % | 3 | % | 3 | % | 2 | % | |||||||||||||||
China | $ | 2,057 | $ | 1,576 | $ | 7,535 | $ | 5,456 | |||||||||||||||
% of Total | 34 | % | 34 | % | 33 | % | 32 | % | |||||||||||||||
Employees (In thousands) | |||||||||||||||||||||||
Regular Full Time | 27.2 | 24.0 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
(In millions, except percentages) | October 31, 2021 | October 25, 2020 | October 31, 2021 | October 25, 2020 | |||||||||||||||||||
Non-GAAP Adjusted Gross Profit | |||||||||||||||||||||||
Reported gross profit - GAAP basis | $ | 2,945 | $ | 2,130 | $ | 10,914 | $ | 7,692 | |||||||||||||||
Certain items associated with acquisitions1 | 6 | 12 | 27 | 37 | |||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | 12 | 23 | |||||||||||||||||||
Other charges | — | — | 2 | — | |||||||||||||||||||
Non-GAAP adjusted gross profit | $ | 2,951 | $ | 2,142 | $ | 10,955 | $ | 7,752 | |||||||||||||||
Non-GAAP adjusted gross margin | 48.2 | % | 45.7 | % | 47.5 | % | 45.1 | % | |||||||||||||||
Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 2,014 | $ | 1,283 | $ | 6,889 | $ | 4,365 | |||||||||||||||
Certain items associated with acquisitions1 | 11 | 16 | 47 | 54 | |||||||||||||||||||
Acquisition integration and deal costs | 5 | 26 | 45 | 80 | |||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | 24 | 30 | |||||||||||||||||||
Severance and related charges3 | (1) | — | 157 | — | |||||||||||||||||||
Deal termination fee | — | — | 154 | — | |||||||||||||||||||
Other charges | — | — | 6 | — | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 2,029 | $ | 1,325 | $ | 7,322 | $ | 4,529 | |||||||||||||||
Non-GAAP adjusted operating margin | 33.1 | % | 28.3 | % | 31.7 | % | 26.3 | % | |||||||||||||||
Non-GAAP Adjusted Net Income | |||||||||||||||||||||||
Reported net income - GAAP basis | $ | 1,712 | $ | 1,131 | $ | 5,888 | $ | 3,619 | |||||||||||||||
Certain items associated with acquisitions1 | 11 | 16 | 47 | 54 | |||||||||||||||||||
Acquisition integration and deal costs | 5 | 26 | 46 | 80 | |||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | 24 | 30 | |||||||||||||||||||
Severance and related charges3 | (1) | — | 157 | — | |||||||||||||||||||
Deal termination fee | — | — | 154 | — | |||||||||||||||||||
Realized loss (gain) on strategic investments, net | (41) | — | (43) | (1) | |||||||||||||||||||
Unrealized loss (gain) on strategic investments, net | (11) | (7) | (56) | (8) | |||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | 33 | |||||||||||||||||||
Other charges | — | — | 6 | — | |||||||||||||||||||
Income tax effect of share-based compensation4 | 12 | 13 | — | — | |||||||||||||||||||
Income tax effects related to intra-entity intangible asset transfers | 4 | 10 | 64 | 114 | |||||||||||||||||||
Resolution of prior years’ income tax filings and other tax items | 55 | (36) | 33 | (41) | |||||||||||||||||||
Income tax effect of non-GAAP adjustments5 | 10 | (5) | (33) | (35) | |||||||||||||||||||
Non-GAAP adjusted net income | $ | 1,756 | $ | 1,148 | $ | 6,287 | $ | 3,845 |
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 | Twelve Months Ended | ||||||||||||||||||||||
(In millions, except per share amounts) | October 31, 2021 | October 25, 2020 | October 31, 2021 | October 25, 2020 | |||||||||||||||||||
Non-GAAP Adjusted Earnings Per Diluted Share | |||||||||||||||||||||||
Reported earnings per diluted share - GAAP basis | $ | 1.89 | $ | 1.23 | $ | 6.40 | $ | 3.92 | |||||||||||||||
Certain items associated with acquisitions | 0.01 | 0.02 | 0.04 | 0.05 | |||||||||||||||||||
Acquisition integration and deal costs | 0.01 | 0.02 | 0.04 | 0.07 | |||||||||||||||||||
Certain incremental expenses related to COVID-19 | — | — | 0.02 | 0.03 | |||||||||||||||||||
Loss on early extinguishment of debt | — | — | — | 0.03 | |||||||||||||||||||
Severance and related charges | — | — | 0.13 | — | |||||||||||||||||||
Deal termination fee | — | — | 0.17 | — | |||||||||||||||||||
Realized loss (gain) on strategic investments, net | (0.03) | — | (0.03) | — | |||||||||||||||||||
Unrealized loss (gain) on strategic investments, net | (0.01) | (0.01) | (0.05) | (0.01) | |||||||||||||||||||
Other charges | — | — | 0.01 | — | |||||||||||||||||||
Income tax effect of share-based compensation | 0.01 | 0.02 | — | — | |||||||||||||||||||
Income tax effects related to intra-entity intangible asset transfers | — | 0.01 | 0.07 | 0.12 | |||||||||||||||||||
Resolution of prior years’ income tax filings and other tax items | 0.06 | (0.04) | 0.04 | (0.04) | |||||||||||||||||||
Non-GAAP adjusted earnings per diluted share | $ | 1.94 | $ | 1.25 | $ | 6.84 | $ | 4.17 | |||||||||||||||
Weighted average number of diluted shares | 907 | 921 | 919 | 923 |
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||||
(In millions, except percentages) | October 31, 2021 | October 25, 2020 | October 31, 2021 | October 25, 2020 | |||||||||||||||||||
Semiconductor Systems Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 1,723 | $ | 1,059 | $ | 6,311 | $ | 3,714 | |||||||||||||||
Certain items associated with acquisitions1 | 9 | 12 | 38 | 41 | |||||||||||||||||||
Acquisition integration costs | — | 2 | (2) | 3 | |||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | 12 | 20 | |||||||||||||||||||
Other charges | — | — | 3 | — | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 1,732 | $ | 1,073 | $ | 6,362 | $ | 3,778 | |||||||||||||||
Non-GAAP adjusted operating margin | 40.2 | % | 35.0 | % | 39.1 | % | 33.2 | % | |||||||||||||||
AGS Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 425 | $ | 320 | $ | 1,508 | $ | 1,127 | |||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | 8 | 8 | |||||||||||||||||||
Other charges | — | — | 1 | — | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 425 | $ | 320 | $ | 1,517 | $ | 1,135 | |||||||||||||||
Non-GAAP adjusted operating margin | 31.0 | % | 28.9 | % | 30.3 | % | 27.3 | % | |||||||||||||||
Display and Adjacent Markets Non-GAAP Adjusted Operating Income | |||||||||||||||||||||||
Reported operating income - GAAP basis | $ | 85 | $ | 95 | $ | 314 | $ | 291 | |||||||||||||||
Certain items associated with acquisitions1 | 1 | 3 | 4 | 12 | |||||||||||||||||||
Certain incremental expenses related to COVID-192 | — | — | 1 | 1 | |||||||||||||||||||
Severance and related charges3 | — | — | 8 | — | |||||||||||||||||||
Non-GAAP adjusted operating income | $ | 86 | $ | 98 | $ | 327 | $ | 304 | |||||||||||||||
Non-GAAP adjusted operating margin | 20.6 | % | 20.2 | % | 20.0 | % | 18.9 | % | |||||||||||||||
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) | October 31, 2021 | ||||
Provision for income taxes - GAAP basis (a) | $ | 294 | |||
Income tax effect of share-based compensation | (12) | ||||
Income tax effects related to intra-entity intangible asset transfers | (4) | ||||
Resolutions of prior years’ income tax filings and other tax items | (55) | ||||
Income tax effect of non-GAAP adjustments | (10) | ||||
Non-GAAP adjusted provision for income taxes (b) | $ | 213 | |||
Income before income taxes - GAAP basis (c) | $ | 2,006 | |||
Certain items associated with acquisitions | 11 | ||||
Acquisition integration and deal costs | 5 | ||||
Severance and related charges | (1) | ||||
Realized loss (gain) on strategic investments, net | (41) | ||||
Unrealized loss (gain) on strategic investments, net | (11) | ||||
Non-GAAP adjusted income before income taxes (d) | $ | 1,969 | |||
Effective income tax rate - GAAP basis (a/c) | 14.7 | % | |||
Non-GAAP adjusted effective income tax rate (b/d) | 10.8 | % |