Dear Fellow Shareholders,

Applied Materials delivered record revenue and earnings per share in fiscal 2025, marking our sixth consecutive year of growth. Over this period, we have grown revenue and earnings per share at annualized rates of approximately 12 percent and 20 percent, respectively. We are in the early stages of a new computing era, and the opportunities for the semiconductor industry and Applied Materials have never been greater. Semiconductors provide the foundation for advances in technology that are reshaping the global economy, including artificial intelligence (Al), the internet of things, robotics, electric and autonomous vehicles, and clean energy. To prepare for the exciting opportunities ahead, Applied has built new capabilities, strengthened our product portfolio and streamlined our organization. Now more than ever the work we do together advances the world's technology.

INFLECTION-FOCUSED INNOVATION

In addition to fueling industry growth, Al computing is reshaping the semiconductor roadmap and changing the way chips are designed and manufactured. The foundational semiconductor technology developed and delivered to customers by Applied Materials plays a critical role in improving the energy efficiency of Al in the datacenter and at the edge. At Applied, our core strategy is inflection-focused innovation. We partner with our customers to recognize technology inflections early, and we focus our research and development on the highest value technology inflections in the fastest growing areas of the market. We then create highly differentiated solutions by connecting our broad portfolio of capabilities and technologies.

For example, in fiscal 2025, we launched several innovative products that extend our leadership in the major technology inflections essential to energy-efficient Al computing: leading-edge logic, high-performance DRAM, high-bandwidth memory, and advanced packaging. These products enable higher performance, lower power advanced logic and memory chips, and improve factory yields. As deployment of Al accelerates globally, Applied is well positioned at the most valuable technology inflections in the fastest growing areas of the market.

HIGH-VELOCITY CO-INNOVATION

A key theme we consistently hear from our customers and ecosystem partners is that co-optimization of the technology stack is more critical than ever. Over the past year, we strengthened and expanded our collaborations with technology leaders, universities and research institutes. In addition, Applied's "high-velocity, co-innovation" model is designed to accelerate new chip and system architectures by providing chip makers and chip designers much earlier access to next-generation process technology. This is a core value proposition of our Equipment and Process Innovation and Commercialization (EPIC) platform. Construction of the platform's flagship facility - the EPIC Center in Silicon Valley - is on track, and we are excited to begin operations in 2026. The EPIC Center will be the largest and most advanced facility of its type globally. By co-locating chip makers, chip designers, university researchers and other ecosystem partners under one roof, we believe we can reduce the time it takes the industry to bring a new technology from concept to commercialization by as much as 30 percent.

As our customers race to bring complex new device architecture inflections to market, we are also providing advanced service solutions that help them quickly transfer new technology from R&D labs into pilot lines and then rapidly optimize device performance, yield and cost in high-volume production. In fiscal 2025, the recurring services and parts portion of Applied Global Services delivered another year of double-digit growth with more than two-thirds of this core service revenue generated from subscriptions.

As a leader in the technology ecosystem, we are committed to working closely with our customers, suppliers and partners to reduce the environmental impact of chipmaking and support the responsible growth of the semiconductor industry. Applied is advancing energy-efficient computing through materials engineering innovations that underpin Al and other data-heavy applications as well as driving progress towards our 2030 goals for our own carbon emissions.

WELL POSITIONED FOR FUTURE GROWTH

Looking ahead to 2026 and beyond, we expect large-scale Al adoption will drive substantial investment in Al-computing infrastructure including advanced semiconductors and wafer fab equipment. Our customers are engaging with us early to ensure we are ready to support significant production ramps in the coming years. Inside the company, we are adopting Al and digital tools to drive higher velocity and productivity, innovate the way we work, and streamline our organization to meet the tremendous opportunities ahead. At Applied Materials, we deliver material innovation that changes the world. Our inflection-focused innovation strategy puts us in a great position to extend our leadership in the semiconductor technologies essential to high-performance, energy-efficient computing.

Sincerely,

Thomas J. Iannotti
Chairman of the Board

Gary E. Dickerson
President and
Chief Executive Officer