APPLIED MATERIALS, INC.
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS
| Three Months Ended | Nine Months Ended | ||||||||||||||
| (In millions, except percentages) | July 30,
2023 | July 31,
2022 | July 30,
2023 | July 31,
2022 | |||||||||||
| Non-GAAP Adjusted Gross Profit | |||||||||||||||
| Reported gross profit - GAAP basis | $ | 2,976 | $ | 3,006 | $ | 9,215 | $ | 8,892 | |||||||
| Certain items associated with acquisitions1 | 7 | 7 | 21 | 20 | |||||||||||
| Non-GAAP adjusted gross profit | $ | 2,983 | $ | 3,013 | $ | 9,236 | $ | 8,912 | |||||||
| Non-GAAP adjusted gross margin | 46.4 | % | 46.2 | % | 46.7 | % | 46.8 | % | |||||||
| Non-GAAP Adjusted Operating Income | |||||||||||||||
| Reported operating income - GAAP basis | $ | 1,802 | $ | 1,924 | $ | 5,683 | $ | 5,794 | |||||||
| Certain items associated with acquisitions 1 | 10 | 10 | 32 | 29 | |||||||||||
| Acquisition integration and deal costs | 6 | 19 | 20 | 32 | |||||||||||
| Severance and related charges 2 | — | — | — | (4 | ) | ||||||||||
| Non-GAAP adjusted operating income | $ | 1,818 | $ | 1,953 | $ | 5,735 | $ | 5,851 | |||||||
| Non-GAAP adjusted operating margin | 28.3 | % | 30.0 | % | 29.0 | % | 30.7 | % | |||||||
| Non-GAAP Adjusted Net Income | |||||||||||||||
| Reported net income - GAAP basis | $ | 1,560 | $ | 1,606 | $ | 4,852 | $ | 4,934 | |||||||
| Certain items associated with acquisitions 1 | 10 | 10 | 32 | 29 | |||||||||||
| Acquisition integration and deal costs | 6 | 12 | 20 | 28 | |||||||||||
| Severance and related charges 2 | — | — | — | (4 | ) | ||||||||||
| Realized loss (gain), dividends and impairments on strategic investments, net | (4 | ) | (1 | ) | 109 | (1 | ) | ||||||||
| Unrealized loss (gain) on strategic investments, net | 6 | 18 | 13 | (15 | ) | ||||||||||
| Income tax effect of share-based compensation 3 | 5 | 22 | (6 | ) | (22 | ) | |||||||||
| Income tax effects related to intra-entity intangible asset transfers | 9 | 21 | 25 | 120 | |||||||||||
| Resolution of prior years’ income tax filings and other tax items | 10 | 1 | (22 | ) | (54 | ) | |||||||||
| Income tax effect of non-GAAP adjustments 4 | (2 | ) | (6 | ) | (7 | ) | — | ||||||||
| Non-GAAP adjusted net income | $ | 1,600 | $ | 1,683 | $ | 5,016 | $ | 5,015 | |||||||
