Phase Space AI

Financial Model Notes

Applied Materials [AMAT]

Applied Materials [AMAT] — Financial Model Notes & Data-Integrity Log

As of 2026-07-29 · framework v1.5.1

1. Source hierarchy actually used

2. Screen-input validation

AMAT was not scored by the screen (reports/scan_v2/ contains no AMAT record), so there are no screen inputs to validate for this name. All figures here are derived from AV normalised statements plus EDGAR, as tabled in §1 and §4.

Split check performed and clean. AMAT's last split was 2002-04-17 (AV SPLITS), so the split-basis trap that corrupted the KLAC record cannot apply. Scale confirmed independently: 793.959m × $476.29 (2026-07-28 close) = $378,178m against AV's MarketCapitalization of $378,290m — a 0.03% difference.

Independent scale check. TTM net income $8,508m ÷ 793.959m = $10.72 implied EPS against AV OVERVIEW EPS of $10.65 — a 0.7% difference, consistent with basic-versus-diluted. AMAT is the only name of the three whose OVERVIEW EPS reconciles to its own statements, because its fiscal quarter (ending 2026-04-30) is already inside AV's OVERVIEW window, whereas KLAC's and LRCX's June-2026 quarters are not.

Cross-check of the operating-margin bridge against the 10-K, which caught an AV defect. The FY2025 10-K segment note (R83) states RD&E $3,570m (12.58%) and SG&A $1,768m (6.23%). AV's sellingGeneralAndAdministrative reports $911m (3.21%) — see §3.

3. Alpha Vantage defects found on this name

Defect 1 — signed-negative D&A in the cash flow statement. For the quarter ending 2026-04-30:

• CASH_FLOW.depreciationDepletionAndAmortization = −$8,000,000 (negative)
• INCOME_STATEMENT.depreciationAndAmortization = +$135,000,000 (positive)

A $143m disagreement, and a sign error, between two AV statements for the same period. The prior five quarters agree exactly ($103–127m), so the −$8m is a lone outlier. Resolution adopted: the income- statement series, cross-checked against the FY2025 10-K segment note, which states total-company D&A of $435m for FY2025 — consistent with a ~$110–135m quarterly run-rate. TTM D&A = $485m.

Defect 2 — AV's ebit field is not operating income, and the gap is large. For the quarter ending 2026-04-30, AV reports ebit = $3,294m against operatingIncome = $2,523m — a $771m (30.6%) gap, because ebit includes non-operating income. Using it would report AMAT's operating margin as 41.6% instead of 31.9%, a 9.7pp error, which would then propagate into the terminal margin and invert the archetype classification exactly as happened to KLAC in the screen. The brief warns about ebitda; ebit is an additional trap it does not list. operatingIncome was used throughout.

Defect 3 — sellingGeneralAndAdministrative understated by $857m. AV reports $911m (3.21% of revenue) for FY2025. The FY2025 10-K segment note (R83) states SG&A $1,768m (6.23%). AV appears to carry only a component of SG&A; the remainder falls into an unexplained residual, so the operating margin still reconciles — but the opex bridge, which valuation.md calls "the real test" for a terminal margin, is wrong by 3.0pp of revenue if built from AV's expense lines. The bridge in AMAT_Valuation.md §1 is built from the 10-K instead, and reconciles to 29.2% exactly.

Defect 4 — deferredRevenue is present-but-NULL in all 81 quarterly balance-sheet records. Calibration item D1. Contract liabilities came from EDGAR. AMAT publishes no RPO at all, so longer-dated backlog coverage is genuinely INDETERMINATE for this name rather than merely missing from AV.

Defect 5 (tooling, not vendor) — av_vs_edgar.py performed ZERO comparisons on AMAT and reported no disagreements. Output: AMAT 0 cmp 0 dis -- 0 inv. A clean-looking line that represents no test at all. Cause: AV normalises AMAT's 52/53-week fiscal quarter-end to a calendar month-end (2026-04-30) while EDGAR carries the true period end (2026-04-26), and the audit joins on exact date. It therefore found no overlap and, having found none, reported nothing wrong — while the −$8m D&A sign error in Defect 1 sat in the data unexamined. The audit's null result is not evidence of agreement. Fix: join on nearest period-end within ±7 days.

4. Derived figures, shown so they can be checked

AV's ebitda field was NOT used, per the brief. It is wrong on this cluster: the field is derived from the same signed D&A that fails on KLAC and AMAT.

AV's ebit field was also NOT used — it is not operating income. For AMAT Q2 FY2026, AV reports ebit $3,294m against operatingIncome $2,523m, a $771m (30.6%) gap that would overstate the operating margin from 31.9% to 41.6%, a 9.7pp error. The brief warns about ebitda; ebit is an additional, unlisted trap.

5. Reproduction

Raw pulls are in work/wfe/ at the repository root: av_AMAT_INCOME_STATEMENT.json, av_AMAT_BALANCE_SHEET.json, av_AMAT_CASH_FLOW.json, av_AMAT_OVERVIEW.json, av_AMAT_SPLITS.json, est_AMAT.json, ef_AMAT.json (EDGAR companyfacts), AMAT_R*.htm (10-K R-files), snap_AMAT.json.