Lam Research Stock Earnings Reports

Lam Research reported a strong September quarter with record revenue of $5.3 billion, a 50.6% gross margin (post-Novellus record), and a 35% operating margin. The company achieved record spares & services revenue, continued strength in foundry exposure (foundry = 60% of systems revenue), and growing momentum across NAND, DRAM (including HBM), and advanced packaging. Management reiterated a robust setup for 2026 WFE driven by AI-related data center investment, noting an illustrative cadence that every $100B of incremental data center investment could translate to roughly $8B of WFE. Lam highlighted a multi-year $40B upgrade opportunity in NAND as device layer counts rise above 200, and emphasized product leadership (Cryo 3.0, Ether EUV resist patterning, ALD wins, SABER 3D for packaging). Regional dynamics: China was 43% of revenue in the quarter (driven by domestic Chinese customers), but management expects the new U.S. 50% affiliate rule to reduce shipments to certain domestic China customers (~$200M impact in December quarter and roughly $600M in calendar 2026), causing China to represent <30% of Lam revenue in 2026. Financials & capital allocation: Qtrly deferred revenue $2.77B, cash ~$6.7B, capex $185M, buybacks ~$990M in the quarter (YTD ~30M shares at ~$88 avg), dividend increased to $0.26/quarter, and management reiterated a commitment to return at least 85% of free cash flow over time. December-quarter non-GAAP guidance: revenue $5.2B ± $300M, gross margin 48.5% ± 1 ppt, operating margin 33% ± 1 ppt, EPS $1.15 ± $0.10 (share count ~1.26B). Key near-term headwinds include tariffs, a modestly higher effective tax rate entering 2026 (low-to-mid teens), and the China-related shipment restrictions; upside drivers include AI-driven demand across leading-edge foundry, HBM/DRAM, NAND upgrades, and advanced packaging.