Lam Research Corporation
LRCX · Nasdaq
Next quarter
Expected to report Oct 21, 2026 — estimated from last year’s reporting date.
Consensus is $2.15 EPS for Sep 2026 across 8 estimates, ranging $2.09 to $2.19.
LRCX Jun 2026
- 7.69%
- +17.98%
- $1.69
- $1.82
- —
- —
Highlights
- Record quarter: Revenue reached $6.72 billion, up 15.1% sequentially and 30.0% from $5.17 billion a year ago.
- EPS beat: Non-GAAP diluted EPS was $1.82 versus consensus of $1.69, a 7.69% surprise; GAAP diluted EPS was $1.81.
- Margin expansion: Non-GAAP gross margin rose to 52.0% from 49.9% sequentially, while operating margin increased to 38.4% from 35.0%.
- AI-led demand: Management attributed the record result to AI-driven semiconductor investment and rising manufacturing complexity, with strength across memory and non-memory markets.
- Systems and support growth: Systems revenue was $4.25 billion, up 13.9% sequentially and 23.6% year over year; customer support-related revenue was $2.47 billion, up 17.1% sequentially and 42.6% year over year.
- Strong September outlook: Lam guided to $8.10 billion of revenue, plus or minus $400 million, with 39.5% operating margin and non-GAAP diluted EPS of $2.15, plus or minus $0.15.
- Cash generation and capital return: Operating cash flow was $1.46 billion in the quarter; Lam repurchased $246.6 million of stock and paid $325.3 million in dividends.
- Geographic concentration: Taiwan, China and Korea represented 27%, 26% and 20% of quarterly revenue, respectively, leaving the business highly exposed to Asia-Pacific demand and export-control policy.
Analysis
Lam Research's June 2026 quarter was a clear upside print, with non-GAAP diluted EPS of $1.82 beating the $1.69 consensus estimate by 7.69%. Revenue of $6.72 billion rose 15.1% from $5.84 billion in the March quarter and 30.0% from $5.17 billion a year earlier. GAAP net income increased to $2.28 billion from $1.83 billion sequentially and $1.72 billion year over year, while GAAP diluted EPS rose to $1.81 from $1.45 and $1.35, respectively.
The defining feature was operating leverage on a broad-based demand recovery led by AI-related investment. Systems revenue grew 13.9% sequentially to $4.25 billion, while the higher-margin customer support-related business grew 17.1% to $2.47 billion. Non-GAAP gross margin expanded 210 basis points sequentially to 52.0%, and operating margin rose 340 basis points to 38.4%. Lam also delivered an unusually strong near-term outlook: September revenue guidance of $8.10 billion at the midpoint implies roughly 20.5% sequential growth, with operating margin guided to 39.5% and EPS to $2.15. The print was tempered by substantial geographic concentration, particularly 26% of revenue from China, and the continuing exposure to export controls, tariffs and supply-chain risks.
AI-driven demand
Management framed the quarter around AI-driven semiconductor investment and increasing process complexity. The company said customer spending is rising across both memory and non-memory markets as manufacturers adopt three-dimensional architectures, advanced packaging, new materials and more precise deposition and etch processes. Lam characterized the June quarter as a record for revenue, operating margin and EPS and said its technology investments position it for a third consecutive year of outperformance in 2026.
- Market mix: Fiscal-year data showed foundry-related business at 54% of revenue, up from 45% a year earlier, while memory declined to 39% from 42% and logic/IDM declined to 7% from 13%.
- Technology exposure: Lam's portfolio addresses deposition, etch, clean, dry resist and advanced packaging applications, including high-bandwidth memory and three-dimensional device structures.
- Secular opportunity: The 10-K identifies AI infrastructure, cloud computing and advanced semiconductor architectures as drivers of higher wafer-fabrication spending, while warning that customer investment levels and AI adoption could change rapidly.
Revenue and margins
Revenue growth accelerated across both reported revenue streams, with customer support-related activity growing faster than systems. The combination of volume, mix and operating leverage produced record profitability.
- Systems: Revenue was $4.25 billion, up from $3.73 billion in March and $3.44 billion in June 2025.
- Customer support: Revenue was $2.47 billion, versus $2.11 billion sequentially and $1.73 billion a year earlier. The category includes service, spares, upgrades and Reliant non-leading-edge equipment.
- Profitability: GAAP gross margin expanded to 51.7% from 49.8% sequentially and 50.1% a year ago; GAAP operating margin rose to 37.4% from 35.0% and 33.7%.
- Expenses: GAAP operating expenses increased 11.8% sequentially to $965.3 million, slower than the 15.1% revenue increase. R&D was $642.9 million and SG&A was $322.3 million.
September outlook
Lam's September guidance points to another sharp step-up rather than a moderation after the June record. At the midpoint, revenue would increase approximately 20.5% sequentially from $6.72 billion, while operating margin would expand another 110 basis points from the June GAAP level.
- Revenue: $8.10 billion, with a range of $7.70 billion to $8.50 billion.
- Gross margin: 52.0%, plus or minus 1 percentage point.
- Operating margin: 39.5%, plus or minus 1 percentage point.
- Diluted EPS: $2.15, plus or minus $0.15, based on a diluted share count of 1.255 billion.
- Adjustments: Expected non-GAAP exclusions are limited to $3.3 million of amortization, debt-discount amortization and related tax effects.
Cash and capital return
Lam remained strongly cash generative, although working capital absorbed cash as receivables and inventory increased alongside the revenue ramp. Cash, cash equivalents and restricted cash rose to $5.60 billion from $4.77 billion at the end of March, helped by operating cash flow and partly offset by capital returns.
- Operating cash flow: $1.46 billion in the June quarter, up from $1.14 billion in March and $944.7 million a year earlier.
- Working capital: Accounts receivable increased to $5.34 billion from $4.13 billion sequentially, while inventories rose to $4.28 billion from $4.00 billion.
- Capital spending: Capital expenditures and intangible assets were $188.8 million in the quarter and $966.4 million for fiscal 2026.
- Shareholder returns: Lam repurchased $246.6 million of stock and paid $325.3 million in dividends during the quarter. Fiscal-year repurchases totaled $3.85 billion and dividends totaled $1.27 billion.
Geographic and policy exposure
The quarter's revenue remained concentrated in East Asia, which is both the center of semiconductor manufacturing demand and the source of Lam's principal geopolitical and regulatory exposure. China was the second-largest region despite ongoing U.S. export restrictions.
- Revenue by region: Taiwan contributed 27%, China 26%, Korea 20%, Japan 9%, the United States 9%, Southeast Asia 5% and Europe 4%.
- China exposure: China accounted for approximately 34% of fiscal 2026 revenue according to the 10-K, while quarterly revenue from China was 26%.
- Policy risks: Lam cited export controls, tariffs, trade restrictions, supply-chain disruption and geopolitical tensions as factors that could limit sales, increase costs or pressure margins.
- Supply-chain balance: Deferred revenue increased to $2.43 billion from $2.22 billion sequentially, while estimated future revenue from Japan shipments awaiting customer acceptance rose to $490.2 million from $434.3 million.
