filings.toolsLam Research 10-Q 2026-03-29
Filed 2026-04-23. 8 sections, 208K characters. Original on sec.gov · Markdown · JSON
Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 29, 2026
or
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 0-12933
LAM RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 94-2634797 | |||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| 4650 Cushing Parkway, Fremont, California | 94538 | |||||||
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (510) 572-0200
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| Common Stock, Par Value $0.001 Per Share | LRCX | The Nasdaq Stock Market | ||||||
| (Nasdaq Global Select Market) |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||||||||
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 21, 2026, the Registrant had 1,250,571 thousand shares of Common Stock outstanding.
LAM RESEARCH CORPORATION
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| Revenue | $ | 5,841,488 | $ | 4,720,175 | $ | 16,510,452 | $ | 13,264,198 | |||||||||||||||
| Cost of goods sold | 2,930,961 | 2,406,489 | 8,263,884 | 6,874,848 | |||||||||||||||||||
| Gross margin | 2,910,527 | 2,313,686 | 8,246,568 | 6,389,350 | |||||||||||||||||||
| Research and development | 583,200 | 525,904 | 1,732,951 | 1,516,209 | |||||||||||||||||||
| Selling, general, and administrative | 280,311 | 226,023 | 827,310 | 713,301 | |||||||||||||||||||
| Total operating expenses | 863,511 | 751,927 | 2,560,261 | 2,229,510 | |||||||||||||||||||
| Operating income | 2,047,016 | 1,561,759 | 5,686,307 | 4,159,840 | |||||||||||||||||||
| Other income (expense), net | (35,460) | (25,035) | 21,024 | 19,308 | |||||||||||||||||||
| Income before income taxes | 2,011,556 | 1,536,724 | 5,707,331 | 4,179,148 | |||||||||||||||||||
| Income tax expense | (186,096) | (206,057) | (719,217) | (541,019) | |||||||||||||||||||
| Net income | $ | 1,825,460 | $ | 1,330,667 | $ | 4,988,114 | $ | 3,638,129 | |||||||||||||||
| Net income per share: | |||||||||||||||||||||||
| Basic | $ | 1.46 | $ | 1.04 | $ | 3.97 | $ | 2.82 | |||||||||||||||
| Diluted | $ | 1.45 | $ | 1.03 | $ | 3.95 | $ | 2.81 | |||||||||||||||
| Number of shares used in per share calculations: | |||||||||||||||||||||||
| Basic | 1,249,728 | 1,283,779 | 1,256,343 | 1,290,041 | |||||||||||||||||||
| Diluted | 1,257,325 | 1,288,100 | 1,262,792 | 1,294,545 | |||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements
Lam Research Corporation 2026 Q3 10-Q 3
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| Net income | $ | 1,825,460 | $ | 1,330,667 | $ | 4,988,114 | $ | 3,638,129 | |||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Foreign currency translation adjustment | (13,629) | 8,686 | (47,794) | 5,199 | |||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||
| Net unrealized gains during the period | 5,874 | 4,132 | 26,628 | 6,248 | |||||||||||||||||||
| Net gains reclassified into net income | (15,003) | (2,826) | (38,029) | (5,190) | |||||||||||||||||||
| (9,129) | 1,306 | (11,401) | 1,058 | ||||||||||||||||||||
| Defined benefit plans, net change in unrealized component | 67 | 182 | 226 | 260 | |||||||||||||||||||
| Other comprehensive income (loss), net of tax | (22,691) | 10,174 | (58,969) | 6,517 | |||||||||||||||||||
| Comprehensive income | $ | 1,802,769 | $ | 1,340,841 | $ | 4,929,145 | $ | 3,644,646 | |||||||||||||||
See Notes to Condensed Consolidated Financial Statements
Lam Research Corporation 2026 Q3 10-Q 4
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
| March 29, 2026 | June 29, 2025 | ||||||||||
| (unaudited) | (1) | ||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 4,750,936 | $ | 6,390,659 | |||||||
| Accounts receivable, less allowance of $8,348 as of March 29, 2026, and $6,496 as of June 29, 2025 | 4,132,890 | 3,378,071 | |||||||||
| Inventories | 3,999,992 | 4,307,991 | |||||||||
| Prepaid expenses and other current assets | 413,099 | 440,274 | |||||||||
| Total current assets | 13,296,917 | 14,516,995 | |||||||||
| Property and equipment, net | 2,853,614 | 2,428,744 | |||||||||
| Goodwill and intangible assets, net | 1,882,017 | 1,808,685 | |||||||||
| Other assets | 2,759,362 | 2,590,836 | |||||||||
| Total assets | $ | 20,791,910 | $ | 21,345,260 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Trade accounts payable | $ | 1,071,605 | $ | 854,208 | |||||||
| Accrued expenses and other current liabilities | 2,075,421 | 2,394,366 | |||||||||
| Deferred profit | 2,091,277 | 2,565,540 | |||||||||
| Current portion of long-term debt and finance lease obligations | 4,095 | 754,311 | |||||||||
| Total current liabilities | 5,242,398 | 6,568,425 | |||||||||
| Long-term debt and finance lease obligations | 3,730,384 | 3,730,194 | |||||||||
| Income taxes payable | 621,572 | 603,412 | |||||||||
| Other long-term liabilities | 612,777 | 581,610 | |||||||||
| Total liabilities | 10,207,131 | 11,483,641 | |||||||||
| Commitments and contingencies (refer to Note 13) | |||||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock, at par value of $0.001 per share; authorized, 5,000 shares, none outstanding | — | — | |||||||||
| Common stock, at par value of $0.001 per share; authori |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
With the exception of historical facts, the statements contained in this discussion are forward-looking statements, which are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Certain, but not all, of the forward-looking statements in this report are specifically identified as forward-looking, by use of phrases and words such as “believe,” “estimated,” “anticipate,” “expect,” “probable,” “intend,” “plan,” “aim,” “may,” “should,” “could,” “would,” “will,” “continue,” and other future-oriented terms. The identification of certain statements as “forward-looking” does not mean that other statements not specifically identified are not forward-looking. Forward-looking statements include, but are not limited to, statements that relate to: trends and opportunities in the global economic environment; trends and opportunities in the semiconductor industry, including in the end markets and applications for semiconductors, in device complexity, and in the complexity of device manufacturing; growth or decline in the industry and the market for, and spending on, wafer fabrication equipment; the anticipated levels of, and rates of change in, margins, market share, served available market, capital expenditures, research and development expenditures, international sales, revenue (actual and/or deferred), operating expenses and earnings generally; management’s plans and objectives for our current and future operations and business focus; restructuring activities; business process improvements and initiatives; volatility in our quarterly results; the makeup of our customer base; customer and end user requirements and our ability to satisfy those requirements; the performance and benefits of our products and services; customer spending and demand for our products and services, and the reliability of indicators of change in customer spending and demand; the effect of variability in our customers’ business plans or demand for our products and services; our competition, and our ability to defend our market share and to gain new market share; the success of joint development and collaboration relationships with customers, suppliers, or others; outsourced activities; our supply chain and the role of suppliers in our business, including the impacts of supply chain constraints and material costs; our leadership and competency, and our ability to facilitate innovation; our research and development programs; the opportunities in our industry for, and our ability to create sustainable differentiation; technology inflections in the industry and our ability to identify those inflections and to invest in research and development programs to meet them; our ability to deliver multi-product solutions; the resources invested to comply with evolving standards and the impact of such efforts; changes in state, federal and international tax laws, our estimated annual tax rate and the factors that affect our tax rates; legal and regulatory compliance; the estimates we make, and the accruals we record, in order to implement our critical accounting policies (including, but not limited to, the adequacy of prior tax payments, future tax benefits or liabilities, and the adequacy of our accruals relating to them); hedging transactions; debt or financing arrangements; our investment portfolio; our access to capital markets; uses of, payments of, and impact of interest rate fluctuations on, our debt; our intention to pay quarterly dividends and the amounts thereof, if any; our ability and intention to repurchase our shares; credit risks; controls and procedures; recognition or amortization of expenses; our ability to manage and grow our cash position; our ability to scale our operations to respond to changes in our business; our goals and initiatives with respect to environmental, social and governance matters, including emissions, and human capital, the value of our patents; the materiality of potential losses arising from legal proceedings; the probability of making payments under our guarantees; and the sufficiency of our financial resources or liquidity to support future business activities (including, but not limited to, operations, investments, debt service requirements, dividends, and capital expenditures). Such statements are based on current expectations and are subject to risks, uncertainties, and changes in condition, significance, value, and effect, including without limitation those discussed below under the heading “Risk Factors” within Part II Item 1A and elsewhere in this report and other documents we file from time to time with the Securities and Exchange Commission (“SEC”), such as our current reports on Form 8-K. Such risks, uncertainties, and changes in condition, significance, value, and effect could cause our actual results to differ materially from those expressed in this report and in ways not readily foreseeable. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof and are based on information currently and reasonably known to us. We do not undertake any obligation to release the results of any revisions to these forward-looking statements, which may be made to reflect events or circumstances that occur after the date of this report or to reflect the occurrence or effect of anticipated or unanticipated events.
Documents To Review In Connection With Management’s Discussion and Analysis Of Financial Condition and Results Of Operations
For a full understanding of our financial position and results of operations for the three and nine months ended March 29, 2026, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations below, you should also read the Condensed Consolidated Financial Statements and notes presented in this Form 10-Q and the financial statements and notes in our annual report on form 10-K for the year ended June 29, 2025 (our “2025 Form 10-K”).
Lam Research Corporation 2026 Q3 10-Q 17
EXECUTIVE SUMMARY
Lam Research Corporation is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. We have built a strong global presence with core competencies in areas like nanoscale manufacturing enablement, chemistry, plasma and fluidics, advanced systems engineering, and a broad range of operational disciplines. Our products and services are designed to help our customers build smaller and better performing devices that are used in a variety of electronic products, including mobile phones, personal computers, cloud and enterprise servers, wearables, automotive vehicles, and data storage devices.
Our customer base includes leading semiconductor memory, foundry, and integrated device manufacturers that make products such as non-volatile memory, dynamic random-access memory, and logic devices. Their continued success is part of our commitment to driving semiconductor breakthroughs that define the next generation. Our core technical competency is integrating hardware, process, materials, software, and process control, enabling results on the wafer.
Semiconductor manufacturing, our customers’ business, involves the fabrication of multiple dies or integrated circuits on a wafer. This involves the repetition of a set of core processes and can require hundreds of individual steps. Fabricating these devices requires a sequence of highly sophisticated process technologies to integrate an increasing array of new materials with precise control at the atomic scale. Along with meeting technical requirements, wafer processing equipment must deliver high productivity and be cost-effective.
Demand from cloud computing, artificial intelligence (“AI”), 5G, the Internet of Things, and other markets is driving the need for increasingly powerful and cost-efficient semiconductors. At the same time, there are growing technical challenges with traditional two-dimensional scaling. These trends are driving significant inflections in semiconductor manufacturing, such as the increasing importance of vertical scaling strategies like three-dimensional architecture as well as multiple patterning to enable shrinks.
We believe we are in a strong position with our leadership and expertise in deposition, etch, and clean markets to facilitate some of the most significant innovations in semiconductor device manufacturing. Our Customer Support Business Group provides products and services to maximize installed equipment performance, predictability, and operational efficiency. Several factors create opportunities for sustainable differentiation for us: (i) our focus on research and development, with several ongoing programs relating to sustaining engineering, product and process development, and concept and feasibility; (ii) our ability to effectively leverage cycles of learning from our broad installed base; (iii) our collaborative focus with semi-ecosystem partners, including our close-to-customer focus; (iv) our ability to identify and invest in the breadth of our product portfolio to meet technology inflections; and (v) our focus on delivering our multi-product solutions with a goal to enhance the value of Lam’s solutions to our customers.
Wafer fabrication equipment investments were strong in the 2025 calendar year, and we believe there will be continued growth in 2026 with the AI market driving higher semiconductor industry spending across both the memory and non-memory market segments. In the short term, volatility in the semiconductor industry environment from trade restrictions, tariffs, as well as other direct and indirect risks and uncertainties discussed in Part II, Item 1A, “Risk Factors,” have had, and in the future may have, a negative impact on our revenue and operating margin. Over the longer term, we believe that secular demand for semiconductors, combined with technology inflections in our industry, including 3D device scaling, multiple patterning, process flow, and advanced packaging chip integration, will drive sustainable growth and lead to an increase in the served available market for our products and services in the deposition, etch, and clean businesses.
Lam Research Corporation 2026 Q3 10-Q 18
The following table summarizes certain key financial information for the periods indicated below:
| Three Months Ended | |||||||||||||||||
| March 29, 2026 | December 28, 2025 | ||||||||||||||||
| (in thousands, except per share data and percentages) | |||||||||||||||||
| Revenue | $ | 5,841,488 | $ | 5,344,791 | |||||||||||||
| Gross margin | $ | 2,910,527 | $ | 2,651,162 | |||||||||||||
| Gross margin as a percent of total revenue | 49.8 | % | 49.6 | % | |||||||||||||
| Total operating expenses | $ | 863,511 | $ | 840,959 | |||||||||||||
| Net income | $ | 1,825,460 | $ | 1,593,994 | |||||||||||||
| Diluted net income per share | $ | 1.45 | $ | 1.26 |
In the March 2026 quarter, revenue increased 9% compared to the three months ended December 28, 2025 (the “December 2025 quarter”), driven by an increase in systems revenue primarily resulting from increased customer investments in the DRAM market segment as well as an increase in customer support-related revenue mainly tied to our expanding installed base and higher spares, upgrades and services revenue, partially offset by decreased customer spend on non-leading-edge equipment. The deferred revenue balance was $2.22 billion at the end of the March 2026 quarter, down slightly relative to the balance at the end of the December 2025 quarter of $2.25 billion. The decrease in the deferred revenue balance included approximately $300 million of decreases in customer down payments that were largely offset by increases across other components of deferred revenue balance associated with growing business levels.
We aim to balance the requirements of our customers with the availability of resources, as well as performance to our operational and financial objectives. As a result, from time to time, we exercise discretion and judgment as to the timing and prioritization of manufacturing and deliveries of products, which has impacted, including in the current fiscal year, and may in the future impact, the timing of revenue recognition with respect to such products.
The increase in gross margin as a percentage of revenue in the March 2026 quarter compared to the December 2025 quarter was primarily a result of improved factory efficiencies. The increase in operating expenses in the March 2026 quarter compared to the December 2025 quarter was primarily driven by an increase in employee-related costs as a result of beginning of calendar year seasonality and higher headcount, as well as higher costs associated with workforce optimization, partially offset by lower elective deferred compensation plan-related costs and decreased outside service spend.
Our cash, cash equivalents, and restricted cash balances decreased to $4.77 billion at the end of the March 2026 quarter compared to $6.20 billion at the end of the December 2025 quarter. This decrease was primarily the result of $1.16 billion of share repurchases, including net share settlement of employee stock-based compensation and excise tax; $751.2 million of principal payments on debt instruments and debt issuance costs; $331.6 million of capital expenditures; and $325.8 million of dividends paid to stockholders, partially offset by $1.14 billion of cash generated from operating activities. Employee headcount as of March 29, 2026 was approximately 20,600.
Lam Research Corporation 2026 Q3 10-Q 19
RESULTS OF OPERATIONS
The following table presents our revenues disaggregated by geographic region:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| March 29, 2026 | December 28, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||
| Revenue (in millions) | $ | 5,841 | $ | 5,345 | $ | 16,510 | $ | 13,264 | |||||||||||||||||||||
| China | 34 | % | 35 | % | 37 | % | 33 | % | |||||||||||||||||||||
| Korea | 23 | % | 20 | % | 19 | % | 23 | % | |||||||||||||||||||||
| Taiwan | 23 | % | 20 | % | 21 | % | 19 | % | |||||||||||||||||||||
| Japan | 8 | % | 10 | % | 9 | % | 9 | % | |||||||||||||||||||||
| United States | 6 | % | 5 | % | 6 | % | 8 | % | |||||||||||||||||||||
| Southeast Asia | 4 | % | 8 | % | 6 | % | 4 | % | |||||||||||||||||||||
| Europe | 2 | % | 2 | % | 2 | % | 4 | % |
The following table presents our revenue disaggregated between systems and customer support-related revenue:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| March 29, 2026 | December 28, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||
| Systems revenue | $ | 3,730,582 | $ | 3,357,493 | $ | 10,635,640 | $ | 8,053,655 | |||||||||||||||||||||
| Customer support-related revenue and other | 2,110,906 | 1,987,298 | 5,874,812 | 5,210,543 | |||||||||||||||||||||||||
| $ | 5,841,488 | $ | 5,344,791 | $ | 16,510,452 | $ | 13,264,198 | ||||||||||||||||||||||
For a discussion on the March 2026 quarter compared to the December 2025 quarter, refer to “Executive Summary” above.
The increase in revenue in the nine months ended March 29, 2026 compared to the same period in the prior year was predominantly driven by increases in Foundry equipment spending by our customers, as well as higher customer support-related revenue mainly due to spares revenue.
Systems revenue includes sales of new leading-edge equipment in deposition, etch, clean and other wafer fabrication markets.
Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from the Company’s Reliant® product line.
The percentage of leading- and non-leading-edge equipment and upgrade revenue from each of the markets we serve was as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| March 29, 2026 | December 28, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||
| Foundry | 54 | % | 59 | % | 58 | % | 42 | % | |||||||||||||||||||||
| Memory | 39 | % | 34 | % | 36 | % | 43 | % | |||||||||||||||||||||
| Logic/integrated device manufacturing | 7 | % | 7 | % | 6 | % | 15 | % |
The decrease in the foundry market segment for the March 2026 quarter compared to the December 2025 quarter was primarily driven by lower mature node investments, while the memory market segment saw strengthened investments across both DRAM and non-volatile memory.
Lam Research Corporation 2026 Q3 10-Q 20
Gross Margin
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| March 29, 2026 | December 28, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||
| Gross margin | $ | 2,910,527 | $ | 2,651,162 | $ | 8,246,568 | $ | 6,389,350 | |||||||||||||||||||||
| Percent of revenue | 49.8 | % | 49.6 | % | 49.9 | % | 48.2 | % |
Gross margin as a percentage of revenue increased in the March 2026 quarter compared to the December 2025 quarter, driven mainly by improved factory efficiencies.
The increase in gross margin as a percentage of revenue in the nine months ended March 29, 2026 compared to the same period in the prior year was primarily due to favorable changes in customer mix, slightly offset by reduced factory efficiencies from higher tariff-related spend.
Research and Development
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| March 29, 2026 | December 28, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||
| Research & development (“R&D”) | $ | 583,200 | $ | 573,305 | $ | 1,732,951 | $ | 1,516,209 | |||||||||||||||||||||
| Percent of revenue | 10.0 | % | 10.7 | % | 10.5 | % | 11.4 | % |
We continued to make significant R&D investments in the March 2026 quarter focused on leading-edge deposition, etch, clean and other semiconductor manufacturing processes. R&D expense in the March 2026 quarter increased compared to the December 2025 quarter primarily driven by employee-related spend as a result of beginning of calendar year seasonality and higher headcount as well as increased costs related to workforce optimization, partially offset by lower elective deferred compensation plan-related costs.
R&D expense in the nine months ended March 29, 2026 increased compared to the same period in the prior year, mainly tied to employee-related costs as a result of higher headcount, and increased supplies spending, and depreciation expense.
Selling, General, and Administrative
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| March 29, 2026 | December 28, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||
| Selling, general, and administrative (“SG&A”) | $ | 280,311 | $ | 267,654 | $ | 827,310 | $ | 713,301 | |||||||||||||||||||||
| Percent of revenue | 4.8 | % | 5.0 | % | 5.0 | % | 5.4 | % |
SG&A expense during the March 2026 quarter increased compared to the December 2025 quarter driven by employee-related spend as a result of beginning of calendar year seasonality and higher headcount as well as costs related to workforce optimization, partially offset by lower outside service spending and elective deferred compensation plan-related costs.
SG&A expense in the nine months ended March 29, 2026 increased compared to the same period in the prior year, primarily as a result of employee-related costs due to higher headcount.
Lam Research Corporation 2026 Q3 10-Q 21
Other Income (Expense), Net
Other income (expense), net consisted of the following:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| March 29, 2026 | December 28, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||||||
| Interest income | $ | 42,639 | $ | 53,155 | $ | 159,724 | $ | 176,698 | |||||||||||||||||||||
| Interest expense | (39,333) | (40,876) | (122,681) | (135,429) | |||||||||||||||||||||||||
| (Losses) gains on deferred compensation plan-related assets, net | (27,265) | 16,628 | 12,451 | 5,019 | |||||||||||||||||||||||||
| Foreign exchange losses, net | (1,050) | (8,034) | (14,618) | (19,505) | |||||||||||||||||||||||||
| Other, net | (10,451) | 5,537 | (13,852) | (7,475) | |||||||||||||||||||||||||
| $ | (35,460) | $ | 26,410 | $ | 21,024 | $ | 19,308 | ||||||||||||||||||||||
Interest income decreased in the March 2026 quarter compared to the December 2025 quarter, primarily due to lower cash balances and lower interest rates. Interest income decreased in the nine months ended March 29, 2026 compared to the same period in the prior year, primarily due to lower interest rates.
Interest expense decreased in the March 2026 quarter compared to the December 2025 quarter, primarily due to the maturity of $750.0 million of the Company’s senior notes in March 2026. Interest expense decreased in the nine months ended March 29, 2026 compared to the same period in the prior year primarily due to the maturity of $500.0 million of the Company’s senior notes in March 2025.
The gains and losses on deferred compensation plan-related assets, net were driven by fluctuations in the fair market value of the underlying funds for all periods presented.
Foreign exchange fluctuations were primarily due to currency movements against portions of our unhedged balance sheet exposures for all periods presented.
The variation in other, net in the March 2026 quarter and the nine months ended March 29, 2026 compared to the December 2025 quarter and to the same nine-month period in the prior year was primarily driven by fluctuations in the fair market value of equity investments.
Income Tax Expense
Our provision for income taxes and effective tax rate for the periods indicated were as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| March 29, 2026 | December 28, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||
| Income tax expense | $ | 186,096 | $ | 242,619 | $ | 719,217 | $ | 541,019 | |||||||||||||||||||||
| Effective tax rate | 9.3 | % | 13.2 | % | 12.6 | % | 12.9 | % |
The decrease in the effective tax rate for the March 2026 quarter compared to the December 2025 quarter was primarily due to higher stock-based compensation excess tax benefits and the recognition of previously unrecognized tax benefits in the March 2026 quarter.
The effective tax rate for the nine months ended March 29, 2026 compared to the same period in the prior year remained consistent.
International revenues account for a significant portion of our total revenues, such that a material portion of our pre-tax income is earned and taxed outside the United States. International pre-tax income is taxable in the United States at a lower effective tax rate than the federal statutory tax rate. Please refer to Note 7, “Income Taxes”, to our Consolidated Financial Statements in Part II, Item 8 of our 2025 Form 10-K for additional information.
We re-evaluate uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Any change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision.
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BEPS 2.0 GMT is fully effective for us this fiscal year. We assessed our exposure to GMT under currently enacted legislation and determined that we expect to meet transitional safe harbor requirements in most jurisdictions, with limited jurisdictions subject to GMT.
On July 4, 2025, the OBBBA was signed into law by U.S. President Donald Trump. The impact on income taxes due to change in legislation is required, under ASC 740, Income Taxes, to be recognized in the period in which the law is enacted, which is this fiscal year. In general, the OBBBA introduces changes to U.S. taxation, including changes in the taxation of non-U.S. income.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our critical accounting policies and estimates are unchanged from those disclosed in “Critical Accounting Policies and Estimates” in Part II, Item 7 of our 2025 Form 10-K.
Recent Accounting Pronouncements
See Note 2 - Recent Accounting Pronouncements, of our Condensed Consolidated Financial Statements, included in Part 1 of this Form 10-Q for details of any recently adopted or effective accounting pronouncements.
Updates Not Yet Effective
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income taxes paid. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is required to adopt this standard prospectively in fiscal year 2026 for the annual reporting period ending June 28, 2026. The Company does not expect the adoption of ASU 2023-09 to have an impact on its Consolidated Financial Statements other than additional footnote disclosures.
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disaggregation of certain expenses in the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement. In January 2025, the FASB issued ASU 2025-01 which clarified the effective date for entities that do not have an annual reporting period that ends on December 31st. The guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is required to adopt this standard in fiscal year 2028 for the annual reporting period ending June 25, 2028 either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company will apply the guidance prospectively and is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.
In December 2025, the FASB issued ASU 2025-10, “Accounting for Government Grants Received by Business Entities,” which introduces guidance for recognizing, measuring, and presenting government grants, addressing diversity in practice. The guidance is effective for annual reporting periods beginning after December 15, 2028, and interim reporting within those annual reporting periods, with early adoption permitted. The Company is required to adopt this standard in the first quarter of fiscal year 2030. The Company does not expect the adoption of ASU 2025-10 to have an impact on its Consolidated Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES
Total gross cash, cash equivalents, and restricted cash balances were $4.77 billion at March 29, 2026 compared to $6.41 billion as of June 29, 2025. The decrease was primarily driven by $3.60 billion of share repurchases, including net share settlement on employee stock-based compensation and excise tax; $945.3 million in dividends paid; $777.6 million in capital expenditures, and $754.1 million of principal payments on debt instruments and debt issuance costs, partially offset by cash generated from operating activities totaling $4.40 billion.
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Cash Flows from Operating Activities
Net cash provided by operating activities of $4.40 billion during the nine months ended March 29, 2026 consisted of (in thousands):
| Net income | $ | 4,988,114 | |||
| Non-cash charges: | |||||
| Depreciation and amortization | 321,891 | ||||
| Equity-based compensation expense | 282,396 | ||||
| Deferred income taxes | (113,310) | ||||
| Changes in operating asset and liability accounts | (1,053,956) | ||||
| Other | (24,706) | ||||
| $ | 4,400,429 | ||||
Changes in operating asset and liability accounts, net of foreign exchange impact, included the following sources of cash: decreases in inventory of $224.2 million and prepaid expenses and other current assets of $136.0 million, and an increase in accounts payable of $223.8 million. These sources of cash were offset by the following uses of cash: an increase in accounts receivable of $756.2 million and decreases in accrued expenses and other liabilities of $407.5 million and deferred gross profit of $474.3 million.
Cash Flows from Investing Activities
Net cash used for investing activities during the nine months ended March 29, 2026 was $778.4 million, primarily consisting of capital expenditures for manufacturing capacity and lab infrastructure investments.
Cash Flows from Financing Activities
Net cash used for financing activities during the nine months ended March 29, 2026 was $5.24 billion, primarily consisting of $3.60 billion in treasury stock repurchases, including net share settlement on employee stock-based compensation and excise tax, $945.3 million in dividends paid, and $754.1 million of principal payments on debt instruments and debt issuance costs.
Liquidity
Given that the semiconductor industry is highly competitive and has historically experienced rapid changes in demand, we believe that maintaining sufficient liquidity reserves is important to support sustaining levels of investment in R&D and capital infrastructure. Anticipated cash flows from operations based on our current business outlook, combined with our current levels of cash and cash equivalents as of March 29, 2026, are expected to be sufficient to support our anticipated levels of operations, investments, debt service requirements, capital expenditures, capital redistributions, and dividends through at least the next twelve months. However, factors outside of our control, including uncertainty in the global economy and the semiconductor industry, as well as disruptions in credit markets, have in the past, are currently, and could in the future, impact customer demand for our products, as well as our ability to manage normal commercial relationships with our customers, suppliers, and creditors.
During the three months ended March 29, 2026, $750.0 million principal value of our 2026 Notes were settled upon maturity using available cash on hand.
In March 2026, we increased the issuance capacity under our commercial paper program (the “CP Program”) from $1.50 billion to $2.00 billion. The net proceeds from the CP Program may be used for general corporate purposes, including repurchases of our Common Stock from time to time under our stock repurchase program. As of March 29, 2026, we had no outstanding borrowings under the CP Program.
In the longer term, liquidity will depend to a great extent on our future revenues and our ability to appropriately manage our costs based on demand for our products and services. While we have substantial cash balances, we may require additional funding and need or choose to raise the required funds through borrowings or public or private sales of debt or equity securities. We believe that, if necessary, we will be able to access the capital markets on terms and in amounts adequate to meet our objectives. However, domestic and global macroeconomic and political conditions could cause disruptions to the capital markets and otherwise make any financing more challenging, and there can be no assurance that we will be able to obtain such financing on commercially reasonable terms or at all.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes to our quantitative and qualitative disclosures about market risk set forth in Part II, Item 7A of our 2025 Form 10-K filed with the SEC on August 11, 2025.
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Item 4. Controls and Procedures
Management’s Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to comply with Rules13a-15 and 15d-15 of the Exchange Act.
In designing and evaluating the disclosure controls and procedures, management, including the Chief Executive Officer and Chief Financial Officer, recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Accordingly, our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives.
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 29, 2026. Based upon that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There has been no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
Please refer to the subsection entitled “Legal Proceedings” within Note 13 “Commitments and Contingencies," to our Condensed Consolidated Financial Statements in this quarterly report on Form 10-Q.
Item 1A. Risk Factors
In addition to the other information in this Form 10-Q, the following risk factors should be carefully considered in evaluating us and our business because the occurrence of any of these factors could materially and adversely affect our business, operating results, financial condition, and price of our Common Stock, and they could cause our actual results to differ materially from those contemplated in any forward-looking statements. Some of the factors, events, and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events, or contingencies have occurred in the past and instead reflect our beliefs and opinions as to the factors, events, or contingencies that could materially and adversely affect us in the future. The risks and uncertainties described below are not the only ones we face. Our operations could also be affected by factors, events, or uncertainties that are not presently known to us or that we currently do not consider to present a material risk to us and our business. Therefore, the following discussion of risk factors should not be considered a complete statement of all the potential risks or uncertainties that we face. No priority or significance is intended by, nor should be attached to, the order in which the risk factors appear.
INDUSTRY AND CUSTOMER RISKS
We Depend on Creating New Products and Processes and Enhancing Existing Products and Processes for Our Success; Consequently, We Are Subject to Risks Associated with Rapid Technological Change
Rapid technological changes in semiconductor manufacturing processes subject us to increased pressure to develop technological advances that enable those processes. We believe that our future success depends in part upon our ability to develop and offer new products with improved capabilities and to continue to enhance our existing products. If new products or existing products have reliability, quality, design, or safety problems, our performance may be impacted by reduced orders, higher manufacturing costs, delays in acceptance of and payment for new products, additional service and warranty expenses, and loss of market share. If we are unable to develop and manufacture products successfully, or the products that we introduce fail in the marketplace, our business, results of operations and financial condition could be materially and adversely affected. For more than 25 years, the primary driver of technology advancement in the semiconductor industry has been to shrink the lithography that prints the circuit design on semiconductor chips. That driver could be approaching its technological limit, leading semiconductor manufacturers to investigate more complex changes in multiple technologies in an effort to continue technology development. In addition, the emergence of “big data” and new tools such as machine learning and AI that capitalize on the availability of large data sets is leading semiconductor manufacturers and equipment manufacturers to pursue new products and approaches that exploit those tools to advance technology development. In the face of uncertainty on which technology solutions will become successful, we will need to focus our efforts on developing the technology changes that are ultimately successful in supporting our customers’ requirements. Our failure to develop and offer the correct technology solutions in a timely manner with productive and cost-effective products could adversely affect our business in a material way. Our failure to commercialize new products in a timely manner could result in loss of market share, unanticipated costs, and inventory obsolescence, which would adversely affect our financial results.
In order to develop new products and processes and enhance existing products and processes, we expect to continue to make significant investments in R&D, to investigate the acquisition of products and technologies, to invest in or acquire businesses or technologies, and to pursue joint development relationships with customers, suppliers, or other members of the industry. Our investments and acquisitions may not be as successful as we may expect, particularly in the event that we invest in or acquire product lines and technologies that are new to us. We may find that acquisitions are not available to us, for regulatory or other reasons, and that we must therefore limit ourselves to collaboration and joint venture development activities that do not have the same benefits as acquisitions. Pursuing development through collaboration and/or joint development activities rather than through an acquisition may pose substantial challenges for management, including those related to aligning business objectives; sharing confidential information, intellectual property and data; sharing value with third parties; and realizing synergies that might have been available in an acquisition but are not available through a joint development project. We must manage product transitions and joint development relationships successfully, as the introduction of new products could adversely affect our sales of existing products and certain jointly developed technologies may be subject to restrictions on our ability to share that technology, which could limit our market for products incorporating those technologies. Future technologies, processes, or product developments, including as a result of adoption of AI, may render our current product offerings obsolete, leaving us with non-competitive products, obsolete inventory, or both. Moreover, customers may adopt new technologies or processes to address the complex challenges associated with next-generation devices, or may adopt new technologies, including those based upon AI, that reduce their reliance on us for process development. This shift could reduce the size of our addressable markets, increase the relative size of markets in which we either do not compete or have relatively low market share, or reduce our competitiveness within the markets in which we do compete.
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We Face a Challenging and Complex Competitive Environment
We face significant competition from multiple competitors, and our competitors may be able to develop products comparable or superior to those we offer or may adapt more quickly to new technologies or evolving customer requirements. In particular, while we continue to develop product enhancements that we believe will address future customer requirements, we may fail in a timely manner to identify those future customer requirements, to devote appropriate resources to developing products to address those requirements, or to complete the development or introduction of these additional product enhancements successfully, or these product enhancements may not achieve market acceptance or be competitive. Accordingly, competition may intensify, and we may be unable to continue to compete successfully in our markets, which could have a material adverse effect on our revenues, operating results, financial condition, and/or cash flows.
With increased consolidation efforts in our industry, as well as the emergence and strengthening of new, regional competitors and the potentially disruptive impact of AI, we may face increasing competitive pressures. Other companies continue to develop systems and/or acquire businesses and products that are competitive to ours and may introduce new products and product capabilities that may affect our ability to sell and support our existing products. We face a greater risk if our competitors enter into strategic relationships with leading semiconductor manufacturers covering products similar to those we sell or may develop, as this could adversely affect our ability to sell products to those manufacturers.
We believe that to remain competitive we must devote significant financial resources to offer products that meet our customers’ needs
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Item 5. Other Information
Rule 10b5-1 and Non-Rule 10b5-1 Trading Arrangements
During the Company’s fiscal quarter ended March 29, 2026, except for the following arrangements, none of the Company’s directors or officers adopted or terminated a trading arrangement for the purchase or sale of the Company’s Common Stock that was intended
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to satisfy the affirmative defense conditions of Rule 10b5-1(c) (a “Rule 10b5-1 Trading Arrangement”) or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).
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On February 6, 2026, Eric K. Brandt, a member of the Board of Directors of the Company, adopted a Rule 10b5-1 Trading Arrangement. Mr. Brandt’s Rule 10b5-1 Trading Arrangement provides for the potential sale of up to 109,000 shares of Common Stock pursuant to the terms of the Rule 10b5-1 Trading Arrangement. Mr. Brandt’s Rule 10b5-1 Trading Arrangement has a termination date of October 30, 2026.
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On February 17, 2026, in connection with his retirement from his position as Executive Vice President and Chief Operating Officer of the Company, Patrick J. Lord terminated a Rule 10b5-1 Trading Arrangement that was originally adopted on October 29, 2025 (the “Terminated Plan”). The Terminated Plan had provided for: (i) the potential sale of up to 36,645 shares of Common Stock; (ii) the potential exercise of 59,490 stock options and the associated sale of up to 59,490 shares of Common Stock resulting from such exercise; (iii) the potential sale of the net shares of Common Stock resulting from the vesting of 17,244 service-based restricted stock units (net shares are net of tax withholding); and (iv) the potential sale of the net shares of Common Stock resulting from the vesting of 63,345 market-based performance restricted stock units, in each case pursuant to the terms of the Terminated Plan. The Terminated Plan contained pricing conditions that precluded or limited the sale of shares below predetermined minimum prices.
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On February 24, 2026, Timothy M. Archer, President, Chief Executive Officer and a member of the Board of Directors of the Company, adopted a Rule 10b5-1 Trading Arrangement. Mr. Archer’s Rule 10b5-1 Trading Arrangement provides for the potential exercise of up to 121,400 stock options expiring March 2, 2027 and the associated sale of up to 121,400 shares of Common Stock resulting from such exercise, in each case pursuant to the terms of the Rule 10b5-1 Trading Arrangement. Mr. Archer’s Rule 10b5-1 Trading Arrangement has a termination date of November 30, 2026.
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On March 11, 2026, Abhijit Y. Talwalkar, Chair of the Board of Directors of the Company, adopted a Rule 10b5-1 Trading Arrangement. Mr. Talwalkar’s Rule 10b5-1 Trading Arrangement provides for the potential sale of up to 18,282 shares of Common Stock pursuant to the terms of the Rule 10b5-1 Trading Arrangement. Mr. Talwalkar’s Rule 10b5-1 Trading Arrangement has a termination date of March 12, 2027.
The Rule 10b5-1 Trading Arrangements of Messrs. Talwalkar, Archer and Brandt contain pricing conditions that preclude or limit the exercise of stock options or the sale of shares, as applicable, below predetermined minimum prices. Each of the Rule 10b5-1 Trading Arrangements (other than the Terminated Plan) will terminate on the earlier of: (a) its respective termination date indicated above; (b) execution of all trades or expiration of all the orders relating to such trades under the Rule 10b5-1 Trading Arrangement; or (c) such date as the Rule 10b5-1 Trading Arrangement is otherwise terminated according to its terms.
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Item 6. Exhibits
| Exhibit Number | Description | ||||
| 31.1 | Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer) | ||||
| 31.2 | Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer) | ||||
| 32.1 | Section 1350 Certification (Principal Executive Officer) | ||||
| 32.2 | Section 1350 Certification (Principal Financial Officer) | ||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | ||||
*Indicates management contract or compensatory plan or arrangement.
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LAM RESEARCH CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: | April 23, 2026 | LAM RESEARCH CORPORATION (Registrant) | |||||||||
| /s/ Douglas R. Bettinger | |||||||||||
| Douglas R. Bettinger | |||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||
| (Principal Financial Officer) |
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