filings.toolsItem 1. Financial Statements
63K characters. Original on sec.gov · Markdown
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; authorized, 4,000,000 shares as of March 29, 2026 and June 29, 2025; issued and outstanding, 1,250,539 shares as of March 29, 2026, and 1,268,740 shares as of June 29, 2025 | 1,251 | 1,268 | |||||||||
| Additional paid-in capital | 9,054,217 | 8,697,290 | |||||||||
| Treasury stock, at cost; 1,710,665 shares as of March 29, 2026, and 1,687,582 shares as of June 29, 2025 | (31,347,671) | (27,763,430) | |||||||||
| Accumulated other comprehensive loss | (121,392) | (62,423) | |||||||||
| Retained earnings | 32,998,374 | 28,988,914 | |||||||||
| Total stockholders’ equity | 10,584,779 | 9,861,619 | |||||||||
| Total liabilities and stockholders’ equity | $ | 20,791,910 | $ | 21,345,260 | |||||||
(1)Derived from audited financial statements
See Notes to Condensed Consolidated Financial Statements
Lam Research Corporation 2026 Q3 10-Q 5
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Nine Months Ended | |||||||||||
| March 29, 2026 | March 30, 2025 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Net income | $ | 4,988,114 | $ | 3,638,129 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 321,891 | 287,838 | |||||||||
| Deferred income taxes | (113,310) | (211,568) | |||||||||
| Equity-based compensation expense | 282,396 | 249,085 | |||||||||
| Other, net | (24,706) | (7,395) | |||||||||
| Changes in operating assets and liabilities | (1,053,956) | (337,013) | |||||||||
| Net cash provided by operating activities | 4,400,429 | 3,619,076 | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Capital expenditures and intangible assets | (777,604) | (586,995) | |||||||||
| Other, net | (807) | 8,154 | |||||||||
| Net cash used for investing activities | (778,411) | (578,841) | |||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Principal payments on debt, including finance lease obligations and payments for debt issuance costs | (754,073) | (506,003) | |||||||||
| Treasury stock purchases, including excise tax payments | (3,604,783) | (2,130,044) | |||||||||
| Dividends paid | (945,317) | (854,335) | |||||||||
| Reissuance of treasury stock related to employee stock purchase plan | 67,185 | 60,557 | |||||||||
| Proceeds from issuance of common stock, net issuance costs | 13,021 | 1,756 | |||||||||
| Other, net | (13,511) | 963 | |||||||||
| Net cash used for financing activities | (5,237,478) | (3,427,106) | |||||||||
| Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (25,375) | (960) | |||||||||
| Net change in cash, cash equivalents, and restricted cash | (1,640,835) | (387,831) | |||||||||
| Cash, cash equivalents, and restricted cash at beginning of period (1) | 6,407,656 | 5,850,803 | |||||||||
| Cash, cash equivalents, and restricted cash at end of period (1) | $ | 4,766,821 | $ | 5,462,972 | |||||||
| Schedule of non-cash transactions: | |||||||||||
| Accrued payables for stock repurchases, including applicable excise tax | $ | 23,675 | $ | 16,967 | |||||||
| Accrued payables for capital expenditures | 84,720 | 87,291 | |||||||||
| Dividends payable | 325,318 | 295,423 | |||||||||
| Transfers of finished goods inventory to property and equipment | 83,772 | 74,560 | |||||||||
| Reconciliation of cash, cash equivalents, and restricted cash | March 29, 2026 | March 30, 2025 | |||||||||
| Cash and cash equivalents | $ | 4,750,936 | $ | 5,450,718 | |||||||
| Restricted cash and cash equivalents (1) | 15,885 | 12,254 | |||||||||
| Total cash, cash equivalents, and restricted cash | $ | 4,766,821 | $ | 5,462,972 | |||||||
(1)Restricted cash is reported within Other assets in the Condensed Consolidated Balance Sheets
See Notes to Condensed Consolidated Financial Statements
Lam Research Corporation 2026 Q3 10-Q 6
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
| March 29, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock Shares | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||||||||||||||||||||||
| Balance at December 28, 2025 | 1,251,180 | $ | 1,251 | $ | 8,948,439 | $ | (30,203,796) | $ | (98,701) | $ | 31,498,233 | $ | 10,145,426 | ||||||||||||||||||||||||||||
| Issuance of common stock | 4,362 | 5 | 9,162 | — | — | — | 9,167 | ||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | (5,003) | (5) | — | (1,143,875) | — | — | (1,143,880) | ||||||||||||||||||||||||||||||||||
| Equity-based compensation expense | — | — | 96,616 | — | — | — | 96,616 | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 1,825,460 | 1,825,460 | ||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | (22,691) | — | (22,691) | ||||||||||||||||||||||||||||||||||
| Cash dividends declared ($0.26 per common share) | — | — | — | — | — | (325,319) | (325,319) | ||||||||||||||||||||||||||||||||||
| Balance at March 29, 2026 | 1,250,539 | $ | 1,251 | $ | 9,054,217 | $ | (31,347,671) | $ | (121,392) | $ | 32,998,374 | $ | 10,584,779 | ||||||||||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||
| March 29, 2026 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock Shares | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||||||||||||||||||||||
| Balance at June 29, 2025 | 1,268,740 | $ | 1,268 | $ | 8,697,290 | $ | (27,763,430) | $ | (62,423) | $ | 28,988,914 | $ | 9,861,619 | ||||||||||||||||||||||||||||
| Issuance of common stock | 4,882 | 6 | 13,015 | — | — | — | 13,021 | ||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | (24,185) | (24) | — | (3,589,909) | — | — | (3,589,933) | ||||||||||||||||||||||||||||||||||
| Reissuance of treasury stock | 1,102 | 1 | 61,516 | 5,668 | — | — | 67,185 | ||||||||||||||||||||||||||||||||||
| Equity-based compensation expense | — | — | 282,396 | — | — | — | 282,396 | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 4,988,114 | 4,988,114 | ||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | (58,969) | — | (58,969) | ||||||||||||||||||||||||||||||||||
| Cash dividends declared ($0.78 per common share) | — | — | — | — | — | (978,654) | (978,654) | ||||||||||||||||||||||||||||||||||
| Balance at March 29, 2026 | 1,250,539 | $ | 1,251 | $ | 9,054,217 | $ | (31,347,671) | $ | (121,392) | $ | 32,998,374 | $ | 10,584,779 | ||||||||||||||||||||||||||||
| See Notes to Condensed Consolidated Financial Statements | |||||||||||||||||||||||||||||||||||||||||
Lam Research Corporation 2026 Q3 10-Q 7
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||
| March 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock Shares | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||||||||||||||||||||||
| Balance at December 29, 2024 | 1,284,956 | $ | 1,285 | $ | 8,439,903 | $ | (26,024,098) | $ | (134,085) | $ | 26,525,021 | $ | 8,808,026 | ||||||||||||||||||||||||||||
| Issuance of common stock | 3,558 | 4 | 1,989 | — | — | — | 1,993 | ||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | (5,557) | (6) | — | (431,767) | — | — | (431,773) | ||||||||||||||||||||||||||||||||||
| Equity-based compensation expense | — | — | 87,115 | — | — | — | 87,115 | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 1,330,667 | 1,330,667 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | 10,174 | — | 10,174 | ||||||||||||||||||||||||||||||||||
| Cash dividends declared ($0.23 per common share) | — | — | — | — | — | (295,097) | (295,097) | ||||||||||||||||||||||||||||||||||
| Balance at March 30, 2025 | 1,282,957 | $ | 1,283 | $ | 8,529,007 | $ | (26,455,865) | $ | (123,911) | $ | 27,560,591 | $ | 9,511,105 | ||||||||||||||||||||||||||||
| Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||
| March 30, 2025 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock Shares | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total | |||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | 1,303,769 | $ | 1,304 | $ | 8,223,046 | $ | (24,365,783) | $ | (130,428) | $ | 24,811,315 | $ | 8,539,454 | ||||||||||||||||||||||||||||
| Issuance of common stock | 3,990 | 4 | 1,752 | — | — | — | 1,756 | ||||||||||||||||||||||||||||||||||
| Purchase of treasury stock | (25,964) | (26) | — | (2,095,514) | — | — | (2,095,540) | ||||||||||||||||||||||||||||||||||
| Reissuance of treasury stock | 1,162 | 1 | 55,124 | 5,432 | — | — | 60,557 | ||||||||||||||||||||||||||||||||||
| Equity-based compensation expense | — | — | 249,085 | — | — | — | 249,085 | ||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 3,638,129 | 3,638,129 | ||||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | 6,517 | — | 6,517 | ||||||||||||||||||||||||||||||||||
| Cash dividends declared ($0.69 per common share) | — | — | — | — | — | (888,853) | (888,853) | ||||||||||||||||||||||||||||||||||
| Balance at March 30, 2025 | 1,282,957 | $ | 1,283 | $ | 8,529,007 | $ | (26,455,865) | $ | (123,911) | $ | 27,560,591 | $ | 9,511,105 | ||||||||||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements
Lam Research Corporation 2026 Q3 10-Q 8
LAM RESEARCH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 29, 2026
(Unaudited)
NOTE 1 — BASIS OF PRESENTATION
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of Lam Research Corporation (“Lam Research” or the “Company”) for the fiscal year ended June 29, 2025, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended June 29, 2025 (the “2025 Form 10-K”).
The condensed consolidated financial statements include the accounts of Lam Research and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s reporting period is a 52/53-week fiscal year. The Company’s current fiscal year will end June 28, 2026 and includes 52 weeks. The quarters ended March 29, 2026 (the “March 2026 quarter”) and March 30, 2025 included 13 weeks. The nine months ended March 29, 2026 and March 30, 2025 each included 39 weeks.
NOTE 2 — RECENT ACCOUNTING PRONOUNCEMENTS
Recently Adopted or Effective
The Company has not adopted any new accounting standards during the three and nine months ended March 29, 2026 that have a material impact on the Company’s Condensed Consolidated Financial Statements.
NOTE 3 — REVENUE
Disaggregation of Revenue
The Company operates in seven geographic regions: United States, China, Europe, Japan, Korea, Southeast Asia, and Taiwan. For geographical reporting, revenue is attributed to the geographic location in which the customers’ facilities are located. The Company serves three primary markets: memory, foundry, and logic/integrated device manufacturing.
The following table presents the Company’s revenues disaggregated between systems and customer support-related revenue:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Systems revenue | $ | 3,730,582 | $ | 3,035,276 | $ | 10,635,640 | $ | 8,053,655 | |||||||||||||||
| Customer support-related revenue and other | 2,110,906 | 1,684,899 | 5,874,812 | 5,210,543 | |||||||||||||||||||
| $ | 5,841,488 | $ | 4,720,175 | $ | 16,510,452 | $ | 13,264,198 | ||||||||||||||||
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.
Lam Research Corporation 2026 Q3 10-Q 9
The following table presents the Company’s revenues disaggregated by geographic region:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| Revenue: | (In thousands) | ||||||||||||||||||||||
| China | $ | 1,996,926 | $ | 1,467,299 | $ | 6,138,046 | $ | 4,368,501 | |||||||||||||||
| Korea | 1,352,538 | 1,150,480 | 3,189,325 | 3,002,825 | |||||||||||||||||||
| Taiwan | 1,317,304 | 1,125,955 | 3,413,611 | 2,478,997 | |||||||||||||||||||
| Japan | 470,727 | 474,935 | 1,548,335 | 1,139,597 | |||||||||||||||||||
| United States | 355,295 | 189,512 | 914,630 | 1,091,174 | |||||||||||||||||||
| Southeast Asia | 207,834 | 178,287 | 923,993 | 710,394 | |||||||||||||||||||
| Europe | 140,864 | 133,707 | 382,512 | 472,710 | |||||||||||||||||||
| $ | 5,841,488 | $ | 4,720,175 | $ | 16,510,452 | $ | 13,264,198 | ||||||||||||||||
The following table presents the percentages of leading- and non-leading-edge equipment and upgrade revenue to each of the primary markets the Company serves:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| Foundry | 54 | % | 48 | % | 58 | % | 42 | % | |||||||||||||||
| Memory | 39 | % | 43 | % | 36 | % | 43 | % | |||||||||||||||
| Logic/integrated device manufacturing | 7 | % | 9 | % | 6 | % | 15 | % |
Deferred Revenue
Revenue of $420.1 million and $1.91 billion included in deferred profit at June 29, 2025 was recognized during the three and nine months ended March 29, 2026, representing 16% and 71% of the $2.68 billion of deferred revenue as of June 29, 2025.
The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of March 29, 2026 and when the Company expects to recognize the amounts as revenue:
| Less than 1 Year | 1-3 Years | More than 3 Years | Total | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Deferred revenue | $ | 1,508,943 | $ | 603,301 | (1) | $ | 108,804 | (1) | $ | 2,221,048 | |||||||||||||
(1)This amount is reported in Deferred profit on the Company's Condensed Consolidated Balance Sheets as the customers can demand the performance to be satisfied at any time.
NOTE 4 — EQUITY-BASED COMPENSATION PLANS
The Lam Research Corporation 2015 Stock Incentive Plan, as amended, and the Lam Research Corporation 2025 Stock Incentive Plan provide for the grant of non-qualified equity-based awards of the Company’s Common Stock to eligible employees and non-employee directors, including stock options, restricted stock units (“RSUs”), and market-based performance RSUs (“market-based PRSUs”). An option is a right to purchase Common Stock at a set price. An RSU award is an agreement to issue a set number of shares of Common Stock at the time of vesting. The Company’s market-based PRSUs contain both a market condition and a service condition. The Company’s option, RSU, and market-based PRSU awards typically vest over a period of three years. The Company also has an employee stock purchase plan that allows eligible employees to purchase its Common Stock at a discount through payroll deductions.
The Company recognized the following equity-based compensation expense (including expense related to the employee stock purchase plan) in the Condensed Consolidated Statements of Operations:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Equity-based compensation expense | $ | 96,616 | $ | 87,115 | $ | 282,396 | $ | 249,085 | |||||||||||||||
Lam Research Corporation 2026 Q3 10-Q 10
NOTE 5 — OTHER INCOME (EXPENSE), NET
The significant components of other income (expense), net, are as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Interest income | $ | 42,639 | $ | 50,638 | $ | 159,724 | $ | 176,698 | |||||||||||||||
| Interest expense | (39,333) | (45,184) | (122,681) | (135,429) | |||||||||||||||||||
| (Losses) gains on deferred compensation plan-related assets, net | (27,265) | (16,903) | 12,451 | 5,019 | |||||||||||||||||||
| Foreign exchange losses, net | (1,050) | (4,702) | (14,618) | (19,505) | |||||||||||||||||||
| Other, net | (10,451) | (8,884) | (13,852) | (7,475) | |||||||||||||||||||
| $ | (35,460) | $ | (25,035) | $ | 21,024 | $ | 19,308 | ||||||||||||||||
NOTE 6 — INCOME TAX EXPENSE
The Company’s provision for income taxes and effective tax rate are as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||
| Income tax expense | $ | 186,096 | $ | 206,057 | $ | 719,217 | $ | 541,019 | |||||||||||||||
| Effective tax rate | 9.3 | % | 13.4 | % | 12.6 | % | 12.9 | % |
The difference between the U.S. federal statutory tax rate of 21% and the Company’s effective tax rate for the three and nine months ended March 29, 2026, and March 30, 2025, was primarily due to income in lower tax jurisdictions.
The Internal Revenue Service (“IRS”) is examining the Company’s U.S. federal income tax returns for the fiscal years ended June 30, 2019, June 28, 2020, and June 27, 2021. To date, the IRS has not proposed any significant adjustments. The Company expects to finalize the audit within the next 12 months and anticipates any related cash settlements will not be significant.
The Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting 2.0 (“BEPS 2.0”) Pillar Two Global Minimum Tax (“GMT”) is fully effective for the Company this fiscal year. The Company assessed its exposure to GMT under currently enacted legislation and determined that it expects to meet transitional safe harbor requirements in most jurisdictions, with limited jurisdictions subject to GMT. The Company assessed the impact and concluded that it was not material. The impact has been included within income tax expense for the nine months ended March 29, 2026.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law by U.S. President Donald Trump. The impact on income taxes due to change in legislation is required, under Accounting Standards Codification (“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. The Company assessed the changes and concluded that they were not material. The impact has been included within income tax expense for the nine months ended March 29, 2026.
Lam Research Corporation 2026 Q3 10-Q 11
NOTE 7 — NET INCOME PER SHARE
Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the treasury stock method, for dilutive stock options, and restricted stock units. The following table reconciles the inputs to the basic and diluted computations for net income per share.
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income | $ | 1,825,460 | $ | 1,330,667 | $ | 4,988,114 | $ | 3,638,129 | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Basic average shares outstanding | 1,249,728 | 1,283,779 | 1,256,343 | 1,290,041 | |||||||||||||||||||
| Effect of potential dilutive securities: | |||||||||||||||||||||||
| Employee stock plans | 7,597 | 4,321 | 6,449 | 4,504 | |||||||||||||||||||
| Diluted average shares outstanding | 1,257,325 | 1,288,100 | 1,262,792 | 1,294,545 | |||||||||||||||||||
| Net income per share - basic | $ | 1.46 | $ | 1.04 | $ | 3.97 | $ | 2.82 | |||||||||||||||
| Net income per share - diluted | $ | 1.45 | $ | 1.03 | $ | 3.95 | $ | 2.81 | |||||||||||||||
For purposes of computing diluted net income per share, weighted-average common shares do not include potentially dilutive securities that are anti-dilutive under the treasury stock method. These anti-dilutive securities, including options and RSUs, were not material for the three and nine months ended March 29, 2026 and March 30, 2025.
NOTE 8 — FINANCIAL INSTRUMENTS
The Company’s investment strategies and investment and fair value policies are unchanged from those disclosed in Note 9, “Financial Instruments,” to the Consolidated Financial Statements in Part II, Item 8 of its 2025 Form 10-K. As of March 29, 2026 and June 29, 2025, the fair value of mutual funds and equity investments were not material. The Company had no debt security investments as of March 29, 2026 and June 29, 2025. The financial statement impacts to the Condensed Consolidated Statement of Operations from debt and equity investments were not material as of and for the three and nine months ended March 29, 2026 and March 30, 2025.
The financial instruments reported within Cash and Cash Equivalents in the Company’s Condensed Consolidated Balance Sheets as of March 29, 2026, and June 29, 2025 consisted of the following:
| March 29, 2026 | June 29, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Money market funds (fair value measured on a recurring basis, level 1) | $ | 2,160,934 | $ | 3,151,084 | |||||||
| Cash | 1,676,377 | 1,662,236 | |||||||||
| Time deposits | 913,625 | 1,577,339 | |||||||||
| Total | $ | 4,750,936 | $ | 6,390,659 | |||||||
Derivative Instruments and Hedging
The Company’s hedging strategies and policies are unchanged from those disclosed in Note 9, “Financial Instruments,” to the Consolidated Financial Statements in Part II, Item 8 of its 2025 Form 10-K. As of March 29, 2026 and June 29, 2025, the fair value of outstanding cash flow and balance sheet hedges were not material. The financial statement impacts to the Condensed Consolidated Statement of Operations from derivative instruments and hedging activities were not material as of and for the three and nine months ended March 29, 2026 and March 30, 2025.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk and the Company’s mitigation strategies are unchanged from those disclosed in Note 9, “Financial Instruments,” to the Consolidated Financial Statements in Part II, Item 8 of its 2025 Form 10-K.
Lam Research Corporation 2026 Q3 10-Q 12
NOTE 9 — INVENTORIES
Inventories are stated at the lower of cost or net realizable value using standard costs that approximate actual costs on a first-in, first-out basis. Inventories consist of the following:
| March 29, 2026 | June 29, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Raw materials | $ | 2,505,789 | $ | 2,662,248 | |||||||
| Work-in-process | 388,364 | 282,885 | |||||||||
| Finished goods | 1,105,839 | 1,362,858 | |||||||||
| $ | 3,999,992 | $ | 4,307,991 | ||||||||
NOTE 10 — PROPERTY AND EQUIPMENT, NET
Property and equipment, net is presented in the table below:
| March 29, 2026 | June 29, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Manufacturing and engineering equipment | $ | 2,469,293 | $ | 2,219,207 | |||||||
| Buildings and improvements | 2,208,883 | 1,914,570 | |||||||||
| Computer and computer-related equipment | 188,150 | 182,439 | |||||||||
| Land | 261,984 | 166,207 | |||||||||
| Office equipment, furniture and fixtures | 100,584 | 92,740 | |||||||||
| 5,228,894 | 4,575,163 | ||||||||||
| Less: accumulated depreciation and amortization | $ | (2,395,736) | $ | (2,169,641) | |||||||
| $ | 2,833,158 | $ | 2,405,522 | ||||||||
The Company has excluded immaterial right-of-use assets, under finance leases, recorded within property and equipment, net from the table above.
NOTE 11 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
| March 29, 2026 | June 29, 2025 | ||||||||||
| (in thousands) | |||||||||||
| Accrued compensation | $ | 600,267 | $ | 618,370 | |||||||
| Warranty reserves | 241,531 | 248,783 | |||||||||
| Income and other taxes payable | 188,597 | 541,426 | |||||||||
| Dividend payable | 325,318 | 291,981 | |||||||||
| Other | 719,708 | 693,806 | |||||||||
| $ | 2,075,421 | $ | 2,394,366 | ||||||||
NOTE 12 — LONG-TERM DEBT AND OTHER BORROWINGS
Senior Notes
On March 4, 2019, the Company completed a public offering of $750.0 million aggregate principal amount of the Company’s Senior Notes due March 15, 2026 (the “2026 Notes”). The 2026 Notes were settled upon maturity during the three months ended March 29, 2026. The remaining outstanding Senior Notes are unchanged from those disclosed in Note 14, “Long-term Debt and Other Borrowings,” to the Consolidated Financial Statements in Part II, Item 8 of the Company’s 2025 Form 10-K.
Lam Research Corporation 2026 Q3 10-Q 13
Commercial Paper Program
In November 2017, the Company established a commercial paper program (the “CP Program”) under which the Company may issue unsecured commercial paper notes on a private placement basis up to a maximum aggregate principal amount of $1.25 billion. In July 2021, the Company amended the CP Program size to a maximum aggregate amount outstanding at any time of $1.50 billion. On March 10, 2026, the CP Program size was further amended to a maximum aggregate amount outstanding at any time of $2.00 billion. The net proceeds from the CP Program may be used for general corporate purposes, including repurchases of the Company’s Common Stock from time to time under the Company’s stock repurchase program. Amounts available under the CP Program may be re-borrowed. The CP Program is backstopped by the Company’s Revolving Credit Arrangement. As of March 29, 2026, the Company had no outstanding borrowings under the CP Program.
NOTE 13 — COMMITMENTS AND CONTINGENCIES
Guarantees
The Company has issued certain indemnifications to its lessors for taxes and general liability under some of its agreements. The Company has entered into insurance contracts that are intended to limit its exposure to such indemnifications. As of March 29, 2026, the Company had not recorded any liability on its Condensed Consolidated Financial Statements in connection with these indemnifications, as it does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be paid under these guarantees.
Generally, the Company indemnifies, under pre-determined conditions and limitations, its customers for infringement of third-party intellectual property rights by the Company’s products or services. The Company seeks to limit its liability for such indemnity to an amount not to exceed the sales price of the products or services subject to its indemnification obligations. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be paid under these guarantees.
The Company provides guarantees and standby letters of credit to certain parties as required for certain transactions initiated during the ordinary course of business. As of March 29, 2026, the maximum potential amount of future payments that the Company could be required to make under these arrangements and letters of credit was $241.6 million. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid.
In addition, the Company has entered into indemnification agreements with its directors, officers, and certain other employees, consistent with its Bylaws and Certificate of Incorporation; and under local law, the Company may be required to provide indemnification to its employees for actions within the scope of their employment. Although the Company maintains insurance contracts that cover some of the potential liability associated with these indemnification agreements, there is no guarantee that all such liabilities will be covered. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under such indemnification agreements or statutory obligations.
Warranties
The Company provides standard warranties on its systems. The liability amount is based on actual historical warranty spending activity by type of system, customer, and geographic region, modified for any known differences such as the impact of system reliability improvements. As of March 29, 2026, warranty reserves totaling $13.4 million were reported in Other long-term liabilities, and the remainder were included in Accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets.
Changes in the Company’s product warranty reserves were as follows:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Balance at beginning of period | $ | 247,804 | $ | 254,812 | $ | 265,466 | $ | 250,404 | |||||||||||||||
| Warranties issued during the period | 77,317 | 70,023 | 210,603 | 201,903 | |||||||||||||||||||
| Settlements made during the period | (64,001) | (50,908) | (192,037) | (142,164) | |||||||||||||||||||
| Changes in liability for pre-existing warranties | (6,147) | (8,108) | (29,059) | (44,324) | |||||||||||||||||||
| Balance at end of period | $ | 254,973 | $ | 265,819 | $ | 254,973 | $ | 265,819 | |||||||||||||||
Lam Research Corporation 2026 Q3 10-Q 14
Legal Proceedings
While the Company is not currently a party to any legal proceedings that it believes material, the Company is either a defendant or plaintiff in various actions that have arisen from time to time in the normal course of business, including intellectual property claims. The Company accrues for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. Based on current information, the Company does not believe that a material loss from known matters is probable and therefore has not recorded an accrual of any material amount for litigation or other contingencies related to existing legal proceedings.
NOTE 14 — STOCK REPURCHASE PROGRAM
In May 2024, the Board of Directors authorized the Company to repurchase up to an additional $10.00 billion of Common Stock; this authorization supplements the remaining balances from any prior authorizations. These repurchases can be conducted on the open market or as private purchases and may include the use of derivative contracts with large financial institutions, in all cases subject to compliance with applicable law. This repurchase program has no termination date and may be suspended or discontinued at any time.
Repurchases under the repurchase program were as follows during the periods indicated.
| Period | Total Number of Shares Repurchased | Total Cost of Repurchase (1) | Average Price Paid per Share (1,2) | Amount Available Under Repurchase Program | |||||||||||||||||||
| (in thousands, except per share data) | |||||||||||||||||||||||
| Available balance as of June 29, 2025 | $ | 7,517,184 | |||||||||||||||||||||
| Quarter ended September 28, 2025 | 9,686 | (3) | $ | 990,046 | $ | 105.67 | $ | 6,527,138 | |||||||||||||||
| Quarter ended December 28, 2025 | 9,387 | $ | 1,442,095 | $ | 153.62 | $ | 5,085,043 | ||||||||||||||||
| Quarter ended March 29, 2026 | 3,516 | (3) | $ | 796,378 | $ | 210.57 | $ | 4,288,665 | |||||||||||||||
(1) The Company’s net share repurchases are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred reduces the amount available under the repurchase program, as applicable, and is included in the cost of shares repurchased in the Condensed Consolidated Statement of Stockholders’ Equity and the calculation of the average price paid per share.
(2) Average price paid per share excludes the effect of accelerated share repurchase activities. See additional disclosure below regarding the Company’s accelerated share repurchase activity during the fiscal year.
(3) Includes shares received at initial or final settlement of accelerated share repurchase agreements. See additional disclosure below regarding the Company’s accelerated share repurchase activity during the fiscal year.
Accelerated Share Repurchase Agreements
On March 11, 2026, the Company entered into an accelerated share repurchase agreement (the “March 2026 ASR”) with a financial institution to repurchase a total of $200.0 million of Common Stock. The Company took an initial delivery of approximately 685 thousand shares, which represented 75% of the prepayment amount divided by the Company’s closing stock price on March 11, 2026. The total number of shares to be received under the March 2026 ASR will be based upon the average daily volume weighted average price of the Company’s Common Stock during the repurchase period, less an agreed upon discount.
On April 30, 2025, the Company entered into accelerated share repurchase agreements (the "April 2025 ASRs") with two financial institutions to repurchase a total of $500.0 million of Common Stock. The Company took an initial delivery of approximately 5.2 million shares, which represented 75% of the prepayment amount divided by the Company’s closing stock price on April 30, 2025. The total number of shares received under the April 2025 ASRs was based upon the average daily volume weighted average price of the Company’s Common Stock during the repurchase period, less an agreed upon discount. Final settlement of the April 2025 ASRs occurred in September 2025, resulting in the receipt of approximately 317 thousand additional shares, which yielded a weighted-average share price of $91.00 for the transaction period, including the effects of a 1% excise tax under the Inflation Reduction Act.
The Company recorded each of the ASRs as equity transactions; as such, at the time of receipt, shares were included in treasury stock at fair market value as of the corresponding trade date. The Company reflects shares received as a repurchase of common stock in the weighted average common shares outstanding calculation for basic and diluted earnings per share.
NOTE 15 — SEGMENT REPORTING
The Company operates in one reportable business segment: manufacturing and servicing of wafer processing semiconductor manufacturing equipment. The Company’s material operating segments qualify for aggregation due to their customer base and similarities in economic characteristics, nature of products and services, and processes for procurement, manufacturing, and distribution.
Lam Research Corporation 2026 Q3 10-Q 15
Segment information is prepared and managed on the same basis as described in Note 19, “Segment, Geographic Information, and Major Customers,” to the Consolidated Financial Statements in Part II, Item 8 of the Company’s 2025 Form 10-K.
The Company's centralized manufacturing and support organizations, including global operations and certain administrative functions, provide support to its operating segments. Costs incurred by these organizations, as well as depreciation and amortization and equity-based compensation expense are allocated to cost of goods sold as overhead. Consequently, depreciation and amortization and equity-based compensation expense are not independently identifiable components within the segment’s results, and, therefore are not provided.
With the exception of goodwill, the Company does not identify assets by operating segment. Consequently, the chief operating decision maker does not regularly review or receive discrete asset information by operating segment.
The table below reconciles the Company's reportable segment to income before income taxes:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| March 29, 2026 | March 30, 2025 | March 29, 2026 | March 30, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Revenue | $ | 5,841,488 | $ | 4,720,175 | $ | 16,510,452 | $ | 13,264,198 | |||||||||||||||
| Installation and warranty expense | 164,334 | 135,170 | 446,139 | 384,265 | |||||||||||||||||||
| Other cost of goods sold (COGS) (1) | 2,671,667 | 2,224,119 | 7,542,513 | 6,308,606 | |||||||||||||||||||
| Segment COGS | 2,836,001 | 2,359,289 | 7,988,652 | 6,692,871 | |||||||||||||||||||
| Segment gross margin | 3,005,487 | 2,360,886 | 8,521,800 | 6,571,327 | |||||||||||||||||||
| Reconciliation to consolidated gross margin | |||||||||||||||||||||||
| All other COGS | 94,960 | 47,200 | 275,232 | 181,977 | |||||||||||||||||||
| 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 | |||||||||||||||||||
| 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 | |||||||||||||||
(1)Other COGS is primarily comprised of the capitalized cost of inventory sold, including both direct and indirect costs, but excludes installation and warranty expense and those items not allocated to the segment.
Lam Research Corporation 2026 Q3 10-Q 16
Previous: Cover and table of contents · Next: Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations