Lam Research Corporation Reports Financial Results for the Quarter Ended December 29, 2024

, /PRNewswire/ -- Lam Research Corporation (the "Company," "Lam," "Lam Research") today announced financial results for the quarter ended December 29, 2024 (the "December 2024 quarter"). Highlights for the December 2024 quarter were as follows: Revenue of $4.38 billion. U.S. GAAP gross margin of 47.4%, U.S. GAAP operating income as a percentage of revenue of 30.5%, and U.S. GAAP diluted EPS of $0.92. Non-GAAP gross margin of 47.5%, non-GAAP operating income as a percentage of revenue of 30.7%, and non-GAAP diluted EPS of $0.91. Key Financial Data for the Quarters Ended December 29, 2024 and September 29, 2024 (in thousands, except per-share data, percentages, and basis points) U.S. GAAP December 2024 September 2024 Change Q/Q Revenue $ 4,376,047 $ 4,167,976 + 5 % Gross margin as percentage of revenue 47.4 % 48.0 % - 60 bps Operating income as percentage of revenue 30.5 % 30.3 % + 20 bps Diluted EPS $ 0.92 $ 0.86 + 7 % Non-GAAP December 2024 September 2024 Change Q/Q Revenue $ 4,376,047 $ 4,167,976 + 5 % Gross margin as percentage of revenue 47.5 % 48.2 % - 70 bps Operating income as percentage of revenue 30.7 % 30.9 % - 20 bps Diluted EPS $ 0.91 $ 0.86 + 6 % U.S. GAAP Financial Results For the December 2024 quarter, revenue was $4,376 million, gross margin was $2,073 million, or 47.4% of revenue, operating expenses were $739 million, operating income was 30.5% of revenue, and net income was $1,191 million, or $0.92 per diluted share on a U.S. GAAP basis. This compares to revenue of $4,168 million, gross margin of $2,003 million, or 48.0% of revenue, operating expenses of $738 million, operating income of 30.3% of revenue, and net income of $1,116 million, or $0.86 per diluted share, for the quarter ended September 29, 2024 (the "September 2024 quarter"). Non-GAAP Financial Results For the December 2024 quarter, non-GAAP gross margin was $2,077 million, or 47.5% of revenue, non-GAAP operating expenses were $735 million, non-GAAP operating income was 30.7% of revenue, and non-GAAP net income was $1,175 million, or $0.91 per diluted share. This compares to non-GAAP gross margin of $2,009 million, or 48.2% of revenue, non-GAAP operating expenses of $722 million, non-GAAP operating income of 30.9% of revenue, and non-GAAP net income of $1,122 million, or $0.86 per diluted share, for the September 2024 quarter. "Lam is executing at a high level at a pivotal moment for semiconductor manufacturing. Increasing demands on chip performance play into Lam's strengths, with advanced deposition and etch applications set to comprise a growing share of WFE," said Tim Archer, Lam Research's President and Chief Executive Officer. "Our investments to win at key technology inflections are paying off, with more exciting opportunities ahead." Balance Sheet and Cash Flow Results Cash, cash equivalents, and restricted cash balances decreased to $5.7 billion at the end of the December 2024 quarter compared to $6.1 billion at the end of the September 2024 quarter. The decrease was primarily the result of cash deployed for capital return activities and capital expenditures during the quarter, partially offset by cash generated from operating activities. Deferred revenue at the end of the December 2024 quarter decreased to $2,032 million compared to $2,047 million as of the end of the September 2024 quarter. Lam's deferred revenue balance does not include shipments to customers in Japan, to whom control does not transfer until customer acceptance. Shipments to customers in Japan are classified as inventory at cost until the time of acceptance. The estimated future revenue from shipments to customers in Japan was approximately $453 million as of December 29, 2024 and $184 million as of September 29, 2024. Revenue The geographic distribution of revenue during the December 2024 quarter is shown in the following table: Region Revenue China 31 % Korea 25 % Taiwan 17 % United States 9 % Japan 8 % Southeast Asia 7 % Europe 3 % The following table presents revenue disaggregated between system and customer support-related revenue: Three Months Ended December 29,2024 September 29,2024 December 24,2023 (In thousands) Systems revenue $ 2,625,649 $ 2,392,730 $ 2,299,286 Customer support-related revenue and other 1,750,398 1,775,246 1,458,973 $ 4,376,047 $ 4,167,976 $ 3,758,259 Systems revenue includes sales of new leading-edge equipment in deposition, etch and clean markets. Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from our Reliant® product line. Outlook For the quarter ended March 30, 2025, Lam is providing the following guidance: U.S. GAAP ReconcilingItems Non-GAAP Revenue $4.65 Billion +/- $300 Million — $4.65 Billion +/- $300 Million Gross margin as a percentage of revenue 47.9 % +/- 1 % $ 2.8 Million 48.0 % +/- 1 % Operating income as a percentage of revenue 31.9 % +/- 1 % $ 3.4 Million 32.0 % +/- 1 % Net income per diluted share $1.00 +/- $0.10 $ 3.9 Million $1.00 +/- $0.10 Diluted share count 1.29 Billion — 1.29 Billion The information provided above is only an estimate of what the Company believes is realizable as of the date of this release and does not incorporate the potential impact of any business combinations, asset acquisitions, divestitures, restructuring, balance sheet valuation adjustments, financing arrangements, other investments, or other significant arrangements that may be completed or realized after the date of this release, except as described below. U.S. GAAP to non-GAAP reconciling items provided include only those items that are known and can be estimated as of the date of this release. Actual results will vary from this model and the variations may be material. Reconciling items included above are as follows: Gross margin as a percentage of revenue - amortization related to intangible assets acquired through business combinations, $2.8 million. Operating income as a percentage of revenue - amortization related to intangible assets acquired through business combinations, $3.4 million. Net income per diluted share - amortization related to intangible assets acquired though business combinations, $3.4 million; amortization of debt discounts, $0.8 million; and associated tax benefit for non-GAAP items ($0.3 million); totaling $3.9 million. Use of Non-GAAP Financial Results In addition to U.S. GAAP results, this press release also contains non-GAAP financial results. The Company's non-GAAP results for both the December 2024 and September 2024 quarters exclude amortization related to intangible assets acquired through business combinations, the effects of elective deferred compensation-related assets and liabilities, amortization of note discounts, and the net income tax effect of non-GAAP items. Additionally, the non-GAAP results for the December 2024 quarter exclude the income tax benefit from a change in tax law. Management uses non-GAAP gross margin, operating expense, operating income, operating income as a percentage of revenue, net income, and net income per diluted share to evaluate the Company's operating and financial results. The Company believes the presentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing investors' ability to view the Company's results from management's perspective. Tables presenting reconciliations of non-GAAP results to U.S. GAAP results are included at the end of this press release and on the Company's website at https://investor.lamresearch.com. Caution Regarding Forward-Looking Statements Statements made in this press release that are not of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, but are not limited to: our outlook and guidance for future financial results, including revenue, gross margin, operating income and net income; our operational execution; the prospects for semiconductor manufacturing and for demand for wafer fabrication equipment ("WFE"); chip performance demands; the competitive positioning of Lam's products; growth in the significance of advanced deposition and etch applications as a proportion of wafer fabrication equipment spending; the success of our investments at key technology inflections; and the opportunities ahead of us. Some factors that may affect these forward-looking statements include: the actions of our customers and competitors may be inconsistent with our expectations; business, political and/or regulatory conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate or change; trade regulations, export controls, trade disputes, and other geopolitical tensions may inhibit our ability to sell our products; supply chain cost increases and other inflationary pressures have impacted and may continue to impact our profitability; supply chain disruptions or manufacturing capacity constraints may limit our ability to manufacture and sell our products; and natural and human-caused disasters, disease outbreaks, war, terrorism, political or governmental unrest or instability, or other events beyond our control may impact our operations and revenue in affected areas; as well as the other risks and uncertainties that are described in the documents filed or furnished by us with the Securities and Exchange Commission, including specifically the Risk Factors described in our annual report on Form 10-K for the fiscal year ended June 30, 2024, and our quarterly report on Form 10-Q for the fiscal quarter ended September 29, 2024. These uncertainties and changes could materially affect the forward-looking statements and cause actual results to vary from expectations in a material way. The Company undertakes no obligation to update the information or statements made in this release. Lam Research Corporation is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. Lam's equipment and services allow customers to build smaller and better performing devices. In fact, today, nearly every advanced chip is built with Lam technology. We combine superior systems engineering, technology leadership, and a strong values-based culture, with an unwavering commitment to our customers. Lam Research (Nasdaq: LRCX) is a FORTUNE 500® company headquartered in Fremont, Calif., with operations around the globe. Learn more at www.lamresearch.com. (LRCX) Consolidated Financial Tables Follow. LAM RESEARCH CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share data and percentages)(unaudited) Three Months Ended Six Months Ended December 29,2024 September 29,2024 December 24,2023 December 29,2024 December 24,2023 Revenue $ 4,376,047 $ 4,167,976 $ 3,758,259 $ 8,544,023 $ 7,240,321 Cost of goods sold 2,303,066 2,165,293 1,985,847 4,468,359 3,805,267 Restructuring charges, net - cost of goods sold — — 14,957 — 22,897 Total cost of goods sold 2,303,066 2,165,293 2,000,804 4,468,359 3,828,164 Gross margin 2,072,981 2,002,683 1,757,455 4,075,664 3,412,157 Gross margin as a percent of revenue 47.4 % 48.0 % 46.8 % 47.7 % 47.1 % Research and development 494,947 495,358 469,712 990,305 892,341 Selling, general and administrative 244,150 243,128 228,843 487,278 435,866 Restructuring charges, net - operating expenses — — 1,688 — 3,709 Total operating expenses 739,097 738,486 700,243 1,477,583 1,331,916 Operating income 1,333,884 1,264,197 1,057,212 2,598,081 2,080,241 Operating income as a percent of revenue 30.5 % 30.3 % 28.1 % 30.4 % 28.7 % Other income (expense), net 14,262 30,081 29,839 44,343 32,440 Income before income taxes 1,348,146 1,294,278 1,087,051 2,642,424 2,112,681 Income tax expense (157,128) (177,834) (132,785) (334,962) (271,017) Net income $ 1,191,018 $ 1,116,444 $ 954,266 $ 2,307,462 $ 1,841,664 Net income per share: Basic $ 0.93 $ 0.86 $ 0.72 $ 1.78 $ 1.39 Diluted $ 0.92 $ 0.86 $ 0.72 $ 1.78 $ 1.39 Number of shares used in per share calculations: Basic 1,287,109 1,299,236 1,316,293 1,293,173 1,321,067 Diluted 1,291,469 1,304,066 1,322,201 1,297,767 1,326,933 Cash dividend declared per common share $ 0.23 $ 0.23 $ 0.20 $ 0.46 $ 0.40 LAM RESEARCH CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands) December 29,2024 September 29,2024 June 30,2024 (unaudited) (unaudited) (1) ASSETS Cash and cash equivalents $ 5,665,379 $ 6,067,471 $ 5,847,856 Accounts receivable, net 3,304,946 2,937,217 2,519,250 Inventories 4,358,152 4,209,878 4,217,924 Prepaid expenses and other current assets 284,370 277,802 298,190 Total current assets 13,612,847 13,492,368 12,883,220 Property and equipment, net 2,313,590 2,214,269 2,154,518 Goodwill and intangible assets 1,761,021 1,758,344 1,765,073 Other assets 2,152,458 2,067,508 1,941,917 Total assets $ 19,839,916 $ 19,532,489 $ 18,744,728 LIABILITIES AND STOCKHOLDERS' EQUITY Current portion of long-term debt and finance lease obligations $ 504,136 $ 504,682 $ 504,814 Other current liabilities 4,846,160 4,837,986 3,833,624 Total current liabilities 5,350,296 5,342,668 4,338,438 Long-term debt and finance lease obligations 4,478,148 4,479,087 4,478,520 Income taxes payable 669,747 664,717 813,304 Other long-term liabilities 533,699 574,126 575,012 Total liabilities 11,031,890 11,060,598 10,205,274 Stockholders' equity (2) 8,808,026 8,471,891 8,539,454 Total liabilities and stockholders' equity $ 19,839,916 $ 19,532,489 $ 18,744,728 (1) Derived from audited financial statements. (2) Common shares issued and outstanding were 1,284,956 as of December 29, 2024, 1,291,958 as of September 29, 2024, and 1,303,769 as of June 30, 2024. LAM RESEARCH CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands, unaudited) Three Months Ended Six Months Ended December 29,2024 September 29,2024 December 24,2023 December 29,2024 December 24,2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,191,018 $ 1,116,444 $ 954,266 $ 2,307,462 $ 1,841,664 Adjustments to reconcile net income to net cash providedby operating activities: Depreciation and amortization 96,200 94,295 90,941 190,495 181,420 Deferred income taxes (82,854) (108,722) (88,747) (191,576) (112,985) Equity-based compensation expense 81,959 80,011 69,901 161,970 137,112 Other, net (8,592) (457) 4,182 (9,049) 4,032 Changes in operating assets and liabilities (535,789) 386,900 423,297 (148,889) 353,760 Net cash provided by operating activities 741,942 1,568,471 1,453,840 2,310,413 2,405,003 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures and intangible assets (188,349) (110,588) (115,276) (298,937) (192,268) Net maturities and sales of available-for-sale securities — — 15,841 — 23,116 Other, net 12,974 37 (2,523) 13,011 (7,489) Net cash used for investing activities (175,375) (110,551) (101,958) (285,926) (176,641) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on debt, including finance lease obligations (1,032) (934) (986) (1,966) (254,095) Treasury stock purchases, including excise tax payments (697,688) (997,035) (645,458) (1,694,723) (1,488,696) Dividends paid (297,634) (260,985) (264,414) (558,619) (494,746) Reissuance of treasury stock related to employee stock purchase plan 60,557 — 53,081 60,557 53,081 Proceeds from issuance of common stock, net issuance costs (194) (43) 1,704 (237) 4,522 Other, net 761 (324) (3,821) 437 (5,972) Net cash used for financing activities (935,230) (1,259,321) (859,894) (2,194,551) (2,185,906) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (26,022) 22,682 6,725 (3,340) (4,306) Net change in cash, cash equivalents, and restricted cash (394,685) 221,281 498,713 (173,404) 38,150 Cash, cash equivalents, and restricted cash at beginning of period (1) 6,072,084 5,850,803 5,126,809 5,850,803 5,587,372 Cash, cash equivalents, and restricted cash at end of period (1) $ 5,677,399 $ 6,072,084 $ 5,625,522 $ 5,677,399 $ 5,625,522 (1) Restricted cash is reported within Other assets in the Condensed Consolidated Balance Sheets Non-GAAP Financial Summary(in thousands, except percentages and per share data) (unaudited) Three Months Ended December 29,2024 September 29,2024 Revenue $ 4,376,047 $ 4,167,976 Gross margin $ 2,077,151 $ 2,009,022 Gross margin as percentage of revenue 47.5 % 48.2 % Operating expenses $ 734,501 $ 722,148 Operating income $ 1,342,650 $ 1,286,874 Operating income as a percentage of revenue 30.7 % 30.9 % Net income $ 1,175,000 $ 1,121,507 Net income per diluted share $ 0.91 $ 0.86 Shares used in per share calculation - diluted 1,291,469 1,304,066 Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income(in thousands, except per share data) (unaudited) Three Months Ended December 29,2024 September 29,2024 U.S. GAAP net income $ 1,191,018 $ 1,116,444 Pre-tax non-GAAP items: Amortization related to intangible assets acquired through certain business combinations - cost of goods sold 2,817 3,076 Elective deferred compensation ("EDC") related liability valuation increase - cost of goods sold 1,353 3,263 EDC related liability valuation increase - research and development 2,432 8,136 Amortization related to intangible assets acquired through certain business combinations - selling, general and administrative 538 692 EDC related liability valuation increase - selling, general and administrative 1,626 7,510 Amortization of note discounts - other income (expense), net 772 765 Gain on EDC related asset - other income (expense), net (4,502) (17,420) Net income tax benefit on non-GAAP items (276) (959) Income tax benefit from a change in tax law (20,778) — Non-GAAP net income $ 1,175,000 $ 1,121,507 Non-GAAP net income per diluted share $ 0.91 $ 0.86 U.S. GAAP net income per diluted share $ 0.92 $ 0.86 U.S. GAAP and non-GAAP number of shares used for per diluted share calculation 1,291,469 1,304,066 Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and Operating Income(in thousands, except percentages)(unaudited) Three Months Ended December 29,2024 September 29,2024 U.S. GAAP gross margin $ 2,072,981 $ 2,002,683 Pre-tax non-GAAP items: Amortization related to intangible assets acquired through certain business combinations 2,817 3,076 EDC related liability valuation increase 1,353 3,263 Non-GAAP gross margin $ 2,077,151 $ 2,009,022 U.S. GAAP gross margin as a percentage of revenue 47.4 % 48.0 % Non-GAAP gross margin as a percentage of revenue 47.5 % 48.2 % U.S. GAAP operating expenses $ 739,097 $ 738,486 Pre-tax non-GAAP items: Amortization related to intangible assets acquired through certain business combinations (538) (692) EDC related liability valuation increase (4,058) (15,646) Non-GAAP operating expenses $ 734,501 $ 722,148 U.S. GAAP operating income $ 1,333,884 $ 1,264,197 Non-GAAP operating income $ 1,342,650 $ 1,286,874 U.S. GAAP operating income as percent of revenue 30.5 % 30.3 % Non-GAAP operating income as a percent of revenue 30.7 % 30.9 % Lam Research Corporation Contacts:Ram Ganesh, Investor Relations, phone: 510-572-1615, e-mail: [email protected] SOURCE Lam Research Corporation WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Lam Research Corporation Reports Financial Results for the Quarter Ended December 29, 2024

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