Lam Research Corporation Reports Financial Results for the Quarter Ended March 31, 2024
- Revenue of $3.79 billion and U.S. GAAP diluted EPS of $7.34 for the March 2024 quarter.
- Non-GAAP gross margin of 48.7% and non-GAAP diluted EPS of $7.79.
- Cash and cash equivalents increased to $5.7 billion.
- China contributed 42% of the revenue.
- Guidance for the quarter ended June 30, 2024, expects revenue of around $3.8 billion.
- None.
Lam Research Corporation's reported revenue of
From an investment standpoint, the slight uptick in diluted EPS from
The geographic distribution of revenue with
For retail investors, understanding the revenue segmentation between systems and customer support-related services is vital, as it reflects the company's revenue diversification and potential for recurring income from support services, which can be less volatile than system sales. However, the reported decrease in customer support-related revenue and other could raise concerns about the sustainability of service-based revenue streams.
Looking at the balance sheet dynamics, the slight increase in cash and equivalents to
The non-GAAP outlook provided for the June 2024 quarter offers a stable revenue expectation with a
Highlights for the March 2024 quarter were as follows:
- Revenue of
$3.79 billion U.S. GAAP gross margin of47.5% ,U.S. GAAP operating income as a percentage of revenue of27.9% , andU.S. GAAP diluted EPS of$7.34 - Non-GAAP gross margin of
48.7% , non-GAAP operating income as a percentage of revenue of30.3% , and non-GAAP diluted EPS of$7.79
Key Financial Data for the Quarters Ended March 31, 2024 and December 24, 2023 (in thousands, except per-share data, percentages, and basis points)
| ||||||
March 2024 | December 2023 | Change Q/Q | ||||
Revenue | $ 3,793,558 | $ 3,758,259 | + 0.9 % | |||
Gross margin as percentage of revenue | 47.5 % | 46.8 % | + 70 bps | |||
Operating income as percentage of revenue | 27.9 % | 28.1 % | - 20 bps | |||
Diluted EPS | $ 7.34 | $ 7.22 | + 1.7 % | |||
Non-GAAP | ||||||
March 2024 | December 2023 | Change Q/Q | ||||
Revenue | $ 3,793,558 | $ 3,758,259 | + 0.9 % | |||
Gross margin as percentage of revenue | 48.7 % | 47.6 % | + 110 bps | |||
Operating income as percentage of revenue | 30.3 % | 30.0 % | + 30 bps | |||
Diluted EPS | $ 7.79 | $ 7.52 | + 3.6 % | |||
For the March 2024 quarter, revenue was
Non-GAAP Financial Results
For the March 2024 quarter, non-GAAP gross margin was
"With solid revenue and earnings per share performance in the March quarter, Lam is off to a strong start in calendar 2024" said Tim Archer, Lam Research's President and Chief Executive Officer. "As our customers address the challenges in scaling semiconductors to meet the power and speed requirements for driving AI transformation, Lam is strengthening its leadership and is well-positioned for the significant opportunities ahead."
Balance Sheet and Cash Flow Results
Cash and cash equivalents, short-term investments, and restricted cash and investments balances increased slightly to
Deferred revenue at the end of the March 2024 quarter decreased to
Revenue The geographic distribution of revenue during the March 2024 quarter is shown in the following table:
| |
Region | Revenue |
42 % | |
24 % | |
9 % | |
9 % | |
6 % | |
5 % | |
5 % |
The following table presents revenue disaggregated between system and customer support-related revenue:
| |||||
Three Months Ended | |||||
March 31, | December 24, | March 26, | |||
(In thousands) | |||||
Systems revenue | $ 2,395,817 | $ 2,299,286 | $ 2,256,033 | ||
Customer support-related revenue and other | 1,397,741 | 1,458,973 | 1,613,536 | ||
$ 3,793,558 | $ 3,758,259 | $ 3,869,569 | |||
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 June 30, 2024, Lam is providing the following guidance:
| ||||||||||
Reconciling Items | Non-GAAP | |||||||||
Revenue | +/- | — | +/- | |||||||
Gross margin as a percentage of revenue | 46.7 % | +/- | 1 % | $ 30 | Million | 47.5 % | +/- | 1 % | ||
Operating income as a percentage of revenue | 28.3 % | +/- | 1 % | $ 43 | Million | 29.5 % | +/- | 1 % | ||
Net income per diluted share | +/- | $ 39 | Million | +/- | ||||||
Diluted share count | 131 million | — | 131 million | |||||||
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.
- Gross margin as a percentage of revenue - transformational costs,
$18 million $9 million $3 million $30 million - Operating income as a percentage of revenue - transformational costs,
$29 million $10 million $4 million $43 million - Net income per diluted share - transformational costs,
$29 million $10 million $4 million $1 million $5 million $39 million
Use of Non-GAAP Financial Results
In addition to
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
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 performance in calendar year 2024; the objectives of our customers; the requirements for driving artificial intelligence transformation; the strengthening of our leadership; and the significance of the opportunities ahead and Lam's positioning relative to those opportunities. Some factors that may affect these forward-looking statements include: trade regulations, export controls, trade disputes, and other geopolitical tensions may inhibit our ability to sell our products; business, political and/or regulatory conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate or change; the actions of our customers and competitors may be inconsistent with our expectations; 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 25, 2023 and our quarterly report on Form 10-Q for the fiscal quarter ended December 24, 2023. 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
Consolidated Financial Tables Follow.
###
LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data and percentages) (unaudited)
| |||||||||
Three Months Ended | Nine Months Ended | ||||||||
March 31, | December 24, | March 26, | March 31, | March 26, | |||||
Revenue | $ 3,793,558 | $ 3,758,259 | $ 3,869,569 | ||||||
Cost of goods sold | 1,977,820 | 1,985,847 | 2,197,237 | 5,783,087 | 7,835,743 | ||||
Restructuring charges, net - cost of goods sold | 15,202 | 14,957 | 66,720 | 38,099 | 66,720 | ||||
Total cost of goods sold | 1,993,022 | 2,000,804 | 2,263,957 | 5,821,186 | 7,902,463 | ||||
Gross margin | 1,800,536 | 1,757,455 | 1,605,612 | 5,212,693 | 6,318,796 | ||||
Gross margin as a percent of revenue | 47.5 % | 46.8 % | 41.5 % | 47.2 % | 44.4 % | ||||
Research and development | 512,274 | 469,712 | 429,451 | 1,404,615 | 1,325,211 | ||||
Selling, general and administrative | 215,904 | 228,843 | 193,500 | 651,770 | 632,922 | ||||
Restructuring charges, net - operating expenses | 15,246 | 1,688 | 40,408 | 18,955 | 40,408 | ||||
Total operating expenses | 743,424 | 700,243 | 663,359 | 2,075,340 | 1,998,541 | ||||
Operating income | 1,057,112 | 1,057,212 | 942,253 | 3,137,353 | 4,320,255 | ||||
Operating income as a percent of revenue | 27.9 % | 28.1 % | 24.4 % | 28.4 % | 30.4 % | ||||
Other income (expense), net | 36,073 | 29,839 | (3,331) | 68,513 | (74,660) | ||||
Income before income taxes | 1,093,185 | 1,087,051 | 938,922 | 3,205,866 | 4,245,595 | ||||
Income tax expense | (127,359) | (132,785) | (124,914) | (398,376) | (537,201) | ||||
Net income | $ 965,826 | $ 954,266 | $ 814,008 | $ 2,807,490 | $ 3,708,394 | ||||
Net income per share: | |||||||||
Basic | $ 7.38 | $ 7.25 | $ 6.03 | $ 21.32 | $ 27.28 | ||||
Diluted | $ 7.34 | $ 7.22 | $ 6.01 | $ 21.22 | $ 27.20 | ||||
Number of shares used in per share calculations: | |||||||||
Basic | 130,838 | 131,629 | 134,924 | 131,663 | 135,945 | ||||
Diluted | 131,518 | 132,220 | 135,395 | 132,282 | 136,314 | ||||
Cash dividend declared per common share | $ 2.00 | $ 2.00 | $ 1.725 | $ 6.00 | $ 5.175 | ||||
LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
| |||||
March 31, | December 24, | June 25, | |||
(unaudited) | (unaudited) | (1) | |||
ASSETS | |||||
Cash and cash equivalents | $ 5,672,232 | $ 5,623,289 | $ 5,337,056 | ||
Investments | — | 14,720 | 37,641 | ||
Accounts receivable, net | 2,203,707 | 2,707,458 | 2,823,376 | ||
Inventories | 4,322,967 | 4,429,906 | 4,816,190 | ||
Prepaid expenses and other current assets | 289,530 | 279,239 | 214,149 | ||
Total current assets | 12,488,436 | 13,054,612 | 13,228,412 | ||
Property and equipment, net | 2,181,741 | 2,147,482 | 1,856,672 | ||
Goodwill and intangible assets | 1,768,998 | 1,777,593 | 1,790,943 | ||
Other assets | 1,840,475 | 1,804,165 | 1,905,616 | ||
Total assets | $ 18,279,650 | $ 18,783,852 | $ 18,781,643 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current portion of long-term debt and finance lease obligations | $ 505,066 | $ 3,779 | $ 8,358 | ||
Other current liabilities | 3,925,023 | 4,268,604 | 4,176,560 | ||
Total current liabilities | 4,430,089 | 4,272,383 | 4,184,918 | ||
Long-term debt and finance lease obligations | 4,478,385 | 4,980,005 | 5,003,183 | ||
Income taxes payable | 832,397 | 797,556 | 882,084 | ||
Other long-term liabilities | 516,678 | 511,430 | 501,286 | ||
Total liabilities | 10,257,549 | 10,561,374 | 10,571,471 | ||
Stockholders' equity (2) | 8,022,101 | 8,222,478 | 8,210,172 | ||
Total liabilities and stockholders' equity | $ 18,279,650 | $ 18,783,852 | $ 18,781,643 | ||
(1) | Derived from audited financial statements. |
(2) | Common shares issued and outstanding were 130,736 as of March 31, 2024, 131,278 as of December 24, 2023, and 133,297 as of June 25, 2023. |
LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited)
| |||||||||
Three Months Ended | Nine Months Ended | ||||||||
March 31, | December 24, | March 26, | March 31, | March 26, | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
Net income | $ 965,826 | $ 954,266 | $ 814,008 | $ 2,807,490 | $ 3,708,394 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 89,922 | 90,941 | 91,663 | 271,342 | 252,828 | ||||
Deferred income taxes | (24,621) | (88,747) | 7,195 | (137,606) | (133,101) | ||||
Equity-based compensation expense | 76,854 | 69,901 | 73,911 | 213,966 | 218,105 | ||||
Other, net | 10,210 | 4,182 | 1,559 | 14,242 | 11,537 | ||||
Changes in operating assets and liabilities | 266,645 | 423,297 | 738,102 | 620,405 | (1,550) | ||||
Net cash provided by operating activities | 1,384,836 | 1,453,840 | 1,726,438 | 3,789,839 | 4,056,213 | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
Capital expenditures and intangible assets | (103,654) | (115,276) | (119,457) | (295,922) | (422,898) | ||||
Business acquisitions, net of cash acquired | — | — | — | — | (119,955) | ||||
Net maturities and sales of available-for-sale securities | 14,650 | 15,841 | 39,414 | 37,766 | 71,852 | ||||
Other, net | (3,356) | (2,523) | (4,289) | (10,845) | (8,381) | ||||
Net cash used for investing activities | (92,360) | (101,958) | (84,332) | (269,001) | (479,382) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
Principal payments on debt, including finance lease obligations | (1,060) | (986) | (2,209) | (255,155) | (21,145) | ||||
Treasury stock purchases | (980,561) | (645,458) | (581,943) | (2,469,257) | (1,147,998) | ||||
Dividends paid | (262,707) | (264,414) | (233,977) | (757,453) | (675,572) | ||||
Reissuance of treasury stock related to employee stock purchase plan | — | 53,081 | — | 53,081 | 44,996 | ||||
Proceeds from issuance of common stock | 8,235 | 1,704 | — | 12,757 | 7,673 | ||||
Other, net | 300 | (3,821) | (1,399) | (5,672) | (635) | ||||
Net cash used for financing activities | (1,235,793) | (859,894) | (819,528) | (3,421,699) | (1,792,681) | ||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | (8,452) | 6,725 | (2,302) | (12,758) | (1,349) | ||||
Net change in cash, cash equivalents, and restricted cash | 48,231 | 498,713 | 820,276 | 86,381 | 1,782,801 | ||||
Cash, cash equivalents, and restricted cash at beginning of period (1) | 5,625,522 | 5,126,809 | 4,736,060 | 5,587,372 | 3,773,535 | ||||
Cash, cash equivalents, and restricted cash at end of period (1) | $ 5,673,753 | $ 5,625,522 | $ 5,556,336 | $ 5,673,753 | $ 5,556,336 | ||||
(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 | |||
March 31, | December 24, | ||
Revenue | $ 3,793,558 | $ 3,758,259 | |
Gross margin | $ 1,847,752 | $ 1,790,388 | |
Gross margin as percentage of revenue | 48.7 % | 47.6 % | |
Operating expenses | $ 697,672 | $ 662,259 | |
Operating income | $ 1,150,080 | $ 1,128,129 | |
Operating income as a percentage of revenue | 30.3 % | 30.0 % | |
Net income | $ 1,024,206 | $ 994,285 | |
Net income per diluted share | $ 7.79 | $ 7.52 | |
Shares used in per share calculation - diluted | 131,518 | 132,220 | |
Reconciliation of (in thousands, except per share data) (unaudited)
| |||
Three Months Ended | |||
March 31, | December 24, | ||
$ 965,826 | $ 954,266 | ||
Pre-tax non-GAAP items: | |||
Amortization related to intangible assets acquired through certain business combinations - cost of goods sold | 3,076 | 2,631 | |
Elective deferred compensation ("EDC") related liability valuation increase - cost of goods sold | 6,963 | 6,492 | |
Restructuring charges, net - cost of goods sold | 15,202 | 14,957 | |
Transformational costs - cost of goods sold | 13,270 | 8,853 | |
Impairment of long-lived assets - cost of goods sold | 8,705 | — | |
EDC related liability valuation increase - research and development | 12,534 | 11,685 | |
Transformational costs - Research and development | 4,423 | — | |
Amortization related to intangible assets acquired through certain business combinations - selling, general and administrative | 770 | 770 | |
EDC related liability valuation increase - selling, general and administrative | 8,356 | 7,790 | |
Transformational costs - selling, general and administrative | 4,423 | 16,051 | |
Restructuring charges, net - operating expenses | 15,246 | 1,688 | |
Amortization of note discounts - other income (expense), net | 753 | 746 | |
Gain on EDC related asset - other income (expense), net | (26,495) | (25,530) | |
Net income tax benefit on non-GAAP items | (8,846) | (6,114) | |
Non-GAAP net income | $ 1,024,206 | $ 994,285 | |
Non-GAAP net income per diluted share | $ 7.79 | $ 7.52 | |
$ 7.34 | $ 7.22 | ||
131,518 | 132,220 | ||
Reconciliation of Operating Expenses and Operating Income (in thousands, except percentages) (unaudited)
| |||
Three Months Ended | |||
March 31, | December 24, | ||
$ 1,800,536 | $ 1,757,455 | ||
Pre-tax non-GAAP items: | |||
Amortization related to intangible assets acquired through certain business combinations | 3,076 | 2,631 | |
EDC related liability valuation increase | 6,963 | 6,492 | |
Restructuring charges, net | 15,202 | 14,957 | |
Transformational costs | 13,270 | 8,853 | |
Impairment of long-lived assets | 8,705 | — | |
Non-GAAP gross margin | $ 1,847,752 | $ 1,790,388 | |
47.5 % | 46.8 % | ||
Non-GAAP gross margin as a percentage of revenue | 48.7 % | 47.6 % | |
$ 743,424 | $ 700,243 | ||
Pre-tax non-GAAP items: | |||
Amortization related to intangible assets acquired through certain business combinations | (770) | (770) | |
EDC related liability valuation increase | (20,890) | (19,475) | |
Restructuring charges, net | (15,246) | (1,688) | |
Transformational costs | (8,846) | (16,051) | |
Non-GAAP operating expenses | $ 697,672 | $ 662,259 | |
$ 1,057,112 | $ 1,057,212 | ||
Non-GAAP operating income | $ 1,150,080 | $ 1,128,129 | |
27.9 % | 28.1 % | ||
Non-GAAP operating income as a percent of revenue | 30.3 % | 30.0 % | |
Lam Research Corporation Contacts:
Ram Ganesh, Investor Relations, phone: 510-572-1615, e-mail: investor.relations@lamresearch.com
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SOURCE Lam Research Corporation
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