01—Abstract
Summary
Summary of the 10-K filed August 14, 2018. Cited figures are marked; the original filing is the authoritative source.
Lam Research Corporation's (LRCX) 2018 10-K filing highlights a robust fiscal year characterized by significant revenue growth, driven by increased customer investments in semiconductor technology and capacity.
The company demonstrated strong performance with revenue reaching $11.08 billiona, a 38% increase year-over-year, and net income soaring by 40% to $2.38 billion. This growth is attributed to the company's strategic position in key technology inflections within the semiconductor industry, such as 3D device scaling and advanced packaging. Lam Research's operational efficiency also improved, with gross margin as a percentage of revenue increasing to 46.6%.
The company continued its commitment to innovation and customer support, as evidenced by a substantial increase in R&D spending. Furthermore, Lam Research actively returned capital to shareholders through a significant share repurchase program and an increasing quarterly dividend, underscoring its financial strength and confidence in future prospects.
02—Key points
Key Highlights
- Revenue increased by 38% to $11.08 billion in fiscal year 2018, indicating strong demand for Lam Research's semiconductor manufacturing equipment.
- Net income grew by 40% to $2.38 billion, demonstrating improved profitability.
- Gross margin as a percentage of revenue increased to 46.6%, up from 45.0% in the prior year, reflecting favorable margin mix and higher revenue.
- Research and Development (R&D) expenses increased by 15.1% to $1.19 billion, highlighting the company's continued investment in innovation.
- The company actively repurchased shares, spending $2.7 billion on treasury stock purchases, and increased its quarterly dividend from $0.45 to $1.10 per share.
- International sales represented a substantial majority of revenue (approximately 93%), with Asia, particularly Korea, being the largest regional market.
- The company acquired Coventor, Inc. for $137.6 million to bolster its simulation and modeling capabilities.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, Lam Research Corp kept $0.21.
- Revenue$11.08B100.0%
- Cost of revenue−$5.91B53.4%
- Gross profit$5.17B46.6%
- Operating costs−$1.95B17.6%
- Operating income$3.21B29.0%
- Interest, other & tax−$832.6M7.5%
- Net income$2.38B21.5%
Where FY2018 revenue went
$11.08B- Cost of revenue: $5.91B, 53% of revenue
- Net income: $2.38B, 21% of revenue
- R&D: $1.19B, 11% of revenue
- SG&A: $762.2M, 6.9% of revenue
- Interest, other & tax: $832.6M, 7.5% of revenue
Kept 21% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed August 14, 2018Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $11.08B$8.01B | +38.2% |
| Cost of Revenue | $5.91B$4.41B | +34.1% |
| Gross Profit | $5.17B$3.60B | +43.3% |
| R&D Expenses | $1.19B$1.03B | +15.1% |
| SG&A Expenses | $762.22M$667.49M | +14.2% |
| Operating Expenses | $1.95B$1.70B | +14.7% |
| Operating Income | $3.21B$1.90B | +68.9% |
| Interest Expense | $97.39M$117.73M | −17.3% |
| Net Income | $2.38B$1.70B | +40.2% |
| EPS (Basic) | $1.47$1.05 | +40.7% |
| EPS (Diluted) | $1.32$0.92 | +42.5% |
| Shares Outstanding (Basic) | 1.62B1.62B | −0.4% |
| Shares Outstanding (Diluted) | 1.81B1.84B | −1.6% |
05—Questions
Frequently Asked Questions
What was Lam Research's revenue and profit performance in fiscal year 2018?
Lam Research reported a strong fiscal year 2018 with revenue increasing by 38% to $11.08 billion and net income growing by 40% to $2.38 billion, reflecting robust demand from its customers in the semiconductor industry.
How is Lam Research returning capital to shareholders?
The company significantly increased its share repurchase program, authorizing an additional $2.0 billion in March 2018, and also raised its quarterly dividend from $0.45 to $1.10 per share, demonstrating a commitment to returning value to its stockholders.
What are the key growth drivers for Lam Research?
Growth is driven by increasing customer investments in semiconductor technology and capacity, fueled by demand from markets like cloud computing and the Internet of Things. Key technology inflections such as 3D device scaling and advanced packaging are also significant drivers for Lam Research's deposition, etch, and clean equipment.
What is the company's geographic revenue breakdown?
The majority of Lam Research's revenue comes from international sales, with Asia being the dominant region. In fiscal year 2018, Korea accounted for 35% of revenue, followed by Japan (17%), China (16%), and Taiwan (13%).
06—Continue