01—Abstract
Summary
Summary of the 10-K filed August 20, 2019. Cited figures are marked; the original filing is the authoritative source.
Lam Research Corporation (LRCX) reported its fiscal year 2019 results, showcasing resilience in a dynamic semiconductor capital equipment market.
The company experienced a revenue decrease of 12.9% to $9.65 billiona compared to fiscal year 2018, primarily due to lower customer demand. Despite this, Lam Research maintained a strong gross margin of 45.1%. The company continues to invest significantly in research and development, focusing on critical wafer fabrication technologies such as deposition, etch, and clean, which are essential for enabling next-generation semiconductor devices.
Lam Research's strategic focus remains on increasing its relevance with key customers by providing innovative solutions that address the evolving challenges in semiconductor manufacturing, particularly with advancements like 3D architectures and multiple patterning. The company's robust balance sheet, with approximately $5.7 billionb in cash, cash equivalents, and investments as of June 30, 2019, provides a solid foundation for continued investment and operational flexibility. Management is confident in the company's long-term positioning driven by technology inflections in the industry.
02—Key points
Key Highlights
- Revenue for fiscal year 2019 decreased by 12.9% to $9.65 billion, reflecting softened customer demand in the semiconductor capital equipment market.
- Gross margin remained strong at 45.1% for fiscal year 2019, though down from 46.6% in fiscal year 2018, attributed to lower factory utilization.
- Significant ongoing investment in Research and Development (R&D) is a priority, with FY2019 R&D expenses totaling $1.19 billion, representing 12.3% of revenue.
- The company continued its share repurchase program, acquiring approximately $2.0 billion of Common Stock under the $5.0 billion authorization during fiscal year 2019.
- Lam Research maintains a strong liquidity position with $5.7 billion in cash, cash equivalents, and investments as of June 30, 2019.
- Geographically, Asia, particularly Korea, China, Japan, and Taiwan, continues to represent the majority of Lam Research's revenue.
- The company highlighted the strategic importance of technological inflections like 3D scaling and multiple patterning, which are expected to drive future demand for its equipment and services.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Lam Research Corp kept $0.23.
- Revenue$9.65B100.0%
- Cost of revenue−$5.30B54.9%
- Gross profit$4.36B45.1%
- Operating costs−$1.89B19.6%
- Operating income$2.46B25.5%
- Interest, other & tax−$273.3M2.8%
- Net income$2.19B22.7%
Where FY2019 revenue went
$9.65B- Cost of revenue: $5.30B, 55% of revenue
- Net income: $2.19B, 23% of revenue
- R&D: $1.19B, 12% of revenue
- SG&A: $702.4M, 7.3% of revenue
- Interest, other & tax: $273.3M, 2.8% of revenue
Kept 23% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed August 20, 2019Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $9.65B$11.08B | −12.9% |
| Cost of Revenue | $5.30B$5.91B | −10.4% |
| Gross Profit | $4.36B$5.17B | −15.6% |
| R&D Expenses | $1.19B$1.19B | +0.2% |
| SG&A Expenses | $702.41M$762.22M | −7.8% |
| Operating Expenses | $1.89B$1.95B | −3.0% |
| Operating Income | $2.46B$3.21B | −23.3% |
| Interest Expense | $117.26M$97.39M | +20.4% |
| Net Income | $2.19B$2.38B | −7.9% |
| EPS (Basic) | $1.44$1.47 | −2.4% |
| EPS (Diluted) | $1.37$1.32 | +4.0% |
| Shares Outstanding (Basic) | 1.52B1.62B | −5.7% |
| Shares Outstanding (Diluted) | 1.60B1.81B | −11.5% |
05—Questions
Frequently Asked Questions
What was Lam Research's revenue performance in fiscal year 2019?
Lam Research's revenue for fiscal year 2019 was $9.65 billion, a decrease of 12.9% compared to $11.08 billion in fiscal year 2018. This decline was attributed to reduced customer demand for semiconductor equipment.
How is the company managing its financial resources and liquidity?
As of June 30, 2019, Lam Research reported a strong liquidity position with $5.7 billion in cash, cash equivalents, and investments. The company also actively managed its capital through significant share repurchases, returning value to shareholders while maintaining investment in R&D and operational capabilities.
What are Lam Research's key areas of investment and strategic focus?
Lam Research continues to make substantial investments in research and development, focusing on core competencies in deposition, etch, and clean technologies. The company's strategic focus is on increasing its relevance with customers by providing solutions for advanced semiconductor manufacturing challenges, such as 3D architectures and next-generation device fabrication.
What is the company's geographic revenue breakdown?
The majority of Lam Research's revenue is generated internationally, with the Asia region being dominant. In fiscal year 2019, key regions included Korea (23% of revenue), China (22%), Japan (20%), and Taiwan (17%).
06—Continue