01—Abstract
Summary
Summary of the 10-K filed August 18, 2020. Cited figures are marked; the original filing is the authoritative source.
Lam Research Corporation (LRCX) reported robust financial performance for the fiscal year ending June 28, 2020, with revenues reaching $10.04 billiona, a 4.1% increase over the prior year.
This growth was primarily driven by strong customer demand in the semiconductor industry, particularly for advanced wafer fabrication equipment. The company maintained a healthy gross margin of 45.9%b, demonstrating its ability to manage costs effectively despite some COVID-19 related disruptions impacting factory and field utilization. Looking ahead, Lam Research is well-positioned to capitalize on secular demand trends in semiconductors, including the growing importance of 3D device scaling and advanced packaging.
The company continues to invest heavily in research and development to maintain its technological leadership in deposition, etch, and clean processes. Key risks include the cyclical nature of the semiconductor industry, potential impacts from global economic conditions, supply chain disruptions, and geopolitical tensions, particularly concerning sales in China. However, the company's strong product portfolio, customer relationships, and strategic focus on innovation provide a solid foundation for future growth.
02—Key points
Key Highlights
- Revenue grew by 4.1% to $10.04 billion for the fiscal year ended June 28, 2020, indicating strong demand for wafer fabrication equipment.
- Gross margin remained strong at 45.9%, reflecting effective cost management, though partially impacted by lower factory and field utilization.
- The company continued significant R&D investment (12.5% of revenue) to drive product innovation and maintain a competitive edge in deposition, etch, and clean technologies.
- Lam Research's backlog increased significantly to $2.9 billion as of June 28, 2020, up from $1.6 billion in the prior year, signaling strong future revenue potential.
- China represented a growing portion of revenue, reaching 31% in FY2020, highlighting the region's increasing importance in the semiconductor market.
- The company actively returned capital to shareholders through $1.4 billion in share repurchases and $657 million in dividends during FY2020.
- Despite COVID-19 related production and supply chain disruptions, the company maintained effective internal controls and disclosure procedures, with remote work capabilities supporting operations.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Lam Research Corp kept $0.22.
- Revenue$10.04B100.0%
- Cost of revenue−$5.44B54.1%
- Gross profit$4.61B45.9%
- Operating costs−$1.93B19.3%
- Operating income$2.67B26.6%
- Interest, other & tax−$422.0M4.2%
- Net income$2.25B22.4%
Where FY2020 revenue went
$10.04B- Cost of revenue: $5.44B, 54% of revenue
- Net income: $2.25B, 22% of revenue
- R&D: $1.25B, 12% of revenue
- SG&A: $682.5M, 6.8% of revenue
- Interest, other & tax: $422.0M, 4.2% of revenue
Kept 22% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed August 18, 2020Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $10.04B$9.65B | +4.1% |
| Cost of Revenue | $5.44B$5.30B | +2.7% |
| Gross Profit | $4.61B$4.36B | +5.7% |
| R&D Expenses | $1.25B$1.19B | +5.1% |
| SG&A Expenses | $682.48M$702.41M | −2.8% |
| Operating Expenses | $1.93B$1.89B | +2.2% |
| Operating Income | $2.67B$2.46B | +8.5% |
| Interest Expense | $177.44M$117.26M | +51.3% |
| Net Income | $2.25B$2.19B | +2.8% |
| EPS (Basic) | $1.55$1.44 | +8.2% |
| EPS (Diluted) | $1.51$1.37 | +10.2% |
| Shares Outstanding (Basic) | 1.45B1.52B | −5.0% |
| Shares Outstanding (Diluted) | 1.49B1.60B | −6.8% |
05—Questions
Frequently Asked Questions
What was Lam Research's revenue and profitability performance in FY2020?
Lam Research reported revenue of $10.04 billion for the fiscal year ended June 28, 2020, a 4.1% increase from the prior year. Net income was $2.25 billion, resulting in diluted earnings per share of $15.10, up 10.2% year-over-year. The gross margin was 45.9%.
What are the key growth drivers and risks for Lam Research?
Key growth drivers include secular demand for semiconductors, technological inflections like 3D device scaling, multiple patterning, and advanced packaging. Significant risks include the cyclical nature of the semiconductor industry, potential disruptions from COVID-19, global economic conditions, supply chain challenges, geopolitical risks (especially concerning China), and intense competition.
How is Lam Research returning capital to shareholders?
In FY2020, Lam Research repurchased approximately $1.4 billion of its common stock and paid $657 million in dividends, demonstrating a commitment to returning capital to shareholders.
What is the company's financial position and liquidity status?
As of June 28, 2020, Lam Research had $7.0 billion in cash, cash equivalents, and investments, providing substantial liquidity. The company's cash flow from operations was $2.1 billion, which was used to fund stock repurchases, dividends, and capital expenditures.
06—Continue