01—Abstract
Summary
Summary of the 10-K filed August 24, 2022. Cited figures are marked; the original filing is the authoritative source.
Lam Research Corporation reported strong revenue growth for fiscal year 2022, a 17.8%a increase over fiscal year 2021, driven by robust demand for semiconductor manufacturing equipment across memory, foundry, and logic markets.
Despite this top-line growth, the company experienced a slight decrease in gross margin percentage due to inflationary pressures on material, freight, and labor costs. Research and development expenses increased, reflecting continued investment in innovation.
The company's financial position remains solid, with significant cash reserves and a consistent dividend payment history. Share repurchases were also a key focus, with substantial amounts returned to shareholders through buybacks and dividends.
02—Key points
Key Highlights
- Revenue increased by 17.8% to $17.2 billion in fiscal year 2022, demonstrating strong demand in the semiconductor equipment market.
- Gross margin as a percentage of revenue slightly decreased to 45.7% from 46.5% in the prior year, attributed to inflationary cost pressures and unfavorable customer/product mix.
- Research and development expenses rose by 7.4% to $1.6 billion, underscoring a commitment to innovation and product development.
- The company repurchased $3.9 billion of its common stock in fiscal year 2022, indicating a focus on returning capital to shareholders.
- Cash flow from operations was $3.1 billion, supporting significant capital expenditures, dividends, and share repurchases.
- The majority of revenue (92%) was generated from international sales, highlighting Lam Research's global market presence.
- The company maintained a strong balance sheet with $3.9 billion in cash, cash equivalents, investments, and restricted cash at the end of fiscal year 2022.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Lam Research Corp kept $0.27.
- Revenue$17.23B100.0%
- Cost of revenue−$9.36B54.3%
- Gross profit$7.87B45.7%
- Operating costs−$2.49B14.5%
- Operating income$5.38B31.2%
- Interest, other & tax−$776.5M4.5%
- Net income$4.61B26.7%
Where FY2022 revenue went
$17.23B- Cost of revenue: $9.36B, 54% of revenue
- Net income: $4.61B, 27% of revenue
- R&D: $1.60B, 9.3% of revenue
- SG&A: $885.7M, 5.1% of revenue
- Interest, other & tax: $776.5M, 4.5% of revenue
Kept 27% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed August 24, 2022Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $17.23B$14.63B | +17.8% |
| Cost of Revenue | $9.36B$7.82B | +19.6% |
| Gross Profit | $7.87B$6.81B | +15.7% |
| R&D Expenses | $1.60B$1.49B | +7.4% |
| SG&A Expenses | $885.74M$829.88M | +6.7% |
| Operating Expenses | $2.49B$2.32B | +7.2% |
| Operating Income | $5.38B$4.48B | +20.1% |
| Interest Expense | $181.70M$208.60M | −12.9% |
| Net Income | $4.61B$3.91B | +17.8% |
| EPS (Basic) | $3.29$2.72 | +20.9% |
| EPS (Diluted) | $3.27$2.69 | +21.7% |
| Shares Outstanding (Basic) | 1.40B1.44B | −2.6% |
| Shares Outstanding (Diluted) | 1.41B1.45B | −3.2% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Lam Research's revenue growth in fiscal year 2022?
Lam Research's revenue growth in fiscal year 2022 was primarily driven by strong customer demand for semiconductor capital equipment, fueled by increasing device manufacturing complexity and robust secular demand for semiconductors in NAND, DRAM, and foundry logic markets.
What factors impacted Lam Research's gross margin in fiscal year 2022?
The gross margin percentage slightly decreased in fiscal year 2022 due to inflationary cost pressures, leading to higher spending on material costs, freight, and logistics. Additionally, an unfavorable customer and product mix contributed to the decline, partially offset by reduced variable compensation expenses.
How is Lam Research managing its exposure to supply chain constraints and inflationary pressures?
Lam Research acknowledges that ongoing supply chain constraints and inflationary cost pressures persisted and impacted its ability to fulfill demand. While improvements were seen, the company expects these challenges to continue in the near term, which may negatively impact revenue and gross margins. The company actively worked to obtain and qualify alternative sources for components to mitigate these risks.
What is Lam Research's approach to returning capital to shareholders?
Lam Research demonstrates a commitment to returning capital to shareholders through both dividends and share repurchases. The company has consistently paid quarterly dividends and authorized significant share repurchase programs, actively buying back its common stock during fiscal year 2022 through open market repurchases and accelerated share repurchase agreements.
06—Continue