10-QPeriod: Q3 FY2018

LAM RESEARCH CORP Quarterly Report for Q3 Ended Mar 25, 2018

Filed April 24, 2018For Securities:LRCX

Summary

Lam Research Corporation (LRCX) reported strong revenue growth in the third quarter of fiscal year 2018, with a significant increase driven by memory customer investments. Revenue for the quarter ending March 25, 2018, reached $2.89 billion, up from $2.15 billion in the prior year's comparable quarter. Net income also saw a substantial rise to $778.8 million, translating to a diluted EPS of $4.33, compared to $574.7 million and $3.10 respectively in the prior year. The company's financial performance reflects a robust demand environment in the semiconductor industry. The company continues to invest heavily in research and development to maintain its leadership in wafer fabrication equipment. Despite increased operating expenses, Lam Research maintained a healthy gross margin of 46.0%. The company also highlighted a significant increase in its cash and investments balance, ending the quarter with $6.7 billion, indicating strong cash flow generation. Management expressed confidence in their ability to fund operations, investments, and capital distributions, supported by robust cash flows and existing credit facilities.

Financial Highlights

55 data points
Beta

Revenue

$2.89B

46.0% Gross Margin

Net Income

$778.80M

26.9% Net Margin

EPS (Diluted)

$0.43

Total Assets

$13.66B

Cash & Equivalents

$4.70B

Free Cash Flow

$1.05B

Financial Statements
Beta
Revenue$2.89B
Cost of Revenue$1.56B
Gross Profit$1.33B
R&D Expenses$305.41M
SG&A Expenses$197.79M
Operating Expenses$503.20M
Operating Income$827.51M
Interest Expense$25.73M
Net Income$778.80M
EPS (Basic)$0.48
EPS (Diluted)$0.43
Shares Outstanding (Basic)1.62B
Shares Outstanding (Diluted)1.80B

Key Highlights

  • 1Revenue for the quarter ending March 25, 2018, was $2.89 billion, a significant increase from $2.15 billion in the same period last year.
  • 2Net income rose to $778.8 million, with diluted EPS reaching $4.33, up from $574.7 million and $3.10 respectively in the prior year.
  • 3Gross margin remained strong at 46.0%, despite an increase in operating expenses.
  • 4Research and Development (R&D) expenses increased to $305.4 million, reflecting continued investment in innovation.
  • 5Total assets grew to $13.66 billion, with a substantial increase in cash and cash equivalents to $4.70 billion.
  • 6The company repurchased $1.0 billion of common stock through accelerated share repurchase agreements initiated in November 2017.
  • 7The Tax Cuts and Jobs Act of 2017 led to significant provisional adjustments in income tax expense, impacting the effective tax rate.

Frequently Asked Questions

The primary driver of the revenue increase was increased investments from the company's memory customers, reflecting strong demand in the semiconductor industry.

R&D expenses increased by approximately $39.4 million for the three months ended March 25, 2018, compared to the same period in the prior year, reflecting continued investment in leading-edge deposition, plasma etch, and single-wafer clean technologies.

Lam Research had $6.7 billion in total cash, cash equivalents, investments, and restricted cash and investments as of March 25, 2018, indicating a strong liquidity position.

The Tax Cuts and Jobs Act of 2017 has led to significant provisional adjustments in income tax expense, including a one-time transition tax on unrepatriated foreign earnings. These adjustments are subject to further evaluation and potential changes under SAB 118.