10-QPeriod: Q1 FY2021

LAM RESEARCH CORP Quarterly Report for Q1 Ended Sep 27, 2020

Filed October 27, 2020For Securities:LRCX

Summary

Lam Research Corporation (LRCX) reported strong financial results for the quarter ending September 27, 2020. Revenue surged to $3.18 billion, a significant increase from $2.17 billion in the same quarter last year, driven by robust demand from foundry customers. This top-line growth translated into a substantial rise in profitability, with net income reaching $823.5 million, or $5.59 per diluted share, up from $465.8 million, or $3.09 per diluted share, in the prior year's comparable quarter. The company's gross margin improved to 47.4%, reflecting favorable customer and product mix, alongside increased factory output. Investments in research and development remained strong, underscoring Lam Research's commitment to innovation in semiconductor manufacturing equipment. The company maintained a healthy liquidity position, with cash, cash equivalents, and investments totaling $6.9 billion, although this saw a slight decrease due to share repurchases and dividend payments, offset by strong operating cash flow.

Financial Highlights

54 data points
Beta

Revenue

$3.18B

47.4% Gross Margin

Net Income

$823.45M

25.9% Net Margin

EPS (Diluted)

$0.56

Total Assets

$15.06B

Cash & Equivalents

$4.13B

Free Cash Flow

$642.51M

Financial Statements
Beta
Revenue$3.18B
Cost of Revenue$1.67B
Gross Profit$1.51B
R&D Expenses$355.37M
SG&A Expenses$189.75M
Operating Expenses$545.12M
Operating Income$961.06M
Interest Expense$52.12M
Net Income$823.45M
EPS (Basic)$0.57
EPS (Diluted)$0.56
Shares Outstanding (Basic)1.45B
Shares Outstanding (Diluted)1.47B

Key Highlights

  • 1Revenue grew significantly to $3.18 billion, up 47% year-over-year, driven by foundry customer investments.
  • 2Net income rose to $823.5 million ($5.59/share diluted) from $465.8 million ($3.09/share diluted) year-over-year.
  • 3Gross margin improved to 47.4% from 45.3% in the prior year's quarter, due to product mix and higher utilization.
  • 4Operating expenses increased due to higher employee-related costs and R&D spending, but remained well-controlled relative to revenue growth.
  • 5The company generated strong operating cash flow of $642.5 million.
  • 6Lam Research maintained a solid cash position of $6.9 billion, despite significant capital returns to shareholders through share repurchases and dividends.

Frequently Asked Questions

The significant increase in revenue to $3.18 billion was primarily driven by increased investments from the company's foundry customers. This reflects strong demand in the semiconductor industry, particularly for the types of wafer fabrication equipment Lam Research provides.

Profitability saw a substantial improvement with net income rising to $823.5 million from $465.8 million in the prior year's quarter. This was fueled by higher revenue, improved gross margins to 47.4% due to a favorable product mix and better factory utilization, and effective management of operating expenses.

Lam Research maintains a strong liquidity position, with cash, cash equivalents, and investments totaling $6.9 billion. While this represents a slight decrease from the previous quarter, it's primarily due to substantial share repurchases and dividend payments, which were more than offset by $642.5 million in cash generated from operations.

The company acknowledges risks related to the ongoing COVID-19 pandemic, including potential disruptions to supply chains, production, and customer demand. They also note the inherent cyclicality of the semiconductor industry and potential impacts from geopolitical factors and trade disputes, particularly concerning sales in China.