01—Abstract
Summary
Summary of the 10-Q filed January 31, 2025. Cited figures are marked; the original filing is the authoritative source.
Lam Research Corporation (LRCX) reported robust financial results for the second quarter of fiscal year 2025, demonstrating significant year-over-year growth in both revenue and net income.
Revenue increased to $4.376 billiona, up from $3.758 billion in the prior year's quarter, driven by a strong rebound in equipment spending from memory manufacturers, particularly in NAND and DRAM segments. Net income also saw a substantial rise to $1.191 billion, or $0.92 per diluted share, compared to $954 million, or $0.72 per diluted share, in the corresponding quarter of the previous year. The company highlighted continued strength in its customer support business, which complements its core systems revenue.
Despite a slight decrease in gross margin percentage due to an unfavorable customer mix, overall profitability remained strong. Lam Research also emphasized its commitment to returning capital to shareholders through share repurchases and dividends, while maintaining a healthy cash position of $5.7 billionb, underscoring its financial stability and operational execution amidst a dynamic semiconductor industry landscape.
02—Key points
Key Highlights
- Revenue for the quarter reached $4.376 billion, an increase of 16.4% year-over-year, driven by strong demand for wafer fabrication equipment.
- Net income surged to $1.191 billion, a 24.8% increase year-over-year, resulting in diluted EPS of $0.92.
- Gross margin improved to 47.4% in the current quarter, compared to 46.5% in the prior year's quarter, reflecting improved operational efficiencies, though slightly down from the previous quarter due to customer mix.
- Systems revenue increased significantly, indicating strong new equipment orders, while customer support revenue also showed robust growth.
- The company repurchased approximately $650.4 million of its common stock during the quarter, demonstrating a commitment to shareholder returns.
- Lam Research maintained a strong liquidity position with $5.7 billion in cash, cash equivalents, and restricted cash as of December 29, 2024.
- The company completed a ten-for-one stock split on October 2, 2024, with all historical per-share data retroactively adjusted.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, Lam Research Corp kept $0.27.
- Revenue$4.38B100.0%
- Cost of revenue−$2.30B52.6%
- Gross profit$2.07B47.4%
- Operating costs−$739.1M16.9%
- Operating income$1.33B30.5%
- Interest, other & tax−$142.9M3.3%
- Net income$1.19B27.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed January 31, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $4.38B$3.76B | +16.4% |
| Cost of Revenue | $2.30B$2.00B | +15.1% |
| Gross Profit | $2.07B$1.76B | +18.0% |
| R&D Expenses | $494.95M$469.71M | +5.4% |
| SG&A Expenses | $244.15M$228.84M | +6.7% |
| Operating Expenses | $739.10M$700.24M | +5.5% |
| Operating Income | $1.33B$1.06B | +26.2% |
| Net Income | $1.19B$954.27M | +24.8% |
| EPS (Basic) | $0.93$0.72 | +29.2% |
| EPS (Diluted) | $0.92$0.72 | +27.8% |
| Shares Outstanding (Basic) | 1.29B1.32B | −2.2% |
| Shares Outstanding (Diluted) | 1.29B1.32B | −2.3% |
05—Questions
Frequently Asked Questions
What were the main drivers of Lam Research's revenue growth in this quarter?
Revenue growth was primarily driven by increased equipment spending from customers in the memory market, specifically in the NAND and DRAM segments. This was supported by a strong performance in the company's customer support business.
How did the company's profitability change compared to the previous year?
Profitability significantly improved, with net income rising by 24.8% year-over-year to $1.191 billion. This translated to diluted earnings per share of $0.92, up from $0.72 in the prior year's quarter.
What is the company's outlook on its financial health and liquidity?
Lam Research maintains a strong liquidity position with $5.7 billion in cash, cash equivalents, and restricted cash. The company expects its cash flows from operations, combined with its current cash balances, to be sufficient to support its anticipated levels of operations, investments, and capital expenditures for at least the next twelve months.
How is the company returning capital to shareholders?
The company continues to return capital to shareholders through share repurchases and dividend payments. During the quarter, approximately $650.4 million was used for share repurchases, and $297.6 million was paid in dividends.
06—Continue