How did Lam Research perform in the December 2024 quarter?

Lam reported revenue of $4.38 billion, up 5% sequentially, with U.S. GAAP diluted EPS of $0.92, up 7%. Operating margin improved to 30.5%, while gross margin eased to 47.4%.

What drove the revenue growth this quarter?

Systems revenue, which covers new leading-edge deposition, etch and clean equipment, rose to $2.63 billion from $2.39 billion sequentially. Customer support-related revenue was roughly flat to slightly down at $1.75 billion.

Why did operating cash flow decline significantly?

Operating cash flow fell to $742 million from $1.57 billion, mainly because of a $536 million outflow from changes in operating assets and liabilities. Accounts receivable rose to $3.30 billion from $2.94 billion, and capital expenditures roughly doubled to $188 million.

How concentrated is Lam's revenue by geography?

China accounted for 31% of December quarter revenue, followed by Korea at 25% and Taiwan at 17%. This concentration exposes Lam to export controls and geopolitical risk, which the filing specifically flags as a factor that could affect sales.

LRCX 8-K: Earnings & Results

Q: What is the company guiding for the March 2025 quarter?

Lam expects revenue of $4.65 billion (±$300 million), U.S. GAAP gross margin of 47.9% (±1%), operating margin of 31.9% (±1%), and U.S. GAAP diluted EPS of $1.00 (±$0.10) on about 1.29 billion diluted shares.

01—Abstract

Summary

Summary of the 8-K filed January 29, 2025. Cited figures are marked; the original filing is the authoritative source.

Lam Research (LRCX) reported results for the fiscal quarter ended December 29, 2024 (its fiscal Q2 2025) that were strong on the top line and profitability.

Revenue rose 5% sequentially to $4.38 billion^a, up from $4.17 billion, and U.S. GAAP diluted EPS increased 7% to $0.92 from $0.86. U.S. GAAP gross margin edged down 60 basis points to 47.4%, while operating margin expanded 20 basis points to 30.5%. Growth was driven by systems revenue, which rose about 10% sequentially to $2.63 billion, while customer support-related revenue declined slightly to $1.75 billion.

The quarter also showed some cash-flow and balance-sheet pressure. Operating cash flow fell sharply to $742 million^b from $1.57 billion in the prior quarter, mainly because of a $536 million outflow from changes in operating assets and liabilities, including a large rise in accounts receivable to $3.30 billion. Capital expenditures roughly doubled to $188 million, and Lam returned significant capital through $698 million of buybacks and $298 million of dividends.

Cash fell to $5.7 billion^c. Deferred revenue declined modestly, while the estimated future revenue from Japan shipments awaiting customer acceptance rose to $453 million from $184 million. Management guided the March 2025 quarter to revenue of $4.65 billion (±$300 million), U.S. GAAP gross margin of 47.9% (±1%), operating margin of 31.9% (±1%), and U.S. GAAP diluted EPS of $1.00 (±$0.10) on 1.29 billion diluted shares.

CEO Tim Archer emphasized that advanced deposition and etch applications are expected to take a growing share of wafer fabrication equipment (WFE) spending. China remained the largest region at 31%^d of revenue. Overall, the filing points to continued sequential growth and a higher outlook, with the main watch items being working capital intensity and geographic concentration.

02—Key points

Key Highlights

Revenue of $4.38B, up 5% sequentially and 16% year over year from $3.76B in the December 2023 quarter.
U.S. GAAP diluted EPS of $0.92, up 7% sequentially; non-GAAP diluted EPS of $0.91, up 6%.
U.S. GAAP operating margin of 30.5%, up 20 bps sequentially, while gross margin declined 60 bps to 47.4%.
Systems revenue rose about 10% sequentially to $2.63B, while customer support-related revenue fell about 1% to $1.75B.
Operating cash flow dropped to $742M from $1.57B in the prior quarter, driven by a $536M working capital outflow and a $3.30B accounts receivable balance.
Lam returned capital with $698M in share repurchases and $298M in dividends; cash and equivalents declined to $5.67B.
Q3 FY25 guidance: revenue of $4.65B (±$300M), U.S. GAAP EPS of $1.00 (±$0.10), and operating margin of 31.9% (±1%).

03—Questions

Frequently Asked Questions

How did Lam Research perform in the December 2024 quarter?
Lam reported revenue of $4.38 billion, up 5% sequentially, with U.S. GAAP diluted EPS of $0.92, up 7%. Operating margin improved to 30.5%, while gross margin eased to 47.4%.
What drove the revenue growth this quarter?
Systems revenue, which covers new leading-edge deposition, etch and clean equipment, rose to $2.63 billion from $2.39 billion sequentially. Customer support-related revenue was roughly flat to slightly down at $1.75 billion.
Why did operating cash flow decline significantly?
Operating cash flow fell to $742 million from $1.57 billion, mainly because of a $536 million outflow from changes in operating assets and liabilities. Accounts receivable rose to $3.30 billion from $2.94 billion, and capital expenditures roughly doubled to $188 million.
What is the company guiding for the March 2025 quarter?
Lam expects revenue of $4.65 billion (±$300 million), U.S. GAAP gross margin of 47.9% (±1%), operating margin of 31.9% (±1%), and U.S. GAAP diluted EPS of $1.00 (±$0.10) on about 1.29 billion diluted shares.
How concentrated is Lam's revenue by geography?
China accounted for 31% of December quarter revenue, followed by Korea at 25% and Taiwan at 17%. This concentration exposes Lam to export controls and geopolitical risk, which the filing specifically flags as a factor that could affect sales.

04—Continue

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