01—Abstract
Summary
Summary of the 8-K filed October 22, 2025. Cited figures are marked; the original filing is the authoritative source.
Lam Research (LRCX) reported results for the fiscal quarter ended September 28, 2025, with revenue of $5.32 billiona, up 3% sequentially and up roughly 28% from $4.17 billion a year earlier.
U.S. GAAP gross margin expanded to 50.4% (up 30 bps Q/Q) and GAAP operating margin rose to 34.4% (up 70 bps Q/Q), while GAAP diluted EPS fell 8% sequentially to $1.24b, largely because of a $290.5 million income tax expense that included a $27.5 million charge from a change in tax law. Non-GAAP diluted EPS was $1.26, down 5% from $1.33 in the prior quarter. Management attributed results to demand for its products tied to AI-driven semiconductor manufacturing inflections.
Cash generation remained strong: operating cash flow was $1.78 billion, cash and equivalents rose to $6.69 billionc, and deferred revenue increased to $2.77 billion. Operating cash flow fell from $2.55 billion in the June quarter as working capital changes contributed far less. Lam continued returning capital, with $976 million in treasury stock purchases and $292 million in dividends paid, and it raised its quarterly dividend to $0.26 per share from $0.23.
Systems revenue rose to $3.55 billiond from $3.44 billion sequentially, while customer support and related revenue was roughly flat at $1.78 billion. For the December 2025 quarter, Lam guided to revenue of $5.20 billion (±$300 million), non-GAAP gross margin of 48.5% (±1%), non-GAAP operating margin of 33.0% (±1%), and non-GAAP diluted EPS of $1.15 (±$0.10) on 1.26 billion diluted shares.
The guidance implies a sequential revenue decline and margin compression. Geographically, China accounted for 43% of September-quarter revenue, a concentration that exposes Lam to export controls and trade tensions, which the company flags as risks.
02—Key points
Key Highlights
- Revenue of $5.32B, up 3% Q/Q and about 28% Y/Y from $4.17B; systems revenue reached $3.55B.
- U.S. GAAP gross margin of 50.4% (+30 bps Q/Q) and operating margin of 34.4% (+70 bps Q/Q), both improving.
- GAAP diluted EPS of $1.24 (down 8% Q/Q) included a $27.5M tax charge from a change in tax law; non-GAAP EPS was $1.26 (down 5%).
- Operating cash flow of $1.78B, down from $2.55B in the prior quarter; cash and equivalents rose to $6.69B.
- Deferred revenue increased to $2.77B; Japan-related future revenue fell sharply to $131M from $342M.
- Quarterly dividend raised to $0.26 per share from $0.23; $976M spent on share repurchases in the quarter.
- December-quarter guidance of $5.20B revenue (±$300M) and non-GAAP EPS of $1.15 (±$0.10), implying sequential declines in revenue and margins; China represented 43% of revenue.
03—Questions
Frequently Asked Questions
How did Lam Research perform in the September 2025 quarter?
Lam reported revenue of $5.32 billion, up 3% sequentially and about 28% year over year. U.S. GAAP gross margin was 50.4% and operating margin was 34.4%, both higher than the prior quarter. GAAP diluted EPS was $1.24, down from $1.35, and non-GAAP EPS was $1.26.
Why did EPS decline even though margins improved?
The decline mainly reflects a higher effective tax rate. Income tax expense was $290.5 million, versus $58.9 million in the prior quarter, including a $27.5 million charge from a change in tax law. The prior quarter also benefited from a $24.7 million tax benefit from concluding certain tax matters, which did not recur.
What is Lam's outlook for the December 2025 quarter?
Lam guided to revenue of $5.20 billion (±$300 million), non-GAAP gross margin of 48.5% (±1%), non-GAAP operating margin of 33.0% (±1%), and non-GAAP diluted EPS of $1.15 (±$0.10). This implies a sequential decline in revenue and margins from the September quarter.
How strong is Lam's cash position and capital return program?
Cash, cash equivalents, and restricted cash reached $6.71 billion. The company repurchased $976 million of stock and paid $292 million in dividends during the quarter, and it raised its quarterly dividend to $0.26 per share. Total debt, including current portions, was about $4.48 billion.
What risks does the filing highlight, particularly around China?
China accounted for 43% of September-quarter revenue, making Lam exposed to export controls, trade regulations, tariffs, and geopolitical tensions. The company also cites supply chain cost pressures, supply disruptions, and capacity constraints as risks to profitability and revenue.
04—Continue