FREMONT, Calif., July 26, 2023 /PRNewswire/ -- Lam Research Corporation (the "Company," "Lam," "Lam Research") today announced financial results for the quarter ended June 25, 2023 (the "June 2023 quarter"). 

Highlights for the June 2023 quarter were as follows:

  • Revenue of $3.21 billion.
  • U.S. GAAP gross margin of 45.5%, U.S. GAAP operating income as a percentage of revenue of 26.6%, and U.S. GAAP diluted EPS of $5.97.
  • Non-GAAP gross margin of 45.7%, non-GAAP operating income as a percentage of revenue of 27.3%, and non-GAAP diluted EPS of $5.98.

 

Key Financial Data for the Quarters Ended

June 25, 2023 and March 26, 2023

(in thousands, except per-share data, percentages, and basis points)


U.S. GAAP



June 2023


March 2023


Change Q/Q

Revenue


$                3,207,257


$                3,869,569


-17 %

Gross margin as percentage of revenue


45.5 %


41.5 %


+ 400 bps

Operating income as percentage of revenue


26.6 %


24.4 %


+ 220 bps

Diluted EPS


$                          5.97


$                          6.01


-1 %








Non-GAAP



June 2023


March 2023


Change Q/Q

Revenue


$                3,207,257


$                3,869,569


-17 %

Gross margin as percentage of revenue


45.7 %


44.0 %


+ 170 bps

Operating income as percentage of revenue


27.3 %


28.3 %


- 100 bps

Diluted EPS


$                          5.98


$                          6.99


-14 %

U.S. GAAP Financial Results

For the June 2023 quarter, revenue was $3,207 million, gross margin was $1,458 million, or 45.5% of revenue, operating expenses were $604 million, operating income was 26.6% of revenue, and net income was $803 million, or $5.97 per diluted share on a U.S. GAAP basis. This compares to revenue of $3,870 million, gross margin of $1,606 million, or 41.5% of revenue, operating expenses of $663 million, operating income of 24.4% of revenue, and net income of $814 million, or $6.01 per diluted share, for the quarter ended March 26, 2023 (the "March 2023 quarter").

Non-GAAP Financial Results

For the June 2023 quarter, non-GAAP gross margin was $1,465 million, or 45.7% of revenue, non-GAAP operating expenses were $590 million, non-GAAP operating income was 27.3% of revenue, and non-GAAP net income was $803 million, or $5.98 per diluted share. This compares to non-GAAP gross margin of $1,704 million, or 44.0% of revenue, non-GAAP operating expenses of $608 million, non-GAAP operating income of 28.3% of revenue, and non-GAAP net income of $946 million, or $6.99 per diluted share, for the March 2023 quarter.

"Lam executed well in the June quarter with profitability levels exceeding the guided ranges," said Tim Archer, Lam Research's President and Chief Executive Officer. "With our investment in a broad, differentiated product portfolio targeted to key technology inflections and a solid foundation for productive collaboration with customers, Lam Research is well positioned to outperform as semiconductors continue to become more critical to the global economy."

Balance Sheet and Cash Flow Results

Cash and cash equivalents, short-term investments, and restricted cash and investments balances remained flat at $5.6 billion at the end of the June 2023 quarter compared to the end of the March 2023 quarter. Cash generated from operating activities totaling $1.1 billion was offset by $869.0 million of share repurchases, including net share settlement of employee stock-based compensation; $232.3 million of dividends paid to stockholders; and $78.7 million of capital expenditures.

Deferred revenue at the end of the June 2023 quarter decreased to $1,838 million compared to $2,003 million as of the end of the March 2023 quarter. Lam's deferred revenue balance does not include shipments to customers in Japan, to whom title does not transfer until customer acceptances. Shipments to customers in Japan are classified as inventory at cost until the time of acceptance. The estimated future revenue from shipments to customers in Japan was approximately $160 million as of June 25, 2023 and $212 million as of March 26, 2023.

Revenue

The geographic distribution of revenue during the June 2023 quarter is shown in the following table:

Region

Revenue

China

26 %

Korea

24 %

Taiwan

20 %

Japan

10 %

United States

8 %

Europe

8 %

Southeast Asia

4 %

The following table presents revenue disaggregated between system and customer support-related revenue:


Three Months Ended


Twelve Months Ended


June 25,
2023


March 26,
2023


June 26,
2022


June 25,
2023


June 26,
2022


(In thousands)

Systems revenue

$      1,710,359


$      2,256,033


$      3,006,374


$    10,695,897


$    11,322,271

Customer support-related revenue and other

1,496,898


1,613,536


1,629,180


6,732,619


5,904,768


$      3,207,257


$      3,869,569


$      4,635,554


$    17,428,516


$    17,227,039











Systems revenue includes sales of new leading-edge equipment in deposition, etch and clean markets.

Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from our Reliant® product line.

Outlook

For the quarter ended September 24, 2023, Lam is providing the following guidance:


U.S. GAAP


Reconciling
Items


Non-GAAP












Revenue

$3.4 Billion

+/-

$300 Million



$3.4 Billion

+/-

$300 Million

Gross margin as a percentage of revenue

45.9 %

+/-

1 %


$    21

Million


46.5 %

+/-

1 %

Operating income as a percentage of revenue

27.0 %

+/-

1 %


$    33

Million


28.0 %

+/-

1 %

Net income per diluted share

$5.82

+/-

$0.75


$    30

Million


$6.05

+/-

$0.75

Diluted share count

133 million



133 million

The information provided above is only an estimate of what the Company believes is realizable as of the date of this release and does not incorporate the potential impact of any business combinations, asset acquisitions, divestitures, restructuring, balance sheet valuation adjustments, financing arrangements, other investments, or other significant arrangements that may be completed or realized after the date of this release, except as described below. U.S. GAAP to non-GAAP reconciling items provided include only those items that are known and can be estimated as of the date of this release. Actual results will vary from this model and the variations may be material. Reconciling items included above are as follows:

  • Gross margin as a percentage of revenue - restructuring charges, $14 million; transformational costs, $4 million; and amortization related to intangible assets acquired through business combinations, $3 million; totaling $21 million.
  • Operating income as a percentage of revenue -  transformational costs, $15 million; restructuring charges, $14 million; and amortization related to intangible assets acquired through business combinations, $4 million; totaling $33 million.
  • Net income per diluted share - transformational costs, $15 million; restructuring charges, $14 million; amortization related to intangible assets acquired though business combinations, $4 million; amortization of debt discounts, $1 million; and associated tax benefit for non-GAAP items ($4 million); totaling $30 million.

Use of Non-GAAP Financial Results

In addition to U.S. GAAP results, this press release also contains non-GAAP financial results. The Company's non-GAAP results for both the June 2023 and March 2023 quarters exclude amortization related to intangible assets acquired through business combinations, the effects of elective deferred compensation-related assets and liabilities, amortization of note discounts, net restructuring charges, product rationalization charges, and transformational costs, and the net income tax effect of non-GAAP items. Additionally, the non-GAAP results for the June 2023 quarter exclude the income tax benefit on conclusion of certain tax matters related to a prior business combination.

Management uses non-GAAP gross margin, operating expense, operating income, operating income as a percentage of revenue, net income, and net income per diluted share to evaluate the Company's operating and financial results. The Company believes the presentation of non-GAAP results is useful to investors for analyzing business trends and comparing performance to prior periods, along with enhancing investors' ability to view the Company's results from management's perspective. Tables presenting reconciliations of non-GAAP results to U.S. GAAP results are included at the end of this press release and on the Company's website at https://investor.lamresearch.com.

Caution Regarding Forward-Looking Statements

Statements made in this press release that are not of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, but are not limited to: our outlook and guidance for future financial results, including revenue, gross margin, operating income and net income; our investments in our products; the breadth, differentiation and targeting of our product portfolio, our positioning in the market; our performance relative to the industry; and the significance of semiconductors to the global economy. Some factors that may affect these forward-looking statements include: trade regulations, export controls, trade disputes and other geopolitical tensions may inhibit our ability to sell our products; business, political and/or regulatory conditions in the consumer electronics industry, the semiconductor industry and the overall economy may deteriorate or change; the actions of our customers and competitors may be inconsistent with our expectations; supply chain cost increases and other inflationary pressures have impacted and are expected to continue to impact our profitability; supply chain disruptions or manufacturing capacity constraints may limit our ability to manufacture and sell our products; and natural and human-caused disasters, disease outbreaks, war, terrorism, political or governmental unrest or instability, or other events beyond our control may impact our operations and revenue in affected areas; as well as the other risks and uncertainties that are described in the documents filed or furnished by us with the Securities and Exchange Commission, including specifically the Risk Factors described in our annual report on Form 10–K for the fiscal year ended June 26, 2022, and our quarterly report on Form 10–Q for the fiscal quarter ended March 26, 2023. These uncertainties and changes could materially affect the forward-looking statements and cause actual results to vary from expectations in a material way. The Company undertakes no obligation to update the information or statements made in this release.

Lam Research Corporation is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. Lam's equipment and services allow customers to build smaller and better performing devices. In fact, today, nearly every advanced chip is built with Lam technology. We combine superior systems engineering, technology leadership, and a strong values-based culture, with an unwavering commitment to our customers. Lam Research (Nasdaq: LRCX) is a FORTUNE 500® company headquartered in Fremont, Calif., with operations around the globe. Learn more at www.lamresearch.com. (LRCX-F)

Consolidated Financial Tables Follow.

 

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data and percentages)



Three Months Ended


Twelve Months Ended


June 25,
2023


March 26,
2023


June 26,
2022


June 25,
2023


June 26,
2022


(unaudited)


(unaudited)


(unaudited)


(unaudited)


(1)

Revenue

$  3,207,257


$  3,869,569


$  4,635,554


$ 17,428,516


$ 17,227,039

Cost of goods sold

1,737,682


2,197,237


2,535,042


9,573,425


9,355,232

Restructuring charges, net - cost of goods sold

11,446


66,720



78,166


Total cost of goods sold

1,749,128


2,263,957


2,535,042


9,651,591


9,355,232

Gross margin

1,458,129


1,605,612


2,100,512


7,776,925


7,871,807

Gross margin as a percent of revenue

45.5 %


41.5 %


45.3 %


44.6 %


45.7 %

Research and development

401,951


429,451


411,157


1,727,162


1,604,248

Selling, general and administrative

199,831


193,500


210,002


832,753


885,737

Restructuring charges, net - operating expenses

1,742


40,408



42,150


Total operating expenses

603,524


663,359


621,159


2,602,065


2,489,985

Operating income

854,605


942,253


1,479,353


5,174,860


5,381,822

Operating income as a percent of revenue

26.6 %


24.4 %


31.9 %


29.7 %


31.2 %

Other income (expense), net

9,010


(3,331)


(120,448)


(65,650)


(188,708)

Income before income taxes

863,615


938,922


1,358,905


5,109,210


5,193,114

Income tax expense

(61,078)


(124,914)


(149,971)


(598,279)


(587,828)

Net income

$     802,537


$     814,008


$  1,208,934


$   4,510,931


$   4,605,286

Net income per share:










Basic

$            5.99


$            6.03


$            8.76


$          33.30


$          32.92

Diluted

$            5.97


$            6.01


$            8.74


$          33.21


$          32.75

Number of shares used in per share calculations:










Basic

134,052


134,924


137,993


135,472


139,899

Diluted

134,392


135,395


138,313


135,834


140,628

Cash dividend declared per common share

$          1.725


$          1.725


$            1.50


$             6.90


$             6.00













(1)

Derived from audited financial statements.

 

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)



June 25,
2023


March 26,
2023


June 26,
2022


(unaudited)


(unaudited)


(1)

ASSETS






Cash and cash equivalents

$              5,337,056


$              5,305,648


$              3,522,001

Investments

37,641


63,849


135,731

Accounts receivable, net

2,823,376


3,262,140


4,313,818

Inventories

4,816,190


4,881,935


3,966,294

Prepaid expenses and other current assets

214,149


216,455


347,391

Total current assets

13,228,412


13,730,027


12,285,235

Property and equipment, net

1,856,672


1,855,117


1,647,587

Restricted cash and investments

250,316


250,688


251,534

Goodwill and intangible assets

1,790,943


1,801,819


1,616,963

Other assets

1,655,300


1,605,710


1,394,313

Total assets

$            18,781,643


$            19,243,361


$            17,195,632

LIABILITIES AND STOCKHOLDERS' EQUITY






Current portion of long-term debt and finance lease obligations

$                      8,358


$                      8,457


$                      7,381

Other current liabilities

4,176,560


4,432,872


4,557,378

Total current liabilities

4,184,918


4,441,329


4,564,759

Long-term debt and finance lease obligations

5,003,183


4,996,920


4,998,449

Income taxes payable

882,084


885,348


931,117

Other long-term liabilities

501,286


512,376


422,941

Total liabilities

10,571,471


10,835,973


10,917,266

Stockholders' equity (2)

8,210,172


8,407,388


6,278,366

Total liabilities and stockholders' equity

$            18,781,643


$            19,243,361


$            17,195,632









(1)

Derived from audited financial statements.

(2)

Common shares issued and outstanding were 133,297 as of June 25, 2023, 134,692 as of March 26, 2023, and 136,975 as of June 26, 2022

 

LAM RESEARCH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



Three Months Ended


Twelve Months Ended


June 25,
2023


March 26,
2023


June 26,
2022


June 25,
2023


June 26,
2022


(unaudited)


(unaudited)


(unaudited)


(unaudited)


(1)

CASH FLOWS FROM OPERATING ACTIVITIES:










Net income

$           802,537


$           814,008


$        1,208,934


$        4,510,931


$        4,605,286

Adjustments to reconcile net income to net cash provided by operating activities:










Depreciation and amortization

89,604


91,663


87,932


342,432


333,739

Deferred income taxes

(38,960)


7,195


(173,987)


(172,061)


(257,438)

Equity-based compensation expense

68,495


73,911


69,588


286,600


259,064

Other, net

40,761


1,559


33,574


52,298


(44,751)

Changes in operating assets and liabilities

160,288


738,102


(782,107)


158,738


(1,796,226)

Net cash provided by operating activities

1,122,725


1,726,438


443,934


5,178,938


3,099,674

CASH FLOWS FROM INVESTING ACTIVITIES:










Capital expenditures and intangible assets

(78,670)


(119,457)


(125,746)


(501,568)


(546,034)

Business acquisition, net of cash acquired




(119,955)


Net sale of available-for-sale securities

26,280


39,414


23,486


98,132


1,165,884

Other, net

(2,790)


(4,289)


26,323


(11,171)


(7,575)

Net cash (used for) provided by investing activities

(55,180)


(84,332)


(75,937)


(534,562)


612,275

CASH FLOWS FROM FINANCING ACTIVITIES:










Principal payments on debt

(2,061)


(2,209)


(2,032)


(23,206)


(11,889)

Treasury stock purchases

(869,014)


(581,943)


(876,089)


(2,017,012)


(3,865,663)

Dividends paid

(232,336)


(233,977)


(208,056)


(907,907)


(815,290)

Reissuance of treasury stock related to employee stock purchase plan

64,903



61,798


109,899


108,178

Proceeds from issuance of common stock

3,438



997


11,111


5,682

Other, net

(2,916)


(1,399)


(152)


(3,552)


45

Net cash used for financing activities

(1,037,986)


(819,528)


(1,023,534)


(2,830,667)


(4,578,937)

Effect of exchange rate changes on cash, cash equivalents, and restricted cash

1,477


(2,302)


(16,683)


128


(30,227)

Net increase (decrease)  in cash, cash equivalents, and restricted cash

31,036


820,276


(672,220)


1,813,837


(897,215)

Cash, cash equivalents, and restricted cash at beginning of period

5,556,336


4,736,060


4,445,755


3,773,535


4,670,750

Cash, cash equivalents, and restricted cash at end of period

$        5,587,372


$        5,556,336


$        3,773,535


$        5,587,372


$        3,773,535













(1)

Derived from audited financial statements.

 

Non-GAAP Financial Summary

(in thousands, except percentages and per share data)

(unaudited)



Three Months Ended


June 25,
2023


March 26,
2023

Revenue

$       3,207,257


$       3,869,569

Gross margin

$       1,465,207


$       1,704,323

Gross margin as percentage of revenue

45.7 %


44.0 %

Operating expenses

$          589,914


$          607,620

Operating income

$          875,293


$       1,096,703

Operating income as a percentage of revenue

27.3 %


28.3 %

Net income

$          803,125


$          946,483

Net income per diluted share

$                5.98


$                6.99

Shares used in per share calculation - diluted

134,392


135,395

 

Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income

(in thousands, except per share data)

(unaudited) 



Three Months Ended


June 25,
2023


March 26,
2023

U.S. GAAP net income

$             802,537


$             814,008

Pre-tax non-GAAP items:




Amortization related to intangible assets acquired through certain business combinations - cost of goods sold

3,093


3,093

Elective deferred compensation ("EDC")  related liability valuation increase - cost of goods sold

4,288


1,498

Restructuring charges - cost of goods sold

11,446


66,720

Product rationalization - cost of goods sold

(13,383)


26,842

Transformational costs - cost of goods sold

1,634


558

EDC related liability valuation increase - research and development

7,719


2,697

Product rationalization - research and development

(3,795)


3,858

Amortization related to intangible assets acquired through certain business combinations - selling, general and administrative

1,395


1,395

EDC related liability valuation increase - selling, general and administrative

5,146


1,798

Product rationalization - selling, general and administrative

(2,891)


2,891

Transformational costs - selling, general and administrative

4,294


2,692

Restructuring charges, net - operating expenses

1,742


40,408

Amortization of note discounts - other income (expense), net

724


718

Gain on EDC related asset - other income (expense), net

(16,599)


(5,443)

Net income tax benefit on non-GAAP items

(1,146)


(17,250)

Income tax benefit on the conclusion of certain tax matters

(3,079)


Non-GAAP net income

$             803,125


$             946,483

Non-GAAP net income per diluted share

$                   5.98


$                   6.99

U.S. GAAP net income per diluted share

$                   5.97


$                   6.01

U.S. GAAP and non-GAAP  number of shares used for per diluted share calculation

134,392


135,395

 

Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin,

Operating Expenses and Operating Income

(in thousands, except percentages)

(unaudited)



Three Months Ended


June 25,
2023


March 26,
2023

U.S. GAAP gross margin

$       1,458,129


$       1,605,612

Pre-tax non-GAAP items:




Amortization related to intangible assets acquired through certain business combinations

3,093


3,093

EDC related liability valuation increase

4,288


1,498

Restructuring charges, net

11,446


66,720

Product rationalization

(13,383)


26,842

Transformational costs

1,634


558

Non-GAAP gross margin

$       1,465,207


$       1,704,323

U.S. GAAP gross margin as a percentage of revenue

45.5 %


41.5 %

Non-GAAP gross margin as a percentage of revenue

45.7 %


44.0 %

U.S. GAAP operating expenses

$          603,524


$          663,359

Pre-tax non-GAAP items:




Amortization related to intangible assets acquired through certain business combinations

(1,395)


(1,395)

EDC related liability valuation increase

(12,865)


(4,495)

Restructuring charges, net

(1,742)


(40,408)

Product rationalization

6,686


(6,749)

Transformational costs

(4,294)


(2,692)

Non-GAAP operating expenses

$          589,914


$          607,620

U.S. GAAP operating income

$          854,605


$          942,253

Non-GAAP operating income

$          875,293


$       1,096,703

U.S. GAAP operating income as percent of revenue

26.6 %


24.4 %

Non-GAAP operating income as a percent of revenue

27.3 %


28.3 %

Lam Research Corporation Contact:
Tina Correia, Investor Relations, phone: 510-572-1615, e-mail: investor.relations@lamresearch.com

(PRNewsfoto/Lam Research)

 

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SOURCE Lam Research Corporation

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