Skip to content
    LRCX
    Earnings call· Jun 2026(Q4 FY26)

    LAM RESEARCH Q4 FY26 earnings call LRCX

    Jul 29, 2026 Source

    Executive summary

    Lam Research Q4 FY26 — Record Performance and Strong AI-Driven Outlook

    Lam Research achieved record financial results in Q4 FY26, driven by robust demand across memory and foundry/logic, particularly from NAND upgrades and advanced packaging. The company raised its calendar 2026 WFE outlook and anticipates an extraordinary setup for WFE growth in 2027, fueled by AI-driven demand and technology inflections. Lam is well-positioned for continued outperformance due to its leadership in etch and deposition technologies and strategic global manufacturing capabilities.

    Highlights

    6

    • Record revenue of $6.72 billion, up 15% sequentially and 30% year-over-year.

    • Record non-GAAP gross margin of 52%, the highest in 20 years.

    • Record non-GAAP operating margin of 38.4% and diluted EPS of $1.82.

    • Full-year FY26 record revenue of $23.2 billion, non-GAAP gross margin of 50.6%, and diluted EPS of $5.82, up 41% from FY25.

    • Calendar 2026 WFE outlook raised to the low $150 billion range, up from a prior outlook of $140 billion.

    • Advanced packaging revenue expected to grow greater than 70% year-on-year.

    Concerns

    3

    • China revenue declined sequentially, with the domestic customer base experiencing a decrease.

    • Non-GAAP tax rate is expected to increase to the mid-teens in the September quarter and beyond due to higher revenue in higher tax jurisdictions and an increased U.S. GILTI rate.

    • Days Sales Outstanding (DSO) increased to 72 days in Q4 FY26 from 64 days in Q3 FY26.

    Guidance & targets

    12
    CategoryTargetConfidence
    Revenue
    $8.1 billion
    high materiality
    High
    Non-GAAP Gross Margin
    52%
    high materiality
    High
    Non-GAAP Operating Margin
    39.5%
    high materiality
    High
    Non-GAAP EPS
    $2.15
    high materiality
    High
    Diluted Share Count
    approximately 1.255 billion shares
    medium materiality
    High
    Calendar 2026 WFE
    low $150 billion range
    high materiality
    High
    Long-term Non-GAAP Gross Margin
    mid-50% level
    high materiality
    High
    Long-term Non-GAAP Operating Margin
    mid-40% level
    high materiality
    High
    SAM as percentage of WFE
    high 30s range
    medium materiality
    High
    Free Cash Flow Return to Shareholders
    at least 85%
    medium materiality
    High
    Non-GAAP Tax Rate
    mid-teens
    medium materiality
    High
    Capital Expenditures as % of Revenue
    4% to 5%
    medium materiality
    High

    Segment performance

    9
    SegmentRevenueYoYQoQMargin
    Memory Systems Revenue
    Increased significantly as a percentage of total systems revenue.
    Record level in dollar terms
    		46%—up from 39%—
    Non-Volatile Memory Systems Revenue
    Driven by industry focus on conversions to 256-layer and above-class devices, primarily for enterprise SSDs.
    NAND revenue more than doubled sequentially
    		23%—up from 12%—
    DRAM Systems Revenue
    Spending directed towards wafer additions and technology upgrades across 1-alpha, 1-beta, and 1-gamma nodes.
    Flattish on a dollar basis sequentially
    		23%—down from 27%—
    Foundry Systems Revenue
    Mature node spending in China was down, largely offset by strength in leading-edge process node investments (2nm and 3nm) and advanced packaging.
    		44%—down from 54%—
    Logic/Other Systems Revenue
    Increased as a percentage of total systems revenue.
    		10%—up from 7%—
    Taiwan Revenue
    Contributed a significant portion of total revenue.
    New record level in dollar terms
    		27%—up from 23%—
    China Revenue
    Declined as expected, with mixed performance between customer types.
    Global multinational customers grew sequentially, while domestic customer base declined
    		26%—down from 34%—
    Korea Revenue
    Slightly decreased as a percentage of total revenue.
    		20%—down from 23%—
    Customer Support Business Group (CSBG)
    Strong growth driven by upgrades and services, with spares maintaining strong levels due to high industry utilization.
    Third consecutive quarter of record revenueIncrease primarily due to record upgrade revenueSmaller increases in Reliant and servicesSpare part purchases remained consistent
    		nearly $2.5 billion43%17%—

    Operational metrics

    25
    Non-GAAP Gross Margin
    52%up from 49.9% QoQ
    Q4 FY26
    Non-GAAP Gross Margin
    50.6%
    FY26

    Full fiscal year 2026 record gross margin.

    Non-GAAP Operating Margin
    38.4%up from 35% QoQ
    Q4 FY26
    Non-GAAP EPS
    $1.82
    Q4 FY26
    Non-GAAP EPS
    $5.82up 41% from FY25
    FY26

    Full fiscal year 2026 record diluted earnings per share.

    Operating Expenses
    $916 millionup from $866 million QoQ
    Q4 FY26
    Non-GAAP Tax Rate
    11%
    Q4 FY26

    In line with expectations for the quarter.

    Other Income and Expense
    $19 millioncompared with -$8 million QoQ
    Q4 FY26

    Variability expected quarter-to-quarter.

    Share Repurchases
    $246 million
    Q4 FY26

    Amount allocated to share repurchases in the quarter.

    Dividends Paid
    $325 million
    Q4 FY26

    Amount paid in dividends in the quarter.

    Diluted Share Count
    1.26 billion sharesdown from prior quarter
    Q4 FY26
    Remaining Share Repurchase Authorization
    $4 billion
    Q4 FY26

    Amount remaining on board-authorized share repurchase program.

    Cash and Investments Balance
    $5.6 billionup from $4.8 billion QoQ
    Q4 FY26

    Management aims to build more cash to support potential liquidity needs.

    Days Sales Outstanding (DSO)
    72 daysup from 64 days QoQ
    Q4 FY26
    Inventory
    $4.3 billionup from prior quarter
    Q4 FY26
    Inventory Turns
    3xvs 2.9x QoQ
    Q4 FY26
    Equity Compensation
    $104 million
    Q4 FY26

    Noncash expense.

    Depreciation
    $105 million
    Q4 FY26

    Noncash expense.

    Amortization
    $15 million
    Q4 FY26

    Noncash expense.

    Capital Expenditures
    $189 million
    Q4 FY26
    Total Employees
    22,400up ~1,800 QoQ
    Q4 FY26
    SAM per wafer in NAND
    doublefrom 128-layer node to 500-plus layer devices
    future

    Expected due to increasing layer counts and manufacturing complexity.

    Dextro automated preventative maintenance tasks
    doubled
    since start of 2026

    Accelerating Dextro application development, leading to improved first-time right recovery, higher tool availability, and increased output.

    Panel systems shipped
    510x515-millimeter
    Q4 FY26

    Leveraging technology from wafer-based SABRE 3D and advanced wet processing platforms.

    Panel tool shipments
    first 310x310-millimeter
    this year

    Putting Lam at the leading edge of the panel-level packaging transition.

    Industry KPIs

    10
    MetricValueDetails
    Lead timesChallenging
    Backlog order book$2.43 billionUSD
    Ai data center revenueNAND revenue more than doubled sequentially
    Services installed baseNearly $2.5 billionUSD
    Fab capacity utilizationHigh utilization in the industry%
    Wfe industry spend outlooklow $150 billion rangeUSD
    Design wins socket pipelineSeveral strategic tool of record positions
    Inventory channel inventory$4.3 billionUSD
    Node platform ramp scheduleNAND conversions to 256-layer and above-class devices
    End market segment revenue mixMemory: 46%; Foundry: 44%; Logic/Other: 10%%

    Orderbook & backlog

    1
    Deferred Revenue Balance$2.43 billionQ4 FY26

    up $213 million from Q3 FY26

    Increase driven by a variety of factors, primarily customer downpayments.

    Product announcements

    4
    ProductTypeDetails
    Akara platformlaunch
    VECTOR hard mask deposition platformupdate
    VECTOR diffusion barrier systemsupdate
    Argos selective etch systemupdate

    Risks & headwinds

    4
    China domestic customer declineQ4 FY26

    China revenue declined sequentially, with domestic customer base down

    Mitigation: Management noted global multinational customers in China grew sequentially, partially offsetting the decline.

    Increased Non-GAAP Tax RateQ1 FY27 and beyond

    Expected to be in the mid-teens for Q1 FY27 and likely beyond, up from 11% in Q4 FY26

    Mitigation: Due to increased revenue in higher tax jurisdictions (primarily US) and higher U.S. GILTI rate.

    Days Sales Outstanding (DSO) increaseQ4 FY26

    72 days in Q4 FY26, up from 64 days in Q3 FY26

    Challenging Lead Times for WFE Equipmentcurrent

    Lead times are challenging

    Mitigation: Lam's strategic global manufacturing and supply chain footprint helps respond to urgent customer requests, but further significant upside in the current year is difficult.

    What to watch in Q1 FY27

    5

    CSBG Growth Drivers

    next quarter
    CurrentStrong upgrades, spares, and advanced services in Q4 FY26
    TargetContinued strength across upgrades, spares, and advanced services, potentially exceeding prior growth targets

    Why it matters

    CSBG is a significant revenue contributor and margin driver, expected to outperform prior growth targets, indicating sustained demand for services and upgrades.

    I think you're going to see similar profile of what we saw this quarter... upgrades are going to continue to be strong... I expect spares to continue to be pretty strong... And then we're excited about what's going on in Advanced Services with all the cobot and Equipment Intelligence.

    Q&A highlights

    7

    Given strong June performance and flat gross margin guidance, what is the expected profile for CSBG in the September quarter?

    Management expects a similar strong profile for CSBG in the September quarter, driven by continued strong upgrades (especially from NAND investment), high industry utilization supporting spares, and excitement around Advanced Services like cobots and Equipment Intelligence.

    “I think you're going to see similar profile of what we saw this quarter... upgrades are going to continue to be strong... I expect spares to continue to be pretty strong... And then we're excited about what's going on in Advanced Services with all the cobot and Equipment Intelligence.”

    asked by Timothy Arcuri · answered by Douglas Bettinger

    2 min read6 chapters

    Detailed Narrative

    01

    AI-Driven Demand and Technology Inflections

    AI is driving unprecedented🌐 demand and technical requirements, accelerating architectural scaling at both the device and packaging levels. This progression, from training to physical AI, creates new use cases and performance needs, notably in NAND for flash storage. Lam is capitalizing on these trends, with AI reshaping technology requirements in advanced foundry logic and DRAM, including Gate-all-around, CFET, HBM, 4F², and panel-level advanced packaging, all of which increase deposition and etch intensity.

    02

    NAND Upgrades and SAM Expansion

    NAND revenue more than doubled sequentially in Q4 FY26, as customers focus on conversions to 256-layer and above-class devices, primarily for enterprise SSDs. Lam expects its served available market (SAM) per wafer in NAND to double from 128-layer to 500-plus layer devices. This expansion is driven by increasing layer counts and manufacturing complexity, creating significant opportunities for Lam in addressing the challenges of stacking higher layers.

    03

    Advanced Foundry Logic and DRAM Leadership

    Lam is strengthening its position in conductor etch with its Akara platform, which combines direct drive plasma technology with high aspect ratio patterning. Akara, initially adopted for 2-nanometer and below gate-all-around architectures, is now gaining momentum in advanced DRAM. Additionally, DRAM customers are adopting Lam's VECTOR hard mask deposition platform for low-k film patterning and VECTOR diffusion barrier systems, offering improved performance and cost savings compared to traditional approaches.

    04

    Advanced Packaging Growth and Panel-Level Innovation

    Lam anticipates greater than 70% year-on-year growth in advanced packaging, driven by the increasing integration of chiplets, HBM stacks, and greater memory bandwidth within single packages. The industry is moving towards larger format panel-level packaging to exceed traditional wafer-based architectures. Lam has shipped 510x515-millimeter panel systems into development programs and will ship its first 310x310-millimeter panel tool this year, positioning it at the forefront of this packaging transition.

    05

    Customer Support Business Group (CSBG) Innovations

    The Customer Support Business Group (CSBG) achieved record revenue, fueled by strong demand for upgrades, Reliant, and Equipment Intelligence-enabled services. Lam's Dextro cobots, the industry's first collaborative maintenance robots, are seeing rapid adoption, doubling the number of automated preventative maintenance tasks since the start of 2026. These solutions are improving tool availability and output, and are expanding from NAND into DRAM, creating additional service revenue opportunities.

    06

    Operational Execution and Global Manufacturing Footprint

    Lam's record financial performance is a result of strong operational execution and its strategic global manufacturing and supply chain footprint. The company has leveraged its factories in Oregon, California, Ohio, Malaysia, Taiwan, Korea, and Austria to respond to accelerated customer demand. This distributed structure allows for efficient procurement and delivery, enabling Lam to meet customer needs and maintain operational velocity amidst significant growth.

    AI-generated summary of the company’s earnings call. Not investment advice.