Lam Research Corporation (LRCX) Q1 2026 Results Show Margin Growth
Earnings Release Date: October 22, 2025
Key Points
- Revenue: $5.32 billion, up 3% sequentially and 28% year over year.
- GAAP EPS: $1.24; Non‑GAAP EPS: $1.26.
- GAAP gross margin: 50.4%; Non‑GAAP gross margin: 50.6%.
- GAAP operating margin: 34.4%; Non‑GAAP operating margin: 35.0%.
- GAAP net income: $1.57 billion; Non‑GAAP net income: $1.60 billion.
- Cash and equivalents: $6.7 billion (vs. $6.4B in prior quarter).
- Deferred revenue: rose to $2.77 billion from $2.68 billion.
- Dividend: $0.26 per share (up from $0.23).
Against Street Expectations:
- EPS $1.26 vs $1.23 est → modest beat.
- Revenue $5.32B vs $5.25B est → slight beat.
Quarter Highlights
- Revenue growth driven by continued AI‑related semiconductor demand and customer investments in advanced deposition and etch technologies.
- Margins: Gross margin improved 30 bps Q/Q; operating margin up 70 bps.
- GAAP EPS fell 8 % sequentially (from $1.35) due to a higher effective tax rate and product mix.
- Cash flow from operations: $1.78 B, down from $2.55 B last quarter.
- CapEx: $185 M; Free cash flow: $1.59 B.
- Regional mix: China 43 %, Taiwan 19 %, Korea 15 %, Japan 10 %, U.S. 6 %, SEA 5 %, Europe 2 %.
- Systems revenue: $3.55 B; Customer support revenue: $1.78 B.
CEO Statement
“Lam’s innovations are helping our customers address major AI‑driven semiconductor manufacturing inflections,” said Tim Archer, President and CEO.
“We are executing well in an environment of tremendous opportunity, and with our expanding portfolio of products and solutions across critical device segments, we are strongly positioned for continued growth.”
Guidance (Quarter Ending December 28 2025)
- Revenue: $5.20 B ± $300 M.
- Gross margin: 48.5 % ± 1 %.
- Operating margin: 33 % ± 1 %.
- EPS: $1.15 ± $0.10 (both GAAP & non‑GAAP).
- Diluted share count: 1.26 B.
No full‑year guidance provided; management cited AI‑related strength but also geopolitical and supply‑chain uncertainty.
Financial Summary
| Metric | Q1 FY 2026 (Sep 2025) | Q4 FY 2025 (Jun 2025) | Q1 FY 2025 (Sep 2024) |
|---|---|---|---|
| Revenue | $5.32 B | $5.17 B | $4.17 B |
| Gross Margin | 50.4 % | 50.1 % | 48.0 % |
| Operating Income | $1.83 B | $1.74 B | $1.26 B |
| Operating Margin | 34.4 % | 33.7 % | 30.3 % |
| Net Income | $1.57 B | $1.72 B | $1.12 B |
| EPS (GAAP) | $1.24 | $1.35 | $0.86 |
| EPS (Non‑GAAP) | $1.26 | $1.33 | $0.86 |
| Cash & Cash Equivalents | $6.7 B | $6.4 B | $6.1 B |
| Operating Cash Flow | $1.78 B | $2.55 B | $1.57 B |
| Deferred Revenue | $2.77 B | $2.68 B | — |
Capital Return
- Dividend: $0.26/share (up 13 % Q/Q).
- Share repurchases: none disclosed.
- Debt: $4.48 B total; stable sequentially.
- Deferred revenue and strong cash flow support continued shareholder returns.
About Lam Research
Lam Research Corporation (NASDAQ: LRCX) is a global supplier of wafer fabrication equipment and services enabling advanced semiconductor manufacturing. Nearly every leading‑edge chip today is built using Lam technology. Headquartered in Fremont, California, Lam combines engineering innovation with global support operations serving customers across Asia, Europe, and the Americas.
Key Takeaways
- Margins strengthen: Non‑GAAP operating margin improved to 35 %, reflecting cost efficiency.
- Sequential EPS decline: $1.26 vs $1.33 last quarter (‑5 %) due to higher tax expense and product mix.
- Geographic reliance: China contributed 43 % of revenue, underscoring regional exposure risk.
- Deferred revenue growth: Backlog rose modestly, signaling steady near‑term demand.
- Cash generation remains solid but moderated sequentially as working‑capital gains tapered.
- Guidance cautious: Revenue and margin outlook point to stable but slower growth next quarter.
- Overall: Lam delivered another efficient quarter, balancing margin expansion with measured growth amid an AI‑driven semiconductor cycle.