Lam Research Corporation Reports Financial Results for the Quarter Ended September 29, 2024
On
Highlights for the
- Revenue of
$4.17 billion . -
U.S. GAAP gross margin of 48.0%,U.S. GAAP operating income as a percentage of revenue of 30.3%, andU.S. GAAP diluted EPS of$0.86 . - Non-GAAP gross margin of 48.2%, non-GAAP operating income as a percentage of revenue of 30.9%, and non-GAAP diluted EPS of
$0.86 .
Key Financial Data for the Quarters Ended
(in thousands, except per-share data, percentages, and basis points)
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Change Q/Q |
Revenue |
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$ 4,167,976 |
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$ 3,871,507 |
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+ 8 % |
Gross margin as percentage of revenue |
|
48.0 % |
|
47.5 % |
|
+ 50 bps |
Operating income as percentage of revenue |
|
30.3 % |
|
29.1 % |
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+ 120 bps |
Diluted EPS pre-split |
|
$ 8.56 |
|
$ 7.78 |
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+ 10 % |
Diluted EPS post-split |
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$ 0.86 |
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$ 0.78 |
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+ 10 % |
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Non-GAAP |
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Change Q/Q |
Revenue |
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$ 4,167,976 |
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$ 3,871,507 |
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+ 8 % |
Gross margin as percentage of revenue |
|
48.2 % |
|
48.5 % |
|
- 30 bps |
Operating income as percentage of revenue |
|
30.9 % |
|
30.7 % |
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+ 20 bps |
Diluted EPS pre-split |
|
$ 8.60 |
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$ 8.14 |
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+ 6 % |
Diluted EPS post-split |
|
$ 0.86 |
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$ 0.81 |
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+ 6 % |
For the
Non-GAAP Financial Results
For the
"With continued strong execution, Lam delivered financial performance ahead of expectations," said
Balance Sheet and Cash Flow Results
Cash, cash equivalents, and restricted cash balances increased to
Deferred revenue at the end of the
Revenue
The geographic distribution of revenue during the
Region |
Revenue |
|
37 % |
|
18 % |
|
15 % |
|
12 % |
|
7 % |
|
6 % |
|
5 % |
The following table presents revenue disaggregated between system and customer support-related revenue:
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Three Months Ended |
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(In thousands) |
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Systems revenue |
$ 2,392,730 |
|
$ 2,169,885 |
|
$ 2,056,655 |
Customer support-related revenue and other |
1,775,246 |
|
1,701,622 |
|
1,425,407 |
|
$ 4,167,976 |
|
$ 3,871,507 |
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$ 3,482,062 |
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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
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Reconciling Items |
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Non-GAAP |
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Revenue |
|
+/- |
|
|
— |
|
|
+/- |
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Gross margin as a percentage of revenue |
46.9 % |
+/- |
1 % |
|
$ 2.8 |
Million |
|
47.0 % |
+/- |
1 % |
Operating income as a percentage of revenue |
29.9 % |
+/- |
1 % |
|
$ 3.4 |
Million |
|
30.0 % |
+/- |
1 % |
Net income per diluted share |
|
+/- |
|
|
$ 3.9 |
Million |
|
|
+/- |
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Diluted share count |
1.29 Billion |
|
— |
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1.29 Billion |
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.
- Gross margin as a percentage of revenue - amortization related to intangible assets acquired through business combinations,
$2.8 million . - Operating income as a percentage of revenue - amortization related to intangible assets acquired through business combinations,
$3.4 million . - Net income per diluted share - amortization related to intangible assets acquired though business combinations,
$3.4 million ; amortization of debt discounts,$0.8 million ; and associated tax benefit for non-GAAP items ($0.3 million ); totaling$3.9 million .
Use of Non-GAAP Financial Results
In addition to
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
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 operational execution; the technologies that will enable the next generation of semiconductors; the extent of our investments in product development and the relevance of those investments to key technology inflections; our competitive positioning; wafer fabrication equipment ("WFE") spending growth; and our positioning and prospects for performance relative to WFE growth. 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 may 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
Consolidated Financial Tables Follow.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data and percentages) (unaudited) |
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Three Months Ended |
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Revenue |
$ 4,167,976 |
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$ 3,871,507 |
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$ 3,482,062 |
Cost of goods sold |
2,165,293 |
|
2,026,133 |
|
1,819,420 |
Restructuring charges, net - cost of goods sold |
— |
|
5,276 |
|
7,940 |
Total cost of goods sold |
2,165,293 |
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2,031,409 |
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1,827,360 |
Gross margin |
2,002,683 |
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1,840,098 |
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1,654,702 |
Gross margin as a percent of revenue |
48.0 % |
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47.5 % |
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47.5 % |
Research and development |
495,358 |
|
497,829 |
|
422,629 |
Selling, general and administrative |
243,128 |
|
216,477 |
|
207,023 |
Restructuring charges, net - operating expenses |
— |
|
(768) |
|
2,021 |
Total operating expenses |
738,486 |
|
713,538 |
|
631,673 |
Operating income |
1,264,197 |
|
1,126,560 |
|
1,023,029 |
Operating income as a percent of revenue |
30.3 % |
|
29.1 % |
|
29.4 % |
Other income (expense), net |
30,081 |
|
27,796 |
|
2,601 |
Income before income taxes |
1,294,278 |
|
1,154,356 |
|
1,025,630 |
Income tax expense |
(177,834) |
|
(134,074) |
|
(138,232) |
Net income |
$ 1,116,444 |
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$ 1,020,282 |
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$ 887,398 |
Pre-split: |
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Net income per share: |
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Basic |
$ 8.59 |
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$ 7.81 |
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$ 6.69 |
Diluted |
$ 8.56 |
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$ 7.78 |
|
$ 6.66 |
Number of shares used in per share calculations: |
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Basic |
129,924 |
|
130,633 |
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132,584 |
Diluted |
130,407 |
|
131,112 |
|
133,166 |
Cash dividend declared per common share |
$ 2.30 |
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$ 2.00 |
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$ 2.00 |
Post-split: |
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Net income per share: |
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Basic |
$ 0.86 |
|
$ 0.78 |
|
$ 0.67 |
Diluted |
$ 0.86 |
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$ 0.78 |
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$ 0.67 |
Number of shares used in per share calculations: |
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Basic |
1,299,236 |
|
1,306,333 |
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1,325,840 |
Diluted |
1,304,066 |
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1,311,118 |
|
1,331,664 |
Cash dividend declared per common share |
$ 0.23 |
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$ 0.20 |
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$ 0.20 |
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CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
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(unaudited) |
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(1) |
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(unaudited) |
ASSETS |
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Cash and cash equivalents |
$ 6,067,471 |
|
$ 5,847,856 |
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$ 5,126,150 |
Accounts receivable, net |
2,937,217 |
|
2,519,250 |
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2,810,953 |
Inventories |
4,209,878 |
|
4,217,924 |
|
4,747,781 |
Prepaid expenses and other current assets |
277,802 |
|
298,190 |
|
308,678 |
Total current assets |
13,492,368 |
|
12,883,220 |
|
12,993,562 |
Property and equipment, net |
2,214,269 |
|
2,154,518 |
|
2,110,511 |
|
1,758,344 |
|
1,765,073 |
|
1,784,000 |
Other assets |
2,067,508 |
|
1,941,917 |
|
1,650,384 |
Total assets |
$ 19,532,489 |
|
$ 18,744,728 |
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$ 18,538,457 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
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Current portion of long-term debt and finance lease obligations |
$ 504,682 |
|
$ 504,814 |
|
$ 3,861 |
Other current liabilities |
4,837,986 |
|
3,833,624 |
|
4,243,316 |
Total current liabilities |
5,342,668 |
|
4,338,438 |
|
4,247,177 |
Long-term debt and finance lease obligations |
4,479,087 |
|
4,478,520 |
|
4,980,460 |
Income taxes payable |
664,717 |
|
813,304 |
|
780,511 |
Other long-term liabilities |
574,126 |
|
575,012 |
|
482,979 |
Total liabilities |
11,060,598 |
|
10,205,274 |
|
10,491,127 |
Stockholders' equity (2) |
8,471,891 |
|
8,539,454 |
|
8,047,330 |
Total liabilities and stockholders' equity |
$ 19,532,489 |
|
$ 18,744,728 |
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$ 18,538,457 |
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(1) |
Derived from audited financial statements. |
(2) |
Common shares issued and outstanding were 1,291,958 as of |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, unaudited) |
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Three Months Ended |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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Net income |
$ 1,116,444 |
|
$ 1,020,282 |
|
$ 887,398 |
Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation and amortization |
94,295 |
|
88,357 |
|
90,479 |
Deferred income taxes |
(108,722) |
|
(61,375) |
|
(24,238) |
Equity-based compensation expense |
80,011 |
|
79,092 |
|
67,211 |
Other, net |
(457) |
|
(3,999) |
|
(150) |
Changes in operating assets and liabilities |
386,900 |
|
(259,927) |
|
(69,537) |
Net cash provided by operating activities |
1,568,471 |
|
862,430 |
|
951,163 |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
Capital expenditures and intangible assets |
(110,588) |
|
(100,748) |
|
(76,992) |
Net maturities and sales of available-for-sale securities |
— |
|
— |
|
7,275 |
Other, net |
37 |
|
(865) |
|
(4,966) |
Net cash used for investing activities |
(110,551) |
|
(101,613) |
|
(74,683) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
Principal payments on debt, including finance lease obligations |
(934) |
|
(949) |
|
(253,109) |
|
(997,035) |
|
(373,550) |
|
(843,238) |
Dividends paid |
(260,985) |
|
(261,462) |
|
(230,332) |
Reissuance of treasury stock related to employee stock purchase plan |
— |
|
66,885 |
|
— |
Proceeds from issuance of common stock, net issuance costs |
(43) |
|
2,796 |
|
2,818 |
Other, net |
(324) |
|
(7,871) |
|
(2,151) |
Net cash used for financing activities |
(1,259,321) |
|
(574,151) |
|
(1,326,012) |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
22,682 |
|
(9,616) |
|
(11,031) |
Net change in cash, cash equivalents, and restricted cash |
221,281 |
|
177,050 |
|
(460,563) |
Cash, cash equivalents, and restricted cash at beginning of period (1) |
5,850,803 |
|
5,673,753 |
|
5,587,372 |
Cash, cash equivalents, and restricted cash at end of period (1) |
$ 6,072,084 |
|
$ 5,850,803 |
|
$ 5,126,809 |
|
|
|
|
|
|
(1) |
Restricted cash is reported within Other assets in the Condensed Consolidated Balance Sheets |
Non-GAAP Financial Summary (in thousands, except percentages and per share data) (unaudited) |
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Three Months Ended |
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Revenue |
$ 4,167,976 |
|
$ 3,871,507 |
Gross margin |
$ 2,009,022 |
|
$ 1,876,345 |
Gross margin as percentage of revenue |
48.2 % |
|
48.5 % |
Operating expenses |
$ 722,148 |
|
$ 689,133 |
Operating income |
$ 1,286,874 |
|
$ 1,187,212 |
Operating income as a percentage of revenue |
30.9 % |
|
30.7 % |
Net income |
$ 1,121,507 |
|
$ 1,066,890 |
Pre-split: |
|
|
|
Net income per diluted share |
$ 8.60 |
|
$ 8.14 |
Shares used in per share calculation - diluted |
130,407 |
|
131,112 |
Post-split: |
|
|
|
Net income per diluted share |
$ 0.86 |
|
$ 0.81 |
Shares used in per share calculation - diluted |
1,304,066 |
|
1,311,118 |
Reconciliation of (in thousands, except per share data) (unaudited)
|
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|
Three Months Ended |
||
|
|
|
|
|
$ 1,116,444 |
|
$ 1,020,282 |
Pre-tax non-GAAP items: |
|
|
|
Amortization related to intangible assets acquired through certain business combinations - cost of goods sold |
3,076 |
|
3,076 |
Elective deferred compensation ("EDC") related liability valuation increase - cost of goods sold |
3,263 |
|
2,488 |
Restructuring charges, net - cost of goods sold |
— |
|
5,276 |
Transformational costs - cost of goods sold |
— |
|
25,407 |
EDC related liability valuation increase - research and development |
8,136 |
|
4,479 |
Transformational costs - Research and development |
— |
|
8,469 |
Amortization related to intangible assets acquired through certain business combinations - selling, general and administrative |
692 |
|
770 |
EDC related liability valuation increase - selling, general and administrative |
7,510 |
|
2,986 |
Transformational costs - selling, general and administrative |
— |
|
8,469 |
Restructuring charges, net - operating expenses |
— |
|
(768) |
Amortization of note discounts - other income (expense), net |
765 |
|
759 |
Gain on EDC related asset - other income (expense), net |
(17,420) |
|
(9,643) |
Net income tax benefit on non-GAAP items |
(959) |
|
(5,160) |
Non-GAAP net income |
$ 1,121,507 |
|
$ 1,066,890 |
Pre-split |
|
|
|
Non-GAAP net income per diluted share |
$ 8.60 |
|
$ 8.14 |
|
$ 8.56 |
|
$ 7.78 |
|
130,407 |
|
131,112 |
Post-split |
|
|
|
Non-GAAP net income per diluted share |
$ 0.86 |
|
$ 0.81 |
|
$ 0.86 |
|
$ 0.78 |
|
1,304,066 |
|
1,311,118 |
Reconciliation of (in thousands, except percentages) (unaudited) |
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Three Months Ended |
||
|
|
|
|
|
$ 2,002,683 |
|
$ 1,840,098 |
Pre-tax non-GAAP items: |
|
|
|
Amortization related to intangible assets acquired through certain business combinations |
3,076 |
|
3,076 |
EDC related liability valuation increase |
3,263 |
|
2,488 |
Restructuring charges, net |
— |
|
5,276 |
Transformational costs |
— |
|
25,407 |
Non-GAAP gross margin |
$ 2,009,022 |
|
$ 1,876,345 |
|
48.0 % |
|
47.5 % |
Non-GAAP gross margin as a percentage of revenue |
48.2 % |
|
48.5 % |
|
$ 738,486 |
|
$ 713,538 |
Pre-tax non-GAAP items: |
|
|
|
Amortization related to intangible assets acquired through certain business combinations |
(692) |
|
(770) |
EDC related liability valuation increase |
(15,646) |
|
(7,465) |
Restructuring charges, net |
— |
|
768 |
Transformational costs |
— |
|
(16,938) |
Non-GAAP operating expenses |
$ 722,148 |
|
$ 689,133 |
|
$ 1,264,197 |
|
$ 1,126,560 |
Non-GAAP operating income |
$ 1,286,874 |
|
$ 1,187,212 |
|
30.3 % |
|
29.1 % |
Non-GAAP operating income as a percent of revenue |
30.9 % |
|
30.7 % |
Lam Research Corporation Contacts:
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