Lam Research Corp.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 22 October 2025: press release. Guidance figures: 6 lowered, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue rose to $5.32 billion: Revenue was $5.32 billion, up 3% from $5.17 billion in the June quarter and from $4.17 billion in the September 2024 quarter. Source
• Margins rose while diluted EPS fell: U.S. GAAP gross margin was 50.4% and operating margin 34.4%, up 30 and 70 basis points. Diluted EPS was $1.24, down 8% from $1.35; non-GAAP diluted EPS was $1.26, down 5% from $1.33. Source
• China rose to 43% of revenue: China was 43% of revenue, up from 35% in the June quarter. Taiwan was 19% and the United States 6%, both unchanged from June. Source
• Tax law change added $27.45 million: A $27.45 million income tax expense from a change in tax law is excluded from non-GAAP results, alongside the impairment charge. Source
• Deferred revenue reached $2.77 billion: Deferred revenue rose to $2.77 billion from $2.68 billion in June. The balance excludes shipments to Japan customers that await acceptance. Source
• Operating cash flow fell to $1.78 billion: Net cash from operating activities was $1,779.0 million, against $2,554.2 million in June and $1,568.5 million a year earlier. Capital expenditures and intangible assets were $185.1 million, up from $172.2 million. Source
• Innovation tied to AI manufacturing: The chief executive linked the company's innovations to customers' AI-driven semiconductor manufacturing inflections. Source

“Lam's innovations are helping our customers address major AI-driven semiconductor manufacturing inflections,”

Tim Archer, Lam Research's President and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance kept: Revenue guidance range kept at $5.20 billion plus or minus $300 million, the same figure given for the September 2025 quarter. Source
• Guidance lowered: Gross margin guidance lowered to 48.4% U.S. GAAP and 48.5% non-GAAP, from 49.9% and 50.0% in the prior release. Source
• Guidance lowered: Operating margin guidance lowered to 32.9% U.S. GAAP and 33.0% non-GAAP, from 33.9% and 34.0% in the prior release. Source
• Guidance lowered: Diluted EPS guidance lowered to $1.15 from $1.20 in the prior release, U.S. GAAP and non-GAAP alike. Source
• Guidance lowered: Diluted share count guidance lowered to 1.26 billion from 1.27 billion. Source
• New: Japan wording changed: the release now says control, not title, does not transfer on Japan shipments until customer acceptance. Source

Results and growth drivers

• Revenue rose to $5.32 billion: Revenue was $5.32 billion, up 3% from $5.17 billion in the June quarter and from $4.17 billion in the September 2024 quarter. Source
• Margins rose while diluted EPS fell: U.S. GAAP gross margin was 50.4% and operating margin 34.4%, up 30 and 70 basis points. Diluted EPS was $1.24, down 8% from $1.35; non-GAAP diluted EPS was $1.26, down 5% from $1.33. Source
• Net income fell as tax expense rose: Net income was $1,568.7 million, against $1,720.1 million in the June quarter. Income tax expense was $290.5 million, against $58.9 million. Source

Regional revenue mix

• China rose to 43% of revenue: China was 43% of revenue, up from 35% in the June quarter. Taiwan was 19% and the United States 6%, both unchanged from June. Source
• Korea and Japan shares declined: Korea fell to 15% of revenue from 22% in June, and Japan fell to 10% from 14%.
• Southeast Asia share rose to 5%: Southeast Asia was 5% of revenue, against 2% in the June quarter. Europe stayed at 2%. Source

“our expanding portfolio of products and solutions across critical device segments”

Tim Archer, Lam Research's President and Chief Executive Officer

Systems and customer support revenue

• Systems revenue rose from June: Systems revenue was $3,547.6 million, up from $3,437.6 million in June and from $2,392.7 million in the September 2024 quarter. Source
• Customer support revenue edged up: Customer support-related revenue and other was $1,776.6 million, up from $1,733.8 million in June and against $1,775.2 million a year earlier. It covers service, spares, upgrades and Reliant non-leading-edge equipment. Source
• Systems revenue scope defined: Systems revenue is defined to include new leading-edge equipment in deposition, etch, and other wafer fabrication markets. Source

Costs, margins and tax

• Operating expenses rose slightly: GAAP operating expenses were $855.8 million, against $848.6 million in June: R&D was $576.4 million and SG&A $279.3 million. Non-GAAP operating expenses were $831.9 million. Source
• Impairment charge of $5.3 million: A $5.3 million impairment of long-lived assets was recorded in selling, general and administrative expense. No such impairment appeared in the June quarter. Source
• Tax law change added $27.45 million: A $27.45 million income tax expense from a change in tax law is excluded from non-GAAP results, alongside the impairment charge. Source
• Elective deferred compensation valuation effects: Elective deferred compensation liability valuation increases were $6.0 million in cost of goods sold, $10.8 million in R&D and $7.2 million in SG&A, offset by a $23.1 million gain on the related asset. Source
• Non-GAAP excludes listed items: Non-GAAP results exclude acquired-intangible amortization, elective deferred compensation effects, note discount amortization and the tax effect of non-GAAP items, for both quarters shown. Source

Demand and order book

• Deferred revenue reached $2.77 billion: Deferred revenue rose to $2.77 billion from $2.68 billion in June. The balance excludes shipments to Japan customers that await acceptance. Source
• Japan future revenue fell to $131 million: Estimated future revenue from shipments to Japan customers was about $131 million at September 28, 2025, down from $342 million at June 29, 2025. Source
• Receivables up, inventories down: Accounts receivable, net, rose to $3.63 billion from $3.38 billion, while inventories fell to $4.10 billion from $4.31 billion. Source

Cash flow and capital returns

• Operating cash flow fell to $1.78 billion: Net cash from operating activities was $1,779.0 million, against $2,554.2 million in June and $1,568.5 million a year earlier. Capital expenditures and intangible assets were $185.1 million, up from $172.2 million. Source
• Treasury stock purchases fell to $976 million: Treasury stock purchases, including excise tax, were $975.8 million, against $1,292.3 million in June. Dividends paid were $292.0 million, against $295.2 million. Source
• Dividend declared rose to $0.26: Cash dividend declared per common share was $0.26, against $0.23 in June and in the September 2024 quarter. Source
• Cash balance rose to $6.7 billion: Cash, cash equivalents and restricted cash rose to $6.7 billion, from $6.4 billion at the June quarter-end. Source
• Common shares outstanding declined: Common shares outstanding fell to 1,259.2 million from 1,268.7 million in June. Stockholders' equity rose to $10.19 billion. Source
• Debt balances little changed: Long-term debt and finance lease obligations were $3,729.6 million, against $3,730.2 million in June; the current portion was $754.4 million. Source

Strategy and company description

• Innovation tied to AI manufacturing: The chief executive linked the company's innovations to customers' AI-driven semiconductor manufacturing inflections. Source
• Expanding portfolio across device segments: The chief executive cited an expanding portfolio of products and solutions across critical device segments. Source
• Company describes its business: Lam describes itself as a global supplier of wafer fabrication equipment and services, with customers building smaller and better performing devices. Source

Coming up, as management said on 22 October 2025

• December quarter guidance: Management is providing guidance for the quarter ending December 28, 2025, set out in the guidance section. Source
• Japan shipments recognized at acceptance: Revenue on Japan shipments is recognized only after customer acceptance; until then the shipments are held as inventory at cost. Source

Figures management reported

Other quarters

• Q4 FY2026 earnings call
• Q3 FY2026 earnings call
• Q2 FY2026 earnings call
• Q4 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.