Lam Research (NASDAQ:LRCX) reported record revenue, operating margin and earnings per share for its June 2026 quarter, driven by a sharp increase in NAND-related revenue and continued growth in its Customer Support Business Group.
Chief Executive Officer Tim Archer said the company’s June-quarter top-line growth was led by a doubling in NAND revenue from the prior quarter, reflecting demand for storage used in AI systems. Lam also recorded strong customer-support revenue, supported by upgrades, Reliant products and Equipment Intelligence-enabled services.
June-quarter results exceed guidance
Revenue for the June quarter was $6.72 billion, up 15% sequentially and 30% from a year earlier. The result was above the midpoint of Lam’s guidance. Non-GAAP gross margin reached 52%, compared with 49.9% in the March quarter, while operating margin rose to 38.4% from 35%.
Chief Financial Officer Doug Bettinger said gross margin benefited from pricing actions, operational and scale efficiencies, and favorable product mix. June-quarter diluted non-GAAP earnings per share were a record $1.82.
For the fiscal year ended in June, Lam reported record revenue of $23.2 billion and gross margin of 50.6%. Diluted earnings per share were $5.82, up 41% from fiscal 2025, according to Bettinger.
- Deferred revenue rose by $213 million sequentially to $2.43 billion, primarily due to customer down payments.
- Cash and short-term investments totaled $5.6 billion, up from $4.8 billion at the end of March.
- Inventory rose to $4.3 billion as Lam built supply for growing customer demand, while inventory turns improved to 3 times from 2.9 times.
- Lam repurchased about $246 million of stock and paid $325 million in dividends during the quarter.
The company ended the quarter with about 22,400 regular full-time employees, an increase of roughly 1,800 from the prior quarter. The additions were concentrated in factory, field and research-and-development roles.
Memory and customer-support demand strengthen
Memory represented 46% of systems revenue in the June quarter, up from 39% in the March quarter. Non-volatile memory accounted for 23% of systems revenue, compared with 12% in the prior quarter, as NAND revenue more than doubled sequentially.
Bettinger said NAND spending was focused on conversions to 256-layer and higher devices, primarily for enterprise solid-state drives. DRAM accounted for 23% of systems revenue, down from 27% in the prior quarter, though DRAM revenue in dollars was roughly flat with the record level reached in March. DRAM investment was directed toward wafer additions and technology upgrades supporting DDR5, LPDDR5 and high-bandwidth memory.
Foundry represented 44% of systems revenue, down from 54% in the March quarter. Lower mature-node spending from Chinese customers was largely offset by investment in 2-nanometer and 3-nanometer capability and advanced packaging. Logic and other markets represented 10% of systems revenue.
The Customer Support Business Group posted its third consecutive quarter of record revenue, generating nearly $2.5 billion, up 17% sequentially and 43% year over year. The increase was primarily driven by record upgrade revenue, with smaller gains in Reliant products and services.
Bettinger said Lam expects a similar customer-support revenue profile in the September quarter, including continued strength in NAND-related upgrades, spare parts demand supported by high industry utilization, and advanced services such as collaborative maintenance robots and Equipment Intelligence offerings.
AI demand lifts WFE outlook and September guidance
Lam raised its outlook for calendar 2026 wafer-fab-equipment spending to the low-$150 billion range, from a previous outlook of $140 billion with upside bias. Archer said customers have signaled long-term demand visibility and have announced multiyear fab construction plans, while also working to secure equipment for future clean-room capacity.
For the September 2026 quarter, Lam forecast:
- Revenue of $8.1 billion, plus or minus $400 million.
- Non-GAAP gross margin of 52%, plus or minus one percentage point.
- Non-GAAP operating margin of 39.5%, plus or minus one percentage point.
- Non-GAAP earnings per share of $2.15, plus or minus $0.15, based on approximately 1.255 billion shares.
Bettinger said the company expects spending to rise in the September quarter, though at a slower rate than revenue. He added that Lam expects gross margin in the 51% to 52% range to be sustainable in the near term at current volume levels.
Technology transitions expand Lam’s opportunity
Management said AI-related semiconductor requirements are increasing the importance of deposition and etch technologies across NAND, DRAM, foundry logic and advanced packaging. Archer said Lam expects its served available market per wafer in NAND to double from 128-layer devices to devices with more than 500 layers.
Lam highlighted adoption of its Akara conductor-etch platform in 2-nanometer and below gate-all-around logic and advanced DRAM applications. Archer said the platform has secured several strategic tool-of-record positions and its installed base has doubled annually since launch.
The company also cited growth in advanced packaging, where it expects more than 70% year-over-year growth. Lam said it has shipped 510-by-515-millimeter panel systems into development programs across multiple geographies and plans to ship its first 310-by-310-millimeter panel tool this year.
Looking beyond the September quarter, management declined to provide numerical guidance for 2027 but described the outlook as favorable. Archer said Lam expects DRAM to be the fastest-growing wafer-fab-equipment segment next year, followed by leading-edge foundry and logic, then NAND. Bettinger said several new fabs are expected to come online through the end of next year, creating capacity for additional equipment installations.
Lam also updated its longer-term profitability framework, targeting gross margins in the mid-50% range and operating margins in the mid-40% range over the next several years. Bettinger said the company’s served available market is trending toward the high-30% range as a percentage of wafer-fab-equipment spending.
About Lam Research (NASDAQ:LRCX)
Lam Research Corporation (NASDAQ: LRCX) is a global supplier of wafer fabrication equipment and services to the semiconductor industry. Founded in 1980 by David K. Lam and headquartered in Fremont, California, the company develops and manufactures systems used in multiple stages of semiconductor device production, including thin film deposition, plasma etch, wafer cleaning and related process modules and automation.
Lam’s product portfolio covers core process technologies employed by logic and memory manufacturers, with equipment designed to support advanced-node patterning, 3D NAND and other emerging device architectures.
