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SEC filingRevenue grew 9% QoQ to $5.84B, with gross margin expanding 20bps to 49.8%, driven by DRAM investments and improved factory efficiencies.
In the March 2026 quarter, Lam Research revenue increased 9% sequentially to $5.84B, driven by a 11% increase in systems revenue from heightened DRAM customer investments and growth in customer support-related revenue tied to an expanding installed base and higher spares, upgrades, and services. Gross margin expanded 20 basis points to 49.8%, primarily due to improved factory efficiencies. Net income rose 14.5% to $1.83B, with diluted EPS of $1.45 compared to $1.26 in the prior quarter. Operating expenses increased 2.7% to $864M, driven by seasonal employee-related costs and workforce optimization, partially offset by lower deferred compensation costs and outside services.
System revenue accelerated to $3.73B (64% of total), while customer support-related revenue reached $2.11B (36%). By end market, the foundry segment comprised 54% of system and upgrade revenue (down from 59% in the prior quarter) due to reduced mature node investments, while memory increased to 39% (from 34%) on strengthened DRAM and NVM spending. Logic/IDM held at 7%. Geographically, China remained the largest region at 34% of total revenue, with Korea and Taiwan both at 23%.
Management noted continued growth expectations for calendar 2026 driven by AI-related semiconductor spending, though near-term volatility from trade restrictions and tariffs may impact revenue and operating margins. The company emphasized long-term secular demand and technology inflections (3D scaling, multiple patterning, advanced packaging) as drivers for the served available market. No specific quantitative guidance was provided.
As of March 29, 2026, Lam Research held $4.751 billion in cash and cash equivalents, down from $6.391 billion at June 29, 2025, primarily due to share repurchases and debt repayment. Total debt decreased to $3.734 billion (current portion $4.1 million, long-term $3.730 billion) after the maturity of $750 million in 6.500% Senior Notes due 2026. The company has a $2.0 billion commercial paper program with no outstanding borrowings. Deferred revenue, a key indicator of future revenue, stood at $2.221 billion, with $1.509 billion expected to be recognized within one year.
No material purchase commitments or contractual obligations were disclosed in the notes aside from standard warranties ($255 million total) and indemnifications. The company disclosed $241.6 million in maximum potential future payments under guarantees and standby letters of credit, but does not believe any material payments are probable.
Lam Research returned substantial capital to shareholders. During the nine months, it spent $3.5899 billion on share repurchases (22.6 million shares), leaving $4.2887 billion under the May 2024 $10 billion authorization. A $200 million accelerated share repurchase (ASR) was executed in March 2026, with initial delivery of 685,000 shares. Dividends totaled $945.3 million ($0.26 per share quarterly, up from $0.23 a year earlier). Capital expenditures were $777.6 million (4.7% of revenue). Debt reduction of $754 million came from the maturity of the 2026 notes.
The company operates as a single reportable segment: manufacturing and servicing of wafer processing semiconductor equipment. Segment gross margin for the March 2026 quarter was $3.005 billion (51.4% of revenue), up from $2.361 billion (50.0%) a year ago, driven by higher revenue and cost management. Geographically, China remained the largest region at 34% of revenue, followed by Korea (23%) and Taiwan (23%). The memory market accounted for 39% of systems and upgrade revenue in the quarter, foundry 54%, and logic/IDM 7%. Customer support-related revenue (services, spares, upgrades) contributed $2.111 billion in the quarter, or 36% of total revenue.
Net income of $4,988M grew 37% YoY, while CFO of $4,400M grew 22%, resulting in a CFO-to-NI ratio of 0.88, down from 0.99 in the prior period. The gap stemmed from a $1,054M working capital outflow (vs. $337M outflow last year), largely driven by inventory and receivables build. Capex of $778M increased 32%, representing 17.7% of CFO, up from 16.2%. Capital returns (buybacks + dividends) totaled $4,550M, exceeding implied free cash flow (CFO minus capex) of $3,623M by 26%, indicating reliance on balance sheet cash and debt. Share repurchases of $3,605M and dividends of $945M were the main financing uses. No significant one-time items were noted; deferred taxes provided a $113M source. Overall, operating cash flow quality remains solid despite working capital drag, but capital returns outpace internally generated cash.