LRCX · Lam Research Corporation

Lam Research delivered record financial results for Q3 FY2026, with $5.84 billion in revenue (+9% Q/Q) and GAAP diluted EPS of $1.45 (+15% Q/Q), driven by robust AI-related semiconductor capital equipment demand across leading-edge logic and memory customers. Gross margin expanded 20 bps to 49.8% and operating margin rose 110 bps to 35.0%, reflecting strong pricing power, operational leverage, and disciplined expense management—operating expenses grew only 2.7% Q/Q despite double-digit top-line growth. Management explicitly attributed performance to 'AI-driven demand reshaping the semiconductor industry' and highlighted strategic investments enabling customers’ AI roadmaps. The geographic revenue mix remained heavily concentrated in Asia—China (34%), Korea (23%), and Taiwan (23%) together represented 80% of total revenue—underscoring continued regional dependency. Guidance for Q4 FY2026 calls for $6.60 billion ±$400 million in revenue, gross margin of 50.5% ±1%, and EPS of $1.65 ±$0.15, implying continued acceleration and confidence in near-term visibility. However, cash and equivalents declined sharply to $4.77 billion from $6.20 billion, largely due to $1.16 billion in share repurchases and $751 million in debt principal payments—highlighting aggressive capital return even amid strong organic growth. The $434 million in Japan-related deferred revenue (up from $226 million) signals growing backlog in that region, though revenue recognition is delayed until customer acceptance. Overall, this is a materially positive earnings event confirming Lam’s leadership in AI-enabling wafer fabrication infrastructure and reinforcing its outperformance versus peers in the current cycle.