Lam Research's Q4 Earnings Beat Expectations, Revenues Rise Y/Y

Lam Research LRCX reported fourth-quarter fiscal 2025 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.

LRCX reported fourth-quarter non-GAAP earnings of $1.33 per share, which beat the Zacks Consensus Estimate by 10.8%. The bottom line increased 64.2% on a year-over-year basis.

In the fourth quarter of fiscal 2025, LRCX reported revenues of $5.17 billion, which surpassed the consensus mark by 3.6%. The top line increased 34% from the year-ago quarter’s $3.87 billion.

Buoyed by better-than-expected fiscal fourth-quarter performance, Lam Research has released a strong outlook for the first quarter of fiscal 2026.

Lam Research Corporation Price, Consensus and EPS Surprise

Lam Research Corporation price-consensus-eps-surprise-chart | Lam Research Corporation Quote

LRCX’s Q4 Revenues in Detail

Lam Research’s Systems revenues were $3.44 billion (66.5% of total revenues), up 13% from the previous quarter and 58% year over year. Our model estimate for Systems revenues was pegged at $2.87 billion.

In the Customer Support Business Group, revenues were $1.73 billion, comprising 33.5% of total revenues. This marks a 2.9% increase from the previous quarter’s $1.68 billion, and a 1.9% increase from the year-ago period. Our model estimate for Customer Support Business Group revenues was pegged at $2.02 billion .

During the quarter, China contributed 35% of total revenues, Korea 22%, and Taiwan 19%. Other regions included Japan 14%, the United States 6%, Southeast Asia 2%, and Europe 2%.

Operating Details of LRCX

Lam Research’s non-GAAP gross margin rose to 50.3%, up 130 basis points from 49% in the previous quarter.

Non-GAAP operating expenses increased to $822.4 million, up 7.7% from $763.3 million. As a percentage of revenues, non-GAAP operating expenses declined to 15.9% from 16.2% in the third quarter.

As a result, the non-GAAP operating margin improved 160 basis points sequentially to 34.4%.

LRCX’s Balance Sheet & Cash Flow

As of June 29, 2025, Lam Research  held $6.39  billion in cash and cash equivalents, up from $5.45 billion at the end of the prior quarter.

Cash flow from operating activities increased significantly to $2.55 billion, up from $1.31 billion in the previous quarter. In fiscal 2025, the company generated an operating cash flow of $6.17 billion.

During the quarter, Lam Research paid dividends totaling $295.2  million and repurchased shares worth $1.29 billion. During fiscal 2025, it repurchased shares worth $3.42 billion and paid $1.15 billion in dividends.

LRCX Provides Strong Guidance

For the first quarter of fiscal 2026, Lam Research projects revenues of $5.2 billion (+/- $300 million). The Zacks Consensus Estimate for the fiscal first quarter is pegged at $4.63 billion, indicating year-over-year growth of 11.2%.

The company expects a non-GAAP gross margin of 50% (+/-1%) and a non-GAAP operating margin of 34% (+/-1%).

Non-GAAP earnings per share are projected to be $1.20 (+/- $0.10), with a diluted share count of 1.27 billion. The Zacks Consensus Estimate for the fiscal first quarter is pegged at $1.00 per share, indicating year-over-year growth of 16.3%.

Zacks Rank and Other Stocks to Consider

Currently, LRCX carries a Zacks Rank #2 (Buy).

Allegro MicroSystems ALGM, Credo Technology Group CRDO and Applied Materials AMAT are some other top-ranked stocks that investors can consider in the Zacks Electronics - Semiconductors sector. Allegro MicroSystems and Credo Technology Group sport a Zacks Rank #1 (Strong Buy) each, while Applied Materials carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Allegro MicroSystems’s fiscal 2026 earnings has been revised upwards over the past 60 days to 53 cents per share and suggests a year-over-year increase of 120.8%. Allegro MicroSystems shares have soared 54.9% year to date.

The Zacks Consensus Estimate for Credo Technology Group’s fiscal 2026 earnings has been revised upward over the past 60 days to $1.48 per share, suggesting an increase of 111.4% from the year-ago quarter’s reported figure. Credo Technology Group shares have rallied 72.6% year to date.

The Zacks Consensus Estimate for Applied Materials’s fiscal 2025 earnings has been revised upwards to $9.47 per share in the past 60 days, reflecting 9.48% year-over-year growth. Applied Materials shares have risen 16.4% year to date.

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This article originally published on Zacks Investment Research (zacks.com).

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