Lam Research Q1 Earnings Surpass Expectations, Revenues Rise Y/Y

Lam Research (LRCX) reported first-quarter fiscal 2026 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.

LRCX reported first-quarter non-GAAP earnings of $1.26 per share, which beat the Zacks Consensus Estimate by 4.1%. The bottom line increased 46.5% on a year-over-year basis.

In the first quarter of fiscal 2026, LRCX reported revenues of $5.32 billion, which surpassed the consensus mark by 2%. The top line increased 28% from the year-ago quarter’s $4.17 billion.

Lam Research Corporation Price, Consensus and EPS Surprise

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

LRCX’s Q1 Revenues in Detail

Lam Research’s Systems revenues were $3.55 billion (66.6% of total revenues), up 3% from the previous quarter and 48% year over year. Our model estimate for Systems revenues was pegged at $3.43 billion.

In the Customer Support Business Group, revenues were $1.77 billion, comprising 33.4% of total revenues. This marks a 2.5% rise from the previous quarter’s $1.73 billion, and a 0.1% increase from the year-ago period. Our model estimate for Customer Support Business Group revenues was pegged at $1.79 billion.

During the quarter, China contributed 43% of total revenues, Taiwan 19%, and Korea 15%. Other regions included Japan 10%, the United States 6%, Southeast Asia 5%, and Europe 2%.

Operating Details of LRCX

Lam Research’s non-GAAP gross margin rose to 50.6%, up 30 basis points from 50.3% in the previous quarter.

Non-GAAP operating expenses increased to $831.92 million, up 1.2% from $822.38 million. As a percentage of revenues, non-GAAP operating expenses declined to 15.6% in the first quarter from 15.9% in the fourth quarter.

As a result, the non-GAAP operating margin improved 60 basis points sequentially to 35%.

LRCX’s Balance Sheet & Cash Flow

As of Sept. 28, 2025, Lam Research held $6.69 billion in cash and cash equivalents, up from $6.39 billion at the end of the prior quarter.

Cash flow from operating activities decreased significantly to $1.78 billion, down from $2.55 billion in the previous quarter.

During the quarter, Lam Research paid dividends totalling $291.9 million and repurchased shares worth $975.8 million.

LRCX Provides Strong Guidance

For the second quarter of fiscal 2026, Lam Research projects revenues of $5.2 billion (+/- $300 million). The Zacks Consensus Estimate for the fiscal second quarter is pegged at $4.81 billion, indicating year-over-year growth of 9.8%.

The company expects a non-GAAP gross margin of 48.5% (+/-1%) and a non-GAAP operating margin of 33% (+/-1%).

Non-GAAP earnings per share are projected to be $1.15 (+/- $0.10), with a diluted share count of 1.26 billion. The Zacks Consensus Estimate for the fiscal second quarter is pegged at $1.05 per share, indicating year-over-year growth of 15.4%.

Zacks Rank and Other Stocks to Consider

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

Impinj (PI), Credo Technology Group (CRDO) and Ambarella (AMBA) are some other top-ranked stocks that investors can consider in the Zacks Computer and Technology sector. Impinj and Credo Technology Group sport a Zacks Rank #1 (Strong Buy) each, while Ambarella 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 Impinj’s full year 2025 earnings is pegged at $1.98 per share, revised upward by 4 cents over the past 60 days and suggests a year-over-year decline of 6.2%. Impinj shares have soared 39.2% year to date.

The Zacks Consensus Estimate for Credo Technology Group’s fiscal 2026 earnings has been revised upward by 37.2% over the past 60 days to $2.03 per share, suggesting an increase of 190% year-over-year. Credo Technology Group shares have rallied 104.2% year to date.

The Zacks Consensus Estimate for Ambarella’s fiscal 2026 earnings has been revised upwards to 50 cents per share from 13 cents 60 days ago, reflecting 412.5% year-over-year growth. Ambarella shares have risen 9.7% year to date.

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

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