Lam Research Corp’s Earnings Call Highlights Record Revenues

Lam Research Corp ((LRCX)) has held its Q3 earnings call. Read on for the main highlights of the call.

Lam Research Corp’s recent earnings call revealed a robust performance characterized by record-breaking revenues and impressive gross margins. The company showcased significant achievements in its foundry revenues and product development, setting new benchmarks. However, challenges in the memory systems segment, particularly in China, and the looming threat of tariffs, present a balanced outlook for the company moving forward.

Record-Breaking Foundry Revenue

Lam Research achieved a record quarter for foundry revenues, highlighting the company’s solid product momentum and leading-edge technology inflections. Foundry revenues represented 48% of the systems revenue, a notable increase from 35% in the previous quarter, underscoring the company’s strong position in the market.

Gross Margin and Operating Margin Excellence

The company reported the highest quarterly gross margin percentage since its merger with Novelis in 2012, reaching 49%. Additionally, the operating margin hit 32.8%, both metrics exceeding previous records and showcasing Lam Research’s operational efficiency and profitability.

Strong Performance in Data Center and Logic Segments

Lam Research experienced significant gains in deposition and etch intensity due to the increasing complexity of semiconductor devices. The ACARA system further solidified its market-leading position in conductor etch, contributing to the company’s strong performance in the data center and logic segments.

Innovative Product Developments and Customer Wins

The company’s atomic layer deposition (ALD) products and the Altus Halo system have secured multiple key wins for spacer applications. These innovations have led to increased adoption across leading 3D NAND customers, reinforcing Lam Research’s reputation for cutting-edge technology.

Customer Support Business Group Achievements

The Customer Support Business Group generated approximately $1.7 billion in revenue for the March quarter, marking a 21% increase from the same period in 2024. This growth highlights the group’s success in driving revenue through customer support and service offerings.

Decreased Memory Systems Revenue

Despite overall strong performance, memory systems revenue decreased, accounting for 43% of total systems revenue, down from 50% in the prior quarter. Non-volatile memory also saw a decline, representing 20% of revenue, down from 24%.

China Revenue Challenges

The China region accounted for 31% of Lam Research’s revenue, remaining flat from the previous quarter. Restrictions affecting shipments to a domestic China customer, classified as a non-volatile memory producer, present ongoing challenges for the company in this key market.

Potential Impact of Tariffs

The ongoing tariff and global economic environment pose dynamic challenges for Lam Research. These factors could potentially impact customer demand and supply chain operations, adding an element of uncertainty to the company’s future outlook.

Forward-Looking Guidance

Looking ahead, Lam Research provided optimistic guidance for the June quarter, with expected revenues of $5 billion, a gross margin of 49.5%, and an operating margin of 33.5%. The company is strategically focused on expanding its served market and gaining market share through key technology inflections, such as Gate All Around and advanced packaging. Despite headwinds in the Reliant segment, growth in the Customer Support Business Group is anticipated, and Lam remains confident in its ability to outperform semiconductor industry growth.

In summary, Lam Research Corp’s earnings call painted a picture of strong financial performance and strategic growth, tempered by challenges in the memory systems segment and potential tariff impacts. The company’s record-breaking achievements in foundry revenues and innovative product developments position it well for future success, while its forward-looking guidance suggests continued confidence in overcoming industry challenges.