Q1 FY27 · the quarter LRCX reports
Sales
PricedIn$8.20B$7.77B – $8.60B
$7.77B$8.20B$8.60B
adjusted EPS
PricedIn$2.21$2.00 – $2.40
$2.00$2.21$2.40
Middlethe forecast80% range1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.
The six agree closely: five put sales at $8.2B and earnings at $2.20 to $2.23. Muse Wonder, lowest at $8.1B and $2.15, sets the quarter 'at company guidance for sales, margin and earnings per share'. Opus, highest on earnings at $2.23, leans on the record: the company 'has beaten its revenue midpoint by $120-140 million and its earnings midpoint by 12-17 cents in each of the last three quarters'.
The models expect September-quarter sales of about $8.2B, a little above the company's own outlook, as memory and AI spending surge.
Sales$8.20B$7.77B – $8.60B · +54% on Q1 FY26 ($5.32B)
Adjusted EPS$2.21$2.00 – $2.40 · +75% on Q1 FY26 ($1.26)
Investment and cash generation
Base case
Capital spending$342M
Free cash flow$1.74B
Free cash flow: operating cash flow less capital spending.
Lam Research makes the machines that etch and deposit the layers of a chip. Its sales rose every quarter of fiscal 2026, ending June at a record $6.7B, up 15% on March, with gross margin near 52% and adjusted earnings of $1.82 a share. The September quarter has already ended; its results are not yet out.
In July the company guided September sales to $8.1B, more than 20% growth on June, with a 52% gross margin and earnings of $2.15 a share. It raised its view of 2026 industry equipment spending to the low $150B range, from $140B, as customers race to add capacity for AI chips and memory.
All six models build on that outlook. Five set the middle at $8.2B, citing the company's habit of landing above its midpoint; Muse Wonder sets it right on the guide at $8.1B. Earnings land near $2.21, with a 52% gross margin and a 40% operating margin.
The tax rate is the main drag. The company expects it in the mid-teens from September, up from 11% in June, because more profit is earned in the United States. So earnings rise about 21% on June while sales rise about 22%.
Ranges are tight because the quarter is over and the outlook is recent: $7.8B to $8.6B for sales and $2.00 to $2.40 for earnings. Only Muse Wonder reaches lower, to $7.6B, allowing for execution risk beyond the guided band.
About $2.21 a share: sales of $8.2B at a 40% operating margin, taxed near 15%, spread over about 1.255 billion shares.
Outlook against result
Q3 FY25+1.5%$4.65B → $4.72B
Q4 FY25+3.4%$5.00B → $5.17B
Q1 FY26+2.4%$5.20B → $5.32B
Q2 FY26+2.8%$5.20B → $5.34B
Q3 FY26+2.5%$5.70B → $5.84B
Q4 FY26+1.9%$6.60B → $6.72B
Q1 FY27+1.2%$8.10B → $8.20B
Each outlook is the one the company gave before the quarter. The last row is the models' forecast.
The quarter forecast, line by line
The lines as the company's statement shows them. The forecast columns are the average of the models, line by line. Sales growth is the change on the same quarter a year earlier. Earnings per share is the headline's: the company's own for the reported quarter, and for a forecast quarter worked out from the averaged lines with the company's adjustments.
What it rests on
- Sales outlook
- $8.1B midpoint for September
We're expecting revenue of $8.1 billion, plus or minus $400 million.
July earnings call - Earnings outlook
- $2.15 a share midpoint
we're expecting earnings per share of $2.15 plus or minus 15 cents based on a share count of approximately 1.255 billion shares.
July earnings call - Guided growth
- More than 20% over the June quarter
Our $8.1 billion September quarter revenue guide represents more than 20% growth quarter on quarter
July earnings call - Tax rate
- Mid-teens from September, up from 11%
Our non-GAAP tax rate third quarter was 11% in line with our expectations. We do believe the tax rate will be in the mid-teens in the September quarter
July earnings call - Industry spending
- Low $150B range for 2026, up from $140B
we expect calendar 2026 wafer fab equipment spending, or WFE, to be in the low $150 billion range, up from our prior outlook of $140 billion with upside bias.
July earnings call
Low and high
Basethe middle forecast
Key assumptions
Sales land a little above the guide, near $8.2B. The company beat its sales midpoint in each of the last several quarters.5 of 6
- Opus 5.5I put the middle slightly above guidance: about $8.25 billion of sales
- GLM 5.3a touch above the $8.1 billion midpoint, since Lam landed above the midpoint in each of the last four quarters
- GPT-6.1 SolMy middle is modestly above that at $8.25 billion and $2.22
- Gemini 4 Argonwe place our middle forecast for the first quarter of fiscal 2027 slightly above management's guidance midpoint
- Grok 4.7lifted only a little for the company's habit of landing above the middle
Gross margin holds near 52%, the middle of the guided band. The finance chief said the current 51% to 52% range can continue in the near term.4 of 6
- Opus 5.5Gross margin stays near 52.3-52.6% through fiscal 2027
- GPT-6.1 SolI use about 52.3% adjusted gross margin
- GLM 5.3My quarter-plan lines are built from this guide: 52 percent gross margin
- Muse WonderSeptember quarter middle is set at company guidance for sales, margin and earnings per share
Tax rate rises to about 15%, from 11% in June. More revenue falls in higher-tax places, mainly the United States.4 of 6
- GLM 5.3I model a roughly 15 percent adjusted tax rate in every forecast quarter
- Muse WonderA mid teens tax rate is used in both quarter plan quarters, above the June quarter rate.
- Grok 4.7the base-case tax rate is about 15 percent rather than last year's 12 percent
- GPT-6.1 Sola roughly 15% tax rate
Operating margin near 40% as spending grows slower than sales. The company said it is growing spending at a much slower rate than revenue.3 of 6
- Grok 4.7Spending grows slower than sales, so operating margin expands even with a higher tax rate
- GPT-6.1 Sol40% adjusted operating margin
- GLM 5.3roughly 39.5 to 40 percent operating margin
If all of this happens
$8.20Bsales
$2.21adjusted EPS
$342MCapital spending
$1.74BFree cash flow
Cash walk not supplied by every model.
Lowabout 1 chance in 10 of worse
What the low case assumes
Gross margin gives back up to 1.5 points on input costs. The Middle East conflict raised prices of oil, helium and aluminum.3 of 6
- Opus 5.5so I keep the low gross margin case about 1.5 points below the base
- Grok 4.7Tariffs, oil, and specialty-material costs compress gross margin
- Gemini 4 ArgonRising manufacturing and logistics costs from tariffs on steel and aluminum and higher energy and specialty chemical prices linked to the Middle East conflict.
The result falls near or below the bottom of the guide. Delivery timing and product mix can reverse the usual small beat.3 of 6
- Grok 4.7The September quarter, already ended, comes in near the bottom of the company guide
- Muse Wonderranges widen slightly beyond guidance for execution risk
- GPT-6.1 SolThe range allows delivery timing and product mix to reverse that modest beat.
Big tools ship late or customers delay sign-off, pushing sales out of the quarter. Tools count as sales only once customers accept them in ready factories.2 of 6
- Grok 4.7Clean-room delays push customer acceptances out of the year
- GPT-6.1 SolDelayed factory readiness or equipment acceptance
If all of this happens
$7.77Bsales · −5% vs base
$2.00EPS · −9% vs base
Sales would land near the bottom of the guided band, about $7.8B or 5.3% under the base, with earnings near $2.00. That needs big tools to slip out of the quarter or customers to delay sign-off, and gross margin to give back up to 1.5 points on input costs tied to the Middle East conflict. Muse Wonder goes furthest, to $7.6B, because it widens its range 'slightly beyond guidance for execution risk' instead of counting on the usual beat.
The company has landed above its sales midpoint in each recent quarter, so a result near the bottom of the band would break that pattern.
The six lows run from $7.60B (Muse Wonder) to $7.85B (Opus 5.5).
First signThe September quarter report: sales near the bottom of the guided band, or a remark that China shipments or memory orders are slipping.
Highabout 1 chance in 10 of better
What the high case assumes
Sales come in above the top of the guided band. Margins and earnings beat the top of the June guide.3 of 6
- Grok 4.7September sales above the top of the guide
- GLM 5.3September-quarter revenue above $8.5 billion, the top of the guided range
- Muse Wondera September quarter above 8.5 billion dollars
Upgrades, spares and services keep growing at June's pace. Support revenue reached nearly $2.5B in June, up 43% in a year.2 of 6
- Grok 4.7Customer support reached nearly 2.5 billion dollars in the June quarter, up 43 percent from a year earlier
- GLM 5.3management expects a similar profile ahead
Gross margin reaches the top of its band, near 53%. June's 52% margin beat the top of its guided range.2 of 6
- Opus 5.5gross margin guided at 53% or more
- GLM 5.3gross margin prints above 53 percent
If all of this happens
$8.60Bsales · +5% vs base
$2.40EPS · +9% vs base
Sales would reach the top of the guided band, about $8.6B or 4.9% above the base, with earnings near $2.40. Customers would take more tools as new clean rooms open, upgrades and spares would keep growing at June's pace, and gross margin would sit near the top of its band. Sol and Grok go furthest on sales, to $8.7B; GLM goes furthest on earnings, to $2.45, holding that Lam keeps 'beating the high end of its own guidance (as it has for four straight quarters)'.
In June, gross margin, operating margin and earnings all came in above the top of their guided ranges, and sales beat the midpoint.
The six highs run from $8.55B (Gemini 4 Argon) to $8.65B (Grok 4.7).
First signThe September quarter report: sales above the top of the guided band, with comment that every segment keeps growing into December.
Watch
The September quarter report and the December outlook given with it. Sales near the top of the band and an outlook near $8.7B or higher point up; sales near the bottom, a flat outlook or weaker China comments point down.
Q2 FY27 · the quarter after
Sales
PricedIn$8.64B$7.97B – $9.34B
$7.97B$8.64B$9.34B
adjusted EPS
PricedIn$2.36$2.06 – $2.67
$2.06$2.36$2.67
Middlethe forecast80% range1 in 10 chance below this bar, 1 in 10 above it. These are the low and high printed by each number.
All six expect December to beat September, by 3.6% (Grok) to 7.4% (Muse Wonder). GLM, lowest at $8.4B, follows a gentle path, 'then roughly $8.45, $8.7 and $8.9 billion', since 'upcycles rarely run more than two to three years without a digestion'. Sol, highest at $8.8B, uses a steeper bridge of '$8.25 billion, $8.85 billion, $9.4 billion and $10.1 billion'. Sol's range is also widest, $8.0B to $9.8B: low if 'Customer factory openings slip', high if 'Customers bring new capacity online faster'.
December-quarter sales of about $8.6B, a modest step up from September as new factory space comes on bit by bit.
Sales$8.64B$7.97B – $9.34B · +62% on Q2 FY26 ($5.34B)
Adjusted EPS$2.36$2.06 – $2.67 · +86% on Q2 FY26 ($1.27)
Investment and cash generation
Capital spending: not supplied by every model
Free cash flow: not supplied by every model
Free cash flow: operating cash flow less capital spending.
Lam gives an outlook only one quarter ahead, so the December quarter's outlook will come with the September results. Until then the models lean on what management said in July: new capacity arrives gradually, and each coming quarter looks a little better than the last.
The finance chief counted 'eight, nine, ten new fabs' among the bigger customers opening by the end of 2027, each able to take more equipment. Customer support, the upgrades and spares business, set a third straight record in June at nearly $2.5B.
The models put December sales between $8.4B and $8.8B, averaging $8.6B, about 5.4% above September. Earnings average $2.36, up about 7.0%, with margins steady near 52% gross and 40% operating and a tax rate near 15%.
They differ on pace. Grok steps up 3.6% and GLM 3.7%, in line with gradual openings; Sol and Muse Wonder step up more than 7%, expecting faster installs and continued strength in flash memory upgrades.
The risks are policy and timing. China fell to 26% of June-quarter sales from 34%, and China's pause on rare-earth export licences ends in November 2026 unless extended. A lapse or a new export rule could stall sales near September's level.
About $2.36 a share: sales of $8.6B at a 40% operating margin, taxed near 15%, with the share count drifting down slowly through buybacks.
What it rests on
- Quarterly path
- Each coming quarter looks a little better
I feel incrementally good about each successive quarter as I sit here right now.
July earnings call - New factories
- Eight to ten opening by the end of 2027
there's probably eight, nine, ten new fabs coming online between now and the end of next year that's going to enable the reception of more equipment.
July earnings call - Support business
- Nearly $2.5B in June, up 43% in a year
The customer support business group generated a third consecutive quarter of record revenue at nearly $2.5 billion in the June quarter, which was up 17% sequentially from March quarter and 43% higher than the same period in 2025.
July earnings call - China share
- 26% of June-quarter sales, down from 34%
China declined as we expected it would and accounted for 26% of revenue. I'll just remind you that China was 34% of revenue last quarter.
July earnings call - Rare-earth pause
- Suspended until November 2026 unless extended
which have been suspended in part until November 2026 (unless extended)
2026 annual report
Low and high
Basethe middle forecast
Key assumptions
Sales rise about 5.4% over September as new clean rooms open gradually. Management said new capacity comes on 'bit by bit', not all in one quarter.5 of 6
- Grok 4.7sales rise about 3 to 4 percent a quarter after September in the base case
- Opus 5.5I model December at $8.7 billion
- GPT-6.1 SolMy fiscal-2027 sales bridge is $8.25 billion, $8.85 billion
- GLM 5.3then roughly $8.45, $8.7 and $8.9 billion
- Gemini 4 Argonsupports sequential quarterly growth through fiscal 2027
Gross margin steady near 52% and operating margin near 40%. The finance chief said the current 51% to 52% range can hold near term.3 of 6
- Opus 5.5Gross margin stays near 52.3-52.6% through fiscal 2027
- GLM 5.3I hold adjusted gross margin at about 52 percent for fiscal 2027 (the guided level)
- Grok 4.7Gross margin stays a little above 52 percent
Tax rate stays near 15%. Management expects the higher rate to last through 2026 and likely beyond.3 of 6
- GLM 5.3I model a roughly 15 percent adjusted tax rate in every forecast quarter
- Muse WonderA mid teens tax rate is used in both quarter plan quarters
- Opus 5.5The tax rate is 15% in fiscal 2027
Upgrades and spares keep growing on high factory use. Support revenue hit a third straight record in June.3 of 6
- GLM 5.3management expects a similar profile ahead
- Grok 4.7the base case keeps support growing with high factory use
- Muse WonderCustomer support reaching record levels supports a growing recurring part of sales in the middle case through fiscal 2027.
If all of this happens
$8.64Bsales
$2.36adjusted EPS
Lowabout 1 chance in 10 of worse
What the low case assumes
A new export rule cuts sales to Chinese customers. The 2025 affiliate rule took about $600 million from 2026 sales.4 of 6
- Opus 5.5a further export rule cuts Chinese demand
- Grok 4.7Export rules tighten or the pause on Chinese rare-earth licenses is not extended
- Muse WonderChina restrictions tighten further
- GLM 5.3China revenue keeps shrinking on tighter export controls
China's rare-earth licence pause lapses in November 2026, choking parts supply. China is the main source of rare earths used in some Lam products.3 of 6
- Grok 4.7A lapse of the rare-earth license pause or tighter export rules cuts shipments
- GLM 5.3the rare-earth suspension lapses in November 2026
- Gemini 4 Argonpotential retaliatory rare-earth export controls from China
New clean rooms open late, delaying tool deliveries. Tools can only be installed once customers' new space is ready.3 of 6
- Opus 5.5slower clean-room openings
- GPT-6.1 SolDelayed factory readiness or equipment acceptance
- Muse Wonderclean room additions slip
Memory makers pause tool orders as flash supply catches up. Memory spending can reverse within a few quarters once supply meets demand.2 of 6
- Grok 4.7Memory makers, especially in flash, pause tool orders as supply catches demand
- Opus 5.5memory makers pause after a record 2026
If all of this happens
$7.97Bsales · −8% vs base
$2.06EPS · −13% vs base
Sales would have to stop rising after September and hold near $8.0B, 7.8% under the base, with earnings near $2.06. That takes a further export rule on China, a lapse of China's rare-earth pause in November 2026, late clean rooms, or memory makers pausing orders. Opus and Gemini go furthest, to $7.9B: Opus has sales that 'level off near $7.8 billion a quarter from December' as memory makers pause after a record 2026. Grok's earnings low is furthest at $1.98, as 'margins give back some of the recent gain'.
A single China rule announced in 2025 cost about $600 million of 2026 sales, so policy can move a quarter quickly.
The six lows run from $7.90B (Gemini 4 Argon) to $8.05B (GLM 5.3).
First signA December outlook at or below September's result, given with the September quarter report.
Highabout 1 chance in 10 of better
What the high case assumes
New clean rooms open faster and customers pull in orders. Eight to ten new fabs open among big customers by the end of 2027.4 of 6
- GPT-6.1 SolFaster new-factory equipment installations
- Muse Wondernew fabs open faster, memory and foundry customers pull in orders
- Grok 4.7Clean-room space opens faster than the company has assumed
- GLM 5.3clean rooms open faster than planned
Flash memory and advanced packaging spending stay exceptionally strong. Packaging is on track for more than 70% growth this year.3 of 6
- GPT-6.1 SolStronger memory and advanced-packaging investment
- GLM 5.3advanced packaging grows more than 70 percent again
- Gemini 4 Argongreenfield flash memory capacity additions
Gross margin moves toward 53% or more. Pricing and factory scale feed management's mid-50% gross margin goal.2 of 6
- Opus 5.5gross margin guided at 53% or more
- GLM 5.3Gross margin reaching 53.5 to 54.5 percent sooner on the way to the mid-50s target
If all of this happens
$9.34Bsales · +8% vs base
$2.67EPS · +13% vs base
Sales would have to jump to about $9.3B, 8.1% above the base, with earnings near $2.67. Clean rooms would open faster, customers would pull in orders, and flash memory and packaging spending would stay exceptionally strong. Sol goes furthest, to $9.8B and $2.87, because its whole path climbs faster, running '$8.25 billion, $8.85 billion, $9.4 billion and $10.1 billion' through the year, and because it assumes Lam 'gains a little more business per new wafer each year'.
Advanced packaging alone is on track for more than 70% growth in 2026, and flash memory revenue doubled in the June quarter.
The six highs run from $8.85B (GLM 5.3) to $9.75B (GPT-6.1 Sol).
First signA December outlook above $9B, given with the September quarter report.
Watch
The December outlook at the September quarter report: near $8.7B keeps the base, above $9B points higher, at or below September's result points lower. Also watch China's rare-earth decision in November 2026 and any new export rule.