Wednesday 21 October, 16:13 ET · released
Lam Research reported. Sales $8.22B vs our $8.20B, beat +0.2%. Adjusted EPS $2.20 vs our $2.21, miss −1¢. After the call we forecast again.
The quarter against our forecast
Q1 FY27 sales$8.22Bour forecast $8.20B · +0.2% · outlook $8.10B
adjusted EPS$2.20our forecast $2.21 · −1¢
Q1 FY27 line by line, as the income statement shows it
| Line | Outlook | Our forecast | Reported | Against our forecast |
|---|---|---|---|---|
| Revenue | $8.10B | $8.20B | $8.22B | +0.2%beat |
| Operating Segments | ||||
| Reportable Segment | — | $8.20B | — | with the 10-Q |
| Cost of goods sold | — | $3.93B | $3.92B | −0.2%beat |
| Restructuring charges, net - cost of goods sold | — | $0.0M | — | with the 10-Q |
| Total cost of goods sold | — | $3.93B | $3.92B | −0.2%beat |
| Gross margin | — | $4.27B | $4.30B | +0.6%beat |
| Gross margin | — | 52.1% | 52.3% | +0.2 ptbeat |
| Total operating expenses | — | $1.01B | $1.02B | +0.4%miss |
| Operating income | — | $3.26B | $3.28B | +0.7%beat |
| Operating margin | — | 39.8% | 40.0% | +0.2 ptbeat |
| Other income (expense), net | — | $0.3M | $28.5M | +8465.0%beat |
| Income before income taxes | — | $3.26B | $3.31B | +1.5%beat |
| Income tax expense | — | $495M | $559M | +13.0%miss |
| Tax rate | — | 15.2% | 16.9% | +1.7 ptmiss |
| Net income | — | $2.77B | $2.75B | −0.5%miss |
| Diluted (in shares) | — | 1.25B | 1.26B | +0.00Bin line |
| Adjusted EPS | — | $2.21 | $2.20 | −1¢miss |
Our forecast was frozen before the release: the average of 6 models as of 2026-10-21 05:30:42 ET. Each reported number is quoted from the release; the 10-Q's tagged facts confirm the statement's lines when it is filed. Read before our lock: the SEC lists the release in its index that night, and the next check confirms its bytes. A cost above our forecast is a miss.
The company's new outlook
Q2 FY27
RevenueU.S. GAAP and non-GAAP · quarter ending December 27, 2026$8.60 Billion +/- $400 MillionOur forecast $8.64B: ours is inside the range
Gross marginU.S. GAAP · quarter ending December 27, 202652.5% +/- 1%
Gross margin 52.5% +/- 1% $ 2.7 Million 52.5% +/- 1%
Gross marginnon-GAAP · quarter ending December 27, 202652.5% +/- 1%
Gross margin 52.5% +/- 1% $ 2.7 Million 52.5% +/- 1%
Gross margin reconciling itemsGAAP to non-GAAP reconciling items · quarter ending December 27, 2026 · Million2.7
Gross margin 52.5% +/- 1% $ 2.7 Million 52.5% +/- 1%
Operating marginU.S. GAAP · quarter ending December 27, 202640.5% +/- 1%
Operating margin 40.5% +/- 1% $ 3.0 Million 40.5% +/- 1%
Operating marginnon-GAAP · quarter ending December 27, 202640.5% +/- 1%
Operating margin 40.5% +/- 1% $ 3.0 Million 40.5% +/- 1%
Operating margin reconciling itemsGAAP to non-GAAP reconciling items · quarter ending December 27, 2026 · Million3.0
Operating margin 40.5% +/- 1% $ 3.0 Million 40.5% +/- 1%
Net income per diluted shareU.S. GAAP · quarter ending December 27, 2026$2.33 +/- $0.15
Net income per diluted share $2.33 +/- $0.15 $ 3.3 Million $2.33 +/- $0.15
Net income per diluted sharenon-GAAP · quarter ending December 27, 2026$2.33 +/- $0.15Our forecast $2.36: ours is inside the range
Net income per diluted share $2.33 +/- $0.15 $ 3.3 Million $2.33 +/- $0.15
Net income per diluted share reconciling itemsGAAP to non-GAAP reconciling items · quarter ending December 27, 2026 · Million3.3
Net income per diluted share $2.33 +/- $0.15 $ 3.3 Million $2.33 +/- $0.15
Diluted share countU.S. GAAP and non-GAAP · quarter ending December 27, 20261.253 Billion
Our Q2 FY27 forecast, made 2026-10-21 before this releasesales $8.64B · adjusted EPS $2.36
Each item as the release prints it. Our forecast stands beside an item only when the item is one of our two numbers, for our quarter or year, in our unit.
The company's reasons, from the release
- record revenue, profit and EPS ““With AI driving higher semiconductor demand and greater device complexity, our focus on operational execution helped Lam deliver record revenue, profit, and earnings per share in the September quarter,” said Tim Archer, Lam Research's President and Chief Executive Officer. “Our strategic investments in technology inflections and manufacturing capacity are paying off, strengthening our ability to outgrow the wafer fabrication equipment market as the industry expands.””
- increase in cash balances “Cash, cash equivalents, and restricted cash balances increased to $7.45 billion at the end of the September 2026 quarter compared to $5.60 billion at the end of the June 2026 quarter. The increase was primarily the result of cash generated from operating activities during the quarter partially offset by cash deployed for capital return activities and capital expenditures.”