- Revenue: $3.87 billion, an increase from the prior quarter and above the midpoint of guidance.
- Gross Margin: 48.5%, at the top end of the guided range.
- Free Cash Flow: Approximately $4.3 billion, representing 29% of revenue.
- Deferred Revenue: Decreased by $194 million from the March quarter.
- Systems Revenue in Memory: 36%, down from 44% in the prior quarter.
- DRAM Revenue: 19% of systems revenue, down from 23% in the March quarter.
- Nonvolatile Memory Revenue: 17% of systems revenue, down from 21% in the March quarter.
- Foundry Segment Revenue: 43% of systems revenue, roughly flat with the prior quarter.
- Logic and Other Segment Revenue: 21% of systems revenue, up from 12% in the prior quarter.
- China Region Revenue: 39%, down slightly from 42% in the prior quarter.
- Customer Support Business Group Revenue: Approximately $1.7 billion, an increase of 22% from the prior quarter.
- Operating Expenses: $689 million, down marginally from $698 million in the prior quarter.
- Operating Margin: 30.7%, above the guidance range.
- Non-GAAP Tax Rate: 11.5% for the quarter.
- Share Repurchases: $382 million allocated.
- Dividends Paid: $261 million in the June quarter.
- Cash and Cash Equivalents: $5.9 billion at the end of the June quarter.
- Day Sales Outstanding: 59 days, up from 57 days in the prior quarter.
- Inventory Turns: 1.9 times, compared with 1.8 times in the prior quarter.
- Capital Expenditures: $101 million, flat with the March quarter.
- Employee Count: Approximately 17,200 regular full-time employees, flat with the prior quarter.
- September 2024 Quarter Guidance: Revenue of $4.05 billion plus or minus $300 million, gross margin of 47% plus or minus one percentage point, operating margins of 29.5% plus or minus one percentage point, and earnings per share of $8 plus or minus $0.75.
Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lam Research Corp (LRCX, Financial) delivered solid financial results with revenues, profitability, and earnings per share all exceeding the midpoint of guidance.
- The company's Customer Support Business Group (CSBG) posted strong growth, with revenues up 22% sequentially.
- Lam Research Corp (LRCX) achieved a key milestone with its Malaysia factory shipping its 5,000th chamber, marking the fastest ramp of a new manufacturing facility in the company's history.
- The company is making strategic investments in product development, global R&D infrastructure, and digital transformation to position itself for future growth.
- Lam Research Corp (LRCX) reported the highest gross margin percentage since its merger with Novellus in 2013, coming in at 48.2%.
Negative Points
- The company's gross margin is expected to decline in the upcoming quarter due to an unfavorable change in customer mix.
- Deferred revenue decreased by $194 million from the previous quarter, indicating potential future revenue recognition challenges.
- The memory segment's revenue declined, particularly in DRAM, which saw a decrease from 23% to 19% of systems revenue.
- The regional revenue composition showed a slight decline in the China region, which came in at 39%, down from 42% in the prior quarter.
- Operating expenses remained high, with more than 70% concentrated in research and development, which could impact short-term profitability.
Q & A Highlights
Q: Can you clarify your expectations for the Customer Support Business Group (CSBG) growth this year?
A: We now expect CSBG to grow modestly for the year. It was particularly strong in the June quarter, but we are not providing specific guidance for the individual components of the forecast. (Doug Bettinger, CFO)
Q: Can you discuss your leverage to DRAM and the investments you are making in this area?
A: We are well-positioned in DRAM, especially with our new conductor etch tool, which is targeted towards future DRAM nodes. We also have a strong position in advanced packaging and HBM-related expansions. (Timothy Archer, CEO)
Q: How do you see China spending evolving into the back half of this year and into 2025?
A: For 2024, China's spending is somewhat first-half weighted. We expect it to be a solid year in 2025, but it's too soon to quantify specifics. (Doug Bettinger, CFO)
Q: What are your expectations for gross margin in the December quarter?
A: We expect a slight incremental headwind in gross margin due to customer mix, but we are not providing a specific number. (Doug Bettinger, CFO)
Q: Can you provide more color on the opportunities from technology inflections like gate-all-around and backside power delivery?
A: Each technology inflection brings new requirements that we are well-suited to address. We see opportunities to increase our served market and share at each successive process technology node. (Timothy Archer, CEO)
Q: What is driving the strong performance in the CSBG business, and is it sustainable?
A: The strong performance was driven by Reliant systems and spares. We expect CSBG to grow modestly this year, with upgrades becoming more prominent as customers start to upgrade memory fabs. (Timothy Archer, CEO)
Q: How do you see the DRAM market evolving, particularly with the impact of HBM?
A: We see DRAM demand for equipment continuing to grow through 2025 and beyond, driven by both conventional DRAM and HBM. (Timothy Archer, CEO)
Q: What are your thoughts on the sustainability of the trends in the CSBG business?
A: We expect CSBG to return to steady growth, driven by upgrades and spares. The installed base itself continues to get bigger, providing more opportunities for revenue. (Timothy Archer, CEO)
Q: How do you see the impact of customer mix on gross margins in 2025?
A: The customer mix will be a key factor, but we also expect accretion from our Asia factories to benefit gross margins. (Doug Bettinger, CFO)
Q: Can you provide more details on the new cryogenic etch technology and its advantages?
A: Our new cryogenic etch process delivers industry-leading control of memory channel hole profiles, with significant improvements in energy consumption and greenhouse gas emissions. (Timothy Archer, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
