Item 1. Financial Statements
ITEM 1. Financial Statements
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
March 30,
2025 March 31,
2024 March 30,
2025 March 31,
2024
Revenue $ 4,720,175 $ 3,793,558 $ 13,264,198 $ 11,033,879
Cost of goods sold 2,406,489 1,977,820 6,874,848 5,783,087
Restructuring charges, net - cost of goods sold — 15,202 — 38,099
Total cost of goods sold 2,406,489 1,993,022 6,874,848 5,821,186
Gross margin 2,313,686 1,800,536 6,389,350 5,212,693
Research and development 525,904 512,274 1,516,209 1,404,615
Selling, general, and administrative 226,023 215,904 713,301 651,770
Restructuring charges, net - operating expenses — 15,246 — 18,955
Total operating expenses 751,927 743,424 2,229,510 2,075,340
Operating income 1,561,759 1,057,112 4,159,840 3,137,353
Other income (expense), net ( 25,035 ) 36,073 19,308 68,513
Income before income taxes 1,536,724 1,093,185 4,179,148 3,205,866
Income tax expense ( 206,057 ) ( 127,359 ) ( 541,019 ) ( 398,376 )
Net income $ 1,330,667 $ 965,826 $ 3,638,129 $ 2,807,490
Net income per share:
Basic $ 1.04 $ 0.74 $ 2.82 $ 2.13
Diluted $ 1.03 $ 0.73 $ 2.81 $ 2.12
Number of shares used in per share calculations:
Basic 1,283,779 1,308,382 1,290,041 1,316,627
Diluted 1,288,100 1,315,178 1,294,545 1,322,819
See Notes to Condensed Consolidated Financial Statements
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LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
March 30,
2025 March 31,
2024 March 30,
2025 March 31,
2024
Net income $ 1,330,667 $ 965,826 $ 3,638,129 $ 2,807,490
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment 8,686 ( 14,215 ) 5,199 ( 20,363 )
Cash flow hedges:
Net unrealized gains during the period 4,132 8,145 6,248 18,414
Net gains reclassified into net income ( 2,826 ) ( 4,231 ) ( 5,190 ) ( 25,974 )
1,306 3,914 1,058 ( 7,560 )
Available-for-sale investments:
Net unrealized gains during the period — 30 — 314
Net gains reclassified into net income — — — ( 10 )
— 30 — 304
Defined benefit plans, net change in unrealized component 182 177 260 537
Other comprehensive income (loss), net of tax 10,174 ( 10,094 ) 6,517 ( 27,082 )
Comprehensive income $ 1,340,841 $ 955,732 $ 3,644,646 $ 2,780,408
See Notes to Condensed Consolidated Financial Statements
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LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
March 30,
2025 June 30,
2024
(unaudited) (1)
ASSETS
Cash and cash equivalents $ 5,450,718 $ 5,847,856
Accounts receivable, less allowance of $ 5,886 as of March 30, 2025, and $ 5,277 as of June 30, 2024
3,228,182 2,519,250
Inventories 4,463,275 4,217,924
Prepaid expenses and other current assets 318,147 298,190
Total current assets 13,460,322 12,883,220
Property and equipment, net 2,372,203 2,154,518
Goodwill and intangible assets 1,795,248 1,765,073
Other assets 2,340,537 1,941,917
Total assets $ 19,968,310 $ 18,744,728
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable $ 853,308 $ 613,966
Accrued expenses and other current liabilities 1,999,892 1,801,877
Deferred profit 1,882,339 1,417,781
Current portion of long-term debt and finance lease obligations 754,306 504,814
Total current liabilities 5,489,845 4,338,438
Long-term debt and finance lease obligations, less current portion 3,730,034 4,478,520
Income taxes payable 690,660 813,304
Other long-term liabilities 546,666 575,012
Total liabilities 10,457,205 10,205,274
Commitments and contingencies (refer to Note 12)
Stockholders’ equity:
Preferred stock, at par value of $ 0.001 per share; authorized, 5,000 shares, none outstanding
— —
Common stock, at par value of $ 0.001 per share; authorized, 4,000,000 shares as of March 30, 2025 and June 30, 2024; issued and outstanding, 1,282,957 shares as of March 30, 2025, and 1,303,769 shares as of June 30, 2024
1,283 1,304
Additional paid-in capital 8,529,007 8,223,046
Treasury stock, at cost; 1,673,040 shares as of March 30, 2025, and 1,648,239 shares as of June 30, 2024
( 26,455,865 ) ( 24,365,783 )
Accumulated other comprehensive loss ( 123,911 ) ( 130,428 )
Retained earnings 27,560,591 24,811,315
Total stockholders’ equity 9,511,105 8,539,454
Total liabilities and stockholders’ equity $ 19,968,310 $ 18,744,728
(1) Derived from audited financial statements
See Notes to Condensed Consolidated Financial Statements
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LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
March 30,
2025 March 31,
2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,638,129 $ 2,807,490
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 287,838 271,342
Deferred income taxes ( 211,568 ) ( 137,606 )
Equity-based compensation expense 249,085 213,966
Other, net ( 7,395 ) 14,242
Changes in operating assets and liabilities ( 337,013 ) 620,405
Net cash provided by operating activities 3,619,076 3,789,839
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures and intangible assets ( 586,995 ) ( 295,922 )
Proceeds from maturities of available-for-sales securities — 34,336
Proceeds from sales of available-for-sale securities — 3,430
Other, net 8,154 ( 10,845 )
Net cash used for investing activities ( 578,841 ) ( 269,001 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt, including finance lease obligations and payments for debt issuance costs ( 506,003 ) ( 255,155 )
Treasury stock purchases, including excise tax payments ( 2,130,044 ) ( 2,469,257 )
Dividends paid ( 854,335 ) ( 757,453 )
Reissuance of treasury stock related to employee stock purchase plan 60,557 53,081
Proceeds from issuance of common stock, net issuance costs 1,756 12,757
Other, net 963 ( 5,672 )
Net cash used for financing activities ( 3,427,106 ) ( 3,421,699 )
Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 960 ) ( 12,758 )
Net change in cash, cash equivalents, and restricted cash ( 387,831 ) 86,381
Cash, cash equivalents, and restricted cash at beginning of period (1)
5,850,803 5,587,372
Cash, cash equivalents, and restricted cash at end of period (1)
$ 5,462,972 $ 5,673,753
Schedule of non-cash transactions:
Accrued payables for stock repurchases, including applicable excise tax $ 16,967 $ 36,863
Accrued payables for capital expenditures 87,291 45,122
Dividends payable 295,423 261,463
Transfers of finished goods inventory to property and equipment 74,560 55,290
Reconciliation of cash, cash equivalents, and restricted cash March 30,
2025 March 31,
2024
Cash and cash equivalents $ 5,450,718 $ 5,672,232
Restricted cash and cash equivalents (1)
12,254 1,521
Total cash, cash equivalents, and restricted cash $ 5,462,972 $ 5,673,753
(1) Restricted cash is reported within Other assets in the Condensed Consolidated Balance Sheets
See Notes to Condensed Consolidated Financial Statements
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LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
Three Months Ended
March 30, 2025
Common
Stock
Shares Common
Stock Additional
Paid-in
Capital Treasury
Stock Accumulated
Other
Comprehensive
Loss Retained
Earnings Total
Balance at December 29, 2024 1,284,956 $ 1,285 $ 8,439,903 $ ( 26,024,098 ) $ ( 134,085 ) $ 26,525,021 $ 8,808,026
Issuance of common stock 3,558 4 1,989 — — — 1,993
Purchase of treasury stock ( 5,557 ) ( 6 ) — ( 431,767 ) — — ( 431,773 )
Equity-based compensation expense — — 87,115 — — — 87,115
Net income — — — — — 1,330,667 1,330,667
Other comprehensive income — — — — 10,174 — 10,174
Cash dividends declared ($ 0.23 per common share)
— — — — — ( 295,097 ) ( 295,097 )
Balance at March 30, 2025 1,282,957 $ 1,283 $ 8,529,007 $ ( 26,455,865 ) $ ( 123,911 ) $ 27,560,591 $ 9,511,105
Nine Months Ended
March 30, 2025
Common
Stock
Shares Common
Stock Additional
Paid-in
Capital Treasury
Stock Accumulated
Other
Comprehensive
Loss Retained
Earnings Total
Balance at June 30, 2024 1,303,769 $ 1,304 $ 8,223,046 $ ( 24,365,783 ) $ ( 130,428 ) $ 24,811,315 $ 8,539,454
Issuance of common stock 3,990 4 1,752 — — — 1,756
Purchase of treasury stock ( 25,964 ) ( 26 ) — ( 2,095,514 ) — — ( 2,095,540 )
Reissuance of treasury stock 1,162 1 55,124 5,432 — — 60,557
Equity-based compensation expense — — 249,085 — — — 249,085
Net income — — — — — 3,638,129 3,638,129
Other comprehensive income — — — — 6,517 — 6,517
Cash dividends declared ($ 0.69 per common share)
— — — — — ( 888,853 ) ( 888,853 )
Balance at March 30, 2025 1,282,957 $ 1,283 $ 8,529,007 $ ( 26,455,865 ) $ ( 123,911 ) $ 27,560,591 $ 9,511,105
See Notes to Condensed Consolidated Financial Statements
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Three Months Ended
March 31, 2024
Common
Stock
Shares Common
Stock Additional
Paid-in
Capital Treasury
Stock Accumulated
Other
Comprehensive
Loss Retained
Earnings Total
Balance at December 24, 2023 1,312,782 $ 1,313 $ 7,994,997 $ ( 23,003,286 ) $ ( 117,694 ) $ 23,347,148 $ 8,222,478
Issuance of common stock 4,094 4 8,231 — — — 8,235
Purchase of treasury stock ( 9,515 ) ( 10 ) — ( 980,151 ) — — ( 980,161 )
Equity-based compensation expense — — 76,854 — — — 76,854
Net income — — — — — 965,826 965,826
Other comprehensive loss — — — — ( 10,094 ) — ( 10,094 )
Cash dividends declared ($ 0.20 per common share)
— — — — — ( 261,037 ) ( 261,037 )
Balance at March 31, 2024 1,307,361 $ 1,307 $ 8,080,082 $ ( 23,983,437 ) $ ( 127,788 ) $ 24,051,937 $ 8,022,101
Nine Months Ended
March 31, 2024
Common
Stock
Shares Common
Stock Additional
Paid-in
Capital Treasury
Stock Accumulated
Other
Comprehensive
Loss Retained
Earnings Total
Balance at June 25, 2023 1,332,966 $ 1,333 $ 7,806,749 $ ( 21,529,300 ) $ ( 100,706 ) $ 22,032,096 $ 8,210,172
Issuance of common stock 4,820 5 12,752 — — — 12,757
Purchase of treasury stock ( 31,929 ) ( 32 ) — ( 2,460,602 ) — — ( 2,460,634 )
Reissuance of treasury stock 1,504 1 46,615 6,465 — — 53,081
Equity-based compensation expense — — 213,966 — — — 213,966
Net income — — — — — 2,807,490 2,807,490
Other comprehensive loss — — — — ( 27,082 ) — ( 27,082 )
Cash dividends declared ($ 0.60 per common share)
— — — — — ( 787,649 ) ( 787,649 )
Balance at March 31, 2024 1,307,361 $ 1,307 $ 8,080,082 $ ( 23,983,437 ) $ ( 127,788 ) $ 24,051,937 $ 8,022,101
See Notes to Condensed Consolidated Financial Statements
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LAM RESEARCH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 30, 2025
(Unaudited)
NOTE 1 — BASIS OF PRESENTATION
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. The accompanying unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of Lam Research Corporation (“Lam Research” or the “Company”) for the fiscal year ended June 30, 2024, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended June 30, 2024 (the “2024 Form 10-K”).
The condensed consolidated financial statements include the accounts of Lam Research and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. The Company’s reporting period is a 52/53-week fiscal year. The Company’s current fiscal year will end June 29, 2025 and includes 52 weeks. The quarters ended March 30, 2025 (the “March 2025 quarter”) and March 31, 2024 included 13 weeks and 14 weeks, respectively.
Common Stock Split: On October 2, 2024, the Company effected a ten -for-one stock split of its common stock and a proportionate increase in the number of authorized shares. All share and per share amounts throughout this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the stock split. The par value per share remains unchanged at $ 0.001 per share after the stock split.
Reclassification: Certain amounts for the June 30, 2024 Condensed Consolidated Balance Sheet and notes to the financial statements have been reclassified to conform to the current period presentation.
NOTE 2 — RECENT ACCOUNTING PRONOUNCEMENTS
Recently Adopted or Effective
The Company has not adopted any new accounting standards during the nine months ended March 30, 2025 that have a material impact on the Company’s Condensed Consolidated Financial Statements.
Updates Not Yet Effective
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which expands disclosures about a public entity’s reportable segments and requires more enhanced information about a reportable segment’s expenses, interim segment profit or loss, and how a public entity’s chief operating decision maker uses reported segment profit or loss information in assessing segment performance and allocating resources. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is required to adopt this standard in the fiscal year 2025 for the annual reporting period ending June 29, 2025, with retrospective disclosure of prior periods presented. The Company does not expect the adoption of ASU 2023-07 to have an impact on its Consolidated Financial Statements other than additional footnote disclosures.
In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income taxes paid. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is required to adopt this standard prospectively in fiscal year 2026 for the annual reporting period ending June 28, 2026. The Company is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disaggregation of certain expenses in the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement. In January 2025, the FASB issued ASU 2025-01 which clarified the effective date for entities that do not have an annual reporting period that ends on December 31st. The guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is required to adopt this standard either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is required to adopt this standard in fiscal year 2028 for the annual reporting period ending June 25, 2028. The Company
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will apply the guidance prospectively and is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.
NOTE 3 — REVENUE
Disaggregation of Revenue
The Company operates in one reportable business segment: manufacturing and servicing of wafer processing semiconductor manufacturing equipment. The Company’s material operating segments qualify for aggregation due to their customer base and similarities in economic characteristics, nature of products and services, and processes for procurement, manufacturing, and distribution.
The Company operates in seven geographic regions: United States, China, Europe, Japan, Korea, Southeast Asia, and Taiwan. For geographical reporting, revenue is attributed to the geographic location in which the customers’ facilities are located. The Company serves three primary markets: memory, foundry, and logic/integrated device manufacturing.
The following table presents the Company’s revenues disaggregated between systems and customer support-related revenue:
Three Months Ended Nine Months Ended
March 30,
2025 March 31,
2024 March 30,
2025 March 31,
2024
(In thousands)
Systems revenue $ 3,035,276 $ 2,395,817 $ 8,053,655 $ 6,751,758
Customer support-related revenue and other 1,684,899 1,397,741 5,210,543 4,282,121
$ 4,720,175 $ 3,793,558 $ 13,264,198 $ 11,033,879
Systems revenue includes sales of new leading-edge equipment in deposition, etch, clean and other wafer fabrication markets.
Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from the Company’s Reliant® product line.
The following table presents the Company’s revenues disaggregated by geographic region:
Three Months Ended Nine Months Ended
March 30,
2025 March 31,
2024 March 30,
2025 March 31,
2024
(In thousands)
China $ 1,467,299 $ 1,606,693 $ 4,368,501 $ 4,787,399
Korea 1,150,480 916,812 3,002,825 2,176,708
Taiwan 1,125,955 334,952 2,478,997 1,077,325
Japan 474,935 340,331 1,139,597 1,177,696
United States 189,512 227,085 1,091,174 728,098
Southeast Asia 178,287 190,328 710,394 495,060
Europe 133,707 177,357 472,710 591,593
$ 4,720,175 $ 3,793,558 $ 13,264,198 $ 11,033,879
The following table presents the percentages of leading- and non-leading-edge equipment and upgrade revenue to each of the primary markets the Company serves:
Three Months Ended Nine Months Ended
March 30,
2025 March 31,
2024 March 30,
2025 March 31,
2024
Memory 43 % 44 % 43 % 44 %
Foundry 48 % 44 % 42 % 39 %
Logic/integrated device manufacturing 9 % 12 % 15 % 17 %
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Deferred Revenue
Revenue of $ 179.6 million and $ 862.7 million included in deferred profit at June 30, 2024 was recognized during the three and nine months ended March 30, 2025, representing 12 % and 56 %, respectively, of the $ 1,551.6 million of deferred revenue as of June 30, 2024.
The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of March 30, 2025 and when the Company expects to recognize the amounts as revenue:
Less than 1 Year 1-3 Years More than 3 Years Total
(In thousands)
Deferred revenue $ 1,545,639 $ 384,721 (1)
$ 80,518 (1)
$ 2,010,878
(1) This amount is reported in Deferred profit on the Company's Condensed Consolidated Balance Sheets as the customers can demand the performance to be satisfied at any time.
NOTE 4 — EQUITY-BASED COMPENSATION PLANS
The Lam Research Corporation 2015 Stock Incentive Plan, as amended, provides for the grant of non-qualified equity-based awards of the Company’s Common Stock to eligible employees and non-employee directors, including stock options, restricted stock units (“RSUs”), and market-based performance RSUs (“market-based PRSUs”). An option is a right to purchase Common Stock at a set price. An RSU award is an agreement to issue a set number of shares of Common Stock at the time of vesting. The Company’s market-based PRSUs contain both a market condition and a service condition. The Company’s option, RSU, and market-based PRSU awards typically vest over a period of three years . The Company also has an employee stock purchase plan that allows eligible employees to purchase its Common Stock at a discount through payroll deductions.
The Company recognized the following equity-based compensation expense (including expense related to the employee stock purchase plan) and related income tax benefit in the Condensed Consolidated Statements of Operations:
Three Months Ended Nine Months Ended
March 30,
2025 March 31,
2024 March 30,
2025 March 31,
2024
(in thousands)
Equity-based compensation expense $ 87,115 $ 76,854 $ 249,085 $ 213,966
Income tax benefit recognized related to equity-based compensation expense $ 14,767 $ 24,626 $ 35,938 $ 43,544
NOTE 5 — OTHER INCOME (EXPENSE), NET
The significant components of other income (expense), net, are as follows:
Three Months Ended Nine Months Ended
March 30,
2025 March 31,
2024 March 30,
2025 March 31,
2024
(in thousands)
Interest income $ 50,638 $ 71,752 $ 176,698 $ 185,911
Interest expense ( 45,184 ) ( 47,153 ) ( 135,429 ) ( 138,797 )
(Losses) Gains on deferred compensation plan-related assets, net ( 16,903 ) 26,495 5,019 49,124
Foreign exchange losses, net ( 4,702 ) ( 4,344 ) ( 19,505 ) ( 3,643 )
Other, net ( 8,884 ) ( 10,677 ) ( 7,475 ) ( 24,082 )
$ ( 25,035 ) $ 36,073 $ 19,308 $ 68,513
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NOTE 6 — INCOME TAX EXPENSE
The Company’s provision for income taxes and effective tax rate are as follows:
Three Months Ended Nine Months Ended
March 30,
2025 March 31,
2024 March 30,
2025 March 31,
2024
(in thousands, except percentages)
Income tax expense $ 206,057 $ 127,359 $ 541,019 $ 398,376
Effective tax rate 13.4 % 11.7 % 12.9 % 12.4 %
The difference between the U.S. federal statutory tax rate of 21% and the Company’s effective tax rate for the three and nine months ended March 30, 2025 and March 31, 2024 was primarily due to income in lower tax jurisdictions.
The Internal Revenue Service (“IRS”) is examining the Company’s U.S. federal income tax returns for the fiscal years ended June 30, 2019, June 28, 2020 and June 27, 2021. To date, no significant adjustments have been proposed by the IRS. The Company is unable to make a reasonable estimate as to when cash settlements, if any, with the IRS will occur.
The Company is in various stages of examinations in connection with all of its tax audits worldwide, and it is difficult to determine when these examinations will be settled. It is reasonably possible that over the next 12-month period the Company may experience an increase or decrease in its uncertain tax positions as a result of tax examinations or lapses of statutes of limitation. The change in uncertain tax positions as a result of lapses of statutes of limitation may range up to $ 211.0 million, excluding interest and penalties.
NOTE 7 — NET INCOME PER SHARE
Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted net income per share is computed using the treasury stock method, for dilutive stock options, and restricted stock units. The following table reconciles the inputs to the basic and diluted computations for net income per share.
Three Months Ended Nine Months Ended
March 30,
2025 March 31,
2024 March 30,
2025 March 31,
2024
(in thousands, except per share data)
Numerator:
Net income $ 1,330,667 $ 965,826 $ 3,638,129 $ 2,807,490
Denominator:
Basic average shares outstanding 1,283,779 1,308,382 1,290,041 1,316,627
Effect of potential dilutive securities:
Employee stock plans 4,321 6,796 4,504 6,192
Diluted average shares outstanding 1,288,100 1,315,178 1,294,545 1,322,819
Net income per share - basic $ 1.04 $ 0.74 $ 2.82 $ 2.13
Net income per share - diluted $ 1.03 $ 0.73 $ 2.81 $ 2.12
For purposes of computing diluted net income per share, weighted-average common shares do not include potentially dilutive securities that are anti-dilutive under the treasury stock method. These anti-dilutive securities, including options and RSUs, were not material for the three and nine months ended March 30, 2025 and March 31, 2024.
NOTE 8 — FINANCIAL INSTRUMENTS
The Company’s investment strategies and investment and fair value policies are unchanged from those disclosed in Note 9, “Financial Instruments,” to the Consolidated Financial Statements in Part II, Item 8 of its 2024 Form 10-K. As of March 30, 2025 and June 30, 2024, the fair value of mutual funds and equity investments were not material. The Company had no debt security investments as of March 30, 2025 and June 30, 2024. The financial statement impacts to the Condensed Consolidated Statement of Operations from debt and equity investments were not material as of and for the three and nine months ended March 30, 2025 and March 31, 2024.
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The financial instruments reported within Cash and Cash Equivalents in the Company’s Condensed Consolidated Balance Sheets as of March 30, 2025, and June 30, 2024 consisted of the following:
March 30,
2025 June 30,
2024
(in thousands)
Money market funds (fair value measured on a recurring basis, level 1) $ 2,441,620 $ 2,543,462
Cash 1,379,729 1,568,315
Time deposits 1,629,369 1,736,079
Total $ 5,450,718 $ 5,847,856
Derivative Instruments and Hedging
The Company’s hedging strategies and policies are unchanged from those disclosed in Note 9, “Financial Instruments,” to the Consolidated Financial Statements in Part II, Item 8 of its 2024 Form 10-K. As of March 30, 2025 and June 30, 2024, the fair value of outstanding cash flow and balance sheet hedges were not material. The financial statement impacts to the Condensed Consolidated Statement of Operations from derivative instruments and hedging activities were not material as of and for the three and nine months ended March 30, 2025 and March 31, 2024.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk and the Company’s mitigation strategies are unchanged from those disclosed in Note 9, “Financial Instruments,” to the Consolidated Financial Statements in Part II, Item 8 of its 2024 Form 10-K.
NOTE 9 — INVENTORIES
Inventories are stated at the lower of cost or net realizable value using standard costs that approximate actual costs on a first-in, first-out basis. Inventories consist of the following:
March 30,
2025 June 30,
2024
(in thousands)
Raw materials $ 2,758,506 $ 2,921,139
Work-in-process 307,480 284,078
Finished goods 1,397,289 1,012,707
$ 4,463,275 $ 4,217,924
NOTE 10 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
Accrued expenses and other current liabilities consist of the following:
March 30,
2025 June 30,
2024
(in thousands)
Accrued compensation $ 529,686 $ 516,717
Warranty reserves 246,187 228,060
Income and other taxes payable 309,127 186,700
Dividend payable 295,423 260,905
Other 619,469 609,495
$ 1,999,892 $ 1,801,877
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NOTE 11 — LONG-TERM DEBT AND OTHER BORROWINGS
Senior Notes
On March 12, 2015, the Company completed a public offering of $ 500 million aggregate principal amount of the Company’s Senior Notes due March 15, 2025 (the “2025 Notes”). The 2025 Notes were settled upon maturity during the three months ended March 30, 2025. The remaining outstanding Senior Notes are unchanged from those disclosed in Note 14, “Long-term Debt and Other Borrowings,” to the Consolidated Financial Statements in Part II, Item 8 of the Company’s 2024 Form 10-K.
Revolving Credit Facility
On March 12, 2014, the Company established an unsecured Credit Agreement. This agreement was amended on November 10, 2015 (the “Amended and Restated Credit Agreement”), October 13, 2017 (the “2nd Amendment”), February 25, 2019 (the “3rd Amendment”), June 17, 2021 (the “Second Amended and Restated Credit Agreement”), December 7, 2022 (“Amendment No.1 to Second Amended and Restated Credit Agreement”), and January 27, 2025 (the “Third Amended and Restated Credit Agreement”). The Third Amended and Restated Credit Agreement provides for a $ 2.0 billion revolving credit facility with a syndicate of lenders, along with an expansion option that will allow the Company, subject to certain requirements, to request an increase in the facility of up to an additional $ 750.0 million, for a potential total commitment of $ 2.75 billion. The facility matures on January 25, 2030.
Interest on amounts borrowed under the credit facility is, at the Company’s option, based on (1) a base rate, plus a spread of 0.00 % to 0.10 %, or (2) an adjusted term Secured Overnight Financing Rate, plus a spread of 0.70 % to 1.10 %, in each case plus a facility fee, with such spread and facility fee determined in accordance with the Third Amended and Restated Credit Agreement, and with the spread and facility fee based on the rating of the Company’s non-credit enhanced, senior unsecured long-term debt. Principal and any accrued and unpaid interest are due and payable upon maturity. Additionally, the Company will pay the lenders a quarterly commitment fee that varies based on the Company’s credit rating as described above. As of March 30, 2025, the Company had no borrowings outstanding under the credit facility and was in compliance with all financial covenants.
Commercial Paper Program
The Company’s commercial paper program is unchanged from those disclosed in Note 14, “Long-term Debt and Other Borrowings,” to the Consolidated Financial Statements in Part II, Item 8 of its 2024 Form 10-K.
NOTE 12 — COMMITMENTS AND CONTINGENCIES
Guarantees
The Company has issued certain indemnifications to its lessors for taxes and general liability under some of its agreements. The Company has entered into insurance contracts that are intended to limit its exposure to such indemnifications. As of March 30, 2025, the Company had not recorded any liability on its Condensed Consolidated Financial Statements in connection with these indemnifications, as it does not believe that it is probable that any material amounts will be paid under these guarantees.
Generally, the Company indemnifies, under pre-determined conditions and limitations, its customers for infringement of third-party intellectual property rights by the Company’s products or services. The Company seeks to limit its liability for such indemnity to an amount not to exceed the sales price of the products or services subject to its indemnification obligations. The Company does not believe that it is probable that any material amounts will be paid under these guarantees.
The Company provides guarantees and standby letters of credit to certain parties as required for certain transactions initiated during the ordinary course of business. As of March 30, 2025, the maximum potential amount of future payments that the Company could be required to make under these arrangements and letters of credit was $ 205.9 million. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid.
In addition, the Company has entered into indemnification agreements with its directors, officers, and certain other employees, consistent with its Bylaws and Certificate of Incorporation; and under local law, the Company may be required to provide indemnification to its employees for actions within the scope of their employment. Although the Company maintains insurance contracts that cover some of the potential liability associated with these indemnification agreements, there is no guarantee that all such liabilities will be covered. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under such indemnification agreements or statutory obligations.
Warranties
The Company provides standard warranties on its systems. The liability amount is based on actual historical warranty spending activity by type of system, customer, and geographic region, modified for any known differences such as the impact of system reliability improvements. As of March 30, 2025, warranty reserves totaling $ 19.6 million were reported in Other long-term liabilities, and the remainder were included in Accrued expenses and other current liabilities in the Company’s Condensed Consolidated Balance Sheets.
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Changes in the Company’s product warranty reserves were as follows:
Three Months Ended Nine Months Ended
March 30,
2025 March 31,
2024 March 30,
2025 March 31,
2024
(in thousands)
Balance at beginning of period $ 254,812 $ 260,840 $ 250,404 $ 286,663
Warranties issued during the period 70,023 43,479 201,903 139,713
Settlements made during the period ( 50,908 ) ( 45,916 ) ( 142,164 ) ( 147,595 )
Changes in liability for warranties issued during the period ( 107 ) ( 74 ) ( 252 ) ( 148 )
Changes in liability for pre-existing warranties ( 8,001 ) ( 3,757 ) ( 44,072 ) ( 24,061 )
Balance at end of period $ 265,819 $ 254,572 $ 265,819 $ 254,572
Legal Proceedings
While the Company is not currently a party to any legal proceedings that it believes material, the Company is either a defendant or plaintiff in various actions that have arisen from time to time in the normal course of business, including intellectual property claims. The Company accrues for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Judgment is required in both the determination of probability and the determination as to whether a loss is reasonably estimable. Based on current information, the Company does not believe that a material loss from known matters is probable and therefore has not recorded an accrual of any material amount for litigation or other contingencies related to existing legal proceedings.
NOTE 13 — STOCK REPURCHASE PROGRAM
In May 2024, the Board of Directors authorized the Company to repurchase up to an additional $ 10.0 billion of Common Stock; this authorization supplements the remaining balances from any prior authorizations. These repurchases can be conducted on the open market or as private purchases and may include the use of derivative contracts with large financial institutions, in all cases subject to compliance with applicable law. This repurchase program has no termination date and may be suspended or discontinued at any time.
Repurchases under the repurchase program were as follows during the periods indicated. All references to share and per share amounts have been retroactively adjusted to reflect the effects of the stock split. See Note 1 for more information.
Period Total Number of
Shares
Repurchased Total Cost of
Repurchase Average Price
Paid per
Share (1)
Amount
Available Under
Repurchase
Program
(in thousands, except per share data)
Available balance as of June 30, 2024 $ 10,824,660
Quarter ended September 29, 2024 11,952 $ 1,003,654 $ 83.97 $ 9,821,006
Quarter ended December 29, 2024 8,336 $ 650,445 $ 78.03 $ 9,170,561
Quarter ended March 30, 2025 4,448 $ 346,549 $ 77.91 $ 8,824,012
(1) The Company’s net share repurchases are subject to a 1% excise tax under the Inflation Reduction Act. Excise tax incurred reduces the amount available under the repurchase program, as applicable, and is included in the cost of shares repurchased in the Condensed Consolidated Statement of Stockholders’ Equity and the calculation of the average price paid per share.
NOTE 14 — RESTRUCTURING CHARGES, NET
During the fiscal year ended June 25, 2023, the Company initiated a restructuring plan designed to better align the Company’s cost structure with its outlook for the economic environment and business opportunities. Under the plan, through June 30, 2024, the Company terminated approximately 1,760 employees, and incurred expenses related to employee severance and separation costs. Employee severance and separation costs were primarily related to severance, non-cash severance, including equity award compensation expense, pension and other termination benefits. Additionally, the Company made a strategic decision to relocate certain manufacturing activities to pre-existing facilities and incurred charges to move inventory and equipment and exit selected supplier arrangements.
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No restructuring charges were recorded during the three and nine months ended March 30, 2025. During the three months ended March 31, 2024, net restructuring costs of $ 15.2 million and $ 15.2 million were recorded in restructuring charges, net - cost of goods sold, and restructuring charges, net - operating expenses, respectively, in the Condensed Consolidated Statements of Operations. During the nine months ended March 31, 2024, net restructuring costs of $ 38.1 million and $ 19.0 million were recorded in Restructuring charges, net - cost of goods sold, and Restructuring charges, net - operating expenses, respectively in the Condensed Consolidated Statements of Operations.
The restructuring plan was substantially completed as of June 30, 2024, and cumulative costs as of June 30, 2024 totaled $ 181.9 million. The restructuring liability reported as of June 30, 2024 totaling $ 1.1 million was substantially satisfied in the three months ended September 29, 2024.
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