LAM RESEARCH CORP 10-Q

ITEM 1. Financial Statements LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Three Months Ended Six Months Ended December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024 Revenue $ 5,344,791 $ 4,376,047 $ 10,668,964 $ 8,544,023 Cost of goods sold 2,693,629 2,303,066 5,332,923 4,468,359 Gross margin 2,651,162 2,072,981 5,336,041 4,075,664 Research and development 573,305 494,947 1,149,751 990,305 Selling, general, and administrative 267,654 244,150 546,999 487,278 Total operating expenses 840,959 739,097 1,696,750 1,477,583 Operating income 1,810,203 1,333,884 3,639,291 2,598,081 Other income (expense), net 26,410 14,262 56,484 44,343 Income before income taxes 1,836,613 1,348,146 3,695,775 2,642,424 Income tax expense ( 242,619 ) ( 157,128 ) ( 533,121 ) ( 334,962 ) Net income $ 1,593,994 $ 1,191,018 $ 3,162,654 $ 2,307,462 Net income per share: Basic $ 1.27 $ 0.93 $ 2.51 $ 1.78 Diluted $ 1.26 $ 0.92 $ 2.50 $ 1.78 Number of shares used in per share calculations: Basic 1,254,856 1,287,109 1,259,651 1,293,173 Diluted 1,261,739 1,291,469 1,265,526 1,297,767 See Notes to Condensed Consolidated Financial Statements Lam Research Corporation 2025 Q3 10-Q 3 Table of Contents LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands) (unaudited) Three Months Ended Six Months Ended December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024 Net income $ 1,593,994 $ 1,191,018 $ 3,162,654 $ 2,307,462 Other comprehensive income (loss), net of tax: Foreign currency translation adjustment ( 21,439 ) ( 48,613 ) ( 34,165 ) ( 3,487 ) Cash flow hedges: Net unrealized gains during the period 12,184 4,552 20,754 2,116 Net gains reclassified into net income ( 15,931 ) ( 2,260 ) ( 23,026 ) ( 2,364 ) ( 3,747 ) 2,292 ( 2,272 ) ( 248 ) Defined benefit plans, net change in unrealized component 76 39 159 78 Other comprehensive income (loss), net of tax ( 25,110 ) ( 46,282 ) ( 36,278 ) ( 3,657 ) Comprehensive income $ 1,568,884 $ 1,144,736 $ 3,126,376 $ 2,303,805 See Notes to Condensed Consolidated Financial Statements Lam Research Corporation 2025 Q3 10-Q 4 Table of Contents LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) December 28, 2025 June 29, 2025 (unaudited) (1) ASSETS Cash and cash equivalents $ 6,180,440 $ 6,390,659 Accounts receivable, less allowance of $ 7,717 as of December 28, 2025, and $ 6,496 as of June 29, 2025 3,491,987 3,378,071 Inventories 4,037,682 4,307,991 Prepaid expenses and other current assets 307,914 440,274 Total current assets 14,018,023 14,516,995 Property and equipment, net 2,710,989 2,428,744 Goodwill and intangible assets, net 1,864,037 1,808,685 Other assets 2,798,122 2,590,836 Total assets $ 21,391,171 $ 21,345,260 LIABILITIES AND STOCKHOLDERS’ EQUITY Trade accounts payable $ 1,026,937 $ 854,208 Accrued expenses and other current liabilities 2,267,488 2,394,366 Deferred profit 2,164,722 2,565,540 Current portion of long-term debt and finance lease obligations 754,006 754,311 Total current liabilities 6,213,153 6,568,425 Long-term debt and finance lease obligations 3,729,742 3,730,194 Income taxes payable 667,639 603,412 Other long-term liabilities 635,211 581,610 Total liabilities 11,245,745 11,483,641 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 December 28, 2025 and June 29, 2025; issued and outstanding, 1,251,180 shares as of December 28, 2025, and 1,268,740 shares as of June 29, 2025 1,251 1,268 Additional paid-in capital 8,948,439 8,697,290 Treasury stock, at cost; 1,705,662 shares as of December 28, 2025, and 1,687,582 shares as of June 29, 2025 ( 30,203,796 ) ( 27,763,430 ) Accumulated other comprehensive loss ( 98,701 ) ( 62,423 ) Retained earnings 31,498,233 28,988,914 Total stockholders’ equity 10,145,426 9,861,619 Total liabilities and stockholders’ equity $ 21,391,171 $ 21,345,260 (1) Derived from audited financial statements See Notes to Condensed Consolidated Financial Statements Lam Research Corporation 2025 Q3 10-Q 5 Table of Contents LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six Months Ended December 28, 2025 December 29, 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 3,162,654 $ 2,307,462 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 205,569 190,495 Deferred income taxes ( 93,832 ) ( 191,576 ) Equity-based compensation expense 185,780 161,970 Other, net ( 21,851 ) ( 9,049 ) Changes in operating assets and liabilities ( 179,311 ) ( 148,889 ) Net cash provided by operating activities 3,259,009 2,310,413 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures and intangible assets ( 446,000 ) ( 298,937 ) Other, net 2,169 13,011 Net cash used for investing activities ( 443,831 ) ( 285,926 ) CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on debt, including finance lease obligations and payments for debt issuance costs ( 2,879 ) ( 1,966 ) Treasury stock purchases, including excise tax payments ( 2,441,946 ) ( 1,694,723 ) Dividends paid ( 619,488 ) ( 558,619 ) Reissuance of treasury stock related to employee stock purchase plan 67,185 60,557 Proceeds from issuance of common stock, net issuance costs 3,854 ( 237 ) Other, net ( 13,566 ) 437 Net cash used for financing activities ( 3,006,840 ) ( 2,194,551 ) Effect of exchange rate changes on cash, cash equivalents, and restricted cash ( 20,396 ) ( 3,340 ) Net change in cash, cash equivalents, and restricted cash ( 212,058 ) ( 173,404 ) Cash, cash equivalents, and restricted cash at beginning of period (1) 6,407,656 5,850,803 Cash, cash equivalents, and restricted cash at end of period (1) $ 6,195,598 $ 5,677,399 Schedule of non-cash transactions: Accrued payables for stock repurchases, including applicable excise tax $ 42,632 $ 20,515 Accrued payables for capital expenditures 142,595 82,155 Dividends payable 325,828 296,042 Transfers of finished goods inventory to property and equipment 58,283 58,801 Reconciliation of cash, cash equivalents, and restricted cash December 28, 2025 December 29, 2024 Cash and cash equivalents $ 6,180,440 $ 5,665,379 Restricted cash and cash equivalents (1) 15,158 12,020 Total cash, cash equivalents, and restricted cash $ 6,195,598 $ 5,677,399 (1) Restricted cash is reported within Other assets in the Condensed Consolidated Balance Sheets See Notes to Condensed Consolidated Financial Statements Lam Research Corporation 2025 Q3 10-Q 6 Table of Contents LAM RESEARCH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) (unaudited) Three Months Ended December 28, 2025 Common Stock Shares Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Loss Retained Earnings Total Balance at September 28, 2025 1,259,176 $ 1,258 $ 8,794,531 $ ( 28,759,513 ) $ ( 73,591 ) $ 30,230,067 $ 10,192,752 Issuance of common stock 342 1 3,853 — — — 3,854 Purchase of treasury stock ( 9,440 ) ( 9 ) — ( 1,449,951 ) — — ( 1,449,960 ) Reissuance of treasury stock 1,102 1 61,516 5,668 — — 67,185 Equity-based compensation expense — — 88,539 — — — 88,539 Net income — — — — — 1,593,994 1,593,994 Other comprehensive loss — — — — ( 25,110 ) — ( 25,110 ) Cash dividends declared ($ 0.26 per common share) — — — — — ( 325,828 ) ( 325,828 ) Balance at December 28, 2025 1,251,180 $ 1,251 $ 8,948,439 $ ( 30,203,796 ) $ ( 98,701 ) $ 31,498,233 $ 10,145,426 Six Months Ended December 28, 2025 Common Stock Shares Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Loss Retained Earnings Total Balance at June 29, 2025 1,268,740 $ 1,268 $ 8,697,290 $ ( 27,763,430 ) $ ( 62,423 ) $ 28,988,914 $ 9,861,619 Issuance of common stock 520 1 3,853 — — — 3,854 Purchase of treasury stock ( 19,182 ) ( 19 ) — ( 2,446,034 ) — — ( 2,446,053 ) Reissuance of treasury stock 1,102 1 61,516 5,668 — — 67,185 Equity-based compensation expense — — 185,780 — — — 185,780 Net income — — — — — 3,162,654 3,162,654 Other comprehensive loss — — — — ( 36,278 ) — ( 36,278 ) Cash dividends declared ($ 0.52 per common share) — — — — — ( 653,335 ) ( 653,335 ) Balance at December 28, 2025 1,251,180 $ 1,251 $ 8,948,439 $ ( 30,203,796 ) $ ( 98,701 ) $ 31,498,233 $ 10,145,426 See Notes to Condensed Consolidated Financial Statements Lam Research Corporation 2025 Q3 10-Q 7 Table of Contents Three Months Ended December 29, 2024 Common Stock Shares Common Stock Additional Paid-in Capital Treasury Stock Accumulated Other Comprehensive Loss Retained Earnings Total Balance at September 29, 2024 1,291,958 $ 1,292 $ 8,303,014 $ ( 25,374,657 ) $ ( 87,803 ) $ 25,630,045 $ 8,471,891 Issuance of common stock 232 — ( 194 ) — — — ( 194 ) Purchase of treasury stock ( 8,396 ) ( 8 ) — ( 654,873 ) — — ( 654,881 ) Reissuance of treasury stock 1,162 1 55,124 5,432 — — 60,557 Equity-based compensation expense — — 81,959 — — — 81,959 Net income — — — — — 1,191,018 1,191,018 Other comprehensive loss — — — — ( 46,282 ) — ( 46,282 ) Cash dividends declared ($ 0.23 per common share) — — — — — ( 296,042 ) ( 296,042 ) Balance at December 29, 2024 1,284,956 $ 1,285 $ 8,439,903 $ ( 26,024,098 ) $ ( 134,085 ) $ 26,525,021 $ 8,808,026 Six Months Ended December 29, 2024 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 432 — ( 237 ) — — — ( 237 ) Purchase of treasury stock ( 20,407 ) ( 20 ) — ( 1,663,747 ) — — ( 1,663,767 ) Reissuance of treasury stock 1,162 1 55,124 5,432 — — 60,557 Equity-based compensation expense — — 161,970 — — — 161,970 Net income — — — — — 2,307,462 2,307,462 Other comprehensive loss — — — — ( 3,657 ) — ( 3,657 ) Cash dividends declared ($ 0.46 per common share) — — — — — ( 593,756 ) ( 593,756 ) Balance at December 29, 2024 1,284,956 $ 1,285 $ 8,439,903 $ ( 26,024,098 ) $ ( 134,085 ) $ 26,525,021 $ 8,808,026 See Notes to Condensed Consolidated Financial Statements Lam Research Corporation 2025 Q3 10-Q 8 Table of Contents LAM RESEARCH CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS December 28, 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 29, 2025, which are included in the Company’s Annual Report on Form 10-K as of and for the year ended June 29, 2025 (the “2025 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 28, 2026 and includes 52 weeks. The quarters ended December 28, 2025 (the “December 2025 quarter”) and December 29, 2024 included 13 weeks. The six months ended December 28, 2025 and December 29, 2024 each included 26 weeks. NOTE 2 — RECENT ACCOUNTING PRONOUNCEMENTS Recently Adopted or Effective The Company has not adopted any new accounting standards during the three and six months ended December 28, 2025 that have a material impact on the Company’s Condensed Consolidated Financial Statements. NOTE 3 — REVENUE Disaggregation of Revenue 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 Six Months Ended December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024 (In thousands) Systems revenue $ 3,357,493 $ 2,625,649 $ 6,905,058 $ 5,018,379 Customer support-related revenue and other 1,987,298 1,750,398 3,763,906 3,525,644 $ 5,344,791 $ 4,376,047 $ 10,668,964 $ 8,544,023 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. Lam Research Corporation 2025 Q3 10-Q 9 Table of Contents The following table presents the Company’s revenues disaggregated by geographic region: Three Months Ended Six Months Ended December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024 Revenue: (In thousands) China $ 1,858,547 $ 1,342,798 $ 4,141,120 $ 2,901,202 Taiwan 1,069,093 737,674 2,096,307 1,353,042 Korea 1,060,486 1,090,264 1,836,787 1,852,345 Japan 548,311 363,276 1,077,608 664,662 Southeast Asia 413,905 287,318 716,159 532,107 United States 254,619 413,281 559,335 901,662 Europe 139,830 141,436 241,648 339,003 $ 5,344,791 $ 4,376,047 $ 10,668,964 $ 8,544,023 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 Six Months Ended December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024 Foundry 59 % 35 % 60 % 38 % Memory 34 % 50 % 34 % 43 % Logic/integrated device manufacturing 7 % 15 % 6 % 19 % Deferred Revenue Revenue of $ 498.1 million and $ 1,494.7 million included in deferred profit at June 29, 2025 was recognized during the three and six months ended December 28, 2025, representing 19 % and 56 % of the $ 2,681.1 million of deferred revenue as of June 29, 2025. The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of December 28, 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 $ 1,546,892 $ 597,979 (1) $ 105,130 (1) $ 2,250,001 (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, and the Lam Research Corporation 2025 Stock Incentive Plan provide 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) in the Condensed Consolidated Statements of Operations: Three Months Ended Six Months Ended December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024 (in thousands) Equity-based compensation expense $ 88,539 $ 81,959 $ 185,780 $ 161,970 Lam Research Corporation 2025 Q3 10-Q 10 Table of Contents NOTE 5 — OTHER INCOME (EXPENSE), NET The significant components of other income (expense), net, are as follows: Three Months Ended Six Months Ended December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024 (in thousands) Interest income $ 53,155 $ 57,611 $ 117,085 $ 126,060 Interest expense ( 40,876 ) ( 45,299 ) ( 83,348 ) ( 90,245 ) Gains on deferred compensation plan-related assets, net 16,628 4,502 39,716 21,922 Foreign exchange losses, net ( 8,034 ) ( 5,117 ) ( 13,568 ) ( 14,803 ) Other, net 5,537 2,565 ( 3,401 ) 1,409 $ 26,410 $ 14,262 $ 56,484 $ 44,343 NOTE 6 — INCOME TAX EXPENSE The Company’s provision for income taxes and effective tax rate are as follows: Three Months Ended Six Months Ended December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024 (in thousands, except percentages) Income tax expense $ 242,619 $ 157,128 $ 533,121 $ 334,962 Effective tax rate 13.2 % 11.7 % 14.4 % 12.7 % The difference between the U.S. federal statutory tax rate of 21% and the Company’s effective tax rate for the three and six months ended December 28, 2025, and December 29, 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 Organization for Economic Co-operation and Development’s Base Erosion and Profit Shifting 2.0 (“BEPS 2.0”) Pillar Two Global Minimum Tax (“GMT”) is fully effective for the Company this fiscal year. The Company assessed its exposure to GMT under currently enacted legislation and determined that it expects to meet transitional safe harbor requirements in most jurisdictions, with limited jurisdictions subject to GMT. The Company assessed the impact and concluded that it was not material. The impact has been included within income tax expense for the six months ended December 28, 2025. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law by U.S. President Donald Trump. The impact on income taxes due to change in legislation is required, under Accounting Standards Codification (“ASC”) 740, Income Taxes, to be recognized in the period in which the law is enacted, which is this fiscal year. In general, the OBBBA introduces changes to U.S. taxation, including changes in the taxation of non-U.S. income. The Company assessed the changes and concluded that they were not material. The impact has been included within income tax expense for the six months ended December 28, 2025. Lam Research Corporation 2025 Q3 10-Q 11 Table of Contents 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 Six Months Ended December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024 (in thousands, except per share data) Numerator: Net income $ 1,593,994 $ 1,191,018 $ 3,162,654 $ 2,307,462 Denominator: Basic average shares outstanding 1,254,856 1,287,109 1,259,651 1,293,173 Effect of potential dilutive securities: Employee stock plans 6,883 4,360 5,875 4,594 Diluted average shares outstanding 1,261,739 1,291,469 1,265,526 1,297,767 Net income per share - basic $ 1.27 $ 0.93 $ 2.51 $ 1.78 Net income per share - diluted $ 1.26 $ 0.92 $ 2.50 $ 1.78 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 six months ended December 28, 2025 and December 29, 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 2025 Form 10-K. As of December 28, 2025 and June 29, 2025, the fair value of mutual funds and equity investments were not material. The Company had no debt security investments as of December 28, 2025 and June 29, 2025. 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 six months ended December 28, 2025 and December 29, 2024. The financial instruments reported within Cash and Cash Equivalents in the Company’s Condensed Consolidated Balance Sheets as of December 28, 2025, and June 29, 2025 consisted of the following: December 28, 2025 June 29, 2025 (in thousands) Money market funds (fair value measured on a recurring basis, level 1) $ 1,981,712 $ 3,151,084 Cash 2,150,434 1,662,236 Time deposits 2,048,294 1,577,339 Total $ 6,180,440 $ 6,390,659 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 2025 Form 10-K. As of December 28, 2025 and June 29, 2025, 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 six months ended December 28, 2025 and December 29, 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 2025 Form 10-K. Lam Research Corporation 2025 Q3 10-Q 12 Table of Contents 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: December 28, 2025 June 29, 2025 (in thousands) Raw materials $ 2,570,208 $ 2,662,248 Work-in-process 352,343 282,885 Finished goods 1,115,131 1,362,858 $ 4,037,682 $ 4,307,991 NOTE 10 — PROPERTY AND EQUIPMENT, NET Property and equipment, net is presented in the table below: December 28, 2025 June 29, 2025 (in thousands) Manufacturing and engineering equipment $ 2,403,120 $ 2,219,207 Buildings and improvements 2,143,629 1,914,570 Computer and computer-related equipment 186,169 182,439 Land 183,460 166,207 Office equipment, furniture and fixtures 100,280 92,740 5,016,658 4,575,163 Less: accumulated depreciation and amortization $ ( 2,327,459 ) $ ( 2,169,641 ) $ 2,689,199 $ 2,405,522 The Company has excluded immaterial right-of-use assets, under finance leases, recorded within property and equipment, net from the table above. NOTE 11 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following: December 28, 2025 June 29, 2025 (in thousands) Accrued compensation $ 797,939 $ 618,370 Warranty reserves 234,487 248,783 Income and other taxes payable 218,628 541,426 Dividend payable 325,828 291,981 Other 690,606 693,806 $ 2,267,488 $ 2,394,366 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 December 28, 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 Lam Research Corporation 2025 Q3 10-Q 13 Table of Contents 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 December 28, 2025, the maximum potential amount of future payments that the Company could be required to make under these arrangements and letters of credit was $ 239.4 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 December 28, 2025, warranty reserves totaling $ 13.3 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. Changes in the Company’s product warranty reserves were as follows: Three Months Ended Six Months Ended December 28, 2025 December 29, 2024 December 28, 2025 December 29, 2024 (in thousands) Balance at beginning of period $ 257,866 $ 250,375 $ 265,466 $ 250,404 Warranties issued during the period 67,702 69,150 133,286 131,880 Settlements made during the period ( 63,511 ) ( 46,288 ) ( 128,036 ) ( 91,256 ) Changes in liability for pre-existing warranties ( 14,253 ) ( 18,425 ) ( 22,912 ) ( 36,216 ) Balance at end of period $ 247,804 $ 254,812 $ 247,804 $ 254,812 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. Lam Research Corporation 2025 Q3 10-Q 14 Table of Contents Repurchases under the repurchase program were as follows during the periods indicated. Period Total Number of Shares Repurchased Total Cost of Repurchase (3) Average Price Paid per Share (1,3) Amount Available Under Repurchase Program (in thousands, except per share data) Available balance as of June 29, 2025 $ 7,517,184 Quarter ended September 28, 2025 9,686 (2) $ 990,046 $ 105.67 $ 6,527,138 Quarter ended December 28, 2025 9,387 $ 1,442,095 $ 153.62 $ 5,085,043 (1) Average price paid per share excludes the effect of accelerated share repurchase activities. See additional disclosure below regarding the Company’s accelerated share repurchase activity during the fiscal year. (2) Includes shares received at final settlement of accelerated share repurchase agreements. See additional disclosure below regarding the Company’s accelerated share repurchase activity during the fiscal year. (3) 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. Accelerated Share Repurchase Agreements On April 30, 2025, the Company entered into accelerated share repurchase agreements (the "April 2025 ASRs") with two financial institutions to repurchase a total of $ 500 million of Common Stock. The Company took an initial delivery of approximately 5.2 million shares, which represented 75 % of the prepayment amount divided by our closing stock price on April 30, 2025. The total number of shares received under the April 2025 ASRs was based upon the average daily volume weighted average price of the Company’s Common Stock during the repurchase period, less an agreed upon discount. Final settlement of the April 2025 ASRs occurred in September 2025, resulting in the receipt of approximately 317 thousand additional shares, which yielded a weighted-average share price of $ 91.00 for the transaction period, including the effects of a 1% excise tax under the Inflation Reduction Act. The Company recorded the April 2025 ASRs as equity transactions; as such, at the time of receipt, shares were included in treasury stock at fair market value as of the corresponding trade date. The Company reflects shares received as a repurchase of common stock in the weighted average common shares outstanding calculation for basic and diluted earnings per share. NOTE 14 — SEGMENT REPORTING 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. Segment information is prepared and managed on the same basis as described in Note 19, “Segment, Geographic Information, and Major Customers,” to the Consolidated Financial Statements in Part II, Item 8 of the Company’s 2025 Form 10-K. The Company's centralized manufacturing and support organizations, including global operations and certain administrative functions, provide support to its operating segments. Costs incurred by these organizations, as well as depreciation and amortization and equity-based compensation expense are allocated to cost of goods sold as overhead. Consequently, depreciation and amortization and equity-based compensation expense are not independently identifiable components within the segment’s results, and, therefore are not provided. With the exception of goodwill, the Company does not identify assets by operating segment. Consequently, the chief operating decision maker does not regularly review or receive discrete asset information by operating segment. Lam Research Corporation 2025 Q3 10-Q 15 Table of Contents The table below reconciles the Company's reportable segment to income before income taxes: Three Months Ended Six Months Ended December 28, 2025 December 29 2024 December 28, 2025 December 29, 2024 (In thousands) Revenue $ 5,344,791 $ 4,376,047 $ 10,668,964 $ 8,544,023 Installation and warranty expense 140,330 124,432 281,805 249,095 Other cost of goods sold (COGS) (1) 2,459,861 2,115,592 4,870,846 4,084,487 Segment COGS 2,600,191 2,240,024 5,152,651 4,333,582 Segment gross margin 2,744,600 2,136,023 5,516,313 4,210,441 Reconciliation to consolidated gross margin All other COGS 93,438 63,042 180,272 134,777 Gross margin 2,651,162 2,072,981 5,336,041 4,075,664 Research and development 573,305 494,947 1,149,751 990,305 Selling, general, and administrative 267,654 244,150 546,999 487,278 Other income (expense), net 26,410 14,262 56,484 44,343 Income before income taxes $ 1,836,613 $ 1,348,146 $ 3,695,775 $ 2,642,424 (1) Other COGS is primarily comprised of the capitalized cost of inventory sold, including both direct and indirect costs, but excludes installation and warranty expense and those items not allocated to the segment. Lam Research Corporation 2025 Q3 10-Q 16 Table of Contents