Lam Research (LRCX.US) Q1 revenue surges 54% year-on-year to a record high; results and guidance only slightly exceed expectations

According to Zhitong Finance APP, after the US stock market closed on Wednesday, October 21, Lam Research (LRCX.US) announced its financial results for the first quarter of fiscal year 2027, ending September 27, 2026. The financial report shows that the company achieved revenue of $8.219 billion for the quarter, a year-on-year increase of 54% and a quarter-on-quarter increase of 22%, setting a new quarterly record and beating the average analyst estimate of $8.153 billion. Under GAAP, net profit increased 76% year-on-year to $2.753 billion; diluted earnings per share were $2.19; gross margin increased by 60 basis points quarter-on-quarter to 52.3%; operating margin increased by 260 basis points quarter-on-quarter to 40.0%. On a Non-GAAP basis, diluted earnings per share were $2.20, better than the average analyst expectation of $2.18.

Revenue growth was driven by advanced process equipment. By business segment, system equipment revenue was $5.733 billion, an increase of 62% year-on-year and 35% quarter-on-quarter, reflecting strong market demand for advanced deposition and etch equipment; customer support-related revenue was $2.487 billion, up 40% year-on-year.

Cash flow and shareholder returns strengthened simultaneously. Operating cash flow for the quarter was $3.5 billion, with cash and restricted cash at the end of the quarter totaling $7.45 billion; deferred revenue was $2.66 billion, increasing quarter-on-quarter. During the quarter, the company repurchased $1.02 billion in stock (compared to $247 million in the previous quarter) and paid $325 million in dividends, and raised its quarterly dividend from $0.26 to $0.33 per share. CEO Tim Archer stated in the press release that semiconductor demand driven by artificial intelligence (AI) and increased device complexity pushed the company to record results, and the company’s strategic investments in technology inflection points and capacity are paying off.

For guidance, the company projects revenue of $8.6 billion (plus or minus $400 million) for the second quarter of fiscal year 2027 ending December 27, slightly above analysts’ consensus estimate of approximately $8.54 billion; diluted earnings per share under both GAAP and Non-GAAP are projected at $2.33 (plus or minus $0.15), also slightly better than the average analyst estimate of $2.31.

Despite beating both earnings and guidance expectations, as of press time, Lam Research’s stock fell more than 6% after hours on Wednesday in the US stock market. Market analysis believes that the company’s results only marginally exceeded expectations, the guidance range is relatively wide, and with the stock price having risen about 80% cumulatively over the past year ahead of the financial report, this triggered typical profit-taking.