Lam Research Corporation
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Item 1. Business
Incorporated in 1980, Lam Research Corporation (“Lam Research,” “Lam,” “we,” “our,” “us,” or the “Company”) is a Delaware corporation, headquartered in Fremont, California. We maintain a network of facilities throughout Asia, Europe, and the United States in order to meet the needs of our dynamic customer base.
Additional information about Lam Research is available on our website at www.lamresearch.com. The content on any website referred to in this Form 10-K is not a part of or incorporated by reference in this Form 10-K unless expressly noted.
Our Annual Report on Form 10-K, Quarterly Reports on Forms 10-Q, Current Reports on Forms 8-K, Proxy Statements and all other filings we make with the SEC are available on our website, free of charge, as soon as reasonably practical after we file them with or furnish them to the SEC and are also available online at the SEC’s website at www.sec.gov.
The Lam Research logo, Lam Research, and all product and service names used in this report are either registered trademarks or trademarks of Lam Research Corporation or its subsidiaries in the United States and/or other countries. All other marks mentioned herein are the property of their respective holders.
We are a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. We have built a strong global presence with core competencies in areas such as nanoscale manufacturing enablement, chemistry, plasma and fluidics, advanced systems engineering, and a broad range of operational disciplines. Our products and services are designed to help our customers build smaller and better performing devices that are used in a variety of electronic products, including mobile phones, personal computers, cloud and enterprise servers, wearables, automotive vehicles, and data storage devices.
Our customer base includes leading semiconductor memory, foundry, and integrated device manufacturers (“IDMs”) that make products such as non-volatile memory (“NVM”), dynamic random-access memory (“DRAM”), and logic devices. Their continued success is part of our commitment to driving semiconductor breakthroughs that define the next generation. Our core technical competency is integrating hardware, process, materials, software, and process control enabling results on the wafer.
Semiconductor manufacturing, our customers’ business, involves the fabrication of multiple dies or integrated circuits (“ICs”) on a wafer. This involves the repetition of a set of core processes and can require hundreds of individual steps. Fabricating these devices requires a sequence of highly sophisticated process technologies to integrate an increasing array of new materials with precise control at the atomic scale. Along with meeting technical requirements, wafer processing equipment must deliver high productivity and be cost-effective.
Demand for electronic systems supporting artificial intelligence, cloud infrastructure, communications, automotive, industrial and other intelligent systems is driving the need for high performance, energy efficient and highly integrated semiconductor devices. To meet these requirements, semiconductor manufacturers are adopting vertical scaling approaches, including three-dimensional (“3D”) architecture, more sophisticated patterning schemes, new materials, and advanced integration approaches, as traditional two-dimensional scaling is becoming more challenging. These technology inflections are increasing manufacturing complexity and precision requirements in the production of semiconductors driving demand for our advanced semiconductor fabrication technologies and services.
We believe we are in a strong position with our leadership and expertise in deposition, etch, and clean markets to facilitate some of the most significant innovations in semiconductor device manufacturing. Several factors create opportunity for sustainable differentiation for us: (i) our focus on research and development, with several on-going programs relating to sustaining engineering, product and process development, and concept and feasibility; (ii) our ability to effectively leverage cycles of learning from our broad installed base; (iii) our collaborative focus with semi-ecosystem partners, including our close-to-customer focus; (iv) our ability to
Lam Research Corporation 2026 10-K 4
identify and invest in the breadth of our product portfolio to meet technology inflections; and (v) our focus on delivering our multi-product solutions with a goal to enhance the value of Lam’s solutions to our customers.
We also address processes for back-end wafer-level packaging (“WLP”), which is an alternative to traditional wire bonding and can offer a smaller form factor, increased interconnect speed and bandwidth, and lower power consumption, among other benefits. We offer advanced packaging solutions that support fan-out panel-level packaging, a process in which chips or chiplets are cut from a large format substrate sheet several times the size of a traditional silicon wafer, which increases yield and reduces waste and solutions that meet the need for 3D stacking of high bandwidth memory (“HBM”). In addition, our products are well-suited for related markets that rely on semiconductor processes and require production-proven manufacturing capability, such as complementary metal-oxide-semiconductor image sensors (“CIS”) and micro-electromechanical systems (“MEMS”).
Our Customer Support Business Group (“CSBG”) provides products and services to maximize installed equipment performance, predictability, and operational efficiency. We offer a broad range of services to deliver value throughout the lifecycle of our equipment, including customer service, spares, upgrades, and new and refurbished non-leading edge products in our deposition, etch, and clean markets. Many of the technical advances that we introduce in our newest products are also available as upgrades, which provide customers with a cost-effective strategy for extending the performance and capabilities of their existing wafer fabrication lines. Service offerings include fleet level Equipment Intelligence® solutions to maximize the productivity of our customers through system uptime or availability optimization, throughput improvements, and defect reduction. Our spares product line offers running cost optimization programs and focuses on product life extension to help customers increase the return on their capital purchases. Additionally, within CSBG, our Reliant® product line offers new and refurbished non-leading edge products in deposition, etch and clean markets for those applications that do not require the most advanced wafer processing capability.
Products
| Market | Process/Application | Technology | Products | ||||||||||||||||
| Deposition | Metal Films | Electrochemical Deposition (“ECD”) (Copper & Other) | SABRE® family | ||||||||||||||||
| Chemical Vapor Deposition (“CVD”) Atomic Layer Deposition (“ALD”) (Tungsten & Molybdenum) | ALTUS® family | ||||||||||||||||||
| Dielectric Films | Plasma-enhanced CVD (“PECVD”) ALD | VECTOR® family Striker® family | |||||||||||||||||
| Etch | Conductor Etch | Reactive Ion Etch | Kiyo® family Versys® Metal family Akara® family | ||||||||||||||||
| Dielectric Etch | Reactive Ion Etch | Flex® family Vantex® family | |||||||||||||||||
| Through-silicon Via (“TSV”) Etch | Deep Reactive Ion Etch | Syndion® family | |||||||||||||||||
| Selective Etch | Selective Etch | Argos® family Prevos® family Selis® family | |||||||||||||||||
| Clean | Wafer Cleaning | Wet Clean | EOS®, DV-Prime®, Da Vinci®, SP Series families | ||||||||||||||||
| Bevel Cleaning | Dry Plasma Clean | Coronus® family | |||||||||||||||||
| Dry Resist | Photoresist and Pattern Transfer | ||||||||||||||||||
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Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Documents To Review In Connection With Management’s Discussion and Analysis Of Financial Condition and Results Of Operations
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and accompanying Notes to unaudited Condensed Consolidated Financial Statements included in Part I, Item I of this Form 10-Q and the audited Consolidated Financial Statements and accompanying Notes to Consolidated Financial Statements and MD&A included in our 2026 Form 10-K.
EXECUTIVE SUMMARY
Lam Research Corporation is a global supplier of innovative wafer fabrication equipment and services to the semiconductor industry. We have built a strong global presence with core competencies in areas like nanoscale manufacturing enablement, chemistry, plasma and fluidics, advanced systems engineering, and a broad range of operational disciplines. Our products and services are designed to help our customers build smaller and better performing devices that are used in a variety of electronic products, including mobile phones, personal computers, cloud and enterprise servers, wearables, automotive vehicles, and data storage devices.
Our customer base includes leading semiconductor memory, foundry, and integrated device manufacturers that make products such as non-volatile memory, dynamic random-access memory, and logic devices. Their continued success is part of our commitment to driving semiconductor breakthroughs that define the next generation. Our core technical competency is integrating hardware, process, materials, software, and process control, enabling results on the wafer.
Semiconductor manufacturing, our customers’ business, involves the fabrication of multiple dies or integrated circuits on a wafer. This involves the repetition of a set of core processes and can require hundreds of individual steps. Fabricating these devices requires a sequence of highly sophisticated process technologies to integrate an increasing array of new materials with precise control at the atomic scale. Along with meeting technical requirements, wafer processing equipment must deliver high productivity and be cost-effective.
Demand for electronic systems supporting artificial intelligence, cloud infrastructure, communications, automotive, industrial and other intelligent systems is driving the need for high performance, energy efficient and highly integrated semiconductor devices. To meet these requirements, semiconductor manufacturers are adopting vertical scaling approaches, including three-dimensional (“3D”) architecture, more sophisticated patterning schemes, new materials, and advanced integration approaches, as traditional two-dimensional scaling is becoming more challenging. These technology inflections are increasing manufacturing complexity and precision requirements in the production of semiconductors driving demand for our advanced semiconductor fabrication technologies and services.
We believe we are in a strong position with our leadership and expertise in deposition, etch, and clean markets to facilitate some of the most significant innovations in semiconductor device manufacturing. Our Customer Support Business Group provides products and services to maximize installed equipment performance, predictability, and operational efficiency. Several factors create opportunities for sustainable differentiation for us: (i) our focus on research and development, with several ongoing programs relating to sustaining engineering, product and process development, and concept and feasibility; (ii) our ability to effectively leverage cycles of learning from our broad installed base; (iii) our collaborative focus with semi-ecosystem partners, including our close-to-customer focus; (iv) our ability to identify and invest in the breadth of our product portfolio to meet technology inflections; and (v) our focus on delivering our multi-product solutions with a goal to enhance the value of Lam’s solutions to our customers.
Wafer fabrication equipment investments have continued to grow in 2026 with the AI market driving higher semiconductor industry spending across both the memory and non-memory market segments. Over the longer term, we believe that secular demand for semiconductors, combined with technology inflections in our industry, including 3D device scaling, multiple patterning, process flow, and advanced packaging chip integration, will drive sustainable growth and lead to an increase in the market opportunities for our products and services in the deposition, etch, and clean businesses. However, these trends remain subject to volatility in the semiconductor industry environment from trade restrictions and tariffs, as well as the risks, uncertainties, and other factors discussed in Part II, Item 1A, “Risk Factors,” which have had, and in the future may have, a negative impact on our revenue and operating margin.
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The following table summarizes certain key financial information for the periods indicated below:
| Three Months Ended | |||||||||||||||
| September 27, 2026 | June 28, 2026 | ||||||||||||||
| (in thousands, except per share data and percentages) | |||||||||||||||
| Revenue | $ | 8,219,418 | $ | 6,722,238 | |||||||||||
| Gross margin | $ | 4,298,853 | $ | 3,478,740 | |||||||||||
| Gross margin as a percent of total revenue | 52.3 | % | 51.7 | % | |||||||||||
| Total operating expenses | $ | 1,015,126 | $ | 965,252 | |||||||||||
| Net income | $ | 2,753,138 | $ | 2,277,282 | |||||||||||
| Diluted net income per share | $ | 2.19 | $ | 1.81 | |||||||||||
In the three months ended September 27, 2026 (the “September 2026 quarter”), revenue increased 22% compared to the three months ended June 28, 2026 (the “June 2026 quarter”), driven by strong customer demand for semiconductor equipment systems from customers within the foundry and memory market segments. The increase in gross margin as a percentage of revenue in the September 2026 quarter compared to the June 2026 quarter was mainly attributable to favorable customer and product mix. The increase in operating expenses in the September 2026 quarter compared to the June 2026 quarter was primarily driven by higher incentive compensation due to increased profitability as well as incremental headcount.
Our 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. This increase was primarily the result of $3.50 billion of cash generated from operating activities, partially offset by $1.02 billion of share repurchases, including net share settlement of employee stock-based compensation and excise tax; $325.4 million of dividends paid to stockholders; and $257.7 million of capital expenditures. Employee headcount as of September 27, 2026 was approximately 24,300.
RESULTS OF OPERATIONS
Revenue
We generate revenue primarily through the sale and service of semiconductor manufacturing equipment. Demand for our products and services is driven by customers’ investments in wafer fabrication capacity, technology advancement, and installed base support. We present revenue on a disaggregated basis to differentiate between systems revenue and customer support-related revenue. 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 services, spares, upgrades, and non-leading-edge equipment from the Company’s Reliant® product line.
Timing of revenue recognition depends on a number of factors, including customer requirements, resource availability, supply chain conditions, manufacturing capacity, delivery schedules, and other operational considerations.
We present our revenues disaggregated by geographic region based on the location of customers’ facilities to which products were shipped and services were rendered. A significant portion of our revenue is generated outside of the United States.
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The following table presents our total revenue and revenue disaggregated by geographic region:
| Three Months Ended | |||||||||||||||||||||||||
| September 27, 2026 | June 28, 2026 | September 28, 2025 | |||||||||||||||||||||||
| Revenue (in millions) | $ | 8,219 | $ | 6,722 | $ | 5,324 | |||||||||||||||||||
| China | 35 | % | 26 | % | 43 | % | |||||||||||||||||||
| Korea | 20 | % | 20 | % | 15 | % | |||||||||||||||||||
| Taiwan | 18 | % | 27 | % | 19 | % | |||||||||||||||||||
| Japan | 9 | % | 9 | % | 10 | % | |||||||||||||||||||
| United States | 8 | % | 9 | % | 6 | % | |||||||||||||||||||
| Southeast Asia | 6 | % | 5 | % | 5 | % | |||||||||||||||||||
| Europe | 4 | % | 4 | % | 2 | % | |||||||||||||||||||
The following table presents our revenue disaggregated between systems and customer support-related revenue:
| Three Months Ended | |||||||||||||||||||||||||
| September 27, 2026 | June 28, 2026 | September 28, 2025 | |||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||
| Systems revenue | $ | 5,732,907 | $ | 4,249,848 | $ | 3,547,565 | |||||||||||||||||||
| Customer support-related revenue and other | 2,486,511 | 2,472,390 | 1,776,608 | ||||||||||||||||||||||
| $ | 8,219,418 | $ | 6,722,238 | $ | 5,324,173 | ||||||||||||||||||||
Systems revenue increased by $1.48 billion, or 35%, in the September 2026 quarter compared to the June 2026 quarter predominantly driven by increases in foundry as well as memory equipment spending. Customer support-related revenue and other increased slightly in the September 2026 quarter compared to the June 2026 quarter.
Systems revenue increased by $2.19 billion, or 62%, in the three months ended September 27, 2026 compared to the same period in 2025 due to higher levels of semiconductor demand leading to increased investments in both memory and non-memory market segments. Customer support-related revenue and other increased by $709.9 million, or 40%, in the three months ended September 27, 2026 compared to the same period in 2025 primarily due to customer investments in non-leading edge equipment and an increase in spares revenue.
The percentage of leading- and non-leading-edge equipment and upgrade revenue from each of the market segments we serve was as follows:
| Three Months Ended | |||||||||||||||||||||||||
| September 27, 2026 | June 28, 2026 | September 28, 2025 | |||||||||||||||||||||||
| Foundry | 46 | % | 44 | % | 60 | % | |||||||||||||||||||
| Memory | 46 | % | 46 | % | 34 | % | |||||||||||||||||||
| Logic/integrated device manufacturing | 8 | % | 10 | % | 6 | % | |||||||||||||||||||
The increase in the percentage of foundry market segment revenue for the September 2026 quarter compared to the June 2026 quarter was primarily driven by the timing of mature node investments within the China region. The percentage of foundry market segment revenue decreased and the percentage of memory market segment revenue increased in the three months ended September 27, 2026 compared to the same period in the prior year. During this period both the foundry and memory market segments experienced growth on an absolute dollar basis, with the increase in the memory market segment revenue exceeding that of the foundry market segment.
The deferred revenue balance was $2.66 billion at the end of the September 2026 quarter, which is an increase relative to the balance at the end of the June 2026 quarter of $2.43 billion. The increase in the deferred revenue balance is primarily due to increased sales volume, partially offset by a decrease in customer down payments.
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Gross Margin
| Three Months Ended | |||||||||||||||||||||||||
| September 27, 2026 | June 28, 2026 | September 28, 2025 | |||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||
| Gross margin | $ | 4,298,853 | $ | 3,478,740 | $ | 2,684,879 | |||||||||||||||||||
| Percent of revenue | 52.3 | % | 51.7 | % | 50.4 | % | |||||||||||||||||||
Gross margin as a percentage of revenue increased in the September 2026 quarter compared to the June 2026 quarter, driven mainly by favorable customer and product mix.
The increase in gross margin in the three months ended September 27, 2026 compared to the same period in the prior year, was primarily due to favorable changes in product mix, as well as improved efficiencies as a result of higher business volumes.
Research and Development
| Three Months Ended | |||||||||||||||||||||||||
| September 27, 2026 | June 28, 2026 | September 28, 2025 | |||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||
| Research & development (“R&D”) | $ | 666,398 | $ | 642,922 | $ | 576,446 | |||||||||||||||||||
| Percent of revenue | 8.1 | % | 9.6 | % | 10.8 | % | |||||||||||||||||||
We continued to make significant R&D investments in the September 2026 quarter focused on leading-edge deposition, etch, clean, and other semiconductor manufacturing processes. R&D expense in the September 2026 quarter increased compared to the June 2026 quarter primarily driven by increased incentive compensation due to improved profitability and incremental headcount.
R&D expense in the three months ended September 27, 2026 increased compared to the same period in the prior year, primarily from employee-related costs due to increased headcount, increased engineering supplies costs and higher depreciation expense.
Selling, General, and Administrative
| Three Months Ended | |||||||||||||||||||||||||
| September 27, 2026 | June 28, 2026 | September 28, 2025 | |||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||
| Selling, general, and administrative (“SG&A”) | $ | 348,728 | $ | 322,330 | $ | 279,345 | |||||||||||||||||||
| Percent of revenue | 4.2 | % | 4.8 | % | 5.2 | % | |||||||||||||||||||
SG&A expense during the September 2026 quarter increased compared to the June 2026 quarter driven by higher incentive compensation due to improved profitability and incremental headcount and outside service spending, partially offset by a decrease in elective deferred compensation plan-related costs.
SG&A expense in the three months ended September 27, 2026 increased compared to the same period in the prior year, primarily as a result of higher headcount driving an increase in employee-related costs and increased spending for outside services.
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Other Income (Expense), Net
Other income (expense), net consisted of the following:
| Three Months Ended | |||||||||||||||||||||||||
| September 27, 2026 | June 28, 2026 | September 28, 2025 | |||||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||||
| Interest income | $ | 49,849 | $ | 36,465 | $ | 63,930 | |||||||||||||||||||
| Interest expense | (36,762) | (34,203) | (42,472) | ||||||||||||||||||||||
| Gains on deferred compensation plan-related assets, net | 12,870 | 61,325 | 23,088 | ||||||||||||||||||||||
| Foreign exchange gains (losses), net | 3,889 | (15,464) | (5,534) | ||||||||||||||||||||||
| Other, net | (1,353) | (6,469) | (8,938) | ||||||||||||||||||||||
| $ | 28,493 | $ | 41,654 | $ | 30,074 | ||||||||||||||||||||
Interest income increased in the September 2026 quarter compared to the June 2026 quarter, primarily due to both higher cash balances and higher interest rates. Interest income decreased in the three months ended September 27, 2026 compared to the same period in the prior year, primarily due to lower interest rates.
Interest expense was flat in the September 2026 quarter compared to the June 2026 quarter. Interest expense decreased in the three months ended September 27, 2026 compared to the same period in the prior year primarily due to the maturity of $750 million of the Company’s senior notes in March 2026.
The changes in the gains on deferred compensation plan-related assets, net were driven by fluctuations in the fair market value of the underlying funds for all periods presented.
Foreign exchange fluctuations were primarily due to currency movements against portions of our unhedged balance sheet exposures for all periods presented.
The variation in other, net was primarily driven by the changes in fair value of our equity investments and charitable contributions for all periods presented.
Income Tax Expense
Our provision for income taxes and effective tax rate for the periods indicated were as follows:
| Three Months Ended | |||||||||||||||||||||||||
| September 27, 2026 | June 28, 2026 | September 28, 2025 | |||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||
| Income tax expense | $ | 559,082 | $ | 277,860 | $ | 290,502 | |||||||||||||||||||
| Effective tax rate | 16.9 | % | 10.9 | % | 15.6 | % | |||||||||||||||||||
The increase in the effective tax rate for the September 2026 quarter compared to the June 2026 quarter was primarily due to an increase in Net Controlled Foreign Corporation Tested Income (“NCTI”) tax rate, the change in level and proportion of income in higher and lower tax jurisdictions, the income tax expense from a change in U.S. tax law in the September 2026 quarter, and the recognition of previously unrecognized tax benefits from lapses of statutes of limitation in the June 2026 quarter.
The increase in the effective tax rate for the three months ended September 27, 2026 compared to the same period in the prior year was primarily due to an increase in NCTI tax rate, and the change in level and proportion of income in higher and lower tax jurisdictions in the three months ended September 27, 2026, partially offset by the tax expense associated with the revaluation of deferred taxes due to changes in the U.S. taxation of non-U.S. income under the One Big Beautiful Bill Act (“OBBBA”) in the three months ended September 28, 2025.
International revenues account for a significant portion of our total revenues, such that a material portion of our pre-tax income is earned outside the United States. International pre-tax income is generally taxable in the United States at a lower effective tax rate than the federal statutory tax rate. Please refer to Note 7: Income Taxes to our Consolidated Financial Statements in Part II, Item 8 to our 2026 Form 10-K for additional information.
We re-evaluate uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Any change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision.
Lam Research Corporation 2027 Q1 10-Q 20
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There have been no material changes to our critical accounting policies and estimates to those disclosed in “Critical Accounting Policies and Estimates” in Part II, Item 7 of our 2026 Form 10-K.
Recent Accounting Pronouncements
See Note 2 - Recent Accounting Pronouncements, of our Condensed Consolidated Financial Statements, included in Part 1, Item 1 of this Form 10-Q for details of any recently adopted or effective accounting pronouncements.
Updates Not Yet Effective
In November 2024, the Financial Accounting Standards Board (“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 31. 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 in fiscal year 2028 for the annual reporting period ending June 25, 2028 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 will apply the guidance prospectively and is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.
In December 2025, the FASB issued ASU 2025-10, “Accounting for Government Grants Received by Business Entities,” which introduces guidance for recognizing, measuring, and presenting government grants, addressing diversity in practice. The guidance is effective for annual reporting periods beginning after December 15, 2028, and interim reporting within those annual reporting periods, with early adoption permitted. The Company is required to adopt this standard in the first quarter of fiscal year 2030. The Company does not expect the adoption of ASU 2025-10 to have an impact on its Consolidated Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES
Total gross cash, cash equivalents, and restricted cash balances were $7.45 billion at September 27, 2026 compared to $5.60 billion as of June 28, 2026. The increase was primarily driven by cash generated from operating activities totaling $3.50 billion, partially offset by $1.02 billion of share repurchases, including net share settlement on employee stock-based compensation and excise tax; $325.4 million in dividends paid; and $257.7 million in capital expenditures.
Cash Flows from Operating Activities
Net cash provided by operating activities of $3.50 billion and $1.78 billion during the three months ended September 27, 2026 and September 28, 2025, respectively, consisted of:
| Three Months Ended | ||||||||
| September 27, 2026 | September 28, 2025 | |||||||
| (in thousands) | ||||||||
| Net income | $ | 2,753,138 | $ | 1,568,660 | ||||
| Non-cash charges: | ||||||||
| Depreciation and amortization | 122,072 | 101,644 | ||||||
| Equity-based compensation expense | 114,696 | 97,241 | ||||||
| Deferred income taxes | (55,300) | (62,875) | ||||||
| Changes in operating asset and liability accounts | 535,413 | 76,184 | ||||||
| Other | 27,633 | (1,890) | ||||||
| $ | 3,497,652 | $ | 1,778,964 | |||||
Changes in operating asset and liability accounts, net of foreign exchange impact, in the three months ended September 27, 2026 included the following sources of cash: increases in accrued expenses and other liabilities of $832.7 million, accounts payable of $289.8 million and deferred gross profit of $150.2 million. These sources of cash were offset by the following uses of cash: increases in accounts receivable of $342.1 million, inventory of $311.3 million, and prepaid expenses and other current assets of $83.9 million.
Changes in operating asset and liability accounts, net of foreign exchange impact, in the three months ended September 28, 2025 included the following sources of cash: decreases in inventory of $189.8 million and prepaid expenses and other current assets of $30.2 million, and increases in deferred gross profit of $80.9 million, accrued expenses and other liabilities of $25.2 million, and
Lam Research Corporation 2027 Q1 10-Q 21
accounts payable of $5.1 million. These sources of cash were offset by the following uses of cash: increases in accounts receivable of $255.0 million.
The increase of $1.72 billion in net cash provided by operating activities during the three months ended September 27, 2026 compared to the three months ended September 28, 2025 was primarily due to an increase in net income, as well as, changes in operating assets and liabilities, described above.
Cash Flows from Investing Activities
Net cash used for investing activities during the three months ended September 27, 2026 and September 28, 2025 was $267.0 million and $186.0 million, respectively, primarily consisting of capital expenditures for manufacturing capacity and lab infrastructure investments.
Cash Flows from Financing Activities
Net cash used for financing activities during the three months ended September 27, 2026 was $1.38 billion, primarily consisting of $1.02 billion in treasury stock repurchases, including net share settlement on employee stock-based compensation and excise tax, $325.4 million in dividends paid, and $34.5 million of principal payments on debt instruments and debt issuance costs, primarily finance lease-related.
Net cash used for financing activities during the three months ended September 28, 2025 was $1.28 billion, primarily consisting of $975.8 million in treasury stock repurchases, including net share settlement on employee stock-based compensation and excise tax and $292.0 million in dividends paid.
The increase of $100.7 million in net cash used for financing activities during the three months ended September 27, 2026 compared to the three months ended September 28, 2025 was primarily due to incremental share repurchase activity with the execution of $1.00 billion of accelerated share repurchase agreements with two financial institutions in the September 2026 quarter and the increase in the dividend rate over the same period.
Liquidity
Given that the semiconductor industry is highly competitive and has historically experienced rapid changes in demand, we believe that maintaining sufficient liquidity reserves is important to support sustaining levels of investment in R&D and capital infrastructure. Anticipated cash flows from operations based on our current business outlook, combined with our current levels of cash and cash equivalents as of September 27, 2026, are expected to be sufficient to support our anticipated levels of operations, investments, debt service requirements, capital expenditures, capital redistributions, and dividends through at least the next twelve months. However, factors outside of our control, including uncertainty in the global economy and the semiconductor industry, as well as disruptions in credit markets, have in the past, are currently, and could in the future, impact customer demand for our products, as well as our ability to manage normal commercial relationships with our customers, suppliers, and creditors.
Our capital allocation strategy includes a focus to return a portion of our free cash flow to stockholders over time through dividends and share repurchases of Common Stock. Free cash flow is defined as net cash provided by operating activities less cash used for capital expenditures and intangible assets. We expect to fund these capital return activities through future cash provided by operating activities, existing cash and cash equivalents, and/or existing or future available short- and long-term financing.
In the longer term, liquidity will depend to a great extent on our future revenues and our ability to appropriately manage our costs based on demand for our products and services. While we have substantial cash balances, we may require additional funding and need or choose to raise the required funds through borrowings or public or private sales of debt or equity securities. We believe that, if necessary, we will be able to access the capital markets on terms and in amounts adequate to meet our objectives. However, domestic and global macroeconomic and political conditions could cause disruptions to the capital markets and otherwise make any financing more challenging, and there can be no assurance that we will be able to obtain such financing on commercially reasonable terms or at all.
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-10-23 | ARCHER TIMOTHY | President and CEO | Sell | -31,400 | $227.02 | -$7,128,428 |
| 2026-09-09 | ARCHER TIMOTHY | President and CEO | Sell | -30,000 | $319.26 | -$9,577,800 |
| 2026-09-09 | Mayer Bethany indirect | Director | Sell | -9,557 | $314.74 | -$3,007,970 |
| 2026-09-02 | Varadarajan Seshasayee | Senior Vice President | Sell | -59,750 ×3 | $291.32 | -$17,406,370 |
| 2026-08-31 | Harter Ava | Chief Legal Officer | Sell | -5,000 | $302.46 | -$1,512,300 |
| 2026-08-06 | ARCHER TIMOTHY | President and CEO | Sell | -30,000 | $300.00 | -$9,000,000 |
Source: SEC Form 4 filings.
Next expected filings
- ~2027-01-27 10-Q expected by 2027-02-07 (in 91 days)
- ~2027-04-21 10-Q expected by 2027-05-02 (in 175 days)
- ~2027-08-06 10-K expected by 2027-08-15 (in 282 days)
- ~2027-10-20 10-Q expected by 2027-10-31 (in 357 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-10-22 10-Q Quarterly Report
- 2026-10-21 8-K Earnings Release; Financial Statements and Exhibits
- 2026-09-24 DEF 14A Proxy Statement
- 2026-08-27 8-K Officer/Director Change
- 2026-08-07 10-K Annual Report
- 2026-07-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-04-23 10-Q Quarterly Report
- 2026-04-22 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-04 8-K/A Officer/Director Change; Financial Statements and Exhibits
- 2026-02-03 8-K Officer/Director Change; Financial Statements and Exhibits
- 2026-01-29 10-Q Quarterly Report
- 2026-01-28 8-K Earnings Release; Financial Statements and Exhibits
- 2025-11-06 8-K Material Modification to Rights; Officer/Director Change; Bylaws/Articles Amended; Shareholder Vote Results; Financial Statements and Exhibits
- 2025-10-24 10-Q Quarterly Report
- 2025-10-22 8-K Earnings Release; Financial Statements and Exhibits