Executive Vice President and Chief Financial Officer at Lam Research
Great. Thank you, Tim. Good afternoon, everyone and thank you for joining our call today during what I know is a very busy earnings season. I am pleased to share our June quarter results with you today. We had our second consecutive fiscal year of record levels of revenue and diluted earnings per share. Revenues increased year-over-year for the fiscal year by over 17% and diluted earnings per share rose by more than 21%. We delivered solid performance in the June 2022 quarter. Our results across all financial metrics came in at the high end or above our guidance ranges due to our improved execution and the continued strong demand for our equipment.
June quarter revenue was a record at $4.64 billion, which was an increase of more than 14% over the prior quarter and over the high-end of the guidance range. While we are making progress on addressing the supply chain challenges weve previously talked about, it will take more time for them to be fully resolved. Despite the supply chain improvements and higher factory output levels, we still exited the June quarter with $2.2 billion in deferred revenue, which was an increase of $129 million sequentially.
From a segment perspective, memory represented 54% of systems revenue in the June quarter, which was down from the prior quarter level of 66%. The NAND segment came in at 40% percent of our systems revenue, which was roughly consistent with the prior quarter. Our NAND customers are investing in tools for 17x layer and beyond devices. On the DRAM side, revenues were 14% of systems revenue, which is a decline from the prior quarter level of 27%. DRAM investments are focused on the 1z and 1-alpha node addition and conversions.
In the Foundry segment, June quarter revenues increased quarter-over-quarter and represented 26% of our systems revenue compared with 21% in the March quarter. The increase is related to the timing of customer investments with broad-based spending across both leading as well as specialty node devices.
The Logic and Other segment had record performance in the June quarter coming in at 20% of systems revenue higher than the March quarter amount of 13%. Our performance here not only reflects the demand in the market for microprocessors, analog components, image sensors, and advanced packaging solutions, but it also demonstrates the progress we are making in the leading-edge foundry logic inflections that Tim talked about earlier.
Let me now turn to the regional composition of our total revenue. The China region came in at 31% of total revenue, which was flat with the March quarter percentage. China domestic customers were the majority of the China regional revenue in the June quarter. There was also a strong concentration of investments by our customers in the Korea and Taiwan regions, which comprised 24% and 19% of our total revenues respectively in the June quarter.
The Customer Support Business Group revenue was also a record at approximately $1.6 billion which was up 16% from the prior quarter level and 18% higher than the June quarter in calendar 2021. There was strength across all parts of CSBG, but notably in spares with our customers fabs running at high utilization levels as well as in our Reliant business, with customers investing in specialty market areas such as RF and power devices. While quarter-on-quarter growth rates in CSBG can vary based on customer investment patterns, I believe CSBG is well positioned to again deliver annual growth in 2022.
Let me now pivot to our gross margin performance. The June quarter came in at 45.2% above the midpoint of the guided range. Our fixed cost absorption improved somewhat with the higher output levels. However, we continue to have cost challenges in the areas of freight and logistics, semiconductors as well as in other critical components. We will continue to drive progress on improving our operational efficiencies. However, we expect inflationary pressures to be a persistent headwind in the second half of the year. Our September quarter guidance embeds our views on these factors.
Operating expenses for June were $635 million, up slightly from March quarter. The increase was mainly in R&D across all of our business units as we are investing in development of technologies to support our customers long-term roadmaps as well as to mitigate some of the supply chain challenges we are having.
The June quarter operating margin was 31.5% coming in over the guidance range as a result of the stronger than expected revenue performance. Our non-GAAP tax rate for the quarter was 11%, generally in line with our expectations. We estimate the tax rate for calendar year 22 to be in the low-teens level. This estimate doesnt reflect any impact of any potential U.S. tax policy changes. And this is obviously something we continue to monitor closely and we will update you as appropriate. And just to remind you, as we have discussed in the past, you should expect the tax rate to fluctuate on a quarterly basis.
Other income and expense for the June quarter was approximately $87 million in expense consistent with what we noted on our call last quarter as well as what was included in the June quarter guidance. We had an increase in expense this quarter related to market declines in one our venture investments that recently went public. The OI&E P&L line item is subject to market-related fluctuations that will cause some level of volatility due to items such as foreign exchange as well as impacts in the equity markets.
We continue to execute on our capital return objectives during the June allocating $868 million towards share repurchases. We paid $208 million in dividends. Our share repurchase activity was a combination of open market repurchases as well as an accelerated share repurchase program. This ASR will continue to execute during the September quarter.
Id also like to highlight that since calendar year 2012, when we brought Lam and Novellus together, we have returned approximately 115% or more than $20 billion of our free cash flow to equity holders. Our stated plan is to return 75% to 100% of free cash flow through a combination of buyback and dividends. June quarter diluted earnings per share, was $8.83. Diluted share count was 138 million shares, which was lower than the March quarter and lower than our June quarter expectation due to the increase in share repurchase activity.
Let me turn to the balance sheet. Cash and short-term investments, including restricted cash, totaled $3.9 billion, which was down from $4.6 billion at the end of the March quarter. The decrease in the cash position was attributed to our capital return activity as well as our usage of cash for growth in working capital as well as continuing capital investments. We increased the level of inventory we are carrying to support our growing business volumes. Inventory turns were flat with the prior quarter level coming in at 2.6x. Days sales outstanding come in at 85 days, which was essentially flat with the March quarter. It again was a somewhat back-end weighted shipment quarter.
Non-cash expenses for the June quarter included approximately $70 million for equity compensation, $69 million in depreciation and $19 million for amortization. Capital expenditures for the June quarter came in at $126 million, down by roughly $20 million from the March quarter level. Capital expenditures are supporting the company growth in manufacturing in multiple geographies, including the United States and Malaysia as well as research and development infrastructure investment in California, Oregon as well as our new technology center in Korea.
We ended the June quarter with approximately 17,700 regular full-time employees, which was an increase of approximately 800 people from the prior quarter. We had headcount growth, primarily in the factory and field organizations to address the higher output levels, to manage supply chain constraints as well as to support increasing customer delivery and installation.
Looking ahead, Id like to provide our non-GAAP guidance for the September 2022 quarter. We are expecting revenue of $4.9 billion plus or minus $300 million; gross margin of 45%, plus or minus 1 percentage point. This gross margin outlook reflects ongoing inflationary challenges that we are seeing in the supply chain. Operating margins of 31.5%, plus or minus 1 percentage point; and finally, earnings per share of $9.50 plus or minus $0.75 based on a share count of approximately 137 million shares.
So then in summary, Lam demonstrated an improved operational execution in the June quarter and delivered record financial performance both quarterly as well as on a fiscal year basis. While the semiconductor industry is not immune from softening macro factors that we see, Lams technology leadership, along with our robust installed base is a solid foundation for continued long-term growth for the company.
And with that, operator, I will conclude my prepared remarks. Tim and I would now like to open up the call and take questions.