Lam Research (LRCX) Financials

Lam Research (NASDAQ: LRCX) continued its strong recovery in fiscal 2026. Fourth-quarter revenue increased to $6.72 billion, up from $5.84 billion in the third quarter and approximately 30% above the $5.17 billion reported in Q4 2025. The company’s growth has accelerated from the weaker revenue levels seen during fiscal 2024, when quarterly revenue was generally below $4.4 billion.

Profitability also improved meaningfully. Fourth-quarter gross profit rose to $3.48 billion, producing a gross margin of approximately 51.7%, compared with 49.8% in Q3. Operating income increased to $2.51 billion, while net income reached $2.28 billion, or $1.81 per diluted share. Net income was up approximately 32% from Q4 2025, and the operating margin expanded to about 37.4% from 35.0% in the prior quarter.

• Revenue momentum is improving: Quarterly revenue advanced from $3.21 billion in Q4 2023 to $6.72 billion in Q4 2026, indicating a substantial recovery in demand for Lam Research’s semiconductor manufacturing equipment.
• Margins are expanding: Gross margin improved from approximately 47.5% in Q4 2025 to 51.7% in Q4 2026, while operating margin rose from 33.7% to 37.4% over the same period.
• Earnings growth has been strong: Quarterly net income increased from $802.5 million in Q4 2023 to $2.28 billion in Q4 2026. Diluted EPS also rose from $1.34 in Q4 2025 to $1.81 in the latest quarter.
• Research and development spending is supporting growth: R&D expense reached $642.9 million in Q4 2026, up from $580.2 million in Q4 2025. The spending represents continued investment in products and technologies that could support future semiconductor equipment demand.
• Operating cash flow remains substantial: Lam Research generated $1.46 billion of operating cash flow in Q4 2026 and more than $5.8 billion during fiscal 2026 based on the quarterly figures provided.
• Capital returns remain significant: The company repurchased approximately $3.86 billion of stock across fiscal 2026 and paid roughly $1.30 billion in dividends. These actions can support per-share earnings and shareholder returns when the business continues generating strong cash flow.
• Debt has become more manageable: Short-term debt declined from $754 million in Q1 2026 to just $4 million in Q3, while long-term debt remained broadly stable near $3.7 billion. Total liabilities also declined from $11.7 billion in Q1 to $10.2 billion in Q3.
• Working-capital movements are volatile: Changes in operating assets and liabilities reduced Q4 operating cash flow by approximately $1.04 billion, following an $894 million reduction in Q3. This may reflect investment in receivables, inventory or other operating assets rather than a deterioration in reported earnings, but it warrants monitoring.
• Receivables remain elevated: Accounts receivable increased from $2.52 billion at the end of fiscal 2024 to $4.13 billion in Q3 2026. The increase is consistent with higher sales, but investors should watch collections and customer payment trends.
• Cash balances have declined during fiscal 2026: Cash and equivalents fell from $6.69 billion at the end of Q1 2026 to $4.75 billion at the end of Q3, primarily as the company funded buybacks, dividends, debt repayment and capital expenditures. Q4 cash flow improved by $831 million, but the company’s cash cushion remains below its fiscal-year starting level.

Lam Research’s balance sheet remains supported by more than $20 billion of total assets and approximately $10.6 billion of common equity as of Q3 2026. Net property, plant and equipment has increased from $2.15 billion at the end of fiscal 2024 to $2.85 billion, suggesting continued investment in operating capacity. However, total inventory remains substantial at approximately $4.0 billion, and the recent working-capital cash outflows indicate that growth is requiring additional funding.

Overall, the financial statements show a company benefiting from powerful revenue growth, improving margins and strong profitability. The primary risks are cash conversion, elevated receivables, semiconductor-cycle volatility and the large amount of capital being returned to shareholders. For retail investors, the latest figures present a favorable operating trend, although sustaining growth while maintaining cash generation will be important for the stock’s longer-term performance.