Lam Research (LRCX) Financials

Lam Research’s Q1 2027 results show a sharp acceleration in revenue, earnings and cash generation compared with the prior quarter. The supplied statements also show a strong recovery from the lower revenue levels seen during fiscal 2024, though some balance-sheet and cash-flow measures warrant monitoring.

• Revenue and earnings climbed. Q1 2027 revenue rose 22% sequentially to $8.22 billion from $6.72 billion in Q4 2026. Net income increased about 21% to $2.75 billion, while diluted earnings per share advanced to $2.19 from $1.81.
• Profitability improved alongside growth. Gross margin increased to about 52.3% from 51.7% in Q4 2026, and operating margin rose to roughly 40.0% from 37.4%. This suggests the latest revenue growth was accompanied by better operating leverage.
• The longer-term revenue trend is substantially higher. Revenue grew from $3.48 billion in Q1 2024 to $8.22 billion in Q1 2027. The path included a decline and recovery, but the latest quarter is well above the earlier period’s levels.
• Operating cash flow strengthened. Cash from operations was $3.50 billion in Q1 2027, up from $1.46 billion in Q4 2026. After $258 million of capital expenditures, estimated free cash flow was about $3.24 billion.
• Liquidity and net cash remain robust. Cash and equivalents reached $7.44 billion at Q1 2027 quarter-end. Against approximately $3.74 billion of total debt, Lam Research had about $3.71 billion of net cash; current assets were roughly 2.5 times current liabilities.
• Shareholder returns continued. The company used about $1.02 billion for share repurchases and paid $325 million in dividends during Q1 2027. These distributions were supported by strong operating cash generation.
• Working-capital balances are rising. Accounts receivable increased to $5.66 billion and inventory to $4.55 billion. These balances can grow with sales, but investors may want to watch whether collections and inventory levels remain in line with demand.
• Cash distributions are a sizable use of funds. Buybacks and dividends totaled about $1.35 billion in Q1 2027, contributing to a $1.38 billion financing cash outflow. These returns benefit shareholders but reduce cash available for other uses.
• Income-tax expense rose notably. Tax expense was $559 million in Q1 2027, compared with $278 million in Q4 2026. The effective tax rate increased to about 16.9% from 10.9%, which partially limited the conversion of higher pretax income into net income.