Why Is Lam Research (LRCX) Up 9.8% Since Last Earnings Report?

Core Insights - Lam Research reported strong fourth-quarter fiscal 2025 results, with both earnings and revenues exceeding expectations, indicating robust performance in the semiconductor equipment sector [2][3]. Financial Performance - Non-GAAP earnings per share for Q4 fiscal 2025 were $1.33, surpassing the Zacks Consensus Estimate by 10.8% and reflecting a year-over-year increase of 64.2% [2]. - Revenues for Q4 reached $5.17 billion, exceeding the consensus estimate by 3.6% and marking a 34% increase from $3.87 billion in the same quarter last year [3]. Revenue Breakdown - Systems revenues accounted for $3.44 billion, representing 66.5% of total revenues, which is a 13% increase from the previous quarter and a 58% increase year-over-year [4]. - Customer Support Business Group revenues were $1.73 billion, making up 33.5% of total revenues, with a 2.9% increase from the previous quarter and a 1.9% increase year-over-year [5]. Operating Metrics - Non-GAAP gross margin improved to 50.3%, up 130 basis points from the previous quarter, while non-GAAP operating expenses rose to $822.4 million, a 7.7% increase [6]. - The non-GAAP operating margin improved to 34.4%, reflecting a sequential increase of 160 basis points [6]. Cash Flow and Shareholder Returns - As of June 29, 2025, Lam Research held $6.39 billion in cash and cash equivalents, an increase from $5.45 billion in the prior quarter [7]. - Cash flow from operating activities surged to $2.55 billion, up from $1.31 billion in the previous quarter, with total operating cash flow for fiscal 2025 at $6.17 billion [7]. - The company paid dividends totaling $295.2 million and repurchased shares worth $1.29 billion during the quarter, with total share repurchases for fiscal 2025 amounting to $3.42 billion [8]. Guidance and Future Outlook - For Q1 fiscal 2026, Lam Research projects revenues of $5.2 billion (+/- $300 million) and expects a non-GAAP gross margin of 50% (+/-1%) [9]. - Non-GAAP earnings per share are projected to be $1.20 (+/- $0.10) with a diluted share count of 1.27 billion [10]. - Recent estimates have trended upward, with a consensus estimate shift of 21.43% [11]. Investment Scores - Lam Research has a Growth Score of B and a Momentum Score of C, with an aggregate VGM Score of B, indicating a balanced investment profile [12].