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Lam Research(LRCX) - 2024 Q4 - Earnings Call Transcript
LRCXLam Research(LRCX)2024-08-01 01:10
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Financial Data and Key Metrics Changes - Revenue for the June quarter was 3.87billion,anincreasefromthepriorquarterandabovethemidpointofguidance[16]−GrossmarginfortheJunequarterwas48.53.87 billion, an increase from the prior quarter and above the midpoint of guidance [16] - Gross margin for the June quarter was 48.5%, slightly down from 48.7% in the March quarter, benefiting from improved factory efficiencies [20] - Free cash flow for the June quarter was approximately 4.3 billion, representing 29% of revenue [15] - Diluted earnings per share for the June quarter were 8.14,closetothehighendofguidance[23]BusinessLineDataandKeyMetricsChanges−Systemsrevenueinmemorywas368.14, close to the high end of guidance [23] Business Line Data and Key Metrics Changes - Systems revenue in memory was 36%, down from 44% in the prior quarter, primarily due to a decline in DRAM investments [17] - Foundry segment represented 43% of systems revenue, roughly flat compared to the March quarter [18] - Customer Support Business Group (CSBG) revenue was approximately 1.7 billion, up 22% from the prior quarter [19] Market Data and Key Metrics Changes - China region accounted for 39% of total revenue, down from 42% in the prior quarter, driven by domestic spending [19] - Korea represented 18% of revenue, down from 24%, while Taiwan increased to 15% from 9% [19] Company Strategy and Development Direction - The company is prioritizing strategic investments in product development, global R&D infrastructure, and digital transformation for operational efficiency [6] - Long-term focus includes capitalizing on the increase in etch and deposition intensity, particularly in AI-related applications [14] - The company plans to hold an Investor Day in February 2025 to discuss long-term opportunities [14] Management's Comments on Operating Environment and Future Outlook - Management expects WFE spending to be in the mid 90billionrangefortheyear,withapositiveenvironmentforcontinuedgrowthin2025[6][7]−ThecompanyanticipatesthatmemorycustomerswillbiasWFEspendingtowardtechnologyupgradesoftheinstalledbase[8]−Managementnotedthattherecoveryinthesparesbusinessisbeginningandupgradeactivityshouldimproveastheyearprogresses[27]OtherImportantInformation−Thecompanyannounceda90 billion range for the year, with a positive environment for continued growth in 2025 [6][7] - The company anticipates that memory customers will bias WFE spending toward technology upgrades of the installed base [8] - Management noted that the recovery in the spares business is beginning and upgrade activity should improve as the year progresses [27] Other Important Information - The company announced a 10 billion share repurchase authorization, with 10.8billionremainingintheplanattheendoftheJunequarter[23]−CapitalexpendituresfortheJunequarterwere10.8 billion remaining in the plan at the end of the June quarter [23] - Capital expenditures for the June quarter were 101 million, focused on lab investments and manufacturing facilities in Asia [25] Q&A Session Summary Question: Clarification on service system mix in guidance - Management expects service to grow modestly for the year, particularly strong in the June quarter [30] Question: Insights on DRAM investments - Management highlighted progress in conductor etch capabilities targeted at future DRAM challenges, with strong positions in HBM and TSV etching [32][33] Question: Outlook for China market - Management indicated that China is expected to have a solid year, with spending being somewhat first-half weighted [37] Question: Gross margin expectations for December quarter - Management signaled a slight headwind in gross margin due to customer mix, but did not provide specific numbers [38] Question: Sustainability of CSBG growth - Management noted that CSBG includes various components, with upgrades expected to become a more prominent part of WFE spending [45][46] Question: NAND WFE outlook - Management stated that upgrades will be a significant driver of NAND WFE, with confidence in outgrowing WFE in the NAND space [54] Question: Impact of export controls on customer behavior - Management observed no noticeable change in customer behavior due to export control concerns [72]