Lam Research September 2026 Earnings: Systems Sales Lift Revenue to a Record $8.22 Billion

Lam Research (NASDAQ: LRCX) reported September 2026-quarter revenue of $8.22 billion, up about 54% from $5.32 billion a year earlier, while GAAP diluted EPS rose about 77% to $2.19 from $1.24. Systems revenue supplied roughly three-quarters of the year-over-year sales increase, and GAAP operating margin expanded 5.6 percentage points to 40.0%. Operating cash flow nearly doubled to $3.50 billion.

Core Earnings Data

Revenue also advanced 22% from the June 2026 quarter. Profit increased faster than sales as gross margin improved and GAAP operating expenses rose about 19% year over year, well below the 54% revenue growth rate.

The difference between reported and adjusted results was limited: non-GAAP gross margin was 52.4%, non-GAAP operating margin was 40.2%, and non-GAAP diluted EPS was $2.20.

Business and Segment Performance

Systems revenue was the principal growth engine, rising about 62% year over year to $5.73 billion. Customer support-related revenue—which includes services, spare parts, upgrades, and Reliant equipment—grew about 40% to $2.49 billion but was nearly unchanged from the June quarter.

Systems accounted for approximately 75% of Lam’s total year-over-year revenue increase. Sequentially, systems revenue grew about 35%, compared with less than 1% growth in customer support-related revenue, showing that equipment sales drove nearly all of the quarter-to-quarter expansion.

China represented 35% of quarterly revenue, followed by Korea at 20% and Taiwan at 18%. Together, those three markets generated 73% of total revenue, making regional semiconductor spending and trade policy important factors for future results.

Profitability, Cash Flow, and the Balance Sheet

GAAP gross margin increased to 52.3% from 50.4% a year earlier, while operating margin rose to 40.0% from 34.4%. The larger operating-margin expansion reflected operating expenses growing considerably more slowly than revenue and gross profit.

Operating cash flow reached $3.50 billion, exceeding quarterly net income of $2.75 billion. Changes in operating assets and liabilities contributed $535.4 million, and operating cash flow less capital expenditures of $257.7 million was approximately $3.24 billion.

Cash, cash equivalents, and restricted cash increased to $7.45 billion from $5.60 billion at the end of the June quarter. That increase came despite $1.02 billion of treasury stock purchases and $325.4 million of dividend payments during the quarter.

Deferred revenue rose to $2.66 billion from $2.43 billion sequentially, while inventory increased to $4.55 billion from $4.28 billion. Lam also had approximately $468.3 million of estimated future revenue from shipments to Japanese customers that remained in inventory until customer acceptance and was not included in deferred revenue.

Earnings Guidance

For the quarter ending December 27, 2026, Lam’s guidance midpoint indicates further sequential growth in revenue, margins, and EPS. At the precision presented by the company, the GAAP and non-GAAP guidance figures are the same.

Management’s View

President and CEO Tim Archer attributed Lam’s record quarterly revenue, profit, and EPS to AI-driven semiconductor demand, increasing device complexity, and operational execution. Management also said investments in technology transitions and manufacturing capacity are strengthening Lam’s ability to grow faster than the wafer fabrication equipment market as the industry expands.

Recent Insider Transactions

The supplied insider-trading data show 135,760 shares purchased in five transactions and 323,428 shares sold in 12 transactions over the latest six-month period. That produced net sales of 187,668 shares, equal to 5.10% of the reported 3.52 million insider shares held.

Among the latest 10 reported transactions, seven were sales with a combined disclosed value of approximately $58.33 million, while three were derivative exercises or conversions. These records describe the transactions but do not establish the insiders’ reasons for completing them.

Risks Investors Should Monitor

• Semiconductor equipment demand: Systems produced most of the quarter’s growth, increasing Lam’s exposure to changes in wafer fabrication equipment spending, AI-related investment, and the timing of customer capacity expansions.
• Geographic and trade-policy exposure: China generated 35% of revenue, while export controls, tariffs, trade disputes, and other geopolitical developments could limit product and service sales.
• Margin and supply-chain execution: Customer and product mix, tariffs, inflation, supply-chain costs, and manufacturing constraints could affect Lam’s ability to deliver the gross and operating margins included in its guidance.
• Revenue-recognition timing: The timing of customer acceptance in Japan affects when shipped equipment moves from inventory into revenue. Approximately $468.3 million of estimated future revenue was subject to this treatment at quarter-end.

Summary

Lam’s September 2026 quarter combined rapid systems growth with wider margins and substantially higher cash generation. The next points to monitor are whether equipment demand can sustain the systems-led momentum, whether Lam reaches its December-quarter margin targets, and how geographic exposure, trade restrictions, and customer acceptance timing affect revenue conversion.