AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 28/10/2026
Moat63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Substantial equipment qualification and integration investment creates concrete switching friction within a production-line application. Increased installed-base spares, upgrades and services demand corroborates Lam's benefit from incumbent relationships. This mechanism also protects rival incumbents; installed-base learning remains a stated opportunity rather than a separately demonstrated moat.
durability · 2/4 · Available upgrades and ongoing service relationships support persistence within qualified applications. Extended supplier reliance is management's assessment, without measured duration. New technologies and alternative processes could reset supplier selection or reduce reliance on Lam, limiting confidence that today's friction persists across technology generations.
customer dependency · 3/4 · Qualification investment and increased spares, upgrades and services demand support meaningful operational dependency. June-quarter support-related revenue provides additional indirect evidence of continued demand. That category also contains non-leading-edge equipment, so its growth does not establish service-only retention, customer exclusivity or an inability to switch.
erosion resilience · 2/4 · Installed-base demand and continued support-related revenue growth show current resilience. Alternative technologies, competitor customer alliances and trade restrictions constrain confidence across future transitions. These risks do not demonstrate realized competitive displacement, while the disclosed trade effects show that technical switching friction cannot fully protect commercial access.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · — · Lam discloses efforts to pass increased costs to customers, but supplies no verified outcome separating price changes from volume, mix or efficiency. Margin recovery and revenue growth cannot establish successful pass-through or realized pricing. The warning that attempts could fail is a possibility, not evidence that pricing actually weakened.
retention · 3/4 · Qualification friction, ongoing service relationships and increased installed-base spares, upgrades and services demand support strong repeat-demand evidence. This is an indirect operating assessment, without a measured retention rate. Support-related revenue also includes equipment, and repeat purchases do not demonstrate customers' acceptance of higher prices.
margin resilience · 3/4 · GAAP gross margin declined from 50.4% in September 2025 to 49.6% in December, recovered to 49.8% in March 2026 and reached 51.7% in June. Operating margins also strengthened. These outcomes demonstrate resilience despite disclosed cost pressures, but volume, mix and efficiency prevent attribution solely to pricing.
contractual freedom · 2/4 · Approved purchase orders establish customer contracts, with contractually billed amounts and volume-agreement discounts and credits constraining agreed consideration. Service periods generally last one year or less, limiting extended exposure to fixed terms. The evidence supports mixed contractual flexibility; unilateral repricing rights and equipment-contract cancellation provisions are not disclosed.
Predictability82
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 16.72
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 5.48
- observedAnnualPeriods
- 5.00
Financial strength100
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 100.00
- netDebtEbitGrade
- 100.00
- interestCoverageGrade
- 100.00
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 0.76
- Net debt / operating income (x)
- -0.22
- Interest coverage (x)
- 52.27
- Current ratio (x)
- 2.63
Capital allocation97
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 72.86
- 3-year average dilution (%)
- -2.51
- 3-year average SBC / revenue (%)
- 1.83
- cashConversionGrade
- 88.51
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Fiscal 2026 operating cash flow of $5.858 billion funded $0.966 billion of capital expenditures and intangible assets. Repurchases and dividends totaled $5.122 billion, exceeding the residual, alongside $0.755 billion of debt-related payments. Cash declined, and operating cash flow fell despite higher earnings. Allocation outcomes are mixed; investment returns remain unestablished.
incentive alignment · 2/4 · Actual equity grants, completed relative-TSR payouts, ownership guidelines and an adopted clawback support alignment. Counterweights include 250% annual incentive funding and full service-award vesting on qualified retirement; performance awards retain actual performance conditions. Individual ownership and full award weightings are missing, and ownership requirements may still be within their compliance period.
execution · 3/4 · Comparative revenue and earnings growth, increased R&D spending, expanding installed-base demand and further June-quarter growth demonstrate strong operating execution. Management contribution is inferred from company outcomes rather than isolated causally. Customer investment growth also contributed; forward-looking leadership and outperformance claims are not treated as delivered results.
governance · 2/4 · Current board and committee independence, a separate independent chair and compensation recovery requirements provide substantive safeguards. Acknowledged instances of ineffective compliance procedures and the approved limitation of certain officers' liability temper the assessment. The compliance disclosure does not establish quantified losses or a financial-reporting control failure.
Evidence
Once a Semiconductor Manufacturer Commits to Purchase a Competitor’s Semiconductor Manufacturing Equipment, the Manufacturer Typically Continues to Purchase That Competitor’s Equipment, Making It More Difficult for Us to Sell Our Equipment to That Customer Semiconductor manufacturers must make a substantial investment to qualify and integrate wafer processing equipment into a semiconductor production line.
2026 Q3 10-Q, risk factors: equipment qualification and integration investment · Filed 23/04/2026
We believe that once a semiconductor manufacturer selects a particular supplier’s processing equipment, the manufacturer generally relies upon that equipment for that specific production line application for an extended period of time, especially for customers that are more focused on tool reuse.
2026 Q3 10-Q, risk factors: management assessment of application-specific supplier reliance · Filed 23/04/2026
Lam Research Corporation 2026 Q3 10-Q 18 Table of Contents The following table summarizes certain key financial information for the periods indicated below: Three Months Ended March 29, 2026 December 28, 2025 (in thousands, except per share data and percentages) Revenue $ 5,841,488 $ 5,344,791 Gross margin $ 2,910,527 $ 2,651,162 Gross margin as a percent of total revenue 49.8 % 49.6 % Total operating expenses $ 863,511 $ 840,959 Net income $ 1,825,460 $ 1,593,994 Diluted net income per share $ 1.45 $ 1.26 In the March 2026 quarter, revenue increased 9% compared to the three months ended December 28, 2025 (the “December 2025 quarter”), driven by an increase in systems revenue primarily resulting from increased customer investments in the DRAM market segment as well as an increase in customer support-related revenue mainly tied to our expanding installed base and higher spares, upgrades and services revenue, partially offset by decreased customer spend on non-leading-edge equipment.
2026 Q3 10-Q, MD&A: March-quarter results and installed-base demand · Filed 23/04/2026
Many of the technical advances that we introduce in our newest products are also available as upgrades, which provide customers with a cost-effective strategy for extending the performance and capabilities of their existing wafer fabrication lines.
2026 10-K, business: upgrades extending existing fabrication-line capabilities · Filed 07/08/2026
We maintain ongoing service relationships with our customers and have an extensive network of service engineers in place throughout the United States (“U.S.”), China, Europe, India, Japan, Korea, Southeast Asia, and Taiwan.
2026 10-K, business: ongoing service relationships · Filed 07/08/2026
Revenue
The geographic distribution of revenue during the June 2026 quarter is shown in the following table:
Region
Revenue
Taiwan
27%
China
26%
Korea
20%
Japan
9%
United States
9%
Southeast Asia
5%
Europe
4%
The following table presents revenue disaggregated between systems and customer support-related revenue:
Three Months Ended
June 28,
2026
March 29,
2026
June 29,
2025
(In thousands)
Systems revenue
$
4,249,848
$
3,730,582
$
3,437,625
Customer support-related revenue and other
2,472,390
2,110,906
1,733,768
$
6,722,238
$
5,841,488
$
5,171,393
Systems revenue includes sales of new leading-edge equipment in deposition, etch and other wafer fabrication markets.
June 2026 results exhibit, revenue: dated systems and support-related revenue table · Filed 29/07/2026
Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from our Reliant® product line.
June 2026 results exhibit, revenue: support-related revenue definition · Filed 29/07/2026
Moreover, customers may adopt new technologies or processes to address the complex challenges associated with next-generation devices, or may adopt new technologies, including those based upon AI, that reduce their reliance on us for process development.
2026 10-K, risk factors: alternative technologies and reduced process-development reliance · Filed 07/08/2026
We face a greater risk if our competitors enter into strategic relationships with leading semiconductor manufacturers covering products similar to those we sell or may develop, as this could adversely affect our ability to sell products to those manufacturers.
2026 Q3 10-Q, risk factors: competitor relationships with semiconductor manufacturers · Filed 23/04/2026
•our customers’ reuse of existing and installed products, to the extent that such reuse decreases their need to purchase new products or services;
2026 Q3 10-Q, risk factors: equipment reuse reducing purchases · Filed 23/04/2026
Regulations that impact trade, including tariffs, export controls, additional taxes, trade barriers, sanctions, the termination or modification of trade agreements, trade zones, and other duty mitigation initiatives, and any reciprocal retaliatory actions, can increase our manufacturing costs, decrease margins, reduce the competitiveness of our products, disrupt our supply chain operations, or inhibit our ability to sell products or provide services, all of which has had and in the future could have a material adverse effect on our business, results of operations, or financial condition.
2026 10-K, risk factors: trade restrictions and business effects · Filed 07/08/2026
Several factors create opportunity for sustainable differentiation for us: (i) our focus on research and development, with several on-going programs relating to sustaining engineering, product and process development, and concept and feasibility; (ii) our ability to effectively leverage cycles of learning from our broad installed base; (iii) our collaborative focus with semi-ecosystem partners, including our close-to-customer focus; (iv) our ability to Lam Research Corporation 2026 10-K 4 Table of Contents identify and invest in the breadth of our product portfolio to meet technology inflections; and (v) our focus on delivering our multi-product solutions with a goal to enhance the value of Lam’s solutions to our customers.
2026 10-K, business: opportunities for sustainable differentiation · Filed 07/08/2026
Although we are endeavoring to pass along some of the impact of increased costs to our customers to counteract adverse impacts to our gross margins and other results of operations, such measures could be unsuccessful, or could have the effect of reducing demand for our products or services, which would adversely impact our revenue or market share.
2026 10-K, risk factors: attempted cost pass-through and demand risk · Filed 07/08/2026
•supply chain cost increases, tariffs, and other inflationary pressures have impacted and may continue to impact our profitability;
2026 10-K, risk factors: realized and potential cost pressures · Filed 07/08/2026
GAAP
December 2025
September 2025
Change Q/Q
Revenue
$
5,344,791
$
5,324,173
—
Gross margin as percentage of revenue
49.6
%
50.4
%
- 80 bps
Operating income as percentage of revenue
33.9
%
34.4
%
- 50 bps
Diluted EPS
$
1.26
$
1.24
+ 2%
Non-GAAP
December 2025
September 2025
Change Q/Q
Revenue
$
5,344,791
$
5,324,173
—
Gross margin as percentage of revenue
49.7
%
50.6
%
- 90 bps
Operating income as percentage of revenue
34.3
%
35.0
%
- 70 bps
Diluted EPS
$
1.27
$
1.26
+ 1%
U.S.
December 2025 results exhibit, key financial data: September and December GAAP margins · Filed 28/01/2026
GAAP
June 2026
March 2026
Change Q/Q
Revenue
$
6,722,238
$
5,841,488
+15.1%
Gross margin
51.7
%
49.8
%
+ 190 bps
Operating margin
37.4
%
35.0
%
+ 240 bps
Diluted EPS
$
1.81
$
1.45
+24.8%
Non-GAAP
June 2026
March 2026
Change Q/Q
Revenue
$
6,722,238
$
5,841,488
+15.1%
Gross margin
52.0
%
49.9
%
+ 210 bps
Operating margin
38.4
%
35.0
%
+ 340 bps
Diluted EPS
$
1.82
$
1.47
+23.8%
U.S.
June 2026 results exhibit, key financial data: June and March GAAP results · Filed 29/07/2026
Revenue Recognition: We generally consider documentation of terms with an approved purchase order as a customer contract, provided that collection is considered probable, which is assessed based on the creditworthiness of the customer as determined by credit checks, payment histories, and/or other circumstances.
2026 10-K, revenue recognition: customer contracts · Filed 07/08/2026
Fixed consideration includes amounts to be contractually billed to the customer while variable consideration includes estimates for discounts and credits for future usage which are based on contractual terms outlined in volume purchase agreements and other factors known at the time.
2026 10-K, revenue recognition: fixed consideration, discounts and credits · Filed 07/08/2026
Revenue from services is recognized over time as services are completed or ratably over the contractual period of generally one year or less.
2026 10-K, revenue recognition: service-contract duration · Filed 07/08/2026
LAM RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
Twelve Months Ended
June 28,
2026
March 29,
2026
June 29,
2025
June 28,
2026
June 29,
2025
(unaudited)
(unaudited)
(unaudited)
(unaudited)
(1)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
2,277,282
$
1,825,460
$
1,720,088
$
7,265,396
$
5,358,217
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
119,642
116,322
98,439
441,533
386,277
Deferred income taxes
(175,752)
(19,478)
(151,679)
(289,062)
(363,247)
Equity-based compensation expense
103,985
96,616
94,286
386,381
343,371
Other, net
(8,006)
(2,855)
14,240
(32,712)
6,845
Changes in operating assets and liabilities
(859,923)
(874,645)
778,814
(1,913,879)
441,801
Net cash provided by operating activities
1,457,228
1,141,420
2,554,188
5,857,657
6,173,264
CASH FLOWS FROM INVESTING ACTIVITIES:
June 2026 results exhibit, cash flows: period headers, units and operating cash generation · Filed 29/07/2026
Capital expenditures and intangible assets
(188,801)
(331,604)
(172,191)
(966,405)
(759,186)
Other, net
45,060
(2,976)
42,940
44,253
51,094
Net cash used for investing activities
(143,741)
(334,580)
(129,251)
(922,152)
(708,092)
CASH FLOWS FROM FINANCING ACTIVITIES:
June 2026 results exhibit, cash flows: capital expenditures and intangible assets · Filed 29/07/2026
Principal payments on debt, including finance lease obligations and payments for debt issuance costs
(1,355)
(751,194)
(1,485)
(755,428)
(507,488)
Treasury stock purchases, including excise tax payments
(246,560)
(1,162,837)
(1,292,277)
(3,851,343)
(3,422,321)
Dividends paid
(325,318)
(325,829)
(295,207)
(1,270,635)
(1,149,542)
Reissuance of treasury stock related to employee stock purchase plan
88,780
—
79,556
155,965
140,113
Proceeds from issuance of common stock
4,426
9,167
696
17,447
2,452
Other, net
(282)
55
(820)
(13,793)
143
Net cash used for financing activities
(480,309)
(2,230,638)
(1,509,537)
(5,717,787)
(4,936,643)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash
(2,056)
(4,979)
29,284
(27,431)
28,324
Net change in cash, cash equivalents, and restricted cash
831,122
(1,428,777)
944,684
(809,713)
556,853
Cash, cash equivalents, and restricted cash at beginning of period (2)
4,766,821
6,195,598
5,462,972
6,407,656
5,850,803
Cash, cash equivalents, and restricted cash at end of period (2)
$
5,597,943
$
4,766,821
$
6,407,656
$
5,597,943
$
6,407,656
(1)
Derived from audited financial statements
(2)
Restricted cash is reported within Other assets in the Condensed Consolidated Balance Sheets
Non-GAAP Financial Summary
(in thousands, except percentages and per share data)
(unaudited)
Three Months Ended
June 28,
2026
March 29,
2026
Revenue
$
6,722,238
$
5,841,488
Gross margin
June 2026 results exhibit, cash flows: financing, shareholder returns and cash balances · Filed 29/07/2026
(in thousands, except per share data)
(unaudited)
Three Months Ended
Nine Months Ended
March 29,
2026
March 30,
2025
March 29,
2026
March 30,
2025
Revenue
$
5,841,488
$
4,720,175
$
16,510,452
$
13,264,198
Cost of goods sold
2,930,961
2,406,489
8,263,884
6,874,848
Gross margin
2,910,527
2,313,686
8,246,568
6,389,350
Research and development
583,200
525,904
1,732,951
1,516,209
Selling, general, and administrative
280,311
226,023
827,310
713,301
Total operating expenses
863,511
751,927
2,560,261
2,229,510
Operating income
2,047,016
1,561,759
5,686,307
4,159,840
Other income (expense), net
(35,460)
(25,035)
21,024
19,308
Income before income taxes
2,011,556
1,536,724
5,707,331
4,179,148
Income tax expense
(186,096)
(206,057)
(719,217)
(541,019)
Net income
$
1,825,460
$
1,330,667
$
4,988,114
$
3,638,129
Net income per share:
Basic
$
1.46
$
1.04
$
3.97
$
2.82
Diluted
$
1.45
$
1.03
$
3.95
$
2.81
Number of shares used in per share calculations:
Basic
1,249,728
1,283,779
1,256,343
1,290,041
Diluted
1,257,325
1,288,100
1,262,792
1,294,545
See Notes to Condensed Consolidated Financial Statements
2026 Q3 10-Q, statements of operations: comparative revenue, R&D and earnings · Filed 23/04/2026
dollar value. On February 27, 2026, the committee made a grant under the 2026/2028 LTIP of Market-based PRSUs and service-based RSUs, on the terms set forth in the tables titled “2026/2028 LTIP Equity Vehicles” and “2026/2028 Market-based PRSU Performance Parameters” above, with a combined value equal to the NEO’s total target award opportunity, as determined by the committee and shown below.
2026 proxy, compensation: actual February 27, 2026 LTIP grants · Filed 24/09/2026
Lam’s stock price outperformed the XSOX index by 140.98%, which resulted in the maximum possible performance payout of 150% of the target number of Market-based PRSUs granted to each NEO.
2026 proxy, compensation: completed relative-TSR performance and payout · Filed 24/09/2026
Pursuant to the terms of the Clawback Policy, which applies to the Company’s current and former “Section 16 officers” within the meaning of Rule 16a-1(f) under the Exchange Act, the Company must recoup, on a pre-tax basis, the excess amount of certain incentive-based compensation granted, earned, or vested wholly or in part on the attainment of any financial reporting measure (including relative total shareholder return), such as cash awards under our AIP or Market-based PRSUs awarded under our LTIP, during the three completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement.
2026 proxy, compensation: adopted clawback requirements · Filed 24/09/2026
Stock Ownership Guidelines (Page 43) – We have stock ownership guidelines for each of our executive officers and certain other senior executives; each of our named executive officers has met their individual ownership level under the current program or has a period of time remaining under the guidelines to do so.
2026 proxy, compensation: ownership guidelines and compliance qualification · Filed 24/09/2026
(2) The Funding Factor resulted in AIP funding at 250.0% of target award opportunity for the calendar year (based on the actual non-GAAP operating margin results and the specific goal detailed under “ – 2025 Annual Incentive Program Funding Factor, Corporate Performance Factor, and Profitability Performance Factor” above).
2026 proxy, compensation: actual annual incentive funding factor · Filed 24/09/2026
For service-based RSUs granted to NEOs under our 2026/2028 LTIP, upon a Qualified Retirement, provided that the NEO has not violated any restrictive covenant to which he or she is subject as of the retirement date, all unvested RSUs vest in full as of such date.
2026 proxy, compensation: service-based award treatment on qualified retirement · Filed 24/09/2026
For Market-based PRSUs granted to NEOs under our 2026/2028 LTIP, upon a Qualified Retirement prior to the Performance Vesting Date (as defined in the award agreement), the Market-based PRSUs remain outstanding and continue to be eligible to vest on the original Performance Vesting Date, with vesting determined based on actual Company performance over the full performance period, as if the NEO had remained employed through the Performance Vesting Date, subject to the NEO’s continued compliance with all restrictive covenants to which he or she is subject as of the Performance Vesting Date.
2026 proxy, compensation: continued performance conditions after qualified retirement · Filed 24/09/2026
•Independent Board: All of the Company’s current Board members are independent except for the CEO.
2026 proxy, governance: current board independence · Filed 24/09/2026
•Independent Committees: Each of the Board’s three key standing committees—the audit committee, the compensation and human resources committee, and the nominating and governance committee—are comprised solely of independent directors.
2026 proxy, governance: standing committee independence · Filed 24/09/2026
•Independent Board Leadership: The Company maintains separate CEO and Board chair roles, and the Board chair is currently an independent director.
2026 proxy, governance: separate independent chair · Filed 24/09/2026
There have been, and may continue to be, instances of our compliance policies and procedures not being effective to ensure full compliance with all of the laws, rules and regulations to which we are subject, which non-compliance has presented and may present risks to our business, including potential fines, restrictions on our actions, and reputational damage.
2026 Q3 10-Q, risk factors: acknowledged compliance-procedure failures · Filed 23/04/2026
At the Annual Meeting, the Company’s stockholders approved an amendment (the “Amendment”) to the Company’s existing Restated Certificate of Incorporation, as amended (as amended, the “Certificate of Incorporation”).
November 2025 annual-meeting 8-K: approved charter amendment · Filed 06/11/2025
5: Approval of an Amendment to the Company’s Restated Certificate of Incorporation to Limit the Liability of Certain Officers as Permitted by Delaware Law” in the Proxy Statement, the Amendment limits the liability of certain officers of the Company to the fullest extent permitted by the General Corporation Law of the State of Delaware.
November 2025 annual-meeting 8-K: scope of officer-liability limitation · Filed 06/11/2025
