Lam Research Posts Record Revenue of $8.22 Billion and a Higher December Guide, but Shares Fall After Hours

Lam Research reported the biggest quarter in its history on Wednesday, Oct. 21, with revenue of $8.22 billion for the quarter ended Sept. 27, 2026, up 22 percent from the June quarter, and guided the December quarter to $8.60 billion in revenue. The numbers cleared both the company's own September-quarter guide and Wall Street's estimates — by margins too thin, it turned out, to hold the stock.

The growth came overwhelmingly from new equipment. Systems revenue — sales of new leading-edge equipment for deposition, etch, clean and other wafer fabrication work — jumped to $5.73 billion from $4.25 billion in the June quarter, a rise of about 35 percent (TickerGrove calculation), while customer support-related revenue and other was nearly flat at $2.49 billion, against $2.47 billion in June. "With AI driving higher semiconductor demand and greater device complexity, our focus on operational execution helped Lam deliver record revenue, profit, and earnings per share in the September quarter," said Tim Archer, Lam Research's president and chief executive officer. "Our strategic investments in technology inflections and manufacturing capacity are paying off, strengthening our ability to outgrow the wafer fabrication equipment market as the industry expands."

A record quarter, measured two ways

Lam reports its results on two bases, and the article keeps them apart throughout. On the reported basis (U.S. GAAP), gross margin was 52.3 percent of revenue, operating margin was 40.0 percent and diluted earnings per share were $2.19, on net income of $2.75 billion and operating income of $3.28 billion. On the adjusted basis (non-GAAP), which strips out items including amortization tied to past business combinations and deferred-compensation effects, gross margin was 52.4 percent, operating margin was 40.2 percent and diluted earnings per share were $2.20, on net income of $2.77 billion. The comparison with analyst estimates below uses the adjusted earnings figure, because that is the number analysts model. Against the September 2025 quarter, revenue rose about 54 percent — a TickerGrove calculation from the $5.32 billion Lam reported a year earlier — and reported net income rose from $1.57 billion to $2.75 billion.

Clearing two bars, narrowly

Lam had guided September-quarter revenue to $8.10 billion, plus or minus $400 million, in its June-quarter release, so the $8.22 billion outcome landed inside the guided range and above its midpoint. Against Wall Street, the beat was narrower still. Investor's Business Daily reported that analysts had modeled adjusted earnings of $2.18 a share on sales of $8.14 billion, against the $2.20 adjusted figure and the $8.22 billion in sales Lam delivered — an earnings beat of two cents a share and a revenue beat of about 1 percent (TickerGrove calculation). A two-cent earnings beat is still a beat. But for a stock priced on an accelerating equipment cycle, it left little that investors had not already assumed.

The December guide matched the bar instead of clearing it

For the quarter ending Dec. 27, 2026, Lam guided revenue to $8.60 billion, plus or minus $400 million, gross margin to 52.5 percent, plus or minus one percentage point, operating margin to 40.5 percent, plus or minus one percentage point, and diluted earnings per share to $2.33, plus or minus $0.15 — the same figures on the reported and adjusted bases at this precision — on a diluted share count of 1.253 billion. Investor's Business Daily reported that analysts surveyed by FactSet had been looking for adjusted earnings of $2.33 a share on sales of $8.57 billion for the December quarter: the guide matched the earnings expectation exactly and sat only slightly above the revenue expectation. Sequentially, the $8.60 billion midpoint still implies revenue growth of about 5 percent from the September quarter (TickerGrove calculation) — a slower step than the 22 percent just delivered, and one that asks the systems business to keep growing after a quarter in which it surged by roughly a third.

Cash piled up while the company bought back stock

Cash, cash equivalents and restricted cash rose to $7.45 billion from $5.60 billion at the end of the June quarter, driven by $3.50 billion of net cash provided by operating activities, partly offset by capital returns and capital spending. Lam spent about $1.02 billion repurchasing its own shares in the quarter and paid $325 million in dividends, while capital expenditures and intangible assets took $258 million. Deferred revenue rose to $2.66 billion from $2.43 billion — orders paid for but not yet recognized as revenue — while the estimated future revenue from shipments to customers in Japan, which Lam holds in inventory until customer acceptance, eased to about $468 million from $490 million.

Where the revenue came from — and what to watch

China accounted for 35 percent of September-quarter revenue, followed by Korea at 20 percent, Taiwan at 18 percent, Japan at 9 percent, the United States at 8 percent, Southeast Asia at 6 percent and Europe at 4 percent. China and Korea together took 55 percent of revenue (TickerGrove calculation), so more than half of revenue ships to China and Korea, leaving the top line exposed to export-control changes and to spending swings at a small number of large customers. Investor's Business Daily reported that the shares plunged more than 5 percent in after-hours trading on Oct. 21, to $247.08, after falling 1 percent in the regular session to close at $260.81. That reaction is a snapshot from the evening of the release, not a verdict. What to watch from here: whether December-quarter systems revenue can grow again after the September surge, whether the guided gross-margin step to 52.5 percent holds as the revenue mix shifts, and whether deferred revenue keeps building — the cleanest sign that customers are still committing ahead of delivery.