Lam Research (LRCX) closed its fiscal fourth quarter of 2025 on a high note, reporting record financial results and demonstrating continued momentum across its strategic priorities. For the quarter ended June 29, 2025, the company generated revenue of $5.17 billion, a 9.6% increase sequentially and a 33.6% surge year-over-year, driven by strong demand in both systems and customer support-related businesses.

Profitability also strengthened meaningfully. GAAP gross margin rose to 50.1%, up 110 basis points from Q1, while non-GAAP gross margin climbed to 50.3%, reflecting 130 basis points of sequential improvement. Operating income followed suit, with GAAP operating profit reaching $1.74 billion (33.7% margin) and non-GAAP operating income hitting $1.78 billion (34.4% margin). On the bottom line, GAAP diluted EPS grew to $1.35, a 31.1% jump quarter-over-quarter, while non-GAAP diluted EPS came in at $1.33, up 27.9%. These gains underscore the success of Lam’s margin expansion strategy and its operational execution.

Lam's cash and equivalents rose to $6.4 billion, up from $5.5 billion in the prior quarter, reflecting robust operating cash flow of $2.55 billion. The company also returned $1.29 billion to shareholders via buybacks and paid $295 million in dividends, while maintaining $8.8 billion in remaining share repurchase authorization. Additionally, deferred revenue jumped to $2.68 billion, signaling strong forward visibility.

In terms of segments, Systems revenue surged to $3.44 billion, reflecting continued strength in deposition and etch tools—core areas for Lam. The Customer Support Business Group (CSBG) delivered $1.73 billion, with record upgrade revenues led by NAND conversions, while the Reliant® product line faced headwinds. Spare parts and service offerings also performed well amid healthy utilization trends.

Geographically, China remained Lam’s largest market, accounting for 35% of total revenue, followed by Korea (22%), Taiwan (19%), and Japan (14%). Taiwan saw record dollar-level revenue, driven by advanced foundry and packaging investments.

Management emphasized Lam’s differentiated position in key semiconductor technology shifts, including Gate-All-Around (GAA), backside power delivery, and dry EUV resist processing. CEO Tim Archer cited the growing adoption of Lam’s Stryker Spark ALD and Altus Halo systems in advanced 3D NAND and foundry logic nodes. The company reiterated a $40 billion NAND upgrade opportunity over the coming years as customers scale to higher layer counts.

Looking ahead, Lam provided Q1 FY26 guidance calling for revenue of $5.20 billion ± $300 million, with gross margin expected to hold around 50%, and diluted EPS of $1.20 ± $0.10. The outlook includes the impact of tariffs, supply chain shifts, and China export restrictions, the latter representing a $700 million revenue headwind in the second half of 2025. Nonetheless, Lam’s globally distributed manufacturing base and close-to-customer model continue to provide operational flexibility and margin resilience.

In sum, Lam Research delivered a standout quarter, highlighted by double-digit profit growth, margin expansion, and strong cash generation. With a solid pipeline, strong positioning in next-gen technologies, and disciplined capital return, Lam appears well-prepared to navigate regulatory complexities while capitalizing on long-term demand drivers in semiconductor manufacturing.