LAM RESEARCH CORP

Previous wording

With the exception of historical facts, the statements contained in this discussion are forward-looking statements, which are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Certain, but not all, of the forward-looking statements in this report are specifically identified as forward-looking, by use of phrases and words such as “believe,” “estimated,” “anticipate,” “expect,” “probable,” “intend,” “plan,” “aim,” “may,” “should,” “could,” “would,” “will,” “continue,” and other future-oriented terms. The identification of certain statements as “forward-looking” does not mean that other statements not specifically identified are not forward-looking. Forward-looking statements include, but are not limited to, statements that relate to: trends and opportunities in the global economic environment; trends and opportunities in the semiconductor industry, including in the end markets and applications for semiconductors, in device complexity, and in the complexity of device manufacturing; growth or decline in the industry and the market for, and spending on, wafer fabrication equipment; the anticipated levels of, and rates of change in, margins, market share, served available market, capital expenditures, research and development expenditures, international sales, revenue (actual and/or deferred), operating expenses and earnings generally; management’s plans and objectives for our current and future operations and business focus; restructuring activities; business process improvements and initiatives; volatility in our quarterly results; the makeup of our customer base; customer and end user requirements and our ability to satisfy those requirements; the performance and benefits of our products and services; customer spending and demand for our products and services, and the reliability of indicators of change in customer spending and demand; the effect of variability in our customers’ business plans or demand for our products and services; our competition, and our ability to defend our market share and to gain new market share; the success of joint development and collaboration relationships with customers, suppliers, or others; outsourced activities; our supply chain and the role of suppliers in our business, including the impacts of supply chain constraints and material costs; our leadership and competency, and our ability to facilitate innovation; our research and development programs; the opportunities in our industry for, and our ability to create sustainable differentiation; technology inflections in the industry and our ability to identify those inflections and to invest in research and development programs to meet them; our ability to deliver multi-product solutions; the resources invested to comply with evolving standards and the impact of such efforts; changes in state, federal and international tax laws, our estimated annual tax rate and the factors that affect our tax rates; legal and regula…

Excerpt shortened here; the source contains the full paragraph.

Current wording

With the exception of historical facts, the statements contained in this discussion are forward-looking statements, which are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Certain, but not all, of the forward-looking statements in this report are specifically identified as forward-looking, by use of phrases and words such as “believe,” “estimated,” “anticipate,” “expect,” “probable,” “intend,” “plan,” “aim,” “may,” “should,” “could,” “would,” “will,” “continue,” and other future-oriented terms. The identification of certain statements as “forward-looking” does not mean that other statements not specifically identified are not forward-looking. Forward-looking statements include, but are not limited to, statements that relate to: trends and opportunities in the global economic environment; trends and opportunities in the semiconductor industry, including in the end markets and applications for semiconductors, in device complexity, and in the complexity of device manufacturing; growth or decline in the industry and the market for, and spending on, wafer fabrication equipment; the anticipated levels of, and rates of change in, margins, market share, served available market, capital expenditures, research and development expenditures, international sales, revenue (actual and/or deferred), operating expenses and earnings generally; management’s plans and objectives for our current and future operations and business focus; restructuring activities; business process improvements and initiatives; volatility in our quarterly results; the makeup of our customer base; customer and end user requirements and our ability to satisfy those requirements; the performance and benefits of our products and services; customer spending and demand for our products and services, and the reliability of indicators of change in customer spending and demand; the effect of variability in our customers’ business plans or demand for our products and services; our competition, and our ability to defend our market share and to gain new market share; the success of joint development and collaboration relationships with customers, suppliers, or others; outsourced activities; our supply chain and the role of suppliers in our business, including the impacts of supply chain constraints and material costs; our leadership and competency, and our ability to facilitate innovation; our research and development programs; the opportunities in our industry for, and our ability to create sustainable differentiation; technology inflections in the industry and our ability to identify those inflections and to invest in research and development programs to meet them; our ability to deliver multi-product solutions; the resources invested to comply with evolving standards and the impact of such efforts; changes in state, federal and international tax laws, our estimated annual tax rate and the factors that affect our tax rates; legal and regula…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

For a full understanding of our financial position and results of operations for the three and six months ended December 29, 2024, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations below, you should also read the Condensed Consolidated Financial Statements and notes presented in this Form 10-Q and the financial statements and notes in our 2024 Form 10-K.

Current wording

For a full understanding of our financial position and results of operations for the three and nine months ended March 30, 2025, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations below, you should also read the Condensed Consolidated Financial Statements and notes presented in this Form 10-Q and the financial statements and notes in our 2024 Form 10-K.

Previous wording

Overall, calendar year 2024 wafer fabrication equipment spending was higher, driven by increases in both the memory and non-memory market segments versus calendar year 2023. In the short term, volatility in the semiconductor demand environment, as well as other risks and uncertainties, may negatively impact our revenue and operating margin. Over the longer term, we believe that secular demand for semiconductors, combined with technology inflections in our industry, including 3D device scaling, multiple patterning, process flow, and advanced packaging chip integration, will drive sustainable growth and lead to an increase in the served available market for our products and services in the deposition, etch, and clean businesses.

Current wording

In fiscal year 2025, we anticipate strong wafer fabrication equipment spending levels driven by an increase in both the memory and non-memory market segments. In the short term, volatility in the semiconductor industry environment from trade restrictions, tariffs, as well as other direct and indirect risks and uncertainties, have, and in the future may, negatively impact our revenue and operating margin. Over the longer term, we believe that secular demand for semiconductors, combined with technology inflections in our industry, including 3D device scaling, multiple patterning, process flow, and advanced packaging chip integration, will drive sustainable growth and lead to an increase in the served available market for our products and services in the deposition, etch, and clean businesses.

Previous wording

In the December 2024 quarter, revenue increased 5%compared to the three months ended September 29, 2024 (the “September 2024 quarter”), driven by an increase in systems revenue as a result of strengthened memory investments in both the NAND and dynamic random access memory (“DRAM”) market segments. The deferred revenue balance was $2,031.6 million at the end of the December 2024 quarter, a slight decrease relative to the balance at the end of the September 2024 quarter of $2,047.0 million.

Current wording

In the March 2025 quarter, revenue increased 8% compared to the three months ended December 29, 2024 (the “December 2024 quarter”), driven by an increase in systems revenue as a result of strengthened investments in the Foundry market segment. The deferred revenue balance was $2,010.9 million at the end of the March 2025 quarter, a slight decrease relative to the balance at the end of the December 2024 quarter of $2,031.6 million.

Previous wording

The decrease in gross margin as a percentage of revenue in the December 2024 quarter compared to the September 2024 quarter was primarily a result of unfavorable customer mix. Operating expenses in the December 2024 quarter were flat compared to the September 2024 quarter, as increases in headcount and incentive compensation expense were largely offset by lower elective deferred compensation plan-related costs.

Current wording

The increase in gross margin as a percentage of revenue in the March 2025 quarter compared to the December 2024 quarter was primarily a result of favorable changes in customer and product mix. The increase in operating expenses in the March 2025 quarter compared to the December 2024 quarter was driven by an increase in employee-related costs as a result of seasonality and higher headcount, as well as increased supplies expense, offset by lower elective deferred compensation plan-related costs.

Previous wording

Our cash, cash equivalents, and restricted cash balances decreased to $5.7 billion at the end of the December 2024 quarter compared to $6.1 billion at the end of the September 2024 quarter. This decrease was primarily the result of $697.7 million of share repurchases, including net share settlement of employee stock-based compensation and excise tax; $297.6 million of dividends paid to stockholders; and $188.3 million of capital expenditures; partially offset by $741.9 million of cash generated from operating activities. Employee headcount as of December 29, 2024 was approximately 18,300.

Current wording

Our cash, cash equivalents, and restricted cash balances decreased to $5.5 billion at the end of the March 2025 quarter compared to $5.7 billion at the end of the December 2024 quarter. This decrease was primarily the result of $504.0 million of principal payments on debt instruments and debt issuance costs; $435.3 million of share repurchases, including net share settlement of employee stock-based compensation and excise tax; $295.7 million of dividends paid to stockholders; and $288.1 million of capital expenditures; partially offset by $1,308.7 million of cash generated from operating activities. Employee headcount as of March 30, 2025 was approximately 18,600.

Previous wording

The increase in revenue for the six months ended December 29, 2024 compared to the same period in 2023 was due to increases in equipment spending by our customers across all market segments as well as higher customer support-related revenue.

Current wording

The increase in revenue for the nine months ended March 30, 2025 compared to the same period in 2024 was due to increases in equipment spending by our customers across all market segments as well as higher customer support-related revenue.

Previous wording

The increase in the memory market segment for the December 2024 quarter compared to the September 2024 quarter was primarily attributable to NAND investments by our customers for equipment and upgrades, partially offset by lower Foundry and Logic spending.

Current wording

The decrease in the memory market segment for the March 2025 quarter compared to the December 2024 quarter was primarily attributable to a decrease in non-volatile memory. There was also a decrease in Logic spending by our customers in the quarter. These decreases were offset by increased Foundry spending for both leading and mature node investments.

Previous wording

Gross margin as a percentage of revenue was lowerin the December 2024 quarter compared to the September 2024 quarter mainly as a result of unfavorable customer mix changes.

Current wording

Gross margin as a percentage of revenue was higherin the March 2025 quarter compared to the December 2024 quarter mainly as a result of favorable customer and product mix.

Previous wording

The increase in gross margin as a percentage of revenue in the six months ended December 29, 2024 compared to the same period in the prior year was primarily due toimproved factory efficiencies, partially offset by unfavorable changes in customer mix, increased transformational charges, and higher employee-related expenses.

Current wording

The increase in gross margin as a percentage of revenue in the nine months ended March 30, 2025 compared to the same period in the prior year was primarily due to improved factory efficiencies, partially offset by unfavorable changes in customer mix and increased transformational charges.

Previous wording

We continued to make significant R&D investments in the December 2024 quarter focused on leading-edge deposition, etch, clean and other semiconductor manufactu ring processes. R&D expense in the December 2024 quarter was flat compared to the September 2024 quarter, as increases in headcount and incentive compensation expense were largely offset by lower elective deferred compensation plan-related costs.

Current wording

We continued to make significant R&D investments in the March 2025 quarter focused on leading-edge deposition, etch, clean and other semiconductor manufacturing processes. The increase in R&D expense in the March 2025 quarter compared to the December 2024 quarter was primarily driven by an increase in employee-related costs as a result of seasonality and higher headcount, as well as increased lab-related spending, partially offset by lower elective deferred compensation plan-related costs.

Previous wording

R&D expense in the six months ended December 29, 2024 increased compared to the same period in the prior year, driven by higher headcount and incentive compensation expense as well as spending on outside services, partially offset by lower supplies expense.

Current wording

R&D expense in the nine months ended March 30, 2025 increased compared to the same period in the prior year, driven by higher employee-related costs as a result of increased headcount, as well as spending on outside services, partially offset by lower supplies expense and lower elective deferred compensation plan-related costs.

Previous wording

SG&A expense during the six months ended December 29, 2024 increased compared to the same period in the prior year, driven by increases in headcount and incentive compensation expense as well as higher spending for transformational activities.

Current wording

SG&A expense during the nine months ended March 30, 2025 increased compared to the same period in the prior year, driven by higher employee-related costs as a result of increased headcount as well as higher spending for transformational activities, partially offset by lower elective deferred compensation plan-related costs.

Previous wording

No restructuring charges were recorded during the six months ended December 29, 2024. During the six months ended December 24, 2023, the company recorded net restructuring costs of $26.6 million.

Current wording

No restructuring charges were recorded during the nine months ended March 30, 2025. During the nine months ended March 31, 2024, the company recorded net restructuring costs of $57.1 million.

Previous wording

Interest income decreased in the December 2024 quarter as compared to the September 2024 quarter, primarily due to lower cash balances and lower interest rates. Interest income increased for the six months ended December 29, 2024, compared to the same period in 2023, because of higher cash balances, partially offset by lower interest rates.

Current wording

Interest income decreased in the March 2025 quarter as compared to the December 2024 quarter, primarily due to lower interest rates and lower cash average balances. Interest income decreased for the nine months ended March 30, 2025, compared to the same period in 2024, primarily due to lower interest rates, partially offset by higher cash balances.

Previous wording

The gains on deferred compensation plan-related assets, net were driven by fluctuations in the fair market value of the underlying funds for all periods presented.

Current wording

The variations in deferred compensation plan-related assets, net were driven by fluctuations in the fair market value of the underlying funds for all periods presented.

Previous wording

The decrease in the effective tax rate for the December 2024 quarter compared to the September 2024 quarter was primarily due to the recognition of previously unrecognized tax benefits from lapses of statutes of limitation and the income tax benefit from a change in tax law in the December 2024 quarter.

Current wording

The increase in the effective tax rate for the March 2025 quarter compared to the December 2024 quarter was primarily due to the recognition of previously unrecognized tax benefits from lapses of statutes of limitation and the income tax benefit from a change in tax law in the December 2024 quarter.

Previous wording

Total gross cash, cash equivalents, and restricted cash balances were $5.7 billion at December 29, 2024 compared to $5.9 billion as of June 30, 2024. The decrease was primarily driven by $1,694.7 million of share repurchases, including net share settlement on employee stock-based compensation and excise tax; $558.6 million in dividends paid; and $298.9 million in capital expenditures, partially offset by cash generated from operating activities totaling $2,310.4 million.

Current wording

Total gross cash, cash equivalents, and restricted cash balances were $5.5 billion at March 30, 2025 compared to $5.9 billion as of June 30, 2024. The decrease was primarily driven by $2,130.0 million of share repurchases, including net share settlement on employee stock-based compensation and excise tax; $854.3 million in dividends paid; $587.0 million in capital expenditures; and $506.0 million of principal payments on debt instruments and debt issuance costs, partially offset by cash generated from operating activities totaling $3,619.1 million.

Previous wording

Net cash provided by operating activities of $2,310.4 million during the six months ended December 29, 2024 consisted of (in thousands):

Current wording

Net cash provided by operating activities of $3,619.1 million during the nine months ended March 30, 2025 consisted of (in thousands):

Previous wording

Changes in operating asset and liability accounts, net of foreign exchange impact, included the following uses of cash: increases in accounts receivable of $785.1 million, inventory of $198.8 million, and prepaid expenses and other current assets of $10.8 million. These uses of cash were offset by the following sources of cash: increases in deferred gross profit of $510.1 million, trade accounts payable of $189.4 million, and accrued expenses and other liabilities of $146.3 million.

Current wording

Changes in operating asset and liability accounts, net of foreign exchange impact, included the following uses of cash: increases in accounts receivable of $706.3 million, inventory of $319.7 million, and prepaid expenses and other current assets of $41.9 million.

Previous wording

Net cash used for investing activities during the six months ended December 29, 2024 was $285.9 million, primarily consisting of capital expenditures.

Current wording

Net cash used for investing activities during the nine months ended March 30, 2025 was $578.8 million, primarily consisting of capital expenditures.

Previous wording

Net cash used for financing activities during the six months ended December 29, 2024 was $2,194.6 million, primarily consisting of $1,694.7 million in treasury stock repurchases, including net share settlement on employee stock-based compensation and excise tax, and $558.6 million in dividends paid.

Current wording

Net cash used for financing activities during the nine months ended March 30, 2025 was $3,427.1 million, primarily consisting of $2,130.0 million in treasury stock repurchases, including net share settlement on employee stock-based compensation and excise tax, $854.3 million in dividends paid; and $506.0 million of principal payments on debt instruments and debt issuance costs.