LAM RESEARCH CORP
For the period ended Dec 28, 2025. Filed Jan 29, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 28, 2025 · Filed Jan 29, 2026
LRCX$200.44+8.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-28; filed 2025-10-24.
0000707549-25-000085
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-28; filed 2026-01-29.
0000707549-26-000009
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 68 previous paragraphs and 74 current paragraphs.
44 unchanged; 22 reworded; 7 added; 2 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
Gross margin as a percentage of revenue decreasedin the December 2025 quarter compared to the September 2025 quarter driven primarily by unfavorable changes in customer mix.
Current report
Lam Research Corporation 2025 Q3 10-Q 22
Current report
Updates Not Yet Effective
Current report
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires public entities to disclose consistent categories and greater disaggregation of information in the rate reconciliation and for income taxes paid. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is required to adopt this standard prospectively in fiscal year 2026 for the annual reporting period ending June 28, 2026. The Company does not expect the adoption of ASU 2023-09 to have an impact on its Consolidated Financial Statements other than additional footnote disclosures.
Current report
In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires disaggregation of certain expenses in the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement. In January 2025, the FASB issued ASU 2025-01 which clarified the effective date for entities that do not have an annual reporting period that ends on December 31st. The guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is required to adopt this standard in fiscal year 2028 for the annual reporting period ending June 25, 2028 either (1) prospectively to financial statements issued for reporting periods after the effective date or (2) retrospectively to any or all prior periods presented in the financial statements. The Company will apply the guidance prospectively and is currently in the process of evaluating the impact of adoption on its Consolidated Financial Statements.
Current report
In December 2025, the FASB issued ASU 2025-10, “Accounting for Government Grants Received by Business Entities,” which introduces guidance for recognizing, measuring, and presenting government grants, addressing diversity in practice. The guidance is effective for annual reporting periods beginning after December 15, 2028, and interim reporting within those annual reporting periods, with early adoption permitted. The Company is required to adopt this standard in the first quarter of fiscal year 2030. The Company does not expect the adoption of ASU 2025-10 to have an impact on its Consolidated Financial Statements.
Current report
Lam Research Corporation 2025 Q3 10-Q 23
Removed paragraphs (2)
Previous report
Lam Research Corporation 2025 Q3 10-Q 16
Previous report
Gross margin as a percentage of revenue increasedin the September 2025 quarter compared to the June 2025 quarter driven by favorable changes in customer mix, partially offset by reduced factory efficiencies, higher tariff-related spend, and increased material costs.
Reworded paragraphs (22)
Previous wording
For a full understanding of our financial position and results of operations for the three months ended September 28, 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 2025 Form 10-K.
Current wording
For a full understanding of our financial position and results of operations for the three and six months ended December 28, 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 2025 Form 10-K.
Previous wording
Wafer fabrication equipment spending levels are strong in the 2025 calendar year 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 had, and in the future may have, a negative impact on 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
Wafer fabrication equipment spending levels were strong in the 2025 calendar year driven by higher levels of semiconductor demand leading to 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 had, and in the future may have, a negative impact on 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 September 2025 quarter, revenue increased 3% compared to the three months ended June 29, 2025 (the “June 2025 quarter”), driven by an increase in systems revenue as a result of sustained investments in the Foundry market segment as well as increases in customer support-related revenue. The deferred revenue balance was $2.77 billion at the end of the September 2025 quarter, an increase relative to the balance at the end of the June 2025 quarter of $2.68 billion.
Current wording
In the December 2025 quarter, revenue was up slightly compared to the three months ended September 28, 2025 (the “September 2025 quarter”), as increases in customer support-related revenue were largely offset by decreases in systems revenue due to timing of customer investments. The deferred revenue balance was $2.25 billion at the end of the December 2025 quarter, down relative to the balance at the end of the September 2025 quarter of $2.77 billion, due to a decrease in customer down payments.
Previous wording
The increase in gross margin as a percentage of revenue in the September 2025 quarter compared to the June 2025 quarter was primarily a result of favorable changes in customer mix, partially offset by reduced factory efficiencies, higher tariff-related spend, and increased material costs. The increase in operating expenses in the September 2025 quarter compared to the June 2025 quarter was driven by an increase in employee-related costs tied to higher headcount, partially offset by lower elective deferred compensation plan-related costs.
Current wording
The decrease in gross margin as a percentage of revenue in the December 2025 quarter compared to the September 2025 quarter was primarily a result of unfavorable changes in customer mix. The operating expenses in the December 2025 quarter were relatively flat compared to the September 2025 quarter.
Previous wording
Our cash, cash equivalents, and restricted cash balances increased to $6.7 billion at the end of the September 2025 quarter compared to $6.4 billion at the end of the June 2025 quarter. This increase was primarily the result of $1,779.0 million of cash generated from operating activities, partially offset by $975.8 million of share repurchases, including net share settlement of employee stock-based compensation and excise tax; $292.0 million of dividends paid to stockholders; and $185.1 million of capital expenditures. Employee headcount as of September 28, 2025 was approximately 19,400.
Current wording
Our cash, cash equivalents, and restricted cash balances decreased to $6.2 billion at the end of the December 2025 quarter compared to $6.7 billion at the end of the September 2025 quarter. This decrease was primarily the result of $1,466.2 million of share repurchases, including net share settlement of employee stock-based compensation and excise tax; $327.5 million of dividends paid to stockholders; and $260.9 million of capital expenditures, partially offset by $1,480.0 million of cash generated from operating activities. Employee headcount as of December 28, 2025 was approximately 19,700.
Previous wording
The increase in revenue in the September 2025 quarter compared to the same period in 2024 was tied to increases in Foundry equipment spending by our customers as well as higher customer support-related revenue.
Current wording
The increase in revenue in thesix months ended December 28, 2025 compared to the same period in the prior year was predominantly driven by increases in Foundry equipment spending by our customers, as well as higher customer support-related revenue.
Previous wording
The increase in the foundry market segment for the September 2025 quarter compared to the June 2025 quarter was driven by mature node investments. This increase was offset by a decrease in memory which was attributable to a decrease in non-volatile memory.
Current wording
The decrease in the foundry market segment for the December 2025 quarter compared to the September 2025 quarter was primarily driven by mature node investments, while the memory market segment saw strengthened DRAM investments offset by lower non-volatile memory spending.
Previous wording
The increase in gross margin as a percentage of revenue in the September 2025 quarter compared to the same period in the prior year was primarily due to favorable changes in customer mix.
Current wording
The increase ingross margin as a percentage of revenue in thesix months ended December 28, 2025 compared to the same period in the prior year was primarily due to favorable changes in customer mix, partially offset by reduced factory efficiencies from higher tariff-related spend.
Previous wording
R&D expense in the September 2025 quarter increased compared to the same period in the prior year, driven by higher employee-related costs as a result of increased headcount, and increased spending on supplies.
Current wording
R&D expense in thesix months ended December 28, 2025 increased compared to the same period in the prior year, driven by higher employee-related costs as a result of increased headcount and increased spending on supplies.
Previous wording
SG&A expense during the September 2025 quarter increased compared to both the June 2025 and the September 2024 quarters as aresult of higher employee-related costs due to increased headcount.
Current wording
SG&A expense in thesix months ended December 28, 2025 increased compared to the same period in the prior year, primarily as a result of higher employee-related costs due to increased headcount.
Previous wording
Interest income increased in the September 2025 quarter as compared to the June 2025 quarter, primarily due to higher cash balances. Interest income decreased in the September 2025 quarter compared to the same period in the prior year, primarily due to lower interest rates, partially offset by higher cash balances.
Current wording
Interest income decreased in the December 2025 quarter compared to the September 2025 quarter, primarily due to lower cash balances and lower interest rates. Interest income decreased in the six months ended December 28, 2025 compared to the same period in the prior year, primarily due to lower interest rates, partially offset by higher cash balances.
Previous wording
Interest expense was flat in the September 2025 quarter as compared to the June 2025 quarter. Interest expense decreased in the September 2025 quarter compared to the same period in the prior year primarily due to the maturity of $500 million of the Company’s senior notes in March 2025.
Current wording
Interest expense was flat in the December 2025 quarter compared to the September 2025 quarter. Interest expense decreased in the six months ended December 28, 2025 compared to the same period in the prior year primarily due to the maturity of $500 million of the Company’s senior notes in March 2025.
Previous 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.
Current 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.
Previous wording
The variation in other, net in the September 2025 quarter as compared to the June 2025 quarter and to the same period in the prior year was driven by fluctuations in the fair market value of equity investments and charitable contributions.
Current wording
The variation in other, net in the December 2025 quarter and the six months ended December 28, 2025 compared to the September 2025 quarter and to the same period in the prior year was primarily driven by fluctuations in the fair market value of equity investments.
Previous wording
The increase in the effective tax rate for the September 2025 quarter compared to the June 2025 quarter was primarily due to the recognition of previously unrecognized tax benefits from lapses of statutes of limitation in the June 2025 quarter, the change in level and proportion of income in higher and lower tax jurisdictions, the revaluation of deferred taxes due to changes in the U.S. taxation of non-U.S. income under OBBBA, and GMT being fully effective starting in the September 2025 quarter.
Current wording
The decrease in the effective tax rate for the December 2025 quarter compared to the September 2025 quarter was primarily due to the revaluation of deferred taxes due to changes in the U.S. taxation of non-U.S. income under OBBBA in the September 2025 quarter.
Previous wording
The increase in the effective tax rate for the September 2025 quarter compared to the same period in the prior year was primarily due to the change in level and proportion of income in higher and lower tax jurisdictions, the revaluation of deferred taxes due to changes in the U.S. taxation of non-U.S. income under OBBBA, and GMT being fully effective starting in the September 2025 quarter.
Current wording
The increase in the effective tax rate for the six months ended December 28, 2025 compared to the same period in the prior year was primarily due to the income tax benefit from a change in tax law in the six months ended December 29, 2024, and the tax expense associated with the revaluation of deferred taxes due to changes in the U.S. taxation of non-U.S. income under OBBBA and GMT being fully effective in the six months ended December 28, 2025.
Previous wording
See Note 2 - Recent Accounting Pronouncements, of our Condensed Consolidated Financial Statements, included in Part 1 of this Form 10-Q.
Current wording
See Note 2 - Recent Accounting Pronouncements, of our Condensed Consolidated Financial Statements, included in Part 1 of this Form 10-Q for details of any recently adopted or effective accounting pronouncements.
Previous wording
Total gross cash, cash equivalents, and restricted cash balances were $6.7 billion at September 28, 2025 compared to $6.4 billion as of June 29, 2025. The increase was primarily driven by cash generated from operating activities totaling $1,779.0 million, partially offset by $975.8 million of share repurchases, including net share settlement on employee stock-based compensation and excise tax; $292.0 million in dividends paid; and $185.1 million in capital expenditures.
Current wording
Total gross cash, cash equivalents, and restricted cash balances were $6.2 billion at December 28, 2025 compared to $6.4 billion as of June 29, 2025. The decrease was primarily driven by $2.44 billion of share repurchases, including net share settlement on employee stock-based compensation and excise tax; $619.5 million in dividends paid; and $446.0 million in capital expenditures, partially offset by cash generated from operating activities totaling $3.26 billion.
Previous wording
Net cash provided by operating activities of $1.78 billion during the three months ended September 28, 2025 consisted of (in thousands):
Current wording
Net cash provided by operating activities of $3.26 billion during the six months ended December 28, 2025 consisted of (in thousands):
Previous wording
Changes in operating asset and liability accounts, net of foreign exchange impact, included the following sources of cash: decreases in inventory of $189.8 million and prepaid expenses and other current assets of $30.2 million, and increases in deferred gross profit of $80.9 million, accrued expenses and other liabilities of $25.2 million and accounts payable of $5.1 million. These sources of cash were offset by the following uses of cash: increases in accounts receivable of $255.0 million.
Current wording
Changes in operating asset and liability accounts, net of foreign exchange impact, included the following sources of cash: decreases in inventory of $211.8 million and prepaid expenses and other current assets of $118.5 million, and increases in accounts payable of $110.7 million. These sources of cash were offset by the following uses of cash: decreases in deferred gross profit of $400.8 million and accrued expenses and other liabilities of $103.5 million, and increases in accounts receivable of $116.0 million.
Previous wording
Net cash used for investing activities during the three months ended September 28, 2025 was $186.0 million, primarily consisting of capital expenditures.
Current wording
Net cash used for investing activities during the six months ended December 28, 2025 was $443.8 million, primarily consisting of capital expenditures.
Previous wording
Net cash used for financing activities during the three months ended September 28, 2025 was $1.28 billion, primarily consisting of $975.8 million in treasury stock repurchases, including net share settlement on employee stock-based compensation and excise tax and $292.0 million in dividends paid.
Current wording
Net cash used for financing activities during the six months ended December 28, 2025 was $3.01 billion, primarily consisting of $2.44 billion in treasury stock repurchases, including net share settlement on employee stock-based compensation and excise tax and $619.5 million in dividends paid.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
SG&A expense during the December 2025 quarter was relatively flat compared to the September 2025 quarter.