Lam Research (LRCX) Q2 2025 earnings summary

Executive summary

• December 2024 quarter revenue was $4.38 billion, up 5% sequentially, with GAAP diluted EPS of $0.92 and non-GAAP EPS of $0.91, both exceeding guidance midpoints, driven by strong memory and foundry/logic demand.

• System revenues in DRAM and foundry logic reached record highs, while NAND spending remained muted but showed signs of recovery through upgrades and technology transitions.

• The company completed a ten-for-one stock split on October 2, 2024, and continued to grow its installed base and market share.

• Strategic focus on deposition and etch technologies, advanced packaging, and AI-driven semiconductor manufacturing positioned the company for outperformance in 2025.

• Cash, cash equivalents, and restricted cash ended at $5.7 billion, mainly due to share repurchases and dividends.

Financial highlights

• Calendar year 2024 revenue was $16.2 billion, with diluted EPS of $3.36 and gross margin at 48.2%, the highest since the Novellus merger.

• December quarter revenue was $4.38 billion, up from $4.17 billion prior quarter; non-GAAP EPS was $0.91, up from $0.86.

• Customer Support Business Group (CSBG) revenue for the quarter was $1.75 billion, up from $1.46 billion a year ago.

• Free cash flow for the year totaled $4.05 billion.

• Deferred revenue at quarter end was $2.03 billion, slightly down from the previous quarter.

Outlook and guidance

• March 2025 quarter guidance: revenue of $4.65 billion ±$300 million, gross margin of 48% ±1pp, operating margin of 32% ±1pp, and EPS of $1.00 ±$0.10.

• WFE spending expected to rise to ~$100 billion in 2025, with company shipments to gate-all-around nodes and advanced packaging projected to exceed $3 billion.

• CSBG revenue expected to be flat year-over-year in 2025, with upgrades offsetting declines in Reliant systems.

• Management expects continued volatility in semiconductor demand in the short term, but long-term growth is anticipated from secular demand and technology inflections.

• China revenue percentage and customer concentration expected to decline in 2025 due to export restrictions.