Lam Research revenue rises 22% as supply constraints limit December outlook

Key Facts

Lam Research reported revenue of $8.22 billion for the September 2026 quarter, up 22% from the June quarter, while supply constraints limited its revenue outlook for the following period. The results were released in a company statement on October 21, alongside management's presentation of its December-quarter outlook during the earnings call. Chief Financial Officer Doug Bettinger said revenue guidance would have been higher without supply bottlenecks, according to the call transcript published by Investing. Bettinger described these bottlenecks as "near-term supply chain constraints," linking their impact to the company's outlook for the coming period. Following the results, the shares fell 6.25% to $244.50 in after-hours trading, according to Investing.

On profitability, the company reported net income of $2.75 billion for the September quarter under U.S. generally accepted accounting principles, according to the earnings statement. Diluted earnings per share were $2.19 on the same accounting basis. Adjusted diluted earnings per share, calculated on a non-GAAP basis, were $2.20 for the period. In its revenue breakdown by business, Lam Research reported systems sales of $5,732,907 thousand. This business includes advanced deposition, etch and cleaning equipment used in chip manufacturing, according to the company's description accompanying the results. Customer support-related revenue and other revenue totaled $2,486,511 thousand in the same quarter. This business includes services, spare parts and upgrades, alongside "Reliant" equipment, according to the disclosure, placing these operations alongside systems sales among the company's revenue sources.

Geographically, China's contribution rose to 35% of September-quarter revenue from 26% in the June quarter, according to management comments on the earnings call transcribed by Benzinga. Management attributed this to strong investment by domestic and multinational customers in the Chinese market. In the systems business, the company expects annual revenue growth to exceed 40% by a wide margin in calendar 2026. In a preliminary estimate for the broader market, Lam Research projected that wafer fabrication equipment spending would exceed $200 billion in 2027, according to the same call. Management said growth in spending on dynamic random-access memory equipment would lead the increase. Advanced foundry and logic, followed by "NAND" flash memory, would come next in the ranking of growth drivers presented by the company.

Alongside its equipment sales and customer support operations, Lam Research is proceeding with a plan to expand its global laboratory network announced in August 2026. The company said in its statement on the plan that it intends to invest more than $3 billion in the network. The investment program spans 5 years from the announcement, as part of an expansion aimed at increasing its experimentation capacity. The company set a target increase of more than 50% in that capacity, according to the statement. In Oregon, Lam Research announced a new laboratory project whose facility will cover 120,000 square feet upon completion. It expects the laboratory to open in 2028, according to its statement on the project.

For the December 2026 quarter, Lam Research set the midpoint of its revenue guidance at $8.60 billion, plus or minus $400 million, according to the outlook published with the results. The company targets adjusted earnings per share of $2.33 for the same period, plus or minus $0.15. Management expects a meaningful decline in China's contribution in December, after its share of September-quarter sales increased. On the call reported by Benzinga, management said domestic customers would drive the decline, with multinational customers remaining relatively strong. On delivery timing, Bettinger said anything that could not be shipped in December for timing reasons would be shipped in the following March quarter, according to the call transcript published by Investing. Referring to those shipments if they could not be completed during December, he said: "We'll ship them in the March quarter."