Lam Research Authorizes $25 Billion Share Buyback, Declares Quarterly Dividend
Key Facts
Lam Research’s board on November 5 approved a new authorization to repurchase up to $25 billion of shares and declared a quarterly dividend of $0.33 per share, the company said in a statement. Chief Financial Officer Doug Bettinger said the authorization supports the company’s capital allocation plan and its commitment to returning value to shareholders through dividends and buybacks. He added that the company’s positioning at key technology inflections and strong cash generation give it confidence in meeting its capital return objectives over time. The authorization gives the company broad discretion to make purchases but sets no required amount or timetable for execution. The announcement also combines an optional buyback authorization with a declared dividend that has a scheduled payment date.
The authorization permits share purchases in the open market or through privately negotiated transactions, including derivatives transactions and structured repurchase agreements. It does not require the company to buy any shares and has no expiration date, according to the statement. Bettinger said on the October 21 earnings call that $3 billion remained under the previous buyback program. On the same call, he said the company’s medium- and long-term objectives include returning 85% of free cash flow to shareholders. The new authorization fits within the capital return policy outlined by management, while the actual volume and timing of purchases remain subject to the company’s decisions.
The company will pay the declared dividend on January 6, 2027, to shareholders of record on December 2, 2026, according to its statement. Future dividends remain subject to review and approval by the board. The announcement follows the September quarter results, when revenue was $8.219 billion, compared with $6.722 billion in the June quarter, a sequential increase of 22%. GAAP net income was $2.75 billion in the September quarter, versus $2.28 billion in the previous quarter. Diluted earnings per share rose to $2.19 from $1.81, while operating margin increased to 40.0% from 37.4%, up 260 basis points.
Chief Executive Tim Archer said rising semiconductor demand and device complexity, driven by artificial intelligence, along with operational execution, helped deliver record revenue, earnings and earnings per share in the September quarter. Cash, cash equivalents and restricted cash rose to $7.451 billion at quarter-end, compared with $5.598 billion at the end of the June quarter. The results and liquidity provide a backdrop for the decision to continue returning capital, while management linked demand growth to greater device complexity. It also pointed to supply constraints limiting its ability to meet demand. Bettinger said December revenue guidance “would have been a little higher were it not for some supply chain constraints,” adding that no single or unusual factors were behind them.
Lam Research forecast revenue of $8.60 billion for the quarter ending December 27, 2026, plus or minus $400 million, and diluted earnings per share of $2.33, plus or minus $0.15. Archer said cleanroom availability and constraints on some components would continue to limit semiconductor and manufacturing equipment companies’ ability to fully meet end demand during 2027. The company cited risks including changes in demand for semiconductor manufacturing equipment tied to artificial intelligence, supply chain disruptions or manufacturing capacity constraints. These factors place the next quarter’s outlook in the context of strong demand offset by supply and production capacity constraints. The forecast for the quarter ending in December remains the next specified financial milestone in the company’s statement.
Lam Research shares fell 12.1% in morning trading on November 5, as semiconductor stocks declined after Qualcomm forecast weaker-than-expected earnings, according to Investing.com coverage. The coverage also cited concerns about artificial intelligence infrastructure spending and the supply chain. The stock closed at $221.43 on November 4, then at $185.20 on November 5, according to EL7 data. The following day, shares rose 9.2% after the buyback program announcement, according to the Associated Press. The rebound came in a session when indexes fell 6% in Tokyo and 6% in Seoul following a decline in the U.S. market on Thursday.