Earnings Recap — Q4 FY2026
CY Q3 2026 · Reported July 29, 2026 · Beat 7 of last 7 quarters
Lam Research Corporation reported Q4 FY2026 revenue of $6.72B, a beat of 0.9% against consensus, and EPS of $1.82, a beat of 7.7%.
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Lam's quarter is a direct read on AI-driven capacity expansion: record revenue, a more-than-doubling of NAND revenue, and a raised calendar 2026 WFE outlook to the low $150 billion range indicate that AI storage, DRAM and leading-edge logic demand is converting into equipment orders, not just commentary. The specificity management offered — customers securing tools for fabs due to come online 'at lead time or beyond,' 8 to 10 new fabs between now and the end of next year, and advanced packaging growth now tracking above 70% year-over-year — suggests the constraint has shifted from budget to clean room, tool lead times and supply chain capacity. A raised long-term framework of mid-50s gross margin and mid-40s operating margin also implies management expects this buildout to be multiyear and to carry pricing and mix benefits rather than being a single cyclical spike.
Lam reported record June quarter revenue of $6.72 billion, up 15% sequentially and 30% year-over-year, alongside record gross margin of 52%, operating margin of 38.4%, and record diluted EPS of $1.82. Fiscal 2026 closed with record revenue of $23.2 billion, gross margin of 50.6%, and EPS of $5.82, up 41% from fiscal 2025. Memory was 46% of systems revenue — a record dollar level — with NAND revenue dollars more than doubling sequentially as customers converted to 256-layer-and-above devices primarily for enterprise SSDs, while DRAM dollars were roughly flat with the March record and foundry was 44% of systems revenue as mature-node China spending declined. The Customer Support Business Group delivered its third consecutive record quarter at nearly $2.5 billion, up 17% sequentially, and deferred revenue rose $213 million to $2.43 billion, driven largely by customer downpayments. Regionally, Taiwan reached a record 27% of revenue, China fell to 26% from 34%, and Korea was 20%; inventory turns improved to 3x, the highest level in almost five years, with headcount up about 1,800 to roughly 22,400.
Management raised its calendar 2026 WFE outlook to the low $150 billion range from $140 billion previously, framing 2026 as a third consecutive year of Lam outperformance to WFE and describing 2027 as an 'extraordinary setup' for WFE growth. The September quarter guide of $8.1 billion implies more than 20% sequential growth, with gross margin guided to 52%, operating margin to 39.5%, and EPS to $2.15 — while noting the tax rate steps up to the mid-teens as revenue shifts toward higher-tax jurisdictions, primarily the United States, and that this should continue through 2026 and likely beyond. CFO Doug Bettinger raised the long-term profitability framework, saying the company intends to drive gross margins to the mid-50% level and operating margins to the mid-40% level over the next several years, and framed the path as a mix of scale, new product introduction and getting 'fairly paid for the value we're delivering.' On demand visibility, Tim Archer said customers are working with Lam to secure equipment orders for incremental clean room space as it comes online, with discussions happening 'at lead time or beyond,' and Bettinger pointed to roughly 8 to 10 new fabs coming online between now and the end of next year, though management declined to quantify 2027 or commit to sequential growth every quarter. Archer said that entering 2027 he expects DRAM to be the fastest-growing segment, followed by leading-edge foundry/logic and then NAND — the same ordering as 2026 — and noted Lam's SAM is already trending around 36% to 36.5% of WFE, progressing toward the high-30s goal ahead of the timeline outlined at the 2025 Investor Day. He also clarified that the previous quarter's $140 billion WFE figure carried an upside bias that has now played out to $150 billion, and that the current $150 billion outlook was not described with the same upside bias.
“As we enter the second half of the year, we expect calendar 2026 wafer fab equipment spending or WFE to be in the low $150 billion range up from our prior outlook of $140 billion with upside bias.”
on 2026 WFE outlook raised
“We expect Lam's served available market or SAM per wafer in NAND to double from the 128-layer node to 500-plus layer devices.”
on NAND SAM expansion
“Now within this framework, we intend to drive gross margins to the mid-50% level and operating margins to the mid-40% level over the next several years as the AI transformation drives continued greater investment in global semiconductor capacity.”
on Long-term margin framework
A third-party trend forecast points to a divergence in memory fundamentals next year — oversupply in NAND on weaker consumer demand with DRAM shortages continuing. Are you seeing anything in conversations with memory makers pointing to oversupply or a reversal in NAND fundamentals next year?
Archer said customers are currently progressing through upgrades to 200-plus layer devices with some greenfield this year, and that it is a ways out before meaningful NAND greenfield arrives, so it is early to call 2028; the fundamentals look about the same for Lam right now. He emphasized the Lam story is bigger than NAND, with vertical scaling learnings from 3D NAND applied to DRAM and foundry/logic, and said 2027 looks like a great setup for the industry and for Lam with DRAM the fastest grower, foundry/logic second, and NAND third — the same ordering as 2026.
Advanced packaging growth guidance has moved from greater than 40% to greater than 50% and now 70% — is the increase due to HBM or 2.5D/3.5D SoIC transitions happening faster, or customers pulling production capability forward from next year into this year?
Archer said it is 'just everything' — 2.5D in the foundry/logic space, HBM, and the emerging move to panel packaging where Lam got an early start and where the transition is in very early stages but is an important inflection point. He added that advanced packaging growth will be a little hard to predict over the next few years because adoption is occurring all over the place. Bettinger reminded that Lam has clear leadership in TSV etch and copper electroplating.
Are clean rooms really the limiter to how big 2027 can be — if clean rooms were unlimited, is there no question you could grow that much next year? And at a minimum, could we see sequential growth from here until the end of 2027?
Bettinger declined to put numbers on 2027 but pointed to roughly 8, 9, or 10 new fabs coming online between now and the end of next year that will enable the reception of more equipment, saying he is excited about where this is going. On sequential growth, he noted the capacity does not all come on in any one quarter and comes on bit by bit, and that while he would not guide quarter by quarter through next year, he feels incrementally good about each successive quarter as of today.