5 Insightful Analyst Inquiries from Lam Research’s Fourth Quarter Earnings Call

Lam Research Q4 Performance Overview

Lam Research delivered a strong fourth quarter, marked by impressive revenue gains and effective operational management. The leadership team attributed this success to the company’s advanced etch and deposition solutions, which played a pivotal role. CEO Tim Archer highlighted that the surge in AI-driven workloads spurred customers to invest in cutting-edge foundry and memory infrastructure. Recent introductions, such as the Aqara etch platform and significant enhancements to service offerings, have broadened Lam’s reach across DRAM, NAND, and logic markets. Archer remarked, “Our results reflect our consistent ability to execute in a rapidly growing semiconductor sector.”

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Key Highlights from Lam Research’s Q4 CY2025

• Total Revenue: $5.34 billion, surpassing analyst expectations of $5.25 billion (22.1% year-over-year growth, 1.8% above consensus)
• Adjusted EPS: $1.27, exceeding forecasts of $1.17 (8.7% above estimates)
• Adjusted EBITDA: $1.93 billion, topping projections of $1.85 billion (36.2% margin, 4.7% beat)
• Q1 CY2026 Revenue Outlook: $5.7 billion at the midpoint, ahead of the $5.37 billion analyst consensus
• Q1 CY2026 Adjusted EPS Guidance: $1.35 at the midpoint, above the $1.20 analyst estimate
• Operating Margin: 33.9%, up from 30.5% in the prior year’s quarter
• Inventory Days Outstanding: 136, an improvement from 141 in the previous quarter
• Market Value: $287.3 billion

While executive commentary is always insightful, analyst Q&A sessions often reveal the most pressing and nuanced issues. Here are the questions that stood out to us this quarter:

Top 5 Analyst Questions from the Q4 Earnings Call

• Tim Arcuri (UBS): Asked about how industry-wide clean room space limitations are affecting spending on wafer fab equipment. CFO Doug Bettinger did not provide specific figures due to evolving customer plans but confirmed robust demand and ongoing capacity constraints.
• C.J. Muse (Cantor Fitzgerald): Queried the durability of growth in the Customer Support Business Group. CEO Tim Archer responded that predictive maintenance and automation are fueling continued expansion, with expectations for high single-digit to low double-digit growth rates.
• Atif Malik (Citi): Sought clarity on the timeline for DRAM technology upgrades and the market potential for the Aqara system. Archer indicated that large-scale transitions are likely closer to the end of the decade, but near-term benefits are anticipated from current node migrations.
• Srini Pajjuri (RBC Capital): Inquired about the factors behind recent market share increases and whether revenue growth could outpace the broader industry. Archer pointed to gains in both NAND and foundry logic, driven by technological advancements.
• Stacy Rasgon (Bernstein Research): Requested details on the expected pattern of quarterly growth and the proportion of revenue from China. Bettinger projected steady, sequential growth, with China’s share likely to decrease as other regions accelerate their investments.

Looking Ahead: Key Drivers for Upcoming Quarters

In the next few quarters, analysts will be closely tracking several factors: the adoption rate of Lam’s new product lines, especially in advanced packaging and AI-focused nodes; the company’s ability to further expand manufacturing and supply chain capabilities to meet increased demand; and shifts in regional and customer composition as investments in foundry and DRAM accelerate outside of China. Continued progress in digital services and research and development will also be essential for maintaining momentum.

Lam Research shares are currently trading at $229.54, down from $239.58 prior to the earnings release. Is the company at a pivotal moment for investors?

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