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Lam Research Q3 Earnings Surpass Expectations, Revenues Rise Y/Y
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Key Takeaways
LRCX posted Q3 FY26 EPS of $1.47, up 41% Y/Y, on revenues of $5.84B, up 23.8% Y/Y.
Lam Research saw Systems revenues rise 24% and Customer Support sales jump 25.3%.
LRCX guided Q4 FY26 revenues of $6.6B and EPS of $1.65, both above consensus estimates.
Lam Research Corporation (LRCX - Free Report) delivered third-quarter fiscal 2026 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.
LRCX reported fiscal third-quarter non-GAAP earnings of $1.47 per share, beating the Zacks Consensus Estimate by 8.1%. The bottom line increased 41.3% on a year-over-year basis.
In the third quarter of fiscal 2026, LRCX reported revenues of $5.84 billion, which rose 23.8% year over year and surpassed the consensus estimate by 1.3%. Strength was supported by an accelerating AI-driven semiconductor demand backdrop and a record quarter for customer support activities.
Lam Research Corporation Price, Consensus and EPS Surprise
In the third quarter of fiscal 2026, Systems revenues were $3.73 billion (63.9% of total revenues), up 24% on a year-over-year basis. The Zacks Consensus Estimate for Systems revenues was pegged at $3.82 billion.
Customer Support Business Group revenues totaled $2.11 billion (36.1% of total revenues), which increased 25.3% on a year-over-year basis, reflecting continued expansion across spares, upgrades and services. The Zacks Consensus Estimate for Customer Support Business Group revenues was pegged at $1.93 billion.
During the quarter, China contributed 34% of total revenues, Taiwan 23%, and Korea 23%. Other regions like Japan contributed 8%, the United States 6%, Southeast Asia 4%, and Europe 2%.
Lam Profitability Improves on Mix and Factory Efficiencies
Lam Research posted fiscal third-quarter non-GAAP gross margin of 49.9%, improving 20 basis points from 49.7% in the previous quarter. Management attributed performance to a favorable customer and product mix as well as improved factory efficiencies, supported by prior work to enhance the global manufacturing footprint.
Non-GAAP operating expenses were $866 million in the fiscal third quarter, up from $827 million in the prior quarter, driven by seasonal employee-related costs and higher headcount to support growth.
Even with higher spending, non-GAAP operating margin expanded 70 basis points to 35.0%, up from 34.3% in the previous quarter.
LRCX’s Balance Sheet & Cash Flow
As of March 29, 2026, Lam Research held $4.8 billion in cash and cash equivalents, down from $6.2 billion at the end of the prior quarter.
Cash flows from operating activities decreased to $1.14 billion, down from $1.48 billion in the previous quarter.
During the quarter, Lam Research paid dividends totaling $325.8 million and repurchased shares worth $796 million.
LRCX Provides Strong Guidance for Q4 FY26
For the fourth quarter of fiscal 2026, Lam Research expects revenues to be $6.60 billion (+/- $400 million). The Zacks Consensus Estimate for the fiscal fourth quarter is pegged at $6.08 billion, indicating year-over-year growth of 17.7%.
The company forecasts non-GAAP gross margin of 50.5% (+/- 1%) and non-GAAP operating margin of 36.5% (+/- 1%).
Lam Research guided non-GAAP earnings of $1.65 per share (+/- $0.15), based on a diluted share count of 1.26 billion. The Zacks Consensus Estimate for the fiscal fourth quarter is pegged at $1.44 per share, indicating year-over-year growth of 8.3%.
Shares of Arista Networks have gained 35.6% year to date. The Zacks Consensus Estimate for ANET’s 2026 earnings is pegged at $3.54 per share, up by a penny over the past seven days, indicating an increase of 18.8% year over year.
Shares of Advanced Energy have gained 80.2% year to date. The Zacks Consensus Estimate for AEIS’ 2026 earnings is pegged at $8.32 per share, up by 12 cents over the past 60 days, indicating a rise of 29.8% year over year.
Applied Materials shares have surged 57% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $11.10 per share, down by a penny over the past 30 days, indicating an increase of 17.8% year over year.
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Lam Research Q3 Earnings Surpass Expectations, Revenues Rise Y/Y
Key Takeaways
Lam Research Corporation (LRCX - Free Report) delivered third-quarter fiscal 2026 results, wherein both top and bottom lines surpassed the Zacks Consensus Estimate.
LRCX reported fiscal third-quarter non-GAAP earnings of $1.47 per share, beating the Zacks Consensus Estimate by 8.1%. The bottom line increased 41.3% on a year-over-year basis.
In the third quarter of fiscal 2026, LRCX reported revenues of $5.84 billion, which rose 23.8% year over year and surpassed the consensus estimate by 1.3%. Strength was supported by an accelerating AI-driven semiconductor demand backdrop and a record quarter for customer support activities.
Lam Research Corporation Price, Consensus and EPS Surprise
Lam Research Corporation price-consensus-eps-surprise-chart | Lam Research Corporation Quote
LRCX Revenue Mix Shows Broad-Based Strength
In the third quarter of fiscal 2026, Systems revenues were $3.73 billion (63.9% of total revenues), up 24% on a year-over-year basis. The Zacks Consensus Estimate for Systems revenues was pegged at $3.82 billion.
Customer Support Business Group revenues totaled $2.11 billion (36.1% of total revenues), which increased 25.3% on a year-over-year basis, reflecting continued expansion across spares, upgrades and services. The Zacks Consensus Estimate for Customer Support Business Group revenues was pegged at $1.93 billion.
During the quarter, China contributed 34% of total revenues, Taiwan 23%, and Korea 23%. Other regions like Japan contributed 8%, the United States 6%, Southeast Asia 4%, and Europe 2%.
Lam Profitability Improves on Mix and Factory Efficiencies
Lam Research posted fiscal third-quarter non-GAAP gross margin of 49.9%, improving 20 basis points from 49.7% in the previous quarter. Management attributed performance to a favorable customer and product mix as well as improved factory efficiencies, supported by prior work to enhance the global manufacturing footprint.
Non-GAAP operating expenses were $866 million in the fiscal third quarter, up from $827 million in the prior quarter, driven by seasonal employee-related costs and higher headcount to support growth.
Even with higher spending, non-GAAP operating margin expanded 70 basis points to 35.0%, up from 34.3% in the previous quarter.
LRCX’s Balance Sheet & Cash Flow
As of March 29, 2026, Lam Research held $4.8 billion in cash and cash equivalents, down from $6.2 billion at the end of the prior quarter.
Cash flows from operating activities decreased to $1.14 billion, down from $1.48 billion in the previous quarter.
During the quarter, Lam Research paid dividends totaling $325.8 million and repurchased shares worth $796 million.
LRCX Provides Strong Guidance for Q4 FY26
For the fourth quarter of fiscal 2026, Lam Research expects revenues to be $6.60 billion (+/- $400 million). The Zacks Consensus Estimate for the fiscal fourth quarter is pegged at $6.08 billion, indicating year-over-year growth of 17.7%.
The company forecasts non-GAAP gross margin of 50.5% (+/- 1%) and non-GAAP operating margin of 36.5% (+/- 1%).
Lam Research guided non-GAAP earnings of $1.65 per share (+/- $0.15), based on a diluted share count of 1.26 billion. The Zacks Consensus Estimate for the fiscal fourth quarter is pegged at $1.44 per share, indicating year-over-year growth of 8.3%.
Zacks Rank and Stocks to Consider
Currently, LRCX carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Computer and Technology sector are Arista Networks (ANET - Free Report) , Advanced Energy (AEIS - Free Report) and Applied Materials (AMAT - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Arista Networks have gained 35.6% year to date. The Zacks Consensus Estimate for ANET’s 2026 earnings is pegged at $3.54 per share, up by a penny over the past seven days, indicating an increase of 18.8% year over year.
Shares of Advanced Energy have gained 80.2% year to date. The Zacks Consensus Estimate for AEIS’ 2026 earnings is pegged at $8.32 per share, up by 12 cents over the past 60 days, indicating a rise of 29.8% year over year.
Applied Materials shares have surged 57% year to date. The Zacks Consensus Estimate for AMAT’s fiscal 2026 earnings is pegged at $11.10 per share, down by a penny over the past 30 days, indicating an increase of 17.8% year over year.