LRCX Financial Analysis

Analysis Date: 1/30/2025

Business Model

Lam Research generates revenue primarily through sales of semiconductor manufacturing equipment and customer support services.

Revenue Sources

• System Sales (60% of revenue) - Equipment and upgrades for etch, deposition, and clean processes
• Customer Support Business Group (40% of revenue) - Services, spares, upgrades and non-leading edge equipment

Revenue Distribution by Channel

• Systems Revenue: $2.63B (60%)
• Customer Support Revenue: $1.75B (40%)

Income Statement Analysis

• Revenue increased 5% quarter-over-quarter to $4.38B
• Gross margin decreased 60 basis points to 47.4%
• Operating expenses remained flat at $739M
• Operating income grew 5.5% to $1.33B

Balance Sheet Analysis

• Cash decreased due to capital return activities
• Accounts receivable increased due to higher sales
• Inventory levels remained well managed

Cash Flow Analysis

• Operating cash flow decreased due to working capital changes
• Higher capital expenditures for capacity expansion

Capital Allocation

Lam returned significant capital to shareholders through $650M in share repurchases and $298M in dividends during Q4 2024. The company maintains strong investment in R&D and capacity expansion while maintaining a robust balance sheet.

Management Commentary

Strong execution at pivotal moment for semiconductor manufacturing

Winning key technology inflections in advanced nodes

WFE expected to rise slightly to ~$100B in 2025

Overall Sentiment: Confident and optimistic about growth opportunities in 2025

Recommendation

Rating: Buy

Reason for Rating: Strong market position in growing semiconductor equipment market

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 1/30/2025, 6:29:01 AM