Slide 1: Lam Research Corporation March Quarter 2016 Financial Results
Lam Research Corporation March Quarter 2016 Financial Results April 20, 2016 Lam Research Corp. | 4.20.2016 1
Slide 2: Cautions Regarding Forward-Looking Statements
Cautions Regarding Forward-Looking Statements This presentation and accompanying discussion contain “forward-looking statements” as defined under U.S. securities laws. Forward-looking statements are statements other than statements of historical fact. Examples of forward-looking statements include,
Slide 3: Agenda
Agenda March Quarter Highlights Progress on Growth Objectives 2016 Industry Outlook Update on Combination with KLA-Tencor Financial Results and Outlook Lam Research Corp. | 4.20.2016 3
Slide 4: Business Review and Industry Outlook
Business Review and Industry Outlook Martin Anstice President & Chief Executive Officer Lam Research Corp. | 4.20.2016 4
Slide 5: March Quarter Highlights
March Quarter Highlights Strong execution and performance momentum ► Revenue and shipments above the mid-point of guidance ► Gross margin, operating income, and EPS above the high end of guidance* ► Growing R&D while managing operating expenses ► Ended the quarter with a strong combination of both b
Slide 6: Progress on Growth Objectives
Progress on Growth Objectives Partnering with customers to enable technology inflections ► Strong traction for Lam’s product and service offerings in 3D NAND selections and roadmaps ► Building on momentum with differentiated products for FinFET and multiple patterning applications ► 35k+ module inst
Slide 7: 2016 Industry Outlook
2016 Industry Outlook Memory Foundry & Logic Non-volatile memory WFE to Spending levels projected exceed $9B to be flat to slightly higher vs. CY’15 3D NAND shipped capacity of ~350k-400k WSPM by the end Strategic investments of 2016 focused on enabling 10 nm Expect DRAM WFE in the mid- te
Slide 8: Update on Combination with KLA-Tencor
Update on Combination with KLA-Tencor Accelerated innovation as combined company Value-Enhancing Collaboration ► Interactions with customers reinforce confidence in the vision for the combined Explore Innovate Open Deliver enabling company communication solutions ► Integration planning focused on or
Slide 9: March Quarter 2016 Financial Results and June Quarter 2016 Outlook
March Quarter 2016 Financial Results and June Quarter 2016 Outlook Doug Bettinger Executive Vice President & Chief Financial Officer Lam Research Corp. | 4.20.2016 9
Slide 10: March Quarter Results
March Quarter Results Starting CY’16 with momentum ► Above mid-point of guidance for all metrics ► Building deferred revenue on the strength of shipments Shipments Revenue Deferred Revenue $1.4 $1.4 $1.3 $1.3 $511 $ Millions $ Billions $ Billions $395 Dec'15 Mar'16 Dec'15 Mar'16 Dec'15 Mar'16 Lam Re
Slide 11: March Quarter Shipments
March Quarter Shipments QMar’16 shipments of $1.446 billion ► 12% increase compared to December quarter ► System shipments segment mix: Mar’16 Dec’15 Logic/Other Logic/Other 7% 10% NVM Foundry 23% Foundry 23% NVM Memory 25% Memory 43% 70% 65% DRAM DRAM 27% 42% Lam Research Corp. | 4.20.2016 11
Slide 12: March Quarter Financial Results
March Quarter Financial Results Mar’16 Dec’15 Revenue $1,314M $1,426M Non-GAAP Gross Margin* 45.1% 45.5% Non-GAAP Operating Expenses* $350M $352M Non-GAAP Operating Income* $242M $296M Non-GAAP Operating Margin* 18.4% 20.8% Non-GAAP Other Income/(Expense)* ($7.2M) ($7.1M) Non-GAAP Tax Rate* 14% 7% G
Slide 13: Key Balance Sheet and Financial Metrics
Key Balance Sheet and Financial Metrics Mar’16 Dec’15 Total Consolidated Gross Cash Balance $4,767M $4,683M Account Receivables, Net $1,237M $1,090M DSO 86 Days 70 Days Inventory Turns 3.2 3.6 Deferred Revenue* $511M $395M Capital Expenditures $46M $28M Equity Compensation Expense $35M $33M Amortiza
Slide 14: June 2016 Quarter Non-GAAP Guidance
June 2016 Quarter Non-GAAP Guidance Jun’16 Guidance Shipments $1.575 billion ± $75 million Revenue $1.525 billion ± $75 million Non-GAAP Gross Margin 46.0% ± 1% Non-GAAP Operating Margin 22.0% ± 1% Non-GAAP Earnings per Share(1) $1.63 ± $0.10 (1) Based on a share count of ~173 million shares. Lam Re
Slide 15: Questions & Answers
Questions & Answers Lam Research Corp. | 4.20.2016 15
Slide 16: VAA
VAA INNOVATIVE TECHNOLOGY TRUSTED PRODUCTIVITY FAST SOLUTIONS Alam .
Slide 17: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and (unaudited) Three Months Ended March 27, December 27, 2016 2015 U.S. GAAP gross margin 571,265 $ 626,510 Pre-tax non-GAAP items: Amortization r
Slide 18: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income and U.S. GAAP number of dilutive shares to Non-GAAP number of dilutive shares (in thousands, except per share data) (unaudited) Three Months Ended March 27, December 27, 2016 2015 U.S. GAAP net income $ 143,451 $
Slide 19: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Other Expense, Net to Non-GAAP Other Expense, Net (in thousands) (unaudited) Three Months Ended March 27, December 27, 2016 2015 U.S. GAAP other expense, net $ (29,834) $ (29,935) Pre-tax non-GAAP items: Amortization of note discounts 9,333 9,258
Slide 20: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Income Tax Rate to Non-GAAP Income Tax Rate (in thousands, except percentages) (unaudited) Three Months Ended March 27, December 27, 2016 2015 U.S. GAAP income before income taxes $ 160,919 $ 208,899 U.S. GAAP income tax expense (benefit) $ 17,46
Slide 21: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP to Non-GAAP Guidance for the June 2016 Quarter (unaudited) Reconciling U.S. GAAP Items Non-GAAP Shipments $1.575 Billion +/- $75 Million - $1.575 Billion +/- $75 Million Revenue $1.525 Billion +/- $75 Million - $1.525 Billion +/- $75 Million Gros
Slide 22: Appendix – Reconciliation
Appendix – Reconciliation LAM RESEARCH CORPORATION RECONCILIATION OF DEFERRED REVENUE (in millions) (unaudited) Three Three Months Months Ended Ended March 27, December 27, 2016 2015 Beginning Balance $ 394.6 $ 517.4 Shipments 1,446.0 1,287.9 Revenue (1,314.1) (1,425.5) Net Change in Japan (1) (12.1
Slide 23: VAA
VAA INNOVATIVE TECHNOLOGY TRUSTED PRODUCTIVITY FAST SOLUTIONS Alam .