Slide 1: December Quarter 2018 Financial Results
Lam Research Corporation December Quarter 2018 Financial Results January 23, 2019 © 2019 Lam Research Corp. | 01.23.2019 1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements This presentation and the accompanying discussion contain “forward-looking statements” under U.S. securities laws. Forward-looking statements include any statements that are not statements of historical fact. Examples of forward-looking state
Slide 3: Business Review and Industry Outlook
Business Review and Industry Outlook Tim Archer President and Chief Executive Officer © 2019 Lam Research Corp. | 01.23.2019 3
Slide 4: 2018 Strongest Financial Year in Company History
2018 Calendar Year Financial Performance $10,871M in Revenue – 14% increase from 2017 2018 Strongest Financial Year in EPS growth of 27% from 2017* Company History Operating Cash Flow growth over 50% from 2017 *Data calculated on a non-GAAP basis. Reconciliations of U.S. GAAP results to non-GAAP res
Slide 5: Industry Overview
Industry Overview Calendar 2018 WFE ended largely as expected at ~ $50B Memory-led decline in industry spending entering 2019 Expect WFE down from 2018 in the mid to high teens range Lam is well-positioned to deliver attractive long-term growth and opportunity © 2019 Lam Research Corp. | 01.23.2019
Slide 6: Lam's Growth Strategy
Lam’s Growth Strategy Increasing the Recurring Expanding Size of Gaining Market Share Revenue Stream Served Available Markets from Installed Base © 2019 Lam Research Corp. | 01.23.2019 6
Slide 7: Etch and Deposition - Central to Customers' Technology Roadmaps
Etch and Deposition - Central to Customers’ Technology Roadmaps Etch Deposition Built on leadership position in memory for Film quality, repeatability, and productivity critical applications with penetrations for are fundamental elements of differentiation high aspect ratio etch for Lam Non-me
Slide 8: Installed Base Units
CSBG: Installed-Base Units 5-Year Growth 60,000 ~56,000 ~50,000 50,000 Installed Base Units ~44,000 ~40,000 40,000 ~36,000 30,000 20,000 10,000 0 2014 2015 2016 2017 2018 Building a strong recurring revenue stream for Lam © 2019 Lam Research Corp. | 01.23.2019 8
Slide 9: Summary
Summary 2019 business environment is challenging; our long-term opportunity remains compelling Lam is committed to delivering on its growth strategy while responding to near-term trends with strong focus on operating efficiency Lam is fundamentally well-positioned in the right segments of the market
Slide 10: December Quarter 2018 Financial Results and March Quarter 19 Outlook
December Quarter 2018 Financial Results and March Quarter 2019 Outlook Doug Bettinger Executive Vice President and Chief Financial Officer © 2019 Lam Research Corp. | 01.23.2019 10
Slide 11: December Quarter Results
December Quarter Results ► Non-GAAP Operating margin and EPS exceeded guidance range ► Spending discipline during a decline in industry capital equipment investments Revenue Earnings per Share* $3.87 $2.5 Revenue ($B) EPS ($) Revenue Earnings per Share* $2.3 $3.36 QSep'18 QDec'18 QSep'18 QDec'18 *Da
Slide 12: December Quarter Revenue Mix
December Quarter Revenue Mix ► Combined memory segment is 79% of total systems revenue System Revenue Segments Revenue by Region Europe, 5% Logic/Other U.S., 5% 8% Foundry SEA Japan 13% 7% 27% NVM China Revenue55% 14% Revenue DRAM 24% Korea Taiwan 25% 17% Memory 79% © 2019 Lam Research Corp. | 01.23
Slide 13: December Quarter Financial Results
December Quarter Financial Results Dec’18 Sep’18 Revenue $2,523M $2,331M Non-GAAP Gross Margin* 46.3% 46.4% Non-GAAP Operating Expenses* $440M $451M Non-GAAP Operating Income* $728M $630M Non-GAAP Operating Income as a 28.8% 27.0% percentage of Revenue* Non-GAAP Other Income/(Expense)* ($30M) $0.5M
Slide 14: Key Balance Sheet and Financial Metrics
Key Balance Sheet and Financial Metrics Dec’18 Sep’18 Total Consolidated Gross Cash Balance $3,891M $3,875M Account Receivables, Net $1,869M $1,847M DSO 67 Days 72 Days Inventory Turns 3.2 2.7 Deferred Revenue* $493M $626M Capital Expenditures $106M $56M Equity Compensation Expense $39M $50M Amortiz
Slide 15: March 2019 Quarter Guidance
March 2019 Quarter Guidance $2,400M $150M 25.0% 1% Revenue Non-GAAP Operating Income as a percentage of revenue 44.5% 1% $3.40 $0.20 Non-GAAP Non-GAAP Gross Margin Earnings per Share* A reconciliation of U.S. GAAP projected results to non-GAAP projected results can be found at the end of thi
Slide 16: Questions and Answers
Questions and Answers © 2019 Lam Research Corp. | 01.23.2019 16
Slide 17: Appendix - Reconciliation
Appendix - Reconciliation Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income (in thousands, except per share data) (unaudited) Twelve Months Three Months Ended Ended December 23, September 23, June 24, March 25, December 23, 2018 2018 2018 2018 2018 U.S. GAAP net income $ 568,855 $ 533,36
Slide 18: Appendix - Reconciliation
Appendix - Reconciliation Reconciliation of U.S. GAAP Gross Margin, Operating Expenses and Operating Income to Non-GAAP Gross Margin, Operating Expenses and Operating Income (in thousands, except percentages) (unaudited) Three Months Ended December 23, September 23, 2018 2018 U.S. GAAP gross margin
Slide 19: Appendix - Reconciliation
Appendix - Reconciliation Reconciliation of U.S. GAAP Other Expense, Net to Non-GAAP Other Income (Expense), Net (in thousands) (unaudited) Three Months Ended December 23, September 23, 2018 2018 U.S. GAAP Other expense, net $ (30,649) $ (377) Pre-tax non-GAAP items: Amortization of note discounts 8
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 December 23, September 23, 2018 2018 U.S. GAAP income before income taxes $ 659,730 $ 591,374 U.S. GAAP income tax expense $ 90,875 $ 58
Slide 21: Appendix - Reconciliation
Appendix - Reconciliation Reconciliation of U.S. GAAP to Non-GAAP Guidance for the March 2019 quarter U.S. GAAP Reconciling Items Non-GAAP Revenue $2.4 Billion +/- $150 Million — $2.4 Billion +/- $150 Million Gross margin as a percentage of revenue 43.6% +/- 1% $ 22 Million 44.5% +/- 1% Operating in
Slide 22: VAA
VAA Innovative Technology Trusted Productivity Fast Solutions y NX