Slide 1: March Quarter 2015 Financial Results
Lam Research Corporation March Quarter 2015 Financial Results April 20, 2015 Lam Research Corp. | 4.20.2015 1
Slide 2: Cautions Regarding Forward-Looking Statements
Cautions Regarding Forward-Looking Statements Statements made in this presentation that are not statements of historical fact are forward-looking statements and are subject to the safe harbor provisions created by the Private Securities Litigation Reform Act of 1995. Forward- looking statements rela
Slide 3: Business Review and Industry Outlook
Business Review and Industry Outlook Martin Anstice President & Chief Executive Officer Lam Research Corp. | 4.20.2015 3
Slide 4: Agenda
Agenda March quarter results and outperformance drivers Outlook for 2015 wafer fabrication equipment spending Updates on Lam’s strategic focus for 2015 Financial and operational performance review Lam Research Corp. | 4.20.2015 4
Slide 5: March Quarter Results
March Quarter Results Record quarter, continuing outperformance trajectory ► Lam’s values and scalable culture continue YoY Growth Rate QMar’14 to QMar’15 to build competitive advantage ► Record levels for shipments, revenues QMar 2015 Shipments and Op Inc in the March quarter QMar 2014 ► Greater th
Slide 6: Inflection Driven Market
Inflection Driven Market Strength in the inflections, sustainable growth opportunity Inflection-Based Spending ► Inflections of multi-patterning, 3D devices, as % of WFE and packaging critical to scaling ~50% ► Inflection spending estimated to reach ~33% ~50% of WFE by 2017 ~10% ► Etch and depositio
Slide 7: Differentiated Products Addressing the Inflections
Differentiated Products Addressing the Inflections ALD and conductor etch leadership ► Rapid growth in the expanding ALD market — Success in spacer-based multi-patterning extended to multiple segments — VECTOR® ALD Oxide delivers technology with productivity necessary for high-volume manufacturing a
Slide 8: 2015 Industry Outlook
2015 Industry Outlook Memory Foundry Logic Market demand driven by Leading-edge investment Logic spend in line with mobile and enterprise focused on FinFET CY’14 levels enablement DRAM spend focused on Reflects sustained conversion to 20 nm Distributed among a commitment to number of cus
Slide 9: Lam's Strategic Objectives for CY'15
Lam’s Strategic Objectives for CY’15 Continued focus on customer trust and profitable growth ► 2015 focus areas: — Execution on opportunities won — Further increasing customer trust — Strengthen strategic alliances — Profitable growth of the company — Preparing for the next set of technology inflect
Slide 10: March Quarter 2015 Financial Results and June Quarter 2015 Outlook
March Quarter 2015 Financial Results and June Quarter 2015 Outlook Doug Bettinger Executive Vice President & Chief Financial Officer Lam Research Corp. | 4.20.2015 10
Slide 11: March Quarter Results
March Quarter Results Another quarter of strong execution ► Record levels for shipments, revenue, and operating income ► Above mid-point of guidance for all metrics ► Earnings per share above the high end of guidance Shipments Revenue Op Inc* $1.497 $1.393 $277 $1.247 $1.232 $230 $ Billions $ Billio
Slide 12: March Quarter Shipments
March Quarter Shipments QMar’15 shipments above mid-point ► Shipments of $1.497 billion — Shipments up 20% quarter over quarter ► System shipments segment mix: March 2015 December 2014 Logic/Other Logic/Other 9% Memory 15% NAND Memory NAND (67%) (53%) 10% 21% Foundry 24% 1% DRAM 32% DRAM 43% Foundry
Slide 13: March Quarter Financial Results
March Quarter Financial Results Mar’15 Dec’14 Revenue $1,393M $1,232M Non-GAAP Gross Margin* 44.7% 45.4% Non-GAAP Operating Expenses* $345M $330M Non-GAAP Operating Income* $277M $230M Non-GAAP Operating Margin* 19.9% 18.7% Non-GAAP Other Income/(Expense)* ($2.6M) ($1.2M) Non-GAAP Tax Rate* 11% 9% G
Slide 14: Key Balance Sheet and Financial Metrics
Key Balance Sheet and Financial Metrics Mar’15 Dec’14 Total Consolidated Gross Cash Balance $4,113M $3,039M Account Receivables, Net $1,047M $944M DSO 68 Days 70 Days Inventory Turns 3.4 3.0 Deferred Revenue* $485M $374M Capital Expenditures $32M $61M Equity Compensation Expense $33M $31M Amortizati
Slide 15: June 2015 Quarter Non-GAAP Guidance
June 2015 Quarter Non-GAAP Guidance Jun’15 Guidance Shipments $1.600 billion ± $50 million Revenue $1.460 billion ± $50 million Non-GAAP Gross Margin 45.5% ± 1% Non-GAAP Operating Margin 21.0% ± 1% Non-GAAP Earnings per Share(1) $1.46 ± $0.07 (1) Based on a share count of ~174 million shares Lam Res
Slide 16: Questions & Answers
Questions & Answers Lam Research Corp. | 4.20.2015 16
Slide 17: VA A
VA A INNOVATIVE TECHNOLOGY TRUSTED PRODUCTIVITY FAST SOLUTIONS Alam y
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 Three Months Ended March 29, December 28, 2015 2014 U.S. GAA
Slide 19: 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 share and per share data) (unaudited) Three Months Ended Three Months Ended March 29, December 28, 2015 2014 U.S
Slide 20: 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 29, December 28, 2015 2014 U.S. GAAP other expense, net $ (11,389) $ (9,799) Pre-tax non-GAAP items: Amortization of note discounts 8,749 8,609
Slide 21: 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 29, December 28, 2015 2014 U.S. GAAP income before income taxes $ 228,576 $ 178,942 U.S. GAAP income tax expense (benefit) $ 22,29
Slide 22: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP to Non-GAAP Guidance for the June 2015 Quarter (unaudited) Reconciling GAAP Items Non-GAAP Shipments $1.60 Billion +/- $50 Million - $1.60 Billion +/- $50 Million Revenue $1.46 Billion +/- $50 Million - $1.46 Billion +/- $50 Million Gross margin
Slide 23: Appendix – Reconciliation
Appendix – Reconciliation LAM RESEARCH CORPORATION RECONCILIATION OF DEFERRED REVENUE (in millions) (unaudited) Three Three Months Months Ended Ended March 29, December 28, 2015 2014 Beginning Balance $ 373.7 $ 356.8 Shipments 1,497.4 1,247.3 Revenue (1,393.3) (1,232.2) Net Change in Japan (1) 7.8 (
Slide 24: VA A
VA A INNOVATIVE TECHNOLOGY TRUSTED PRODUCTIVITY FAST SOLUTIONS Alam y