Slide 1: September Quarter 2017 Financial Results
Lam Research Corporation September Quarter 2017 Financial Results October 17, 2017 © 2017 Lam Research Corp. | 10.17.2017 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 Martin Anstice President & Chief Executive Officer © 2017 Lam Research Corp. | 10.17.2017 3
Slide 4: September Quarter and CY'17 Performance
September Quarter and CY’17 Performance ► Shipments, revenue, and gross margin* above mid-point of guidance ► Operating margin* and EPS* above guidance range ► On track for ~50% shipment growth and >2.5% market share gain in CY’17 Outperforming WFE growth by ~2X in CY’17 *Data are presented on a non
Slide 5: Sustainable Spending Driven by Growing Importance of Data
Sustainable Spending Driven by Growing Importance of Data ► AI has the potential to transform the economy, with IoT devices enabling rapid delivery and ramp of AI-enabled services ► Demand trends fueling growth in DRAM and NAND, resulting in record revenues in the memory semiconductor segment ► Semi
Slide 6: Commitment to Disruptive and Enabling Technology
Commitment to Disruptive and Enabling Technology ► Leadership position in vertical scaling in 3D NAND ► Growing logic application share at 10 nm ► ALE: Dielectric application win for critical transistor contact at a leading foundry ► ALD: Dielectric and metal application wins for NVM devices ► Grew
Slide 7: Extending Differentiation and Strategic Relevance
Extending Differentiation and Strategic Relevance ► Well-positioned systems business Served markets growing significantly faster than WFE Four-year shipment growth at 2X WFE growth >90% of PTOR decisions made for CY’18 ► Record revenue for customer support business, outperforming the rate of i
Slide 8: September Quarter 2017 Financial Results and December Quarter 2017 Outlook
September Quarter 2017 Financial Results and December Quarter 2017 Outlook Doug Bettinger Executive Vice President & Chief Financial Officer © 2017 Lam Research Corp. | 10.17.2017 8
Slide 9: September Quarter Results
September Quarter Results ► QSep’17 above mid-point of guidance for all metrics ► Revenue, gross margin dollars*, operating income dollars*, cash from operations, and earnings per share* at record levels in QSep’17 Shipments Revenue Earnings Per Share* $2.5 $2.5 $3.46 $2.4 $2.3 $3.11 $ Billions $ Bi
Slide 10: September Quarter Shipments
September Quarter Shipments ► 6% decrease compared to June quarter ► System shipments segment mix: Sep’17 Jun’17 Logic/Other Logic/Other 5% 13% Foundry 22% Foundry 21% NVM Memory NVM Memory 49% 66% 73% 59% DRAM DRAM 14% 17% QSep’17 shipments of $2.382 billion © 2017 Lam Research Corp. | 10.17.2017 1
Slide 11: September Quarter Financial Results
September Quarter Financial Results Sep’17 Jun’17 Revenue $2,478M $2,345M Non-GAAP Gross Margin* 47.2% 46.5% Non-GAAP Operating Expenses* $438M $440M Non-GAAP Operating Income* $733M $650M Non-GAAP Operating Margin* 29.6% 27.7% Non-GAAP Other Income/(Expense)* ($1.4M) $1.2M Non-GAAP Tax Rate* 14% 13
Slide 12: Key Balance Sheet and Financial Metrics
Key Balance Sheet and Financial Metrics Sep’17 Jun’17 Total Consolidated Gross Cash Balance $6,438M $6,297M Account Receivables, Net $1,531M $1,673M DSO 56 Days 65 Days Inventory Turns 4.0 4.1 Deferred Revenue* $938M $966M Capital Expenditures $60M $35M Equity Compensation Expense $42M $44M Amortiza
Slide 13: December 2017 Quarter Non-GAAP Guidance
December 2017 Quarter Non-GAAP Guidance Dec’17 Guidance Shipments $2.600 billion ± $100 million Revenue $2.550 billion ± $100 million Non-GAAP Gross Margin 47.5% ± 1% Non-GAAP Operating Margin 30.0% ± 1% Non-GAAP Earnings per Share* $3.65 ± $0.12 *Based on a share count of ~182 million shares. © 201
Slide 14: Questions & Answers
Questions & Answers © 2017 Lam Research Corp. | 10.17.2017 14
Slide 15: 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 September 24, June 25, 2017 2017 U.S. GAAP net income $ 590,690 $
Slide 16: 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 September 24, June 25, 2017 2017 U.S. GAAP gross margin $ 1,
Slide 17: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Other Income (Expense), Net to Non-GAAP Other Income (Expense), Net (in thousands) (unaudited) Three Months Ended September 24, June 25, 2017 2017 U.S. GAAP Other expense, net $ (5,502) $ (4,444) Pre-tax non-GAAP items: Amortization of note disco
Slide 18: 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 September 24, June 25, 2017 2017 U.S. GAAP income before income taxes 687,720 $ 603,495 U.S. GAAP income tax expense 97,030 $ 77,071 U.S
Slide 19: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP to Non-GAAP Guidance for the December 2017 quarter (unaudited) Reconciling U.S. GAAP Items Non-GAAP Shipments $2.60 Billion +/- $100 Million — $2.60 Billion +/- $100 Million Revenue $2.55 Billion +/- $100 Million — $2.55 Billion +/- $100 Million
Slide 20: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of Deferred Revenue (in millions) (unaudited) Three Months Ended September 24, June 25, 2017 2017 Beginning Balance $ 966.0 $ 842.1 Shipments 2,381.6 2,542.7 Revenue (2,478.1) (2,344.9) Net Change in Japan (1) 52.0 (136.3) Services & Other 16.4 62.4 Ending Ba
Slide 21: Innovative
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