Slide 1: December Quarter 2015 Financial Results
Lam Research Corporation December Quarter 2015 Financial Results January 27, 2016 Lam Research Corp. | 1.27.2016 1
Slide 2: Cautions Regarding Forward-Looking Statements
Cautions Regarding Forward-Looking Statements All statements included or incorporated by reference in this document, other than statements or characterizations of historical fact, are forward-looking statements within the meaning of the federal securities laws, including Section 27A of the Securitie
Slide 3: Additional Information and Where to Find It; Participants in the Solicitation
Additional Information and Where to Find It; Participants in the Solicitation Additional Information and Where to Find It: This document does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval nor shall there be any sale of
Slide 4: Business Review and Industry Outlook
Business Review and Industry Outlook Martin Anstice President & Chief Executive Officer Lam Research Corp. | 1.27.2016 4
Slide 5: Agenda
Agenda December Quarter and CY’15 Accomplishments 2016 Industry Outlook Lam Opportunities in CY’16 and Beyond Financial Results and Outlook Lam Research Corp. | 1.27.2016 5
Slide 6: December Quarter and CY'15 Accomplishments
December Quarter and CY’15 Accomplishments A strong finish to a record CY’15 Earnings Per Share* ► Earnings per share* >$6 in CY’15 $6 $5 ► Shipments and revenue >$5.9B in CY’15 $4 $3 $2 $1 ► Three year CAGR in shipments >22% vs. $0 6% CAGR in WFE CY'14 CY'15 Revenue ($B) ► Ongoing strength in execu
Slide 7: CY'15 Market Share and SAM Progress
CY’15 Market Share and SAM Progress Demonstrated our ability to continue outperformance Lam SAM ► SAM increased to beyond 30% of WFE as % of WFE in 2015 >30% 26.5% 27.5% ► Increased company market share to mid-high 40% range in CY’15 2013 2014 2015 ► ≥5% market share gain in etch and Company Market
Slide 8: 2016 Industry Outlook
2016 Industry Outlook Memory Foundry & Logic NAND supply bit growth in Leading-edge investment the mid 30% range focused on 10 nm technology Expect 3D NAND shipped 28 nm and above capacity capacity of ~350k-400k WSPM investments continue by the end of 2016 Project spending levels to be D
Slide 9: Lam Opportunities in CY'16 and Beyond
Lam Opportunities in CY’16 and Beyond Focused on opportunities, planning and execution ► Deliver on customer commitments made ► Continued focus on our value proposition of increased innovation ► Execute on our outperformance opportunity in the technology inflections ► Create stronger company with gr
Slide 10: December Quarter 2015 Financial Results and March Quarter 16 Outlook
December Quarter 2015 Financial Results and March Quarter 2016 Outlook Doug Bettinger Executive Vice President & Chief Financial Officer Lam Research Corp. | 1.27.2016 10
Slide 11: December Quarter and CY'15 Results
December Quarter and CY’15 Results Multiple milestones achieved in CY’15 ► At or above mid-point of guidance in QDec’15 for all guided metrics ► Generated $1.2 billion in cash from operations in CY’15 ► >$410 million returned to shareholders through dividends and share repurchases in CY’15 Shipments
Slide 12: December Quarter Shipments
December Quarter Shipments QDec’15 shipments above mid-point ► Shipments of $1.288 billion ► System shipments segment mix: Dec’15 Sep’15 Logic/Other Logic/Other 10% 10% NAND & Other NVM 23% Foundry 18% NAND & 25% Memory Other NVM Memory 65% 40% 72% Foundry DRAM DRAM 32% 42% Lam Research Corp. | 1.27
Slide 13: December Quarter Financial Results
December Quarter Financial Results Dec’15 Sep’15 Revenue $1,426M $1,600M Non-GAAP Gross Margin* 45.5% 46.5% Non-GAAP Operating Expenses* $352M $364M Non-GAAP Operating Income* $296M $380M Non-GAAP Operating Margin* 20.8% 23.8% Non-GAAP Other Income/(Expense)* ($7.1M) ($18.0M) Non-GAAP Tax Rate* 7% 1
Slide 14: Key Balance Sheet and Financial Metrics
Key Balance Sheet and Financial Metrics Dec’15 Sep’15 Total Consolidated Gross Cash Balance $4,683M $4,515M Account Receivables, Net $1,090M $1,089M DSO 70 Days 62 Days Inventory Turns 3.6 3.8 Deferred Revenue* $395M $517M Capital Expenditures $28M $49M Equity Compensation Expense $33M $36M Amortiza
Slide 15: March 2016 Quarter Non-GAAP Guidance
March 2016 Quarter Non-GAAP Guidance Mar’16 Guidance Shipments $1.430 billion ± $75 million Revenue $1.300 billion ± $75 million Non-GAAP Gross Margin 44.0% ± 1% Non-GAAP Operating Margin 17.0% ± 1% Non-GAAP Earnings per Share(1) $1.07 ± $0.10 (1) Based on a share count of ~172.5 million shares. Lam
Slide 16: Questions & Answers
Questions & Answers Lam Research Corp. | 1.27.2016 16
Slide 17: Innovative Technology, Trusted Productivity, Fast Solutions
AA INNOVATIVE TECHNOLOGY TRUSTED PRODUCTIVITY FAST SOLUTIONS Alam ‘XN
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 (unaudited) Three Months Ended December 27, September 27, 2015 2015 U.S. GAAP gross margin $ 626,510 $ 722,363 Pre-tax non-GAA
Slide 19: 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 (unaudited) Twelve Months Ended December 27, December 28, 2015 2014 U.S. GAAP gross margin $ 2,591,013 $ 2,130,030 Pre-tax non
Slide 20: 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 December 27, September 27, 2015 2015 U.S. GAAP net income $ 222,9
Slide 21: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. 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) Twelve Months Ended December 27, December 28, 2015 2014 U.S. GAAP net income $ 849,215 $ 715,812 Pre-tax no
Slide 22: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Other Expense, Net to Non-GAAP Other Expense, Net (in thousands) (unaudited) Three Months Ended December 27, September 27, 2015 2015 U.S. GAAP other expense, net $ (29,935) $ (27,121) Pre-tax non-GAAP items: Amortization of note discounts 9,258 9
Slide 23: 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 27, September 27, 2015 2015 U.S. GAAP income before income taxes $ 208,899 $ 308,307 U.S. GAAP income tax expense $ (14,081) $
Slide 24: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP to Non-GAAP Guidance for the March 2016 Quarter (unaudited) Reconciling GAAP Items Non-GAAP Shipments $1.43 Billion +/- $75 Million - $1.43 Billion +/- $75 Million Revenue $1.30 Billion +/- $75 Million - $1.30 Billion +/- $75 Million Gross margin
Slide 25: Appendix – Reconciliation
Appendix – Reconciliation LAM RESEARCH CORPORATION RECONCILIATION OF DEFERRED REVENUE (in millions) (unaudited) Three Three Months Months Ended Ended December 27, September 27, 2015 2015 Beginning Balance $ 517.4 $ 518.1 Shipments 1,287.9 1,579.3 Revenue (1,425.5) (1,600.0) Net Change in Japan (1) 3
Slide 26: Innovative Technology, Trusted Productivity, Fast Solutions
AA INNOVATIVE TECHNOLOGY TRUSTED PRODUCTIVITY FAST SOLUTIONS Alam ‘XN