Slide 1: June Quarter 2016 Financial Results
Lam Research Corporation June Quarter 2016 Financial Results July 27, 2016 © Lam Research Corp. | 7.27.2016 1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement 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 statemen
Slide 3: Business Review and Industry Outlook
Business Review and Industry Outlook Martin Anstice President & Chief Executive Officer © Lam Research Corp. | 7.27.2016 3
Slide 4: June Quarter Headlines and Outlook
June Quarter Headlines and Outlook Results reinforce increasingly strong presence in the industry ► Technology inflections continue to intensify around etch and deposition processes ► Higher share in complex, critical applications raises quality of earnings ► Expectations for performance in 2H’16 st
Slide 5: Inflections Enabling New Industry Growth Drivers
Inflections Enabling New Industry Growth Drivers Partnering to deliver innovative products & services at scale ► Focused on the success of our customers in achieving their business objectives ► Acceleration of industry application drivers such as virtual reality, artificial intelligence, connected a
Slide 6: Lam in Extraordinary Position
Lam in Extraordinary Position Positioned to drive innovation & capitalize on opportunities ► Enabling roadmaps supporting performance Lam SAM as % of WFE and cost objectives of our customers >30% ► Strategic relevance demonstrated by expansion of Lam’s SAM opportunity to 27.5% >30% of WFE in CY’15 2
Slide 7: Business Combination with KLA-Tencor
Business Combination with KLA-Tencor Value creation for our stakeholders ► Excitement and substance building, both internally and with our customers ► Targeting closure in the coming few months pending regulatory approvals ► Committed to innovate to the benefit of the overall semi ecosystem ► Enhanc
Slide 8: 2016 Industry Outlook
2016 Industry Outlook Memory Foundry & Logic Expect memory WFE of ~$15B Spend tracking better than prior expectations 3D NAND shipped capacity at the higher end of ~350k-400k Investments focused on WSPM range in CY’16 10 nm additions and 7 nm pilot capacity 50% of DRAM capacity 20 nm capab
Slide 9: June Quarter 2016 Financial Results and September Quarter 2016 Outlook
June Quarter 2016 Financial Results and September Quarter 2016 Outlook Doug Bettinger Executive Vice President & Chief Financial Officer © Lam Research Corp. | 7.27.2016 9
Slide 10: June Quarter and FY'16 Results
June Quarter and FY’16 Results Record financial performance in FY’16 ► QJun’16 above mid-point of guidance for all metrics ► Shipments, revenue, operating income,* and earnings per share* at an all-time high in FY’16 Shipments Revenue Earnings Per Share* $5.9 $5.9 $5.5 $5.3 $6.37 $5.05 $ Billions $
Slide 11: June Quarter Shipments
June Quarter Shipments QJun’16 shipments of $1.587 billion ► 10% increase compared to March quarter ► System shipments segment mix: Jun’16 Mar’16 Logic/Other Logic/Other 7% 7% Foundry Foundry 23% 27% Memory Memory NVM NVM 51% 66% 43% 70% DRAM DRAM 15% 27% © Lam Research Corp. | 7.27.2016 11
Slide 12: June Quarter Financial Results
June Quarter Financial Results Jun’16 Mar’16 Revenue $1,546M $1,314M Non-GAAP Gross Margin* 46.6% 45.1% Non-GAAP Operating Expenses* $361M $350M Non-GAAP Operating Income* $359M $242M Non-GAAP Operating Margin* 23.2% 18.4% Non-GAAP Other Income/(Expense)* ($9.0M) ($7.2M) Non-GAAP Tax Rate* 10% 14% G
Slide 13: Key Balance Sheet and Financial Metrics
Key Balance Sheet and Financial Metrics Jun’16 Mar’16 Total Consolidated Gross Cash Balance $7,078M $4,767M Account Receivables, Net $1,262M $1,237M DSO 74 Days 86 Days Inventory Turns 3.5 3.2 Deferred Revenue* $566M $511M Capital Expenditures $52M $46M Equity Compensation Expense $39M $35M Amortiza
Slide 14: September 2016 Quarter Non-GAAP Guidance
September 2016 Quarter Non-GAAP Guidance Sep’16 Guidance Shipments $1.700 billion ± $75 million Revenue $1.625 billion ± $75 million Non-GAAP Gross Margin 45.5% ± 1% Non-GAAP Operating Margin 22.5% ± 1% Non-GAAP Earnings per Share(1) $1.77 ± $0.10 (1) Based on a share count of ~176 million shares. ©
Slide 15: Questions & Answers
Questions & Answers © Lam Research Corp. | 7.27.2016 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 Operating Income (unaudited) Three Months Ended June 26, March 27, December 27, September 27, 2016 2016 2015 2015 U.S. GAAP gross margin $ 698,
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 June 26, March 27, 2016 2016 U.S. GAAP net income $ 258,939 $ 143
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 per share data) (unaudited) Year Ended June 26, June 28, 2016 2015 U.S. GAAP net income $ 914,049 $ 655,577 Pre-
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 June 26, March 27, 2016 2016 U.S. GAAP Other expense, net $ (27,249) $ (29,834) Pre-tax non-GAAP items: Amortization of note discounts 7,492 9,333 Amo
Slide 21: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Income Tax Rate to Non-GAAP Income Tax Rate (in thousands) (unaudited) Three Months Ended June 26, March 27, 2016 2016 U.S. GAAP income before income taxes $ 281,992 $ 160,919 U.S. GAAP income tax expense (benefit) $ 23,053 $ 17,468 U.S. GAAP inc
Slide 22: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP to Non-GAAP Guidance for the September 2016 Quarter (unaudited) Reconciling U.S. GAAP Items Non-GAAP Shipments $1.700 Billion +/- $75 Million — $1.700 Billion +/- $75 Million Revenue $1.625 Billion +/- $75 Million — $1.625 Billion +/- $75 Million
Slide 23: Appendix – Reconciliation
Appendix – Reconciliation LAM RESEARCH CORPORATION RECONCILIATION OF DEFERRED REVENUE (in millions) (unaudited) Three Months Three Months Ended Ended June 26, March 27, 2016 2016 Beginning Balance $ 510.7 $ 394.6 Shipments 1,587.4 1,446.0 Revenue (1,546.3) (1,314.1) Net Change in Japan (1) (11.0) (1
Slide 24: VAA
VAA INNOVATIVE TECHNOLOGY TRUSTED PRODUCTIVITY FAST SOLUTIONS Alam .