Lam Research Corporation · NASDAQ:LRCX
Lam Research — Q3 2018 Earnings Presentation
22 slides from Lam Research's earnings presentation, Oct 16, 2018
Slide 1: September Quarter 2018 Financial Results
Lam Research Corporation September Quarter 2018 Financial Results October 16, 2018 © 2018 Lam Research Corp. | 10.16.2018 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 Chief Executive Officer © 2018 Lam Research Corp. | 10.16.2018 3
Slide 4: September Quarter Performance
September Quarter Performance ► Revenues of $2.3 billion, operating income of $630 million*, and EPS of $3.36* ► Revenues, gross margin, and EPS all exceeded the mid- point of our guidance ► Near-term outlook consistent with July commentary *Data are presented on a non-GAAP basis. Reconciliations of
Slide 5: Rational Industry Behavior
Rational Industry Behavior ► Strength in long-term drivers for data economy enablement from the world of silicon ► 2018 WFE expectations are up slightly year over year ► Compelling opportunities for Lam’s strength in Etch and Deposition Committed to investment and innovation for the success of our c
Slide 6: Product Differentiation and Growing Strategic Relevance
Product Differentiation and Growing Strategic Relevance ► Deposition Key penetrations of new films for patterning, new specialty applications, and deeper partnership models for 3D NAND ► Etch Continued to strengthen our leading capabilities in high aspect ratio applications for 3D NAND scaling E
Slide 7: CSBG – Installed-Base Units 5-Year Growth
CSBG – Installed-Base Units 5-Year Growth 60,000 ~56,000 ~50,000 50,000 ~44,000 ~40,000 40,000 ~36,000 30,000 20,000 10,000 0 2014 2015 2016 2017 2018E Continued strength in installed-base unit growth © 2018 Lam Research Corp. | 10.16.2018 7
Slide 8: September Quarter 2018 Financial Results and December Quarter 2018 Outlook
September Quarter 2018 Financial Results and December Quarter 2018 Outlook Doug Bettinger Executive Vice President & Chief Financial Officer © 2018 Lam Research Corp. | 10.16.2018 8
Slide 9: September Quarter Results
September Quarter Results ► Operating margin and EPS at the high-end of guidance range ► Discipline in our spending during a decline in industry capital equipment investments Revenue Earnings per Share* $5.31 $3.1 $ Billions $2.3 $3.36 $ QJun'18 QSep'18 QJun'18 QSep'18 Strong Execution in QSep’18 *D
Slide 10: September Quarter Revenue Mix
September Quarter Revenue Mix ► Combined memory segment is 77% of total systems revenue System Revenue Segments Revenue by Region Europe U.S. 4% Logic/Other 5% 6% Foundry SEA Japan 17% 9% 29% NVM 51% Memory Taiwan 12% 77% DRAM 26% Korea China 16% 25% © 2018 Lam Research Corp. | 10.16.2018 10
Slide 11: September Quarter Financial Results
September Quarter Financial Results Sep’18 Jun’18 Revenue $2,331M $3,126M Non-GAAP Gross Margin* 46.4% 48.0% Non-GAAP Operating Expenses* $451M $507M Non-GAAP Operating Income* $630M $994M Non-GAAP Operating Margin* 27.0% 31.8% Non-GAAP Other Income/(Expense)* $0.5M $4.8M Non-GAAP Tax Rate* 11.9% 6.
Slide 12: Key Balance Sheet and Financial Metrics
Key Balance Sheet and Financial Metrics Sep’18 Jun’18 Total Consolidated Gross Cash Balance $3,875M $5,206M Account Receivables, Net $1,847M $2,177M DSO 72 Days 63 Days Inventory Turns 2.7 3.5 Deferred Revenue* $626M $994M Capital Expenditures $56M $80M Equity Compensation Expense $50M $47M Amortiza
Slide 13: December 2018 Quarter Non-GAAP Guidance
December 2018 Quarter Non-GAAP Guidance Dec’18 Guidance Revenue $2.5 billion ± $150 million Non-GAAP Gross Margin 46% ± 1% Non-GAAP Operating Margin 27.5% ± 1% Non-GAAP Earnings per Share* $3.65 ± $0.20 A reconciliation of U.S. GAAP results to non-GAAP results can be found at the end of this present
Slide 14: Questions & Answers
Questions & Answers © 2018 Lam Research Corp. | 10.16.2018 14
Slide 15: Appendix - Reconciliation
Appendix - Reconciliation Reconciliation of U.S. GAAP Net Income to Non-GAAP Net Income (in thousands, except per share data) (unaudited) Three Months Ended September 23, June 24, 2018 2018 U.S. GAAP net income $ 533,360 $ 1,021,146 Pre-tax non-GAAP items: Amortization related to intangible assets a
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 23, June 24, 2018 2018 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 23, June 24, 2018 2018 U.S. GAAP Other (expense) income, net $ (377) $ 2,954 Pre-tax non-GAAP items: Amortization of note
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 23, June 24, 2018 2018 U.S. GAAP income before income taxes $ 591,374 $ 958,149 U.S. GAAP income tax expense (benefit) $ 58,01
Slide 19: Appendix - Reconciliation
Appendix - Reconciliation Reconciliation of U.S. GAAP to Non-GAAP Guidance for the December 2018 quarter U.S. GAAP Reconciling Items Non-GAAP Revenue $2.5 Billion +/- $150 Million — $2.5 Billion +/- $150 Million Gross margin 45.1% +/- 1% $ 22 Million 46.0% +/- 1% Operating margin 26.1% +/- 1% $ 34 M
Slide 20: Appendix - Reconciliation
Appendix - Reconciliation Reconciliation of U.S. GAAP Operating Expenses (in thousands) (unaudited) Twelve Months Ended December 23, 2018 (Projected) U.S. GAAP operating expenses for nine months ended September 23, 2018 $ 1,493,863 U.S. GAAP operating expense projected for three months ended Decembe
Slide 21: Appendix - Reconciliation
Appendix - Reconciliation Reconciliation of U.S. GAAP Dilutive Shares Outstanding (in thousands, except percentages) (unaudited) Three Months Ended December 23, 2018 December 24, (Projected) 2017 U.S. GAAP number of shares used for per diluted share calculation 163,000 161,135 Effect of potential di
Slide 22: VAA
VAA Innovative Technology Trusted Productivity Fast Solutions y NX