Slide 1: June Quarter 2017 Financial Results
Lam Research Corporation June Quarter 2017 Financial Results July 26, 2017 © 2017 Lam Research Corp. | 7.26.2017 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. | 7.26.2017 3
Slide 4: June Quarter and 1H CY'17 Performance
June Quarter and 1H CY’17 Performance ► Earnings per share* of $3.11 in QJun’17 ► Cumulative 1H CY’17 shipments of $4.96 billion ► Shipments, revenue, gross and operating margins*, and EPS* above the mid-point of guidance in QJun’17 Delivered another record quarter *Data are presented on a non-GAAP
Slide 5: Industry Strength Continues
Industry Strength Continues ► DRAM and NAND demand driving increased expectations for Lam’s CY’17 and CY’18 performance ► Memory supply/demand balance remains tight, with customers planning incremental higher capital spending ► 2017 WFE spending trending above our prior expectations; currently expec
Slide 6: Lam's Journey to Long-Term Sustainable, Profitable Growth
Lam’s Journey to Long-Term Sustainable, Profitable Growth Key Milestones: ► Built leading position in etch market share ► Transitioned into a multi-product and services company ► Identified and positioned ahead of key technology inflections ► Expanded SAM by 20 points to >35% WFE ► Solidified streng
Slide 7: Increased Strategic Relevance of Lam Products and Services
Increased Strategic Relevance of Lam Products and Services ► AI-driven data needs are leading to sustainably higher demand for memory spending ► Semi industry is embracing vertical scaling as the key driver of performance improvement ► Etch and deposition directly enable vertical scaling ► Lam has h
Slide 8: June Quarter 2017 Financial Results and September Quarter 2017 Outlook
June Quarter 2017 Financial Results and September Quarter 2017 Outlook Doug Bettinger Executive Vice President & Chief Financial Officer © 2017 Lam Research Corp. | 7.26.2017 8
Slide 9: June Quarter and FY'17 Results
June Quarter and FY’17 Results ► QJun’17 above mid-point of guidance for all metrics ► Shipments, revenue, cash from operations, gross margin dollars*, operating income dollars*, and earnings per share* at record levels in both QJun’17 and FY’17 Shipments Revenue Cash from Ops $8.6 $2.0 $8.0 $ Billi
Slide 10: June Quarter Shipments
June Quarter Shipments ► 5% increase compared to March quarter ► System shipments segment mix: Jun’17 Mar’17 Logic/Other Logic/Other 3% 5% Foundry Foundry 22% 24% NVM NVM Memory Memory 73% 50% 73% 59% DRAM DRAM 14% 23% QJun’17 shipments of $2.543 billion © 2017 Lam Research Corp. | 7.26.2017 10
Slide 11: June Quarter Financial Results
June Quarter Financial Results Jun’17 Mar’17 Revenue $2,345M $2,154M Non-GAAP Gross Margin* 46.5% 46.1% Non-GAAP Operating Expenses* $440M $414M Non-GAAP Operating Income* $650M $578M Non-GAAP Operating Margin* 27.7% 26.9% Non-GAAP Other Income/(Expense)* $1.2M ($2.2M) Non-GAAP Tax Rate* 13% 12% GAA
Slide 12: Key Balance Sheet and Financial Metrics
Key Balance Sheet and Financial Metrics Jun’17 Mar’17 Total Consolidated Gross Cash Balance $6,297M $6,140M Account Receivables, Net $1,673M $1,636M DSO 65 Days 69 Days Inventory Turns 4.1 4.2 Deferred Revenue* $966M $842M Capital Expenditures $35M $44M Equity Compensation Expense $44M $35M Amortiza
Slide 13: September 2017 Quarter Non-GAAP Guidance
September 2017 Quarter Non-GAAP Guidance Sep’17 Guidance Shipments $2.350 billion ± $100 million Revenue $2.450 billion ± $100 million Non-GAAP Gross Margin 46.5% ± 1% Non-GAAP Operating Margin 28.0% ± 1% Non-GAAP Earnings per Share* $3.25 ± $0.12 *Based on a share count of ~183 million shares. © 20
Slide 14: Questions & Answers
Questions & Answers © 2017 Lam Research Corp. | 7.26.2017 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 June 25, March 26, 2017 2017 U.S. GAAP net income $ 526,424 $ 57
Slide 16: 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) Twelve Months Ended June 25, June 26, 2017 2016 U.S. GAAP net income $ 1,697,763 $ 9
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 25, March 26, December 25, September 25, 2017 2017 2016 2016 U.S. GAAP gross margin $ 1,06
Slide 18: 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 June 25, March 26, 2017 2017 U.S. GAAP Other expense, net $ (4,444) $ (7,838) Pre-tax non-GAAP items: Amortization of note discounts
Slide 19: 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 25, March 26, 2017 2017 U.S. GAAP income before income taxes $ 603,495 $ 530,580 U.S. GAAP income tax expense (benefit) $ 77,071 $ (44,133) U.S. GAAP i
Slide 20: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP to Non-GAAP Guidance for the September 2017 quarter (unaudited) Reconciling U.S. GAAP Items Non-GAAP Shipments $2.35 Billion +/- $100 Million — $2.35 Billion +/- $100 Million Revenue $2.45 Billion +/- $100 Million — $2.45 Billion +/- $100 Million
Slide 21: Appendix – Reconciliation
Appendix – Reconciliation RECONCILIATION OF DEFERRED REVENUE (in millions) (unaudited) Three Months Ended June 25, March 26, 2017 2017 Beginning Balance $ 842.1 $ 672.6 Shipments 2,542.7 2,412.7 Revenue (2,344.9) (2,154.0) Net Change in Japan (1) (136.3) (131.2) Services & Other 62.4 42.0 Ending Bal
Slide 22: Innovative Trusted Fast
A Innovative Trusted Fast \4