Slide 1: March Quarter 2017 Financial Results
Lam Research Corporation March Quarter 2017 Financial Results April 18, 2017 © 2017 Lam Research Corp. | 4.18.2017 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. | 4.18.2017 3
Slide 4: March Quarter Performance
March Quarter Performance Continued opportunity for multi-year outperformance ► Successful scaling: $2.4B in March quarter shipments, up >40% from the average CY’16 level ► Record financial results — Shipments and revenue above the mid-point of guidance — Non-GAAP EPS above the guidance range ► Posi
Slide 5: Industry Outlook
Industry Outlook Strengthened outlook for CY’17 ► Momentum of investment levels in the segments we participate is net positive ► Capacity additions and technology conversion trends rational and strategic ► 3D NAND: total shipped capacity at the end of CY’17 ~50% of the installed base ► DRAM: double-
Slide 6: Headlines for Lam Research in 2017
Headlines for Lam Research in 2017 Expected to be best cash generation year yet this decade ► Investing in enabling technology, products, and services to support our customers ► Actively enhancing our competitive differentiation ► Confident in industry outperformance ► Committed to returning excess
Slide 7: March Quarter 2017 Financial Results and June Quarter 2017 Outlook
March Quarter 2017 Financial Results and June Quarter 2017 Outlook Doug Bettinger Executive Vice President & Chief Financial Officer © 2017 Lam Research Corp. | 4.18.2017 7
Slide 8: March Quarter Results
March Quarter Results A solid start to CY’17 ► Shipments, revenue, gross margin dollars*, operating income dollars*, and earnings per share* at record levels for QMar’17 ► Operating margin* and earnings per share* above guidance range Shipments Revenue EPS* $2.4 $2.80 $2.2 $1.9 $1.9 $2.24 $ Billions
Slide 9: March Quarter Shipments
March Quarter Shipments QMar’17 shipments of $2.413 billion ► 25% increase compared to December quarter ► System shipments segment mix: Mar’17 Dec’16 Logic/Other Logic/Other 3% 8% Foundry 24% NVM Memory Memory NVM Foundry 37% 73% 31% 61% 50% DRAM 23% DRAM 24% © 2017 Lam Research Corp. | 4.18.2017 9
Slide 10: March Quarter Financial Results
March Quarter Financial Results Mar’17 Dec’16 Revenue $2,154M $1,882M Non-GAAP Gross Margin* 46.1% 46.4% Non-GAAP Operating Expenses* $414M $384M Non-GAAP Operating Income* $578M $490M Non-GAAP Operating Margin* 26.9% 26.0% Non-GAAP Other Expense* ($2.2M) ($12.2M) Non-GAAP Tax Rate* 12% 15% GAAP Dil
Slide 11: Key Balance Sheet and Financial Metrics
Key Balance Sheet and Financial Metrics Mar’17 Dec’16 Total Consolidated Gross Cash Balance $6,140M $6,089M Account Receivables, Net $1,636M $1,426M DSO 69 Days 69 Days Inventory Turns 4.2 4.1 Deferred Revenue* $842M $673M Capital Expenditures $44M $37M Equity Compensation Expense $35M $32M Amortiza
Slide 12: June 2017 Quarter Non-GAAP Guidance
June 2017 Quarter Non-GAAP Guidance Jun’17 Guidance Shipments $2.500 billion ± $100 million Revenue $2.300 billion ± $100 million Non-GAAP Gross Margin 46.0% ± 1% Non-GAAP Operating Margin 27.0% ± 1% Non-GAAP Earnings per Share* $3.00 ± $0.12 *Based on a share count of ~180 million shares. © 2017 La
Slide 13: Questions & Answers
Questions & Answers © 2017 Lam Research Corp. | 4.18.2017 13
Slide 14: 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 March 26, December 25, 2017 2016 U.S. GAAP net income $ 574,713
Slide 15: 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 March 26, December 25, 2017 2016 U.S. GAAP gross margin $ 97
Slide 16: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP Other Expense, Net to Non-GAAP Other Expense, Net (in thousands) (unaudited) Three Months Ended March 26, December 25, 2017 2016 U.S. GAAP Other expense, net $ (7,838) $ (55,023) Pre-tax non-GAAP items: KLA-Tencor acquisition funding interest exp
Slide 17: 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 March 26, December 25, 2017 2016 U.S. GAAP income before income taxes 530,580 $ 384,805 U.S. GAAP income tax expense (benefit) (44,133)
Slide 18: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of U.S. GAAP to Non-GAAP Guidance for the June 2017 quarter (unaudited) Reconciling U.S. GAAP Items Non-GAAP Shipments $2.5 Billion +/- $100 Million — $2.5 Billion +/- $100 Million Revenue $2.3 Billion +/- $100 Million — $2.3 Billion +/- $100 Million Gross ma
Slide 19: Appendix – Reconciliation
Appendix – Reconciliation Reconciliation of Deferred Revenue (in millions) (unaudited) Three Months Ended March 26, December 25, 2017 2016 Beginning Balance $ 672.6 $ 704.3 Shipments 2,412.7 1,922.5 Revenue (2,154.0) (1,882.3) Net Change in Japan (1) (131.2) (63.7) Services & Other 42.0 (8.2) Ending
Slide 20: Innovative
A Innovative Trusted Fast § \g