Lam Research posts a modest earnings beat; next-quarter EPS guidance matches consensus

How large was the beat in the quarter ending in September?

Lam Research reported revenue of 8.219 billion dollars for the quarter ending in September 2026, about 0.95% above market consensus; non-GAAP EPS was 2.20 dollars, 0.02 dollars, or about 1%, above consensus.
Gross margin was 52.4% and operating margin was 40.2%, both 0.5 percentage points above market consensus. Revenue and gross margin also exceeded Evercore ISI’s prior expectations, supporting EPS above the firm’s forecast of 2.15 dollars.

The midpoint of the company’s revenue guidance for the quarter ending in December was 8.6 billion dollars, about 0.4% above market consensus and also above the 8.219 billion dollars recorded in the quarter ending in September; EPS guidance was 2.33 dollars, in line with consensus.
The company expects gross and operating margins of 52.5% and 40.5%, respectively, 0.95 and 0.65 percentage points above consensus. Despite the strong margin guidance, EPS guidance still only matched consensus.
The report said the stock fell about 5% in after-hours trading after the modest earnings beat and in-line guidance were announced; Evercore ISI believes this is consistent with its earlier view to “wait before adding to positions” and its assessment that the semiconductor cycle has entered a late stage.

China was the largest source of revenue in the quarter ending in September, accounting for 35% of total revenue, with revenue from the region rising 65% quarter over quarter; South Korea accounted for 20%, with revenue rising 22% quarter over quarter. Taiwan accounted for 18%, but its revenue fell 18% quarter over quarter, contrasting with China’s growth.
Evercore ISI lists exposure to China and potential trade restrictions as risks. The firm maintained its Outperform rating and 315 dollar price target, based on a price-to-earnings multiple of 24 times calendar-year 2028 EPS, discounted back to 2027.