• Revenue: $16.2 billion for calendar year 2024; $4.38 billion for the December quarter, a 5% increase from the prior quarter.
• Diluted Earnings Per Share (EPS): $3.36 for calendar year 2024; $0.91 for the December quarter.
• Gross Margin: 48.2% for calendar year 2024; 47.5% for the December quarter.
• Operating Margin: 30.7% for the December quarter; 160 basis point improvement for calendar year 2024.
• CSBG Revenue: Increased 11% to $6.6 billion for calendar year 2024; $1.8 billion for the December quarter.
• Deferred Revenue: $2 billion at the end of the December quarter.
• Regional Revenue Composition: China 31%, Korea 25% for the December quarter.
• Capital Return: $650 million in share repurchases and $298 million in dividends for the December quarter; 98% of free cash flow returned in 2024.
• Cash and Short-term Investments: $5.7 billion at the end of the December quarter.
• Inventory: $4.4 billion at the end of the December quarter.
• Capital Expenditures: $188 million for the December quarter.
• Employee Count: Approximately 18,300 regular full-time employees at the end of the December quarter.
• Guidance for March 2025 Quarter: Revenue of $4.65 billion, Gross Margin of 48%, Operating Margin of 32%, EPS of $1.00.

• Warning! GuruFocus has detected 8 Warning Signs with CHRW.

Release Date: January 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lam Research Corp (NASDAQ:LRCX) reported strong financial results for the December 2024 quarter, with revenue, gross margin, operating margin, and EPS all exceeding guidance midpoints.
• The company achieved record highs in system revenues for both DRAM and Foundry Logic, demonstrating the strength of its product portfolio.
• Lam Research Corp (NASDAQ:LRCX) is well-positioned to benefit from technology inflections in AI applications, with shipments for gate-all-around nodes and advanced packaging expected to exceed $3 billion in 2025.
• Strategic investments in R&D and infrastructure have begun to yield important product advances, such as the Cryo 3.0 technology and Aether dry resist solution.
• The company delivered a 160 basis point improvement in operating margin for calendar year 2024, reflecting efficient scaling of operations and strategic investments.

Negative Points

• NAND spending remained at muted levels in 2024, impacting overall growth despite strong performance in other segments.
• The company faces headwinds from customer concentration, which may affect gross margins as the year progresses.
• Lam Research Corp (NASDAQ:LRCX) anticipates a $700 million impact from new regulations restricting sales to certain Chinese customers in 2025.
• Reliant product line within the Customer Support Business Group (CSBG) is expected to face headwinds due to reduced spending in mature nodes outside of China.
• The company expects its China revenue percentage to decrease in 2025 compared to 2024, due to geopolitical and regulatory challenges.

Q & A Highlights

Q: Can you speak about the gross margin guidance and the factors affecting it as you move through March and the rest of the year? A: Douglas Bettinger, CFO, explained that gross margins are expected to remain in a tight range, with potential headwinds from customer concentration. However, the Asia operation strategy is expected to offset some of these headwinds. He advised not to expect significant changes from the current levels.

Q: Can you provide any color on NAND spending for the year, and is it possible that it could double? A: Douglas Bettinger, CFO, noted that NAND spending will increase this year, though he is unsure if it will double. He mentioned that some NAND spending will occur in China with customers they cannot sell to, which might differ from other peers' perspectives. Leading-edge foundry is expected to be strong, and DRAM spending will remain robust.

Q: What is the impact of recent China export controls on Lam's business in 2025? A: Douglas Bettinger, CFO, stated that the new regulations restrict a handful of customers, impacting Lam's forecast by approximately $700 million. This revenue would have been slightly weighted towards the second half of 2025.

Q: How should we think about the split between systems and CSBG in March and how it evolves through the rest of the year? A: Douglas Bettinger, CFO, mentioned that while he won't provide specific details, there are headwinds in CSBG related to the Reliant grouping due to limited spending in mature nodes outside China. However, upgrades are expected to be strong, particularly in NAND, benefiting the upgrade product line within CSBG.

Q: Can you provide insights into the advanced packaging and high bandwidth memory growth profile for this year and beyond? A: Douglas Bettinger, CFO, indicated that advanced packaging revenue exceeded $1 billion in 2024 and is expected to grow in 2025. The growth is driven by transitions in HBM and advanced packaging technologies, such as moving from 2.5D to 3D structures.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.