Lam Research (LRCX): Sales rise 54% and profit per share rises 77% as chipmakers keep buying machines

Lam Research, the US company that makes the machines chipmakers use to build computer chips, reported sales of $8.22bn for the three months to 27 September 2026, up 54% on a year earlier. Profit per share rose 77% to $2.19, and the company's own forecast for the next quarter was $8.60bn of sales, give or take $400m.

What happened

On 21 October 2026, Lam Research published results for its first fiscal quarter of 2027, the three months ended 27 September 2026, and filed them with the US Securities and Exchange Commission (SEC) on Form 8-K, the form used to report major events. Unless we say otherwise, figures are in US dollars and follow US accounting rules (GAAP). Sales were $8,219m, profit (net income) was $2,753m and profit per share was $2.19. The chief executive, Tim Archer, said that "with AI driving higher semiconductor demand and greater device complexity", operational execution helped Lam deliver record sales, profit and profit per share. Lam sells equipment that deposits and etches (carves) the microscopic layers of a chip, plus spare parts and servicing for machines already installed.

Independent coverage from Investing.com put the average analyst expectation at about $8.13bn of sales and $2.18 of adjusted profit per share, so the result was slightly above those estimates. Those are analysts' estimates, not facts reported by the company. For the December quarter, Lam forecast sales of $8.60bn plus or minus $400m, a gross margin of 52.5% plus or minus one percentage point, and profit per share of $2.33 plus or minus $0.15. That is the company's own forecast, not a result. Investing.com cited analyst averages of about $8.54bn and $2.32 for that quarter.

The numbers, explained

Start with sales. Sales of $8,219m compare with $5,324m a year earlier: 8,219 / 5,324 = 1.544, so sales rose 54.4%. Against the previous quarter, which was $6,722m, the rise is 8,219 / 6,722 = 1.223, or 22.3%. Profit grew faster still. Net income rose from $1,569m to $2,753m, up 75.5% (2,753 / 1,569 = 1.755). Profit per share rose from $1.24 to $2.19, up 76.6% (2.19 / 1.24 = 1.766). Lam also reports adjusted (non-GAAP) figures that leave out a few small items; its adjusted profit per share was $2.20, so the two measures are almost identical this quarter.

The company kept more of each dollar as profit. Gross margin, the share of sales left after the direct cost of making and servicing the machines, was 52.3% ($4,299m / $8,219m), against 50.4% a year ago. Operating margin, the share left after running costs such as research and sales, was 40.0% ($3,284m / $8,219m), up from 34.4% a year ago and 37.4% last quarter (our calculation from the filing's figures). Because many of Lam's costs do not rise in step with sales, a 54% rise in sales produced an 80% rise in operating profit, from $1,829m to $3,284m.

The split by business matters. Systems, meaning new machines, brought in $5,733m, up from $3,548m a year ago (+61.6%) and from $4,250m last quarter (+34.9%), so about 70% of sales (5,733 / 8,219). Customer support, which covers spare parts, upgrades and servicing, brought in $2,487m, up 40.0% on a year ago but only 0.6% on last quarter. Cash from operations was $3,498m, against $1,779m a year ago, and spending on equipment was $258m, leaving about $3.24bn after that spending (our calculation). Lam returned about $1.35bn to shareholders: $1,025m of share buybacks plus $325m of dividends. It declared a dividend of $0.33 a share, up from $0.26 (+26.9%).

Why it matters

Lam earns its money by selling machines to the companies that make chips, and by servicing those machines for years afterwards. When chipmakers build or expand factories, orders for new machines rise first; the servicing income follows because every installed machine needs parts and upgrades. This quarter's jump in new-machine sales suggests that chipmakers are spending more on factories. Mr Archer linked this to artificial-intelligence demand and to chips becoming more complex to build, which means more production steps per chip and so more machines.

The regional split shows where the machines are going. China was 35% of sales, Korea 20%, Taiwan 18%, Japan 9%, the United States 8%, Southeast Asia 6% and Europe 4%. Applying 35% to $8.22bn gives roughly $2.9bn from China, though the percentages are rounded so that is only an approximation. The release does not say which customers placed the orders.

What to watch next

The next facts to check are Lam's own December quarter results, which will show whether sales landed within its forecast range of $8.2bn to $9.0bn. We have not seen a confirmed date for that release, so we do not state one. Lam's quarterly report on Form 10-Q, filed with the SEC, will carry more detail on customers, stock levels and risks than the press release. We leave out the share-price reaction because it came from a single source and the sources we read gave an unclear picture.

• Etch and deposition: steps in chipmaking that carve away or add thin layers of material on a silicon wafer
• Systems revenue: sales of new machines. Customer support revenue: spare parts, upgrades and servicing
• Operating margin: operating profit as a share of sales
• GAAP: US accounting rules. Non-GAAP: adjusted figures that leave out some items

Sources

• Lam Research Q1 fiscal 2027 results, Form 8-K Exhibit 99.1 (SEC, primary)
• Lam Research tops first-quarter targets and issues upbeat guidance (Investing.com)
• Is Lam Research Overvalued Despite Q3 Earnings Beat? (GuruFocus)
• Lam Research Corporation Reports Financial Results for the Quarter Ended September 27, 2026 (copy of press release)