Oct 21, 2026 earnings call — Record revenue and margins; AI-driven demand
September quarter revenue was $8.22 billion, a record for the company.
Revenue $8.2B (est $8.1B) · EPS $2.20 (est $2.18)
Key quotes
"Underpinning our outlook for WFE growth is the continued rapid adoption of AI by enterprises and consumers."
"As a result, we now expect cumulative Aether-related revenue to reach approximately $2.5 billion by the end of the decade, roughly $1 billion above our prior expectations."
"We are actively working with our suppliers to accelerate their capacity expansion plans, and are confident Lam is well-positioned to deliver on the strong demand we see ahead."
Analyst Q&A 13
supply timing impact on December quarter
Q (Timothy Arcuri · UBS): Analyst asked if the higher payables imply a specific revenue shortfall in December and whether that lost revenue will return in March; also asked about Lam's position for 3D DRAM versus 4F².
A: Management would not give a specific dollar impact but said the revenue would have been a little higher absent timing and that items delayed from December should ship in the March quarter. On device architectures, management said etch and deposition intensity rises as devices go 3D and that could increase demand for their etch/deposition tools.
"In the script, I said it would have been a little bit higher." — Doug Bettinger (CFO)
supplier bottlenecks and NAND upgrade trend
Q (Melissa Weathers · Deutsche Bank): Analyst asked what actions Lam is taking to relieve supplier bottlenecks and whether Lam would co-invest; also asked where we are in the NAND upgrade cycle and SLC opportunities.
A: Management said they work closely with suppliers and would be open to investments if needed, but many suppliers are well-capitalized and they are managing the tightness. On NAND, they see remaining room in the upgrade cycle, expect finishing the current upgrade in 2027, and noted NAND is fragmenting into specialized devices (including SLC) that can raise wafer capacity demand and equipment intensity.
"If we needed to make some level investments, we'd be open to that." — Doug Bettinger (CFO)
are December revenues one-offs and China mix
Q (Krish Sankar · TD Cowen): Analyst asked if Q4 has any one-time or episodic revenues making WFE look larger, and asked for detail on the China revenue mix change.
A: Management said there are no one-off or episodic revenues in the December quarter; results reflect normal customer demand and were slightly reduced by supply constraints. They expect China percent of revenue to be meaningfully down in December, driven by weaker domestic Chinese customers while multinationals in China remain reasonably strong.
"No, there is nothing unique or one-off or episodic, to use your word, in the December quarter." — Doug Bettinger (CFO)
drivers of CSBG growth and margins
Q (Harlan Sur · JPMorgan): Analyst wanted rank order of CSBG growth drivers (spares, upgrades, Reliant, Equipment Intelligence) and asked how much CSBG operating margins rose year-over-year; also asked about mature node growth outside China.
A: Management said Equipment Intelligence and service innovations are new and exciting drivers, but spares remain the biggest single component. They will not give specific subcomponent numbers. For mature node spending outside China, management does not expect meaningful growth this year but expects it to be stronger next year.
"I have always said spares is the biggest individual component, and that continues to be true." — Doug Bettinger (CFO)
drivers of systems outperformance and gross margin outlook
Q (Srini Pajjuri · RBC): Analyst asked what is driving Lam's systems outgrowth versus WFE next year (which end markets or products) and how to think about gross margins as China normalizes and with pricing/cost actions.
A: Management said the main driver is rising etch and deposition intensity across devices, with strong exposure in advanced packaging, foundry logic, and DRAM products helping outperformance; NAND's full potential is still emerging. On gross margins, they see near-term variability but expect an opportunity to expand gross margin into the mid-50s over several years, driven by new products, closer-to-customer manufacturing, and pricing improvements.
"We did suggest over the next several years, we see an opportunity to expand gross margin in the mid-50s." — Doug Bettinger (CFO)
what raised WFE outlook and buyback details
Q (Vivek Arya · BofA): Analyst asked what allowed Lam to raise WFE expectations through the year and what constraints could be resolved to exceed industry growth; also asked for details on the accelerated repurchase (ASR) and buyback magnitude/timing.
A: Management said customers squeezed more capacity from clean rooms and pulled projects forward, which raised WFE; their 'more than 200' outlook is an early starting point to be refined next quarter. On the ASR, they described how ASRs deliver shares up front and execute over time, said the ASR will continue to execute in December, and reiterated intent to return 85% of free cash flow to shareholders.
"it is going to continue to execute in December, and then we will likely be doing other things in the market relative to the buyback, right?" — Doug Bettinger (CFO)
panel-level packaging ramp and logic vs DRAM outlook
Q (Atif Malik · Citi): Analyst asked for more detail on panel-level packaging ramp, whether products are same as wafer-level (Sabre), and whether the gap between DRAM and foundry logic WFE expectations narrowed.
A: Management said panel-level packaging is similar at a process level and they have invested in panel for several years, but the industry is still in early stages with wafer-level packaging predominant; shipments to 20+ customers are planting seeds for future growth. On the DRAM vs foundry gap, management said the relative expectations have not changed and they were already aware of announced projects.
"So we saw that quite a while ago, and we have been investing in panel for several years." — Tim Archer (CEO)
factors that could change WFE outlook
Q (James Schneider · Goldman Sachs): Analyst asked which moving pieces could make the 2027 WFE outlook higher or lower — customer spending plans versus clean room availability.
A: Management pointed to 10 new tier I fabs coming online next year that will layer in over time and noted this year was primarily clean-room constrained; they emphasized the need to balance equipment supply, clean room schedules, hiring, and supplier constraints when forecasting WFE. They also said they'll have better clarity by the January call to refine the outlook.
"When we look in the next year, we see 10 new tier I fabs coming online between the beginning of the year and the end of the year, and they will layer in over time." — Doug Bettinger (CFO)
unconstrained demand and NAND upgrades vs services
Q (Stacy Rasgon · Bernstein): Analyst asked if Lam has an estimate of unconstrained WFE demand versus the constrained >$200 billion number, and whether NAND upgrades drove NAND growth while CSBG was flat.
A: Management said demand would be higher than the constrained number but would not give a specific unconstrained figure and will refine estimates next quarter. Regarding NAND and CSBG, they said upgrades are part of NAND and CSBG and that new equipment purchases also contributed to NAND growth; both upgrades and new equipment were meaningful contributors.
"I am not going to put a number on what the unconstrained demand would be." — Doug Bettinger (CFO)
SLC transition and advanced packaging growth
Q (Blayne Curtis · Jefferies): Analyst asked whether SLC transition is being seen from customers and for an update on advanced packaging growth next year relative to the $200 billion outlook.
A: Management said SLC and customizing storage hierarchy for workloads is being discussed by customers and is becoming understood, which could increase wafer capacity needs and equipment intensity. On advanced packaging, management reiterated that 70% growth for this year remains the right number and said they expect advanced packaging to grow nicely next year.
"Fundamentally, this idea of customizing memory and storage hierarchy to the different workloads, I think is now pretty well understood." — Tim Archer (CEO)
hybrid bonding and Lam's role in advanced packaging
Q (Shane Brett · Morgan Stanley): Analyst asked how Lam enables hybrid bonding adoption at scale and whether more hybrid bonding helps Lam's advanced packaging share.
A: Management said Lam participates in process elements that enable hybrid bonding through films and etch/deposition work, though they do not perform the bonding themselves. They view success in advanced packaging — hybrid bonding or other approaches — as positive given Lam's high share and because these processes are etch/deposition intensive.
"We participate in the elements of the process that help enable hybrid bonding." — Tim Archer (CEO)
how much market might move to SLC and packaging sizing
Q (Vijay Rakesh): Analyst asked what percent of the market might move to SLC next year and asked if Lam can size the opportunity from CoWoS/EMIB-T wafer volumes for Lam.
A: Management said it is too early for them to comment on what percent of the market will move to SLC and that customers should comment on those shares; they did say Lam's equipment intensity would rise if SLC adoption increases. On sizing CoWoS/EMIB-T opportunity, management said they are not prepared to size that today and will take it as an action to work on.
"I think it is too early for us to make any comment on that, and it would be probably something our customers should actually be commenting on." — Tim Archer (CEO)
inventory level and Aether revenue increase reason
Q (Brian Chin · Stifel): Analyst asked where Lam would ideally like days of inventory and whether they are comfortable at current turns; also asked whether the $1 billion Aether revenue increase reflects new customer additions or pulled-forward timing.
A: Management said they are comfortable with current inventory turns and are building inventory now in anticipation of growing demand into next year, noting efficiencies as the company scales. For Aether, they said the increase is a mix of additional customer adoptions and growing volumes where they are in production (POR) for fast-growing markets like HBM.
"As the company scales up, you do get some level of efficiency offsetting that, though, right now we are trying to build inventory in anticipation of the growing demand we see into the next year." — Doug Bettinger (CFO)