Lam Research LRCX · USD

Segment, Geographic Information, and Major CustomersThe Company operates in one reportable business segment: manufacturing and servicing of wafer processing semiconductor manufacturing equipment. The Company’s material operating segments qualify for aggregation due to their customer base and similarities in economic characteristics, nature of products and services, and processes for procurement, manufacturing, and distribution. The Company's chief operating decision maker (“CODM”) is the Company's Chief Executive Officer.The Company's CODM utilizes segment gross margin as the measure of profit or loss to evaluate operating segment profitability and to assess the allocation of resources. Segment gross margin excludes both routine and non-routine expenses that are not allocated to the reportable segment, including, but not limited to, amortization of intangible assets acquired in certain business combinations, the change in value of the Company's elective deferred compensation-related liability, restructuring charges, impairment of long-lived assets, and transformational charges. Segment results are derived from the Company's internal management reporting system utilizing policies that are substantially the same as those used for external reporting purposes. The CODM utilizes segment revenue growth in conjunction with segment gross margin metrics in comparing forecast to actual results as well as in benchmarking to the Company's peer group.The Company's centralized manufacturing and support organizations, including global operations and certain administrative functions, provide support to its operating segments. Costs incurred by these organizations, as well as depreciation and amortization and equity-based compensation expense are allocated to cost of goods sold as overhead. Consequently, depreciation and amortization and equity-based compensation expense are not independently identifiable components within the segment’s results, and, therefore are not provided.With the exception of goodwill, the Company does not identify assets by operating segment. Consequently, the CODM does not regularly review or receive discrete asset information by operating segment.

RevenueDisaggregation of RevenueThe following table presents the Company’s revenue disaggregated between systems and customer-support related revenue:Year EndedJune 29,2025June 30,2024June 25,2023(in thousands)Systems Revenue$11,491,280 $8,921,643 $10,695,897 Customer support-related revenue and other6,944,311 5,983,743 6,732,619 $18,435,591 $14,905,386 $17,428,516 Systems revenue includes sales of new leading-edge equipment in deposition, etch, clean and other water fabrication markets.Customer support-related revenue includes sales of customer service, spares, upgrades, and non-leading-edge equipment from the Company’s Reliant® product line.The Company operates in one reportable business segment: manufacturing and servicing of wafer processing semiconductor manufacturing equipment. Refer to Note 19: Segment, Geographic Information, and Major Customers for additional information regarding the Company’s evaluation of reportable business segments and the disaggregation of revenue by the geographic regions in which the Company operates.Additionally, the Company serves three primary markets: memory, foundry, and logic/integrated device manufacturing. The following table presents the percentages of leading- and non-leading-edge equipment and upgrade revenue to each of the primary markets the Company serves:Year EndedJune 29,2025June 30,2024June 25,2023Foundry45 %40 %38 %Memory42 %42 %42 %Logic/integrated device manufacturing13 %18 %20 %Deferred Revenue Revenue of $988.8 million included in deferred profit at June 30, 2024 was recognized during fiscal year 2025, representing 64% of the $1,551.6 million of deferred revenue as of June 30, 2024.The following table summarizes the transaction price for contracts that have not yet been recognized as revenue as of June 29, 2025 and when the Company expects to recognize the amounts as revenue:Less than 1 Year1-3 YearsMore than 3 YearsTotal(in thousands)Deferred revenue$2,150,284 $449,095 (1)$81,680 (1)$2,681,059 (1) This amount is reported in Deferred profit on the Company's Consolidated Balance Sheets as the customers can demand the performance to be satisfied at any time.

Commitments and Contingencies The Company has certain obligations to make future payments under various contracts; some of these are recorded on its balance sheet and some are not. Obligations that are recorded on the Company’s balance sheet include the Company’s operating and finance lease obligations. Obligations that are not recorded on the Company’s balance sheet include contractual relationships for purchase obligations and certain guarantees. The Company’s commitments relating to off-balance sheet agreements are included in the tables below. These amounts exclude $635.4 million of liabilities related to uncertain tax positions (see Note 7: Income Taxes for further discussion) as of the end of the fiscal year because the Company is unable to reasonably estimate the ultimate amount or time of settlement. Other GuaranteesThe Company has issued certain indemnifications to its lessors for taxes and general liability under some of its agreements. The Company has entered into insurance contracts that are intended to limit its exposure to such indemnifications. As of June 29, 2025, the Company had not recorded any liability on its Consolidated Financial Statements in connection with these indemnifications, as it does not believe that it is probable that any material amounts will be paid under these guarantees.Generally, the Company indemnifies, under pre-determined conditions and limitations, its customers for infringement of third-party intellectual property rights by the Company’s products or services. The Company seeks to limit its liability for such indemnity to an amount not to exceed the sales price of the products or services subject to its indemnification obligations. The Company does not believe that it is probable that any material amounts will be paid under these guarantees.The Company provides guarantees and standby letters of credit to certain parties as required for certain transactions initiated during the ordinary course of business. As of June 29, 2025, the maximum potential amount of future payments that the Company could be required to make under these arrangements and letters of credit was $218.8 million. The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid.

Long Term Debt and Other BorrowingsAs of June 29, 2025, and June 30, 2024, the Company’s outstanding debt consisted of the following:June 29, 2025June 30, 2024Amount (in thousands)Effective Interest RateAmount (in thousands)Effective Interest RateFixed-rate 3.80% Senior Notes Due March 15, 2025 (“2025 Notes”)$— 3.87 %$500,000 3.87 %Fixed-rate 3.75% Senior Notes Due March 15, 2026 ("2026 Notes")750,000 3.86 %750,000 3.86 %Fixed-rate 4.00% Senior Notes Due March 15, 2029 ("2029 Notes")1,000,000 4.09 %1,000,000 4.09 %Fixed-rate 1.90% Senior Note Due June 15, 2030 ("2030 Notes")750,000 2.01 %750,000 2.01 %Fixed-rate 4.875% Senior Notes Due March 15, 2049 ("2049 Notes")750,000 4.93 %750,000 4.93 %Fixed-rate 2.875% Senior Note Due June 15, 2050 ("2050 Notes")750,000 2.93 %750,000 2.93 %Fixed-rate 3.125% Senior Note Due June 15, 2060 ("2060 Notes")500,000 3.18 %500,000 3.18 %Total Senior Notes outstanding, at par4,500,000 5,000,000 Unamortized discount(26,428)(28,148)Unamortized bond issuance costs(4,774)(5,435)Other financing arrangements566 944 Total debt outstanding, at carrying value$4,469,364 $4,967,361 Reported as:Current portion of long-term debt$749,670 $501,316 Long-term debt$3,719,694 $4,466,045 The Company’s contractual cash obligations relating to its outstanding debt as of June 29, 2025, were as follows: Payments Due by Fiscal Year:PrincipalInterest (in thousands)2026$750,000 $147,922 2027— 128,000 2028— 128,000 20291,000,000 116,333 2030750,000 87,406 Thereafter2,000,000 1,582,474 Total$4,500,000 $2,190,135 Senior NotesOn May 5, 2020, the Company completed a public offering of $750 million aggregate principal amount of the Company’s Senior Notes due June 15, 2030 (the “2030 Notes”), $750 million aggregate principal amount of the Company’s Senior Notes due June 15, 2050 (the “2050 Notes”), and $500 million aggregate principal amount of the Company’s Senior Notes due June 15, 2060 (the “2060 Notes”). The Company pays interest at an annual rate of 1.90%, 2.875%, and 3.125%, on the 2030, 2050, and 2060 Notes, respectively, on a semi-annual basis on June 15 and December 15 of each year.On March 4, 2019, the Company completed a public offering of $750 million aggregate principal amount of the Company’s Senior Notes due March 15, 2026 (the “2026 Notes”), $1.

Income Taxes The components of income before income taxes were as follows:Year EndedJune 29,2025June 30,2024June 25,2023 (in thousands)United States$219,435 $282,736 $151,759 Foreign5,738,694 4,077,486 4,957,451 $5,958,129 $4,360,222 $5,109,210 Significant components of the provision (benefit) for income taxes attributable to income before income taxes were as follows:Year EndedJune 29,2025June 30,2024June 25,2023 (in thousands)Federal:Current$701,819 $566,106 $541,416 Deferred(372,783)(186,238)(136,178)329,036 379,868 405,238 State:Current22,979 20,081 32,082 Deferred12,448 (15,118)(2,813)35,427 4,963 29,269 Foreign:Current238,363 143,595 196,842 Deferred(2,914)4,024 (33,070)235,449 147,619 163,772 Total provision for income taxes$599,912 $532,450 $598,279 Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards. Significant components of the Company’s net deferred tax assets and liabilities were as follows:June 29,2025June 30,2024 (in thousands)Deferred tax assets:Tax carryforwards$431,533 $396,036 Allowances and reserves216,788 189,429 Equity-based compensation10,813 9,981 Inventory valuation differences61,484 64,135 Outside basis differences of foreign subsidiaries1,002,861 680,598 R&D capitalization96,594 75,196 Operating lease liabilities50,722 57,972 Intangible assets4,831 4,908 Other21,099 37,878 Gross deferred tax assets1,896,725 1,516,133 Valuation allowance(424,347)(389,315)Net deferred tax assets1,472,378 1,126,818 Deferred tax liabilities:Capital assets(129,145)(142,963)Amortization of goodwill(11,102)(11,287)Right-of-use assets(50,722)(57,337)Other(6,370)(6,596)Gross deferred tax liabilities(197,339)(218,183)Net deferred tax assets$1,275,039 $908,635 Realization of the Company’s net deferred tax assets is based upon the weighting of available evidence, including such factors as the recent earnings history and expected future taxable income. The Company believes it is more likely than not that such deferred tax assets will be realized with the exception of $424.3 million primarily related to California deferred tax assets. At June 29, 2025, the Company continued to record a valuation allowance to offset the entire California deferred tax asset balance due to the single sales factor apportionment resulting in lower taxable income in California.

LeasesThe Company leases certain office spaces, manufacturing and warehouse spaces, equipment, and vehicles. While the majority of the Company’s lease arrangements are operating leases, the Company has certain leases that qualify as finance leases.Variable lease payments are expensed as incurred and are not included within the right of use asset and lease liability calculation. Variable lease payments primarily include costs associated with the Company’s third-party logistics arrangements that contain one or more embedded leases. Variable lease costs will fluctuate based on factory output and material receipt volumes. Variable lease costs for fiscal years 2025, 2024, and 2023 were $176.6 million, $176.6 million, and $227.7 million; respectively. Finance lease costs, including amortization of right of use assets and interest on lease liabilities; short-term rental expense for agreements less than one year in duration; and operating lease costs were immaterial for fiscal years 2025, 2024, and 2023, respectively.Supplemental cash flow information related to leases was as follows as of June 29, 2025, June 30, 2024, and June 25, 2023:Year EndedJune 29,2025June 30,2024June 25,2023(in thousands)Cash paid for amounts included in the measurement of lease liabilities:Operating cash flows paid for operating leases$85,558 $97,447 $74,397 Financing cash flows paid for principal portion of finance leases4,059 255,695 14,985 Right-of-use assets obtained in exchange for lease obligations:Operating leases$81,011 $146,169 $91,592 Finance leases2,884 226,519 20,161 Supplemental balance sheet information related to leases was as follows as of June 29, 2025 and June 30, 2024:June 29,2025June 30,2024(in thousands)Operating leasesOther assets$286,980 $308,336 Accrued expenses and other current liabilities$78,707 $64,443 Other long-term liabilities193,343 223,273 Total operating lease liabilities$272,050 $287,716 As of June 29, 2025 and June 30, 2024 outstanding finance lease obligations were immaterial.June 29, 2025June 30, 2024Weighted-Average Remaining Lease TermWeighted-Average Discount RateWeighted-Average Remaining Lease TermWeighted-Average Discount Rate(in years)(in years)Operating leases4.93.75 %4.93.

We recognize the significant role of information security in safeguarding our valuable intellectual property along with the confidentiality, integrity and availability of the data of our customers, employees, and suppliers. We have implemented certain policies, procedures, and systems that are designed to identify and address material risks related to cybersecurity and cybersecurity incidents. We have a comprehensive enterprise risk management (“ERM”) program, which is implemented by management and overseen by our Board of Directors (“Board”). Our identification, assessment, and management of material risks from cybersecurity threats is integrated into the Company’s overall ERM system and processes. Our ERM program is designed to leverage existing management processes to (i) identify critical enterprise risks, including both information security and cybersecurity risks, (ii) design and implement appropriate risk mitigation strategies, and (iii) assess the status of risks and mitigation plans.

InventoriesInventories are stated at the lower of cost or net realizable value using standard costs that approximate actual costs on a first-in, first-out basis.