Q4 FY2026 Results (Quarter Ended June 30, 2026)
- Revenue: $6.722B — vs ~$6.0B estimate | +29.99% YoY | +15.1% QoQ
- EPS: $1.81 | +34.07% YoY vs $1.35 in Q4 FY2025
- Gross Profit: $3.479B — implied gross margin of ~51.75%
- Operating Income: $2.513B
- Net Income: $2.277B
The beat was not marginal. $720M above consensus in a single quarter for a capital equipment company is a significant upside surprise. It tells you that either the NAND recovery is running faster than buy-side models estimated, or AI-driven HBM and logic fab demand is pulling forward equipment orders that were expected in FY2027. Most likely both.
Growth Rate Accelerated — That's the Story
The pre-earnings analysis flagged whether the growth rate could hold above 20%. It didn't just hold — it accelerated:
| Quarter | Revenue | YoY Growth |
|---|---|---|
| Q1 FY2026 (Sep '25) | $5.324B | +27.74% |
| Q2 FY2026 (Dec '25) | $5.345B | +22.14% |
| Q3 FY2026 (Mar '26) | $5.841B | +23.76% |
| Q4 FY2026 (Jun '26) | $6.722B | +29.99% |
Revenue growth going from 23.76% in Q3 to 29.99% in Q4 — re-accelerating into the back half of the fiscal year — invalidates the bear case that the equipment cycle is peaking. If the cycle were peaking, growth would be decelerating, not accelerating. What you're seeing instead is a fab buildout that is running at full speed without signs of a near-term pause.
FY2026 Full Year — The Completed Picture
- FY2026 Revenue: $23.233B — +26.02% vs FY2025's $18.436B
- FY2026 EPS: $5.76 — +38.80% YoY
- Gross Margin: 50.47% — first full year above 50%; Q4 alone hit ~51.75%
- Operating Margin: 35.29% — up from 32.01% in FY2025
- Free Cash Flow: $4.891B — solid, slightly down from $5.414B in FY2025 due to higher CapEx
- Net Cash: $1.845B
Gross margin above 50% is the margin milestone we flagged as approaching in the pre-earnings analysis. It's now confirmed — for the full fiscal year, not just one quarter. A capital equipment company running at 50%+ gross margins reflects the deep switching cost moat we described: when a fab is built around Lam etch tools, competitors aren't getting a chance to bid on the next fab. The economics of that lock-in show up here.
FCF of $4.891B is slightly below FY2025's $5.414B not because the business is weakening — operating cash flow was $5.858B — but because CapEx stepped up from $759M to $966M as Lam invests in its own capacity. That's a good problem to have.
What the Stock Did and Why
LRCX dropped 6.4% during the regular session on July 29, closing at $252.35 — below the pre-earnings "add zone" we described at $265–$275. The day session decline was pre-earnings risk-off, not a reaction to results. Then the Q4 print came after the close: +6.24% in after-hours to $268.10. The two-day net result for holders who entered our recommended range of $290–$300 on July 27 was a loss on the position. The thesis, however, is intact.
The post-earnings AH level of $268 is below the $290–$300 entry from two days ago. For anyone watching: this is the add zone. The analysis on July 27 identified $265–$275 as the add level on a disappointment flush. Q4 was the opposite of a disappointment. If AH holds and opens near $268–$275, that's a better entry than $298 was two days ago on the same thesis.
What to Watch From Here
The immediate question is FY2027 guidance. Management typically provides initial annual guidance on the Q4 call, and with FY2026 coming in at $23.233B against the FY2027 consensus estimate of ~$31B (+33.6%), the market will be calibrating whether that estimate is achievable or aggressive. A $31B FY2027 requires roughly $7.75B per quarter on average — achievable at Q4's $6.72B pace only if the growth trajectory continues to climb through 2027.
The three variables that determine whether $31B is realistic:
- NAND recovery velocity — if memory manufacturers continue expanding capex into 2027, Lam's order book fills ahead of schedule
- China exposure — ~30% of Lam's revenue comes from China; any new export control action is an immediate revenue headwind
- HBM demand persistence — AI data center buildout requires HBM; Lam equipment is required to make HBM; if AI spending stays aggressive, Lam's order pipeline stays full
Updated Position Framework
- Current price (AH): $268.10 — improved entry vs $298 pre-earnings
- Entry zone (now): $255–$270 — better risk/reward than the pre-earnings read
- Add zone: $235–$250 if any gap-down at open reverses the AH move
- Trim zone: $320–$340 — toward analyst consensus, depends on FY2027 guide
- Target: $368 (analyst avg PT) to $435 (UBS bull case) — unchanged from pre-earnings, now more credible
- Invalidation: FY2027 guidance comes in below $26B (signals management sees demand softening), or China export restrictions tighten materially
- Thesis: The Q4 beat validates the NAND + HBM dual-tailwind thesis. This isn't a pre-earnings spec anymore — it's a post-earnings confirmation with a better entry price.
The setup two days ago was "binary and uncertain." The Q4 result was unambiguously strong. The stock now sits at a better price with a confirmed operating trajectory. For anyone who stayed on the sidelines before earnings, the AH entry is the cleaner trade.