Lam Research (LRCX) posted an impressive performance in fiscal Q3 2025, showcasing solid momentum across its business despite external headwinds. Revenue rose to $4.72 billion, marking an 8% sequential increase and a significant jump from $3.79 billion a year ago. This growth was accompanied by notable improvements in profitability. The company’s GAAP gross margin expanded to 49.0%, up 160 basis points from the prior quarter, while GAAP operating income climbed to $1.56 billion, or 33.1% of revenue, reflecting a 260 basis point margin improvement.

Earnings followed suit, with GAAP net income rising to $1.33 billion, translating to $1.03 per diluted share, a 12% increase quarter-over-quarter. On a non-GAAP basis, EPS grew 14% to $1.04, underscoring efficient execution and operational leverage. Notably, while cash and equivalents declined slightly to $5.45 billion, the reduction stemmed from capital returns, debt repayment, and ongoing investments.

Lam’s strength was most evident in its Systems revenue, which rose to $3.04 billion from $2.63 billion in Q2, reflecting continued demand for advanced semiconductor manufacturing tools. While Customer Support-related revenue ticked down to $1.68 billion, the company’s expanding installed base and focus on upgrades remain strong counterbalances.

Geographically, China led the revenue mix at 31%, followed by Korea and Taiwan at 24% each, highlighting the strategic importance of Asia in Lam’s growth. Operationally, the company continues to benefit from margin expansion driven by its Malaysia facility ramp-up and increased demand for deposition and etch products, particularly in gate-all-around nodes, NAND transitions, and advanced packaging.

Despite regulatory uncertainties in China—which are expected to reduce 2025 revenue by approximately $700 million—Lam remains optimistic, projecting continued outperformance relative to the broader semiconductor market. For Q4 2025, the company expects revenue of $5.00 billion ± $300 million, with gross margins around 49.5% and EPS guidance of $1.20 ± $0.10.

In summary, Lam Research delivered a robust third quarter with broad-based financial strength, strategic product demand, and improving margins—positioning it well to navigate near-term challenges while capitalizing on long-term technology trends.