Lam Research Posts Record September-Quarter Revenue and First 40% Operating Margin, but Shares Fall After Hours

SentiSense · Published Oct 21, 2026, 4:48 PM ET · Updated Oct 22, 2026, 1:01 PM ET

LRCX reported record revenue of $8.22 billion for the September quarter (fiscal Q1 2027), up 54% year over year, and its first operating margin above 40%: 40.0% GAAP and 40.2% non-GAAP. Non-GAAP EPS of $2.20 topped the $2.17 consensus. Management guided December-quarter revenue to $8.60 billion, plus or minus $0.40 billion, and lifted its cumulative Aether dry-resist revenue view by about $1 billion to roughly $2.5 billion by the end of the decade. Shares still fell after hours as the guide, trimmed by supply-chain constraints, came in only modestly above expectations.

LRCX delivered the strongest quarter in its history on Wednesday. Revenue for the September 2026 quarter, the first of fiscal 2027, reached $8.22 billion, up 22% from the June quarter and 54.4% from a year earlier. Systems revenue rose 61.6% to $5.73 billion and customer support-related revenue climbed 40% to $2.49 billion. Non-GAAP EPS of $2.20 beat the $2.17 consensus, and GAAP diluted EPS was $2.19.

Profitability was the headline. GAAP operating margin reached 40.0% and non-GAAP operating margin 40.2%, with gross margin at 52.3% GAAP and 52.4% non-GAAP. CFO Bettinger told analysts that operating margin "exceeded 40% for the first time in our history," and the CEO described the quarter as "record revenue, profit, and earnings per share". Management also said cumulative Aether dry-resist revenue should reach roughly $2.5 billion by the end of the decade, about $1 billion above its prior view, and that its Customer Support Business Group should grow more than 30% in 2026.

The stock went the other way. Shares fell in after-hours trading, with an early post on X putting the drop at 5%, after closing Wednesday's regular session at $260.81. The guide is the likely reason: December-quarter revenue of $8.60 billion, plus or minus $0.40 billion, and EPS of $2.33, plus or minus $0.15, sit only slightly above the consensus of about $8.54 billion and $2.32 cited by AskTraders. Bettinger said the outlook "would have been a bit higher if not for some near-term supply chain constraints," which push some shipments into the March quarter. The shares had already fallen 15.3% over the past month going into the report.

What to watch: whether the supply-chain constraints clear in time for the March quarter, how quickly Aether adoption converts into the higher revenue target, and whether the 40.5% operating margin midpoint in the December guide holds. Management framed calendar 2026 wafer fab equipment spending in the mid-$150 billion range with a preliminary 2027 view above $200 billion, the market Lam says it has outgrown for three straight years.

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