LRCX 10-Q filed 2026-10-22 | Key takeaways
LRCX filed its 10-Q; the most relevant disclosure change is added Accelerated share repurchase agreements: During the three months ended September 27, 2026, the Company entered into accelerated share repurchase agreements (the "September 2026 ASRs") with two financial institutions to repurchase a total of $1.00 billion of Common Stock. The Company took an initial d.
Key takeaways
Geographic shift: China revenue decreased to 35% from 43% in prior year Q1, while Korea increased to 20% from 15% and Europe increased to 4% from 2%.
Capital return: The company entered into $1.00 billion of September 2026 ASRs with two financial institutions, expected to settle in Q2 FY2027.
Dividend: Quarterly dividend increased to $0.33 per share from $0.26 per share in prior year Q1.
Effective tax rate: Increased to 16.9% from 15.6% in prior year Q1, driven by increase in Net Controlled Foreign Corporation Tested Income tax rate and change in level and proportion of income in higher and lower tax jurisdictions.
Cash position: Cash and cash equivalents increased to $7.44 billion at September 27, 2026 from $5.58 billion at June 28, 2026, driven by $3.50 billion cash from operating activities.
Key metrics
Disclosure changes
- Accelerated share repurchase agreements
During the three months ended September 27, 2026, the Company entered into accelerated share repurchase agreements (the "September 2026 ASRs") with two financial institutions to repurchase a total of $1.00 billion of Common Stock. The Company took an initial delivery of approximately 2.3 million shares, which represented 75% of the prepayment amount divided by the Company's closing stock price on the date of execution.
The $1.00 billion ASR program represents a significant capital return transaction that will reduce shares outstanding and is expected to fully settle in Q2 FY2027. - Effective tax rate
The effective tax rate was 16.9% for Q1 FY2027 compared to 15.6% for Q1 FY2026. The increase was primarily due to an increase in Net Controlled Foreign Corporation Tested Income (NCTI) tax rate, and the change in level and proportion of income in higher and lower tax jurisdictions, partially offset by tax expense associated with revaluation of deferred taxes due to changes in U.S. taxation of non-U.S. income under OBBBA in the prior year period.
The 130 basis point increase in effective tax rate impacts net income and EPS; the company attributed the change primarily to NCTI tax rate increases and geographic income mix. - Dividend per share
The company declared cash dividends of $0.33 per common share in Q1 FY2027, an increase from $0.26 per share in Q1 FY2026.
The 27% increase in quarterly dividend reflects enhanced shareholder return as the company generates strong cash flows. - Market segment revenue mix
Memory segment revenue increased to 46% of systems revenue in Q1 FY2027 from 34% in Q1 FY2026, while Foundry decreased to 46% from 60% year-over-year. Both segments experienced growth in absolute dollars, with memory growth exceeding foundry growth.
The shift toward memory reflects AI-driven demand for high-bandwidth memory (HBM) and other memory technologies, a significant market driver for semiconductor equipment. - Geographic revenue concentration
China revenue decreased to 35% in Q1 FY2027 from 43% in Q1 FY2026, while Korea increased to 20% from 15% and Europe increased to 4% from 2%.
The reduced exposure to China may reflect ongoing export control impacts, while increased Korea and Europe concentration provides geographic diversification.
Primary source
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