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Call sheet · Q4'26

Lam Research (LRCX)

Q4'26 earnings call · held 2026-07-29 · compared with the Q3'26 call · management-credibility review
6/12
Disclosure score
2 high, 4 medium, 2 low flags
Financial quality
Bottom line
The real story isn't the $8.1B guide that'll dominate headlines, it's the 72-day DSO suggesting LAM is shipping faster than customers can pay, creating a potential air pocket when collection catches up. Yes, NAND doubled and September implies a $32B run-rate, but management buried that receivables are stretching dangerously while customer deposits collapsed to 4-year lows. The binding constraint isn't fab space or demand, it's customer liquidity and our ability to convert shipments to cash. Most revealing quote: Doug admitting 'the group of customers that generally provide down payments aren't the ones growing the quickest,' translation: we're shipping to customers who can't prepay. My view changes if DSO drops below 65 days next quarter, proving this was timing not deterioration.

The 30-second version

  • The sleeper: September guide implies $30B+ annualized revenue run-rate, yet DSO jumped to 72 days while down payments hit 4-year lows
  • The obvious: NAND doubled sequentially and September guide of $8.1B crushes expectations
  • The red flag: China revenue guide implies steep decline while deferred revenue mysteriously grew $213M

What changed this quarter

MetricQ3'26Q4'26Change
Revenue$5.84B (24% YoY)$6.72B (30% YoY)+15% sequential acceleration
September GuideN/A$8.1B (+/- $400M)+20% QoQ explosion
EPS$1.47 (beat by $0.05)$1.82 (beat by $0.07)+24% sequential surge
Gross Margin49.9%52.0%+210 bps expansion
Operating Margin35.0%38.4%+340 bps acceleration
DSO64 days72 days+8 days deterioration
Deferred Revenue$2.22B (flat QoQ)$2.43B+$213M sequential build
Customer Down Payments~$500M (implied)~$200M (4-year low)-$300M collapse
NAND Revenue %12% of systems23% of systemsDoubled sequentially
China Revenue %34%26%-800 bps decline

Accountability tracked

8 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
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Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

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