On October 21, Lam Research announced that revenue for the quarter ended September 27, 2026 came to $8.22 billion, up 22% from the previous quarter. As investment in semiconductor manufacturing equipment translates into sales, the company's segment figures show a wide gap. Sales of new equipment rose 34.9% quarter over quarter, while customer support-related revenue grew just 0.6%. Breaking down the overall increase shows where this AI-driven growth actually came from.
New equipment accounts for 99.1% of the revenue increase
In the quarter ended September 2026, new equipment accounted for 99.1% of Lam Research's quarter-over-quarter revenue increase. The figure comes from comparing the company's reported revenue categories across the two periods and calculating the increase in each.
| Revenue category | Quarter ended June 2026 | Quarter ended September 2026 |
|---|---|---|
| New equipment | 4,249,848 | 5,732,907 |
| Customer support-related revenue, etc. | 2,472,390 | 2,486,511 |
| Total | 6,722,238 | 8,219,418 |
Figures are in thousands of dollars. The table was compiled from the revenue breakdown in Lam Research's earnings release.
Company-wide revenue rose by about $1.50 billion, of which roughly $1.48 billion came from new equipment. The contribution is calculated as (5,732,907 − 4,249,848) ÷ (8,219,418 − 6,722,238) × 100. Using the raw figures in thousands of dollars and rounding to one decimal place gives 99.1%. In other words, the quarter-over-quarter growth was almost entirely concentrated in new equipment.
The new equipment category includes advanced equipment for deposition, etching, cleaning, and similar processes: tools that lay thin layers of material on semiconductors, remove the portions that aren't needed, and clean the surface after processing. Customer support-related revenue, by contrast, covers services, spare parts, and equipment upgrades, and also includes non-leading-edge equipment from the Reliant product line. The two categories therefore cannot be neatly divided into "new equipment" and "maintenance fees."
Customer support-related revenue is still sizable at about $2.49 billion, but it barely moved from about $2.47 billion in the previous quarter. Rather than reading the results as a broad lift across the existing-customer business, it is closer to the mark to see them as a quarter in which higher new equipment sales greatly changed the company's overall numbers. Note, however, that 99.1% is the share of the increase in recognized revenue; it does not represent the contribution of new orders or AI-specific equipment.
40.0% operating margin and how to read the AI demand story
The GAAP operating margin was 40.0%, up 2.6 percentage points from 37.4% in the previous quarter. Gross margin also improved, from 51.7% to 52.3%, so higher revenue coincided with higher margins. Net income was $2.75 billion, and diluted earnings per share (EPS) were $2.19.
On an adjusted, non-GAAP basis, operating margin was 40.2% and EPS was $2.20. Market consensus compiled by Investing.com was EPS of $2.18 and revenue of $8.13 billion, and actual results beat both. The $2.20 used in comparison with that forecast is the adjusted figure and should be distinguished from the GAAP figure of $2.19.
Non-GAAP figures exclude items such as amortization of intangible assets related to acquisitions. Some adjustment items also differ between this quarter and the previous one. When comparing profitability, tracking the GAAP operating margin and then reading the company's adjusted metrics alongside it makes it easier to separate the actual profit increase from the effect of adjustments.
President and CEO Tim Archer cited rising semiconductor demand tied to AI and growing device-structure complexity, saying that operational execution led to record revenue, profit, and EPS. He also expressed the view that investment in technology transitions and manufacturing capacity will support growth that outpaces the semiconductor equipment market.
However, the earnings release does not break down this quarter's revenue increase by AI application or by individual product. More complex device structures raise the role of equipment that stacks and processes materials, but that is not grounds for treating all of this quarter's new equipment revenue as AI-related. The company's view of demand and the location of the revenue increase that can be calculated from the results table should be kept separate.
What to watch next: what's behind the $8.6 billion guidance
For the quarter ending December 27, 2026, the company guides revenue centered on $8.6 billion, plus or minus $400 million, for a range of $8.2 billion to $9.0 billion. EPS is guided at $2.33 plus or minus $0.15 on both a GAAP and adjusted basis, and operating margin at 40.5% plus or minus 1 percentage point.
Comparing the revenue midpoint with the September-quarter actual of $8.219418 billion implies growth of about 4.6%. This is calculated as 86 ÷ 82.19418 − 1, expressed as a percentage. The growth implied by next quarter's midpoint is small compared with this quarter's 22% increase. That said, the guidance carries a range, and the midpoint alone does not determine actual growth.
Investing.com's consensus for next quarter was revenue of $8.54 billion and EPS of $2.32. The company's guidance midpoints sit slightly above both. With the market already expecting a high revenue level, what will matter going forward is not only whether results exceed forecasts but also which revenue categories can sustain growth.
The timing of revenue recognition also deserves attention. Lam Research explains that for shipments to customers in Japan, control does not transfer until the customer accepts the equipment, so the shipments are recorded in inventory at cost. Future revenue expected from such shipments at the end of the September quarter is $468.3 million, which is not included in deferred revenue of $2.66 billion. Shipped equipment does not necessarily all count as revenue in the current quarter.
China accounted for 35% of September-quarter revenue by region. The company cites export controls and tariffs as risks, but this share does not directly indicate the proportion subject to regulation. If customers' investment timing, sales regions, or product mix change, the combination of revenue and margin could change as well.
As revenue approaches the $8.6 billion guidance in the December quarter, the question is whether the increase in new equipment continues or whether growth in customer support-related revenue joins it. Tracking revenue by category together with operating margin will let readers check how this sharp revenue jump carried into the next quarter, going a step beyond the AI demand explanation.