Lam Research Corp (LRCX)
Profitability ratios
Return on sales
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 48.71% | 47.32% | 44.62% | 45.69% | 46.53% |
| Operating profit margin | 32.01% | 28.61% | 29.69% | 31.24% | 30.64% |
| Pretax margin | 32.32% | 29.25% | 29.32% | 30.15% | 29.88% |
| Net profit margin | 29.06% | 25.68% | 25.88% | 26.73% | 26.72% |
The analysis of Lam Research Corp's profitability ratios over the period from June 30, 2021, to June 30, 2025, reveals nuanced trends across various margins.
The gross profit margin exhibited a slight decline from 46.53% in 2021 to a low of 44.62% in 2023. However, this margin rebounded sharply to reach 47.32% in 2024 and further increased to 48.71% in 2025, indicating improved efficiency in production or cost management, or favorable pricing strategies that enhance gross profitability.
Operating profit margins demonstrated a modest fluctuation within the period. From 30.64% in 2021, it increased slightly to 31.24% in 2022, then declined to 29.69% in 2023. The margin continued to decline to 28.61% in 2024 before bouncing back to 32.01% in 2025. The overall trend reflects some volatility but with an upward recovery in the most recent year, suggesting an improved operational efficiency or cost control measures.
Pre-tax margins followed a similar pattern, remaining relatively stable between approximately 29.32% and 30.15% during the first three years, with a slight dip to 29.25% in 2024. The margin then saw an increase to 32.32% in 2025, aligning with the return of profitability margins closer to or above previous levels.
Net profit margins remained relatively steady around 26.7% from 2021 to 2022, with a slight decline to 25.88% in 2023 and 25.68% in 2024. In 2025, this margin increased more notably to 29.06%, reflecting improved net profitability that may be driven by enhanced operational efficiencies, product mix, or tax strategies.
Overall, the profitability profile shows a slight downward trend in margins during the early years, followed by a notable rebound in 2024 and a significant improvement in 2025. This pattern suggests that Lam Research Corp has experienced some margin compression but has successfully restored and enhanced profitability in recent periods, potentially due to strategic operational adjustments or favorable market conditions.
Return on investment
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 27.65% | 22.75% | 27.55% | 31.30% | 28.20% |
| Return on assets (ROA) | 25.10% | 20.42% | 24.02% | 26.78% | 24.59% |
| Return on total capital | 0.00% | 53.23% | 64.50% | 85.72% | 74.36% |
| Return on equity (ROE) | 54.33% | 44.82% | 54.94% | 73.35% | 64.85% |
The analysis of Lam Research Corp's profitability ratios over the period from June 30, 2021, to June 30, 2025, reveals various trends and considerations:
1. Operating Return on Assets (Operating ROA): The Operating ROA showed an upward trend from 28.20% in 2021 to a peak of 31.30% in 2022. Subsequently, it declined to 27.55% in 2023, further decreased to 22.75% in 2024, and then increased again to 27.65% in 2025. This pattern indicates a period of operational efficiency performance peaking in 2022, followed by a dip and slight recovery in 2025.
2. Return on Assets (ROA): The ROA followed a similar trajectory, rising from 24.59% in 2021 to 26.78% in 2022, then decreasing to 24.02% in 2023, dropping further to 20.42% in 2024, and rebounding slightly to 25.10% in 2025. The fluctuations suggest varying efficiency in asset utilization and profitability over the period, with a notable dip in 2024.
3. Return on Total Capital: This ratio demonstrated a peak at 85.72% in 2022, followed by a decline to 64.50% in 2023 and further to 53.23% in 2024. Interestingly, the figure plummeted to zero in 2025, which may indicate a significant change in capital structure, potential extraordinary items, or accounting adjustments impacting the measure. The sharp decline raises concerns about the company's ability to generate returns relative to its total capital base.
4. Return on Equity (ROE): The ROE was highest in 2022 at 73.35%, decreasing in subsequent years to 54.94% in 2023 and 44.82% in 2024. However, it experienced an uptick to 54.33% in 2025, stabilizing at a level below its 2022 peak. This pattern underscores a decline in shareholders' profitability from 2022 through 2024, with some recovery evident in 2025.
Overall, the profitability ratios display notable variability over the examined period. The peak performances around 2022 suggest a period of strong operational efficiency and profitability, while subsequent declines, especially in 2024, reflect challenges or shifts in the company's operational or financial environment. The marked drop in the return on total capital in 2025 warrants further investigation to understand underlying causes, such as structural changes or accounting effects.