Lam Research Corp (LRCX)

Interest coverage

		Jun 30, 2025	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	4,314,570	5,515,370	5,073,800	4,813,720	4,545,460	4,212,453	4,058,252	4,623,482	5,250,362	5,787,699	5,982,960	5,622,510	5,296,900	5,207,700	5,221,610	4,893,190	4,482,024	3,921,816	3,420,620	3,097,411
Interest expense (ttm)	US$ in thousands	135,429	181,868	183,837	184,851	185,236	185,329	185,393	185,741	186,462	186,158	185,651	185,755	184,759	190,226	195,752	201,538	208,597	206,152	195,496	185,560
Interest coverage		31.86	30.33	27.60	26.04	24.54	22.73	21.89	24.89	28.16	31.09	32.23	30.27	28.67	27.38	26.67	24.28	21.49	19.02	17.50	16.69

June 30, 2025 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $4,314,570K ÷ $135,429K
= 31.86

The analysis of Lam Research Corp.'s interest coverage ratios over the specified period reveals a generally strong capacity to meet its interest obligations, indicative of robust financial health. Beginning with a ratio of approximately 16.69 as of September 30, 2020, the interest coverage increased significantly over the subsequent quarters, reaching a peak of approximately 32.23 on December 31, 2022. This upward trend reflects a consistent improvement in earnings relative to interest expenses during this period, suggesting enhanced profitability and/or reduced interest burdens.

Throughout 2021 and into 2022, the ratio maintained strong levels above 24, indicating that the company earned more than enough to cover its interest obligations multiple times over. This heightened coverage aligns with periods of strong operational performance, which likely contributed to increased earnings before interest and taxes (EBIT). The ratios remained relatively stable through 2022 and into early 2023, with slight fluctuations, but generally maintained a high level above 24, underscoring continued financial stability.

Starting in late 2023, some moderation in the ratio is observable, with values decreasing to approximately 21.89 as of December 31, 2023. However, the ratios thereafter resumed a slight upward trajectory, reaching around 30.33 by March 2025. This pattern indicates that while there may have been some temporary pressures or strategic fluctuations affecting EBIT, Lam Research continues to retain a strong ability to service its interest obligations.

Overall, the trend suggests that Lam Research Corp. has maintained a high and relatively steady interest coverage ratio throughout the analyzed period, indicative of prudent financial management and consistent earnings generation. The company's ability to cover interest expenses comfortably supports its financial stability and suggests resilience against potential interest rate increases or economic downturns.