Analysis of Investments
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Lam Research Corp., adjustment to net income
US$ in thousands
Based on: 10-K (reporting date: 2026-06-28), 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27).
The financial trajectory of net income demonstrates a general upward trend over the analyzed period, characterized by a period of relative stability followed by significant growth in the final two fiscal years. Although a contraction occurred in 2024, the subsequent recovery and expansion resulted in a substantial increase in overall profitability by June 2026.
- Impact of Mark-to-Market Adjustments
- The variance between reported and adjusted net income, reflecting the mark-to-market adjustments for available-for-sale securities, remained immaterial relative to total earnings throughout the period. In June 2021 and June 2022, reported net income was slightly higher than adjusted net income, indicating positive unrealized gains. This trend reversed in June 2023 and June 2024, where reported figures fell slightly below adjusted figures, suggesting minimal unrealized losses.
- Convergence of Income Metrics
- A total convergence between reported and adjusted net income is observed beginning in June 2025 and continuing through June 2026. The elimination of any variance suggests that mark-to-market adjustments for available-for-sale securities ceased to influence the net income results during these fiscal years.
- Profitability Growth Trends
- A notable acceleration in net income is evident in the latter part of the sequence. After reaching a period low of approximately 3.83 billion USD in June 2024, reported net income grew to 5.36 billion USD in June 2025 and further increased to 7.27 billion USD by June 2026. This represents a significant growth phase in bottom-line performance that occurred concurrently with the stabilization of investment-related adjustments.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Lam Research Corp., adjusted profitability ratios
Based on: 10-K (reporting date: 2026-06-28), 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27).
Analysis of the profitability metrics indicates a period of relative stability followed by a projected acceleration in efficiency and margin expansion. While profitability experienced a slight contraction between 2021 and 2024, a strong recovery trend is evident in the subsequent periods, with margins and return ratios reaching peak levels by 2026.
- Net Profit Margin
- The reported net profit margin remained remarkably stable from 2021 to 2022 at approximately 26.7%, followed by a marginal decline to 25.68% by June 2024. However, a significant upward trend is observed thereafter, with margins increasing to 29.06% in 2025 and reaching 31.27% in 2026, suggesting improved cost management or pricing power.
- Return on Equity (ROE)
- ROE exhibited substantial volatility over the analyzed period. After reaching a peak of 73.35% in June 2022, a downward trend occurred, resulting in a low of 44.82% in June 2024. A recovery phase followed, with ROE climbing back to 54.33% in 2025 and further improving to 58.26% by 2026.
- Return on Assets (ROA)
- ROA trends mirror those of ROE, characterized by an initial increase to 26.78% in 2022, a subsequent decline to 20.42% in 2024, and a robust recovery leading to 30.88% by 2026. This suggests an increasing efficiency in utilizing the asset base to generate earnings in the latter years of the period.
- Impact of Mark-to-Market Adjustments
- A comparison between reported and adjusted ratios reveals a negligible variance across all metrics from 2021 to 2026. The minimal difference between reported and adjusted net profit margins, ROE, and ROA indicates that the mark-to-market valuations of available-for-sale securities have no material impact on the company's overall profitability or efficiency profiles.
Overall, the financial trajectory is characterized by a mid-term dip in efficiency ratios that is superseded by a strong growth phase. The convergence of reported and adjusted figures confirms that core operational performance is the primary driver of these trends, independent of fluctuations in the investment portfolio.
Lam Research Corp., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2026-06-28), 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27).
2026 Calculations
1 Net profit margin = 100 × Net income ÷ Revenue
= 100 × 7,265,396 ÷ 23,232,690 = 31.27%
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Revenue
= 100 × 7,265,396 ÷ 23,232,690 = 31.27%
Profitability metrics exhibit a period of relative stability and moderate contraction followed by a phase of significant expansion between 2021 and 2026. The convergence between reported and adjusted figures suggests that non-recurring items have had a minimal impact on the company's bottom line throughout this period.
- Adjusted Net Income Trends
- Adjusted net income demonstrated volatility, starting at US$ 3,905,146 thousand in 2021 and peaking at US$ 7,265,396 thousand by 2026. A growth trend was observed until 2022, followed by a decline that reached a trough of US$ 3,828,076 thousand in 2024. This was followed by a sharp recovery in 2025 and continued aggressive growth into 2026.
- Adjusted Net Profit Margin Performance
- The adjusted net profit margin remained stable at approximately 26.7% during the 2021-2022 period. A slight downward trend followed, with the margin contracting to 25.89% in 2023 and 25.68% in 2024. However, a strong upward shift occurred in the subsequent years, with the margin increasing to 29.06% in 2025 and reaching 31.27% in 2026, indicating an improvement in operational efficiency or revenue quality.
- Comparative Margin Analysis
- The variance between the reported net profit margin and the adjusted net profit margin is negligible across the entire time series. In 2021 and 2022, the difference was only 0.02 percentage points, and by 2024 through 2026, the reported and adjusted margins became identical, signifying a high degree of consistency between GAAP and non-GAAP profitability results.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2026-06-28), 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27).
2026 Calculations
1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 7,265,396 ÷ 12,470,921 = 58.26%
2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × 7,265,396 ÷ 12,470,921 = 58.26%
Profitability and capital efficiency exhibit a period of volatility followed by a strong recovery. Adjusted net income reached an initial peak of 4.6 billion USD in June 2022 before declining to a low of 3.8 billion USD in June 2024. A significant upward trend is observed thereafter, with adjusted net income increasing to 7.2 billion USD by June 2026.
- Adjusted Return on Equity (ROE) Trends
- The Adjusted ROE followed a similar trajectory to net income, peaking at 73.30% in June 2022. A contraction occurred over the subsequent two years, with the ratio reaching its lowest point of 44.83% in June 2024. A recovery phase is evident from June 2025 onwards, with the ROE climbing to 54.33% and further increasing to 58.26% by June 2026.
- Reported versus Adjusted Metrics
- Minimal variance is observed between reported and adjusted figures for both net income and ROE throughout the analyzed period. This indicates that non-recurring items had a negligible impact on the company's financial performance and that the reported results are highly representative of the adjusted operational performance.
- Correlation between Earnings and Equity Returns
- The fluctuations in Adjusted ROE are closely aligned with the changes in adjusted net income. The significant expansion of the ROE in the final two periods of the analysis is directly linked to the growth in adjusted net income, which expanded by approximately 89% between June 2024 and June 2026, thereby improving the returns generated on shareholder equity.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2026-06-28), 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27).
2026 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × 7,265,396 ÷ 23,529,743 = 30.88%
2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × 7,265,396 ÷ 23,529,743 = 30.88%
The financial performance from June 2021 through June 2026 is characterized by a cyclical trajectory in both profitability and asset efficiency. After an initial phase of growth, a period of contraction occurred between 2023 and 2024, followed by a significant acceleration in performance during the final two years of the period.
- Adjusted Net Income Trends
- Adjusted net income demonstrated volatility, increasing from 3.91 billion USD in 2021 to 4.60 billion USD in 2022. A downward trend followed, with income declining to 4.51 billion USD in 2023 and reaching a low of 3.83 billion USD in 2024. A sharp recovery is observed thereafter, with earnings rising to 5.36 billion USD in 2025 and peaking at 7.27 billion USD in 2026.
- Adjusted Return on Assets (ROA) Performance
- The Adjusted ROA closely correlates with net income fluctuations, indicating that changes in the bottom line are the primary drivers of asset efficiency. The ratio rose to 26.76% in 2022 before retreating to a period low of 20.42% in 2024. A substantial recovery occurred in 2025, with the ratio climbing to 25.10%, and further expanding to a high of 30.88% by June 2026.
- Comparison of Reported and Adjusted Metrics
- There is a negligible variance between reported and adjusted net income and ROA across the entire six-year period. This consistency indicates that non-recurring items or one-time adjustments have had a minimal impact on the overall financial results, suggesting that the observed trends reflect core operational performance.
- Asset Efficiency Insights
- The expansion of the Adjusted ROA to 30.88% in 2026, coinciding with the highest recorded net income, suggests a significant improvement in how effectively assets are being utilized to generate profit. The growth in ROA from 20.42% in 2024 to 30.88% in 2026 represents a rapid increase in operational leverage and capital efficiency.