Lam Research Corp. (NASDAQ:LRCX)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes shows a fluctuating trend over the reported periods. Starting at approximately 2.4 billion, it nearly doubled to about 4.55 billion in the following year, then further increased to roughly 5.63 billion. Subsequently, there was a decline over the next two years to around 3.26 billion, before sharply rising again to approximately 6.11 billion in the final period. This pattern indicates volatility with periods of strong profitability followed by notable contractions, and a significant rebound near the end.

Cost of Capital

The cost of capital displays a gradual upward trend throughout the periods, rising from 18.06% to 19.54%. The increases are relatively steady, suggesting a slowly increasing expense associated with maintaining the capital base, which may affect investment decisions and economic profit calculations.

Invested Capital

Invested capital shows an increasing pattern overall, rising from approximately 11.79 billion to 16.36 billion over the periods. A steady growth in invested capital indicates continued investment in the business, although a slight decrease is observed between the two penultimate periods before rising again in the final period.

Economic Profit

Economic profit trends align closely with movements in NOPAT but exhibit higher volatility. Starting at around 272 million, economic profit surged to over 2.2 billion and then to approximately 3.08 billion in the following years. This was followed by a sharp decrease down to about 386 million before rising again to nearly 2.91 billion. The fluctuations reflect the impact of changes in both NOPAT and cost of capital on value creation, suggesting periods of diminished returns followed by recovery phases.

Net Income

The net income demonstrated a generally positive trend over the analyzed period, with some fluctuations. Starting at approximately 2.25 billion USD in 2020, it almost doubled in 2021 to 3.91 billion USD and increased further to about 4.61 billion USD in 2022. A slight decrease occurred in 2023, falling to 4.51 billion USD, followed by a more pronounced decline in 2024 to 3.83 billion USD. However, in 2025, net income surged significantly to approximately 5.36 billion USD, marking the highest point in the time frame.

Net Operating Profit After Taxes (NOPAT)

The NOPAT showed a generally upward trajectory until 2022, beginning at about 2.40 billion USD in 2020 and increasing substantially to approximately 5.63 billion USD by 2022. However, there was a notable reduction in the following years; NOPAT dropped to 4.06 billion USD in 2023 and further declined to 3.26 billion USD in 2024. A strong recovery is observed in 2025, with NOPAT rising sharply to around 6.11 billion USD, the highest value recorded in the examined periods.

General Observations

Both net income and NOPAT largely followed similar trends, with growth peaking in 2022, followed by declines in 2023 and 2024, prior to significant recoveries in 2025. The reductions in 2023 and 2024 suggest temporary challenges affecting profitability and operational efficiency. The considerable rebound in 2025 indicates successful measures to restore profitability and operational performance. Overall, the company appears to maintain strong profit-generating capabilities with cyclical variability.

Provision for Income Taxes

The provision for income taxes exhibits a generally increasing trend from 2020 through 2023, rising from approximately 323 million US dollars in 2020 to nearly 598 million US dollars in 2023. However, in the subsequent year (2024), there is a noticeable decline to about 532 million US dollars, before rising again significantly in 2025 to approximately 600 million US dollars. This pattern suggests some fluctuation in estimated tax liabilities despite an overall upward movement.

Cash Operating Taxes

Cash operating taxes show a consistent and marked upward trajectory over the entire period analyzed. Starting at approximately 361 million US dollars in 2020, cash taxes almost double to around 654 million US dollars in 2021. The upward momentum continues sharply into 2022 with cash taxes reaching about 883 million US dollars. Although there is a downward adjustment in 2023 and 2024—declining to roughly 782 million and 718 million US dollars respectively—the value increases again considerably in 2025 to approximately 954 million US dollars. This indicates variability in actual cash outflows for taxes, with a generally increasing trend over the six-year period.

Comparative Insights

When comparing provision for income taxes with cash operating taxes, cash taxes have consistently been higher than provisions throughout all years. The gap between these two metrics widens substantially from 2020 to 2022, implying that actual tax payments in cash increasingly exceeded estimated provisions in these years. Although provisions increase steadily, the fluctuations and higher amounts in cash operating taxes may reflect timing differences, changes in tax planning strategies, or variations in tax payments versus accrual estimates.

Total Reported Debt & Leases

The total debt and leases demonstrate a declining trend over the reported periods. Starting from approximately 5.98 billion in mid-2020, the amount decreases to around 4.76 billion by mid-2025. This suggests a possible strategy of reducing leverage or paying down debt over the years, particularly notable from mid-2024 to mid-2025.

Stockholders’ Equity

Stockholders’ equity shows a consistent upward trend across all periods. It grows from about 5.17 billion in 2020 to nearly 9.86 billion in 2025. This significant increase indicates enhanced company value or accumulated earnings, suggesting strengthened financial health and increased net assets over time.

Invested Capital

Invested capital rises steadily from approximately 11.79 billion in 2020 to around 16.36 billion in 2025, with a minor dip observed between mid-2023 and mid-2024. This overall upward movement reflects continued investment in operations or assets, supporting growth initiatives or expansion efforts.

The financial analysis reveals notable fluctuations in key performance indicators over the observed periods. Economic profit experienced a significant increase from approximately 272 million USD in the 2020 fiscal year to a peak exceeding 3 billion USD in 2022, followed by a sharp decline in 2023 and 2024, before rebounding substantially in 2025. This pattern suggests periods of varying profitability and operational efficiency.

Invested capital showed a general upward trend throughout the period, rising from about 11.8 billion USD in 2020 to over 16.3 billion USD by 2025. This steady increase indicates ongoing investments in assets or capital expenditures, potentially supporting growth initiatives or operational capacity expansion.

The economic spread ratio, which measures the return over the cost of capital, displayed considerable volatility. It escalated from 2.31% in 2020 to a high of 22.82% in 2022, but then declined sharply in the subsequent two years to around 2.6% in 2024 before rising again to nearly 17.8% in 2025. This fluctuation aligns with the trends seen in economic profit, reflecting the company's varying ability to generate value above its capital costs.

Economic Profit

Marked by substantial growth through 2022, followed by contraction and a strong recovery in 2025.

Invested Capital

Consistent incremental growth, indicating ongoing investments over the examined years.

Economic Spread Ratio

Highly variable, peaking in 2022, dropping notably in 2023 and 2024, and then improving substantially in 2025, mirroring economic profit trends.

Overall, the data suggests periods of both strong value creation and temporary downturns. The company appears to be managing growth in invested capital, with economic profitability and spread demonstrating sensitivity to underlying business conditions across the years analyzed.

The financial data reveals notable fluctuations in economic profit, adjusted revenue, and economic profit margin over the observed periods. Economic profit exhibits a significant increase from 271,875 thousand US dollars in 2020 to a peak of 3,083,678 thousand US dollars in 2022, followed by a marked decline in 2023 and 2024, before rebounding in 2025 to nearly 2,909,985 thousand US dollars. This pattern indicates volatility in profitability, with a substantial recovery after a period of downturn.

Adjusted revenue presents a generally upward trajectory, starting at 10,132,858 thousand US dollars in 2020 and reaching 18,306,331 thousand US dollars in 2022. Despite a decrease in 2023 and 2024, where revenues fell to 17,068,323 thousand and 14,619,075 thousand US dollars respectively, revenue rebounded strongly in 2025 to 19,565,054 thousand US dollars. The trend shows resiliency in revenue generation capacity despite mid-term declines.

The economic profit margin closely follows the trend in economic profit, with a gradual increase from 2.68% in 2020 to a peak of 16.84% in 2022. A subsequent sharp decline to 6.95% in 2023 and further down to 2.64% in 2024 is observed. However, the margin recovers significantly to 14.87% in 2025. This fluctuation suggests variations in the company’s efficiency in generating economic profit from its revenue base, corresponding with the volatility seen in economic profit values.

Economic Profit

Demonstrates strong growth until 2022, followed by a decline in the next two years, then a recovery in 2025.

Adjusted Revenue

Shows an overall increasing trend with temporary decreases in 2023 and 2024, then an improvement in 2025.

Economic Profit Margin

Follows profit trends, peaking in 2022, dipping notably during 2023–2024, and rebounding nearly to previous high levels by 2025.

The data suggests that while there are periods of decreased profitability and revenue contraction, the company retains the ability to recover and improve its economic profit margin substantially, highlighting fluctuations influenced possibly by external market factors or internal operational efficiencies. Continuous monitoring and analysis would be vital to understanding the underlying causes of the volatility and to strategize for sustained growth.