Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
Return on Invested Capital (ROIC)
Lam Research Corp., ROIC calculation, comparison to benchmarks
| Jun 28, 2026 | Jun 29, 2025 | Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 6,736,884) | 6,105,707) | 3,256,005) | 4,061,570) | 5,632,304) | 4,553,546) | |
| Invested capital2 | 17,887,594) | 16,358,579) | 14,840,667) | 14,985,787) | 13,512,167) | 12,264,919) | |
| Performance Ratio | |||||||
| ROIC3 | 37.66% | 37.32% | 21.94% | 27.10% | 41.68% | 37.13% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | 7.33% | 1.07% | -0.35% | -0.24% | 56.77% | |
| Analog Devices Inc. | — | 5.20% | 3.09% | 7.11% | 5.76% | 2.37% | |
| Applied Materials Inc. | — | 40.78% | 33.64% | 36.75% | 46.34% | 41.96% | |
| Broadcom Inc. | — | 15.57% | 7.86% | 23.04% | 20.75% | 10.98% | |
| Intel Corp. | — | 0.49% | -14.19% | -1.60% | 4.14% | 22.03% | |
| KLA Corp. | 49.20% | 41.67% | 36.99% | 40.63% | 42.51% | 31.64% | |
| Micron Technology Inc. | — | 14.24% | 1.61% | -11.01% | 17.20% | 12.88% | |
| NVIDIA Corp. | 113.77% | 144.85% | 89.32% | 10.91% | 53.12% | 33.44% | |
| Qualcomm Inc. | — | 31.60% | 26.75% | 18.69% | 45.12% | 42.56% | |
| Texas Instruments Inc. | — | 19.02% | 19.20% | 28.83% | 49.74% | 48.28% | |
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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2026 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 6,736,884 ÷ 17,887,594 = 37.66%
4 Click competitor name to see calculations.
The analysis of Return on Invested Capital (ROIC) reveals a cyclical performance trend characterized by a significant mid-period contraction followed by a robust recovery. While the capital base has expanded steadily over the six-year period, the efficiency of this capital in generating profit experienced substantial volatility, reaching a peak in 2022 and a trough in 2024 before returning to historical norms by 2026.
- Net Operating Profit After Taxes (NOPAT) Trends
- NOPAT exhibited significant fluctuation, increasing from 4.55 billion USD in 2021 to a peak of 5.63 billion USD in 2022. This was followed by a two-year decline, reaching a low of 3.26 billion USD in 2024. A sharp recovery is observed in the subsequent years, with NOPAT rising to 6.11 billion USD in 2025 and further increasing to 6.74 billion USD in 2026, suggesting a strong rebound in operational profitability.
- Invested Capital Expansion
- Invested capital shows a consistent upward trajectory, growing from 12.26 billion USD in 2021 to 17.89 billion USD in 2026. Aside from a marginal decrease between 2023 and 2024, the capital base has expanded annually, indicating continuous investment in the company's asset base to support long-term growth.
- ROIC Volatility and Recovery
- The ROIC reflects the interplay between the expanding capital base and the fluctuating NOPAT. The ratio peaked at 41.68% in 2022, coinciding with strong profit growth. A sharp decline occurred through 2023 and 2024, with ROIC falling to 21.94% as profits decreased while invested capital continued to rise. However, a rapid recovery is evident by 2025, with ROIC returning to 37.32% and stabilizing at 37.66% in 2026, indicating that the recent surge in NOPAT has effectively offset the increased capital expenditure.
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Decomposition of ROIC
Lam Research Corp., decomposition of ROIC
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).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The return on invested capital (ROIC) exhibits a cyclical pattern, characterized by a peak in 2022, a significant contraction through 2024, and a projected recovery to historical levels by 2026. The volatility in ROIC is primarily driven by concurrent fluctuations in operating profitability and capital turnover efficiency.
- Operating Profit Margin (OPM)
- Profitability remained strong between 2021 and 2022, peaking at 35.59%. A subsequent decline occurred, reaching a low of 27.18% in 2024, which exerted substantial downward pressure on overall returns. A sharp recovery is observed in 2025, with the margin returning to 36.08% before stabilizing at 34.88% in 2026.
- Turnover of Capital (TO)
- Capital efficiency followed a trajectory similar to profitability. After reaching a peak ratio of 1.35 in 2022, the turnover ratio declined steadily, dropping below the 1.0 threshold to 0.99 in 2024. This indicates a period of diminished asset productivity. Efficiency regained momentum in the final two periods, rising to 1.29 by 2026.
- Effective Cash Tax Rate Impact (1 - CTR)
- The after-tax component of the ROIC decomposition remained the most stable variable. Despite a gradual decrease from 87.43% in 2021 to a low of 81.93% in 2024, the impact on total returns was secondary to the more volatile swings in operating margins and capital turnover.
- ROIC Synthesis
- The decline in ROIC from 41.68% in 2022 to 21.94% in 2024 resulted from a compounding effect where both profit margins and capital turnover deteriorated simultaneously. The subsequent rebound to 37.66% by 2026 is attributed to the restoration of both operational efficiency and asset productivity, effectively neutralizing the mid-period downturn.
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Operating Profit Margin (OPM)
Lam Research Corp., OPM calculation, comparison to benchmarks
| Jun 28, 2026 | Jun 29, 2025 | Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 6,736,884) | 6,105,707) | 3,256,005) | 4,061,570) | 5,632,304) | 4,553,546) | |
| Add: Cash operating taxes2 | 1,281,297) | 954,147) | 717,911) | 782,173) | 882,564) | 654,450) | |
| Net operating profit before taxes (NOPBT) | 8,018,181) | 7,059,854) | 3,973,916) | 4,843,743) | 6,514,868) | 5,207,996) | |
| Revenue | 23,232,690) | 18,435,591) | 14,905,386) | 17,428,516) | 17,227,039) | 14,626,150) | |
| Add: Increase (decrease) in deferred revenue | (247,063) | 1,129,463) | (286,311) | (360,193) | 1,079,292) | 581,380) | |
| Adjusted revenue | 22,985,627) | 19,565,054) | 14,619,075) | 17,068,323) | 18,306,331) | 15,207,530) | |
| Profitability Ratio | |||||||
| OPM3 | 34.88% | 36.08% | 27.18% | 28.38% | 35.59% | 34.25% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | 12.01% | 8.35% | 2.02% | 5.31% | 22.70% | |
| Analog Devices Inc. | — | 26.56% | 20.23% | 32.00% | 27.59% | 20.52% | |
| Applied Materials Inc. | — | 32.79% | 29.32% | 29.22% | 30.32% | 30.54% | |
| Broadcom Inc. | — | 40.10% | 26.40% | 45.19% | 42.94% | 30.96% | |
| Intel Corp. | — | 3.41% | -21.05% | -0.86% | 13.58% | 28.05% | |
| KLA Corp. | 42.38% | 38.94% | 37.54% | 39.78% | 41.73% | 36.39% | |
| Micron Technology Inc. | — | 25.89% | 5.12% | -36.77% | 31.50% | 23.15% | |
| NVIDIA Corp. | 65.44% | 64.15% | 55.52% | 15.97% | 37.99% | 28.45% | |
| Qualcomm Inc. | — | 28.26% | 26.67% | 21.48% | 35.06% | 30.10% | |
| Texas Instruments Inc. | — | 35.56% | 38.37% | 44.51% | 51.22% | 49.60% | |
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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2026 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × 8,018,181 ÷ 22,985,627 = 34.88%
4 Click competitor name to see calculations.
The financial performance from June 2021 through June 2026 is characterized by a period of operational volatility followed by a significant recovery in both scale and profitability. A distinct contraction occurred between 2023 and 2024, which was subsequently reversed by a sharp expansion in the final two years of the observed period.
- Net Operating Profit Before Taxes (NOPBT)
- NOPBT experienced an initial increase from 5,207,996 thousand in 2021 to 6,514,868 thousand in 2022. This was followed by a two-year decline, reaching a period low of 3,973,916 thousand in 2024. A strong recovery is observed thereafter, with profit increasing to 7,059,854 thousand in 2025 and peaking at 8,018,181 thousand in 2026.
- Adjusted Revenue
- Revenue trends align with the movement of operating profits. After rising to 18,306,331 thousand in 2022, adjusted revenue declined to 14,619,075 thousand by June 2024. A substantial growth phase followed, with revenue expanding to 19,565,054 thousand in 2025 and reaching 22,985,627 thousand in 2026.
- Operating Profit Margin (OPM)
- The operating profit margin exhibits a U-shaped trajectory. The margin reached 35.59% in 2022 before contracting to a low of 27.18% in 2024, representing a compression of 8.41 percentage points. A significant rebound occurred in 2025, with the margin expanding to its highest level of 36.08%, before stabilizing slightly at 34.88% in 2026.
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Turnover of Capital (TO)
Lam Research Corp., TO calculation, comparison to benchmarks
| Jun 28, 2026 | Jun 29, 2025 | Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Revenue | 23,232,690) | 18,435,591) | 14,905,386) | 17,428,516) | 17,227,039) | 14,626,150) | |
| Add: Increase (decrease) in deferred revenue | (247,063) | 1,129,463) | (286,311) | (360,193) | 1,079,292) | 581,380) | |
| Adjusted revenue | 22,985,627) | 19,565,054) | 14,619,075) | 17,068,323) | 18,306,331) | 15,207,530) | |
| Invested capital1 | 17,887,594) | 16,358,579) | 14,840,667) | 14,985,787) | 13,512,167) | 12,264,919) | |
| Efficiency Ratio | |||||||
| TO2 | 1.29 | 1.20 | 0.99 | 1.14 | 1.35 | 1.24 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Advanced Micro Devices Inc. | — | 0.56 | 0.44 | 0.39 | 0.40 | 2.65 | |
| Analog Devices Inc. | — | 0.26 | 0.22 | 0.28 | 0.27 | 0.16 | |
| Applied Materials Inc. | — | 1.41 | 1.44 | 1.49 | 1.73 | 1.57 | |
| Broadcom Inc. | — | 0.43 | 0.37 | 0.57 | 0.53 | 0.42 | |
| Intel Corp. | — | 0.45 | 0.58 | 0.59 | 0.71 | 0.89 | |
| KLA Corp. | 1.32 | 1.31 | 1.17 | 1.26 | 1.18 | 1.01 | |
| Micron Technology Inc. | — | 0.61 | 0.47 | 0.29 | 0.58 | 0.60 | |
| NVIDIA Corp. | 2.06 | 2.76 | 1.98 | 1.26 | 1.49 | 1.28 | |
| Qualcomm Inc. | — | 1.42 | 1.26 | 1.14 | 1.50 | 1.66 | |
| Texas Instruments Inc. | — | 0.62 | 0.60 | 0.78 | 1.14 | 1.12 | |
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).
1 Invested capital. See details »
2 2026 Calculation
TO = Adjusted revenue ÷ Invested capital
= 22,985,627 ÷ 17,887,594 = 1.29
3 Click competitor name to see calculations.
The turnover of capital exhibits a cyclical pattern over the observed period, characterized by an initial peak, a subsequent contraction, and a projected recovery. This volatility is primarily driven by fluctuations in adjusted revenue relative to a generally expanding base of invested capital.
- Revenue Trajectory
- Adjusted revenue shows significant volatility, increasing from 15.2 billion USD in 2021 to a peak of 18.3 billion USD in 2022. A downward trend followed, with revenue declining to 14.6 billion USD by June 2024. This is followed by a strong recovery phase, with figures climbing to 19.6 billion USD in 2025 and reaching 23.0 billion USD by June 2026.
- Invested Capital Expansion
- Invested capital maintains a consistent upward trend, growing from 12.3 billion USD in 2021 to 17.9 billion USD in 2026. While a marginal decrease occurred in June 2024, the overall trajectory indicates a steady increase in the company's capital employment over the six-year span.
- Capital Turnover Efficiency
- The turnover of capital ratio reflects the misalignment between revenue and capital investment during the mid-period. Efficiency peaked at 1.35 in 2022 but deteriorated to 0.99 in 2024, indicating that the asset base was not generating revenue as effectively during the downturn. Recovery is evident in the final two years, with the ratio rising to 1.20 in 2025 and 1.29 in 2026, suggesting an improvement in the productivity of invested capital as revenue growth accelerates.
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Effective Cash Tax Rate (CTR)
Lam Research Corp., CTR calculation, comparison to benchmarks
| Jun 28, 2026 | Jun 29, 2025 | Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 6,736,884) | 6,105,707) | 3,256,005) | 4,061,570) | 5,632,304) | 4,553,546) | |
| Add: Cash operating taxes2 | 1,281,297) | 954,147) | 717,911) | 782,173) | 882,564) | 654,450) | |
| Net operating profit before taxes (NOPBT) | 8,018,181) | 7,059,854) | 3,973,916) | 4,843,743) | 6,514,868) | 5,207,996) | |
| Tax Rate | |||||||
| CTR3 | 15.98% | 13.52% | 18.07% | 16.15% | 13.55% | 12.57% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | -8.77% | 71.15% | 143.92% | 111.01% | 5.73% | |
| Analog Devices Inc. | — | 25.25% | 29.57% | 20.23% | 21.73% | 25.70% | |
| Applied Materials Inc. | — | 11.78% | 20.15% | 15.68% | 11.76% | 12.33% | |
| Broadcom Inc. | — | 8.80% | 18.61% | 10.78% | 9.59% | 16.50% | |
| Intel Corp. | — | 67.96% | — | — | 57.13% | 12.07% | |
| KLA Corp. | 12.33% | 18.16% | 15.45% | 18.86% | 13.88% | 14.30% | |
| Micron Technology Inc. | — | 9.95% | 33.29% | — | 6.38% | 6.96% | |
| NVIDIA Corp. | 15.80% | 18.23% | 18.77% | 45.94% | 6.28% | 8.10% | |
| Qualcomm Inc. | — | 21.01% | 20.47% | 23.51% | 14.27% | 14.84% | |
| Texas Instruments Inc. | — | 13.50% | 16.30% | 16.49% | 14.83% | 12.93% | |
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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2026 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 1,281,297 ÷ 8,018,181 = 15.98%
4 Click competitor name to see calculations.
The effective cash tax rate (CTR) exhibits significant volatility over the analyzed period, characterized by a consistent upward trend through 2024, followed by a sharp correction and a subsequent moderate increase in 2026.
- CTR Trend Analysis
- The CTR increased steadily from 12.57% in June 2021 to a peak of 18.07% in June 2024. This upward trajectory indicates a rising proportion of net operating profit being allocated to cash taxes over these four years.
- Correlation Between NOPBT and Tax Rate
- An inverse relationship is observed between June 2022 and June 2024. During this period, Net Operating Profit Before Taxes (NOPBT) declined from 6.5 billion US$ to 3.9 billion US$, yet the CTR rose from 13.55% to 18.07%. This divergence suggests that cash tax payments did not scale down proportionally with the decrease in operating profitability.
- Profitability Recovery and Tax Impact
- A significant shift occurred in June 2025, where the CTR dropped sharply to 13.52% as NOPBT rebounded to 7.0 billion US$. By June 2026, while NOPBT reached its highest point in the series at 8.0 billion US$, the CTR rose again to 15.98%, reflecting an increase in cash operating taxes to 1.28 billion US$.
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