Lam Research Corp. (NASDAQ:LRCX)

Net Operating Profit After Taxes (NOPAT)

NOPAT exhibited significant fluctuations over the periods analyzed. Starting at approximately 2.4 billion USD in mid-2020, it nearly doubled in the following year to about 4.55 billion USD and continued to grow, reaching roughly 5.63 billion USD by mid-2022. However, the figure then declined noticeably to around 4.06 billion USD in mid-2023 and further dropped to approximately 3.26 billion USD in mid-2024. By mid-2025, NOPAT rebounded sharply to approximately 6.11 billion USD, the highest in the series. This pattern suggests periods of strong profit growth interspersed with notable declines before recovering substantially.

Invested Capital

The invested capital showed a consistent upward trend throughout the periods. Beginning at about 11.79 billion USD in mid-2020, it increased steadily each year, reaching approximately 12.26 billion USD in mid-2021, 13.51 billion USD in mid-2022, and 14.99 billion USD in mid-2023. By mid-2024, it slightly decreased to around 14.84 billion USD but rose again to approximately 16.36 billion USD in mid-2025. The overall trend indicates ongoing investment and asset growth over the analyzed timeframe.

Return on Invested Capital (ROIC)

ROIC demonstrated considerable variability, mirroring changes in profitability relative to invested capital. The ratio began at 20.36% in mid-2020, increased substantially to 37.13% in mid-2021, and peaked at 41.68% in mid-2022. It then declined significantly to 27.1% by mid-2023 and further decreased to 21.94% in mid-2024. A notable recovery occurred in mid-2025, with ROIC rising again to 37.32%. This pattern aligns with NOPAT fluctuations and suggests that despite increases in invested capital, profit efficiency experienced periods of both strong improvement and decline.

Summary Insights

The analysis reveals that while the company has consistently increased its invested capital, profitability as measured by NOPAT and efficiency as reflected in ROIC have shown a more volatile pattern. The years 2021 and 2022 appear to be peak periods for profitability and capital returns, followed by a downturn in 2023 and 2024. However, the substantial recovery in 2025 indicates renewed operational effectiveness or potentially other favorable conditions impacting net operating profit. The interplay between rising invested capital and fluctuating returns highlights the importance of management's focus on capital utilization to sustain profitability.

The financial data reveals several key trends and fluctuations over the analyzed periods. The operating profit margin (OPM) demonstrates variability, with a peak observed in the fiscal year ending June 2022 at 35.59%, followed by a decline through June 2024, and a recovery to 36.08% by June 2025. This indicates periods of both strong profitability and some downward pressure on margins, with a return to higher profitability in the most recent year.

Turnover of capital (TO) shows an upward trend from 0.86 in 2020 to a high of 1.35 in 2022, implying improved efficiency in asset utilization during this period. Subsequently, TO declines to 0.99 in 2024 but recovers to 1.2 in 2025, suggesting some volatility but overall improvement in capital efficiency over the longer term.

The measure of 1 minus the effective cash tax rate (CTR) remains relatively stable, fluctuating slightly between 81.93% and 87.43%, with a minor dip in 2024. This stability suggests consistent tax management and cash tax impacts across these years without dramatic shifts.

Return on invested capital (ROIC) exhibits a pattern somewhat parallel to the operating profit margin, with substantial growth from 20.36% in 2020 to a peak of 41.68% in 2022, followed by a decline to 21.94% in 2024 and a rebound to 37.32% in 2025. This trend indicates significant variations in the efficiency and profitability of invested capital, aligning with the fluctuations seen in operating margin and capital turnover.

Operating Profit Margin (OPM)

Experienced growth until 2022, declined over the next two years, then increased sharply in 2025, suggesting cycles of profitability strength and pressure.

Turnover of Capital (TO)

Improved substantially to 2022, decreased in 2024, and partially recovered by 2025, indicating some inconsistency in asset utilization efficiency.

1 – Effective Cash Tax Rate (CTR)

Remained stable with minor fluctuations, implying consistent tax environment and effective cash tax rate management.

Return on Invested Capital (ROIC)

Followed a trend similar to OPM, with strong increases until 2022 followed by a decline and subsequent recovery, reflecting varying returns on capital investment over time.

Overall, the data illustrates cyclical patterns in profitability and capital efficiency, with 2022 marking a peak year for margin and returns, followed by a downturn and a strong recovery in 2025. Stability in the effective cash tax rate indicates limited impact from tax changes on operating results. The interplay of these metrics suggests that while operational performance and capital utilization faced challenges post-2022, the company regained strength by 2025.

The financial data reveals several notable trends over the examined periods.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT demonstrates a general upward trajectory from 2020 to 2025, with some fluctuations. Initially, in 2020, the figure stood at approximately 2.76 million US dollars, more than doubling by 2021 to around 5.21 million. This upward trend continued and peaked at about 6.51 million in 2022. Subsequently, a decline occurred over the next two years, reaching around 3.97 million in 2024. However, the last year saw a significant rebound, with the NOPBT rising sharply to approximately 7.06 million, the highest value in the period.

Adjusted Revenue

Adjusted revenue depicts a growth pattern from 2020 through 2022, ascending from about 10.13 billion US dollars to 18.31 billion. Thereafter, a decline is observed over the next two years, falling to roughly 14.62 billion in 2024. The final year shows a recovery, with adjusted revenue increasing to nearly 19.57 billion. This suggests a cyclical behavior, with the rebound in 2025 surpassing previous peaks.

Operating Profit Margin (OPM)

The operating profit margin followed a similar pattern, starting at 27.26% in 2020 and rising steadily to 35.59% by 2022. Following this period, a decline occurred, with margins falling to 27.18% in 2024. The margin then sharply increased in 2025, reaching 36.08%, indicating improved operational efficiency or profitability during that year. Overall, the margin exhibits cyclic characteristics aligned with the revenue and profit trends.

In summary, the data shows a growth phase from 2020 to 2022 across key financial metrics, followed by a downturn in 2023 and 2024. The year 2025 marks a strong recovery, achieving peak levels in net profit, revenue, and operating margin. This cyclical pattern could reflect varying market conditions, operational adjustments, or strategic changes influencing financial performance over the period.

The analysis of the annual financial data reveals several notable trends in the company's operational efficiency and revenue generation over the six-year period.

Adjusted Revenue

Adjusted revenue demonstrated a general upward trajectory with fluctuations. Starting at approximately $10.13 billion in 2020, it peaked at around $18.31 billion in 2022. Subsequently, there was a decline in 2023 and 2024, reaching about $14.62 billion, before experiencing a significant recovery to approximately $19.57 billion in 2025. This pattern indicates periods of growth interrupted by temporary downturns, suggesting potential market or operational challenges during 2023 and 2024, followed by a robust rebound.

Invested Capital

Invested capital steadily increased throughout the period, beginning at roughly $11.79 billion in 2020 and rising consistently to about $16.36 billion by 2025. The continuous growth in invested capital suggests ongoing investments in assets or resources, supporting the company's capacity to generate revenue and expand operations.

Turnover of Capital (TO)

The turnover of capital, reflecting the efficiency of capital use in generating revenue, exhibited variability. Initially, it was relatively low at 0.86 in 2020, improved markedly to 1.35 in 2022, indicating enhanced capital efficiency. However, this was followed by a decrease to 0.99 in 2024, signaling a drop in capital productivity. By 2025, the ratio rebounded to 1.20, suggesting a recovery in the effective utilization of invested capital.

Overall, the data indicate that while the company consistently increased its invested capital, its revenue growth and capital turnover experienced fluctuations, with periods of reduced efficiency and revenue followed by recovery phases. The trends suggest that despite some operational challenges, the company has been able to restore and improve its capital efficiency and revenue generation capabilities by the end of the analyzed period.

Cash Operating Taxes

The cash operating taxes showed an overall increasing trend from 2020 to 2025, with some fluctuations. Starting at approximately 361 million US dollars in 2020, the amount rose significantly to over 654 million in 2021 and further increased to around 883 million in 2022. However, in 2023 and 2024, there was a decline, with values dropping to approximately 782 million and then 718 million respectively. In 2025, cash operating taxes surged again to over 954 million US dollars, marking the highest level in the observed period.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT experienced strong growth from 2020 to 2022, starting at about 2.76 billion US dollars in 2020, almost doubling to around 5.21 billion in 2021, and then reaching approximately 6.51 billion in 2022. After this peak, there was a noticeable decline in 2023 and 2024, with profits falling to roughly 4.84 billion and then 3.97 billion respectively. In 2025, the figure rebounded substantially to nearly 7.06 billion US dollars, setting a new high for the period analyzed.

Effective Cash Tax Rate (CTR)

The effective cash tax rate fluctuated moderately throughout the years. Beginning at about 13.09% in 2020, it slightly decreased to 12.57% in 2021 before rising again to 13.55% in 2022. A more marked increase occurred in 2023 and 2024, reaching 16.15% and then peaking at 18.07%. In 2025, the rate decreased notably to 13.52%, closer to the levels observed in the earlier years.

Summary

The data indicates a generally positive but volatile financial performance. Both cash operating taxes and net operating profit before taxes demonstrated growth with intermittent declines, particularly noticeable in the years 2023 and 2024. The effective cash tax rate showed variability, with an upward trend in the middle years but a reduction in the final year analyzed. The rebound in both profit and taxes in 2025 suggests potential recovery or strategic changes impacting profitability and tax planning. Overall, the trends reflect a cyclical pattern with periods of expansion followed by contraction and subsequent recovery.