LRCX · 10-K · 2026A · Full report

Income Tax Rate Changes

LAM RESEARCH CORP · 2026-08-07 · Importance 84 · Surprise 100 · In source text

Income tax expense increased $397.2 million, or 66.2%, to $997.1 million in fiscal 2026 from $599.9 million in fiscal 2025. The effective tax rate increased 200 basis points to 12.1% from 10.1%. The increase primarily reflected the full effectiveness of Global Minimum Tax and the recognition of previously unrecognized tax benefits from statute-of-limitation lapses in fiscal 2025. Higher income in lower-tax jurisdictions and increased stock-based compensation excess tax benefits partially offset the rate increase, while the company concluded that the Global Minimum Tax and OBBBA impacts were not material.

Key facts

• Income tax expense for fiscal year 2026: $997,077 (in thousands) versus $599,912 (in thousands) for fiscal year 2025, increase of $397,165 (66.2%) source
• Effective tax rate for fiscal year 2026: 12.1% versus 10.1% for fiscal year 2025 (increase of 200 basis points) source
• On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law and the company assessed the impact on income taxes and concluded it was not material; impact included in income tax expense in fiscal year 2026 source
• Gross deferred tax assets at fiscal year-end 2026: $2.26 billion and at fiscal year-end 2025: $1.90 billion source
• Valuation allowance primarily representing entire California deferred tax asset balance: $464.1 million at end of fiscal year 2026 and $424.3 million at end of fiscal year 2025 source
• Gross deferred tax liabilities at fiscal year-end 2026: $235.5 million and at fiscal year-end 2025: $197.3 million source
• Deferred income taxes (a component of cash flow reconciling items) were $(289,062) (in thousands) for fiscal year 2026 and $(363,247) (in thousands) for fiscal year 2025 (presented in cash flow reconciliation) source

Impact estimates