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**Beta Finch Podcast Script: Mondelez International Q4 2025 Earnings**

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we turn dense quarterly reports into digestible insights. I'm Alex.

**JORDAN:** And I'm Jordan. Today we're diving into Mondelez International's Q4 2025 earnings call - that's the snacking giant behind brands like Oreo, Cadbury, and Trident gum.

**ALEX:** Before we dig in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Absolutely. Now Alex, this earnings call was fascinating because it was all about one commodity - cocoa. The chocolate world has been turned upside down.

**ALEX:** Right, and what a wild ride it's been! So Jordan, let's start with the big picture. What happened with cocoa prices?

**JORDAN:** Well, it's actually a tale of two stories. Throughout most of 2025, cocoa prices were sky-high due to supply issues in West Africa. Mondelez had to take significant price increases on their chocolate products. But then, in just the last couple weeks before this earnings call, cocoa spot prices absolutely cratered - we're talking about an unprecedented drop.

**ALEX:** And here's the kicker - Mondelez can't really benefit from these lower prices in 2026 because they're already hedged at the higher prices, right?

**JORDAN:** Exactly! CEO Dirk Van de Put was very clear about this. He said their cocoa coverage for 2026 is locked in at much higher costs than current market prices. In fact, CFO Luca Zaramella mentioned they're facing a massive one billion dollar inventory accounting expense in Q1 alone as they adjust their books to reflect these hedged costs.

**ALEX:** A billion dollars! That's going to be a significant hit to their first quarter profits. But let's talk about how this played out in different markets during 2025.

**JORDAN:** The performance was really mixed. Van de Put said that markets like India, Brazil, Australia, and South Africa held up well despite the price increases. About half of European markets performed as expected. But the northern European markets - Germany, UK, the Nordics - showed much higher price elasticity than they anticipated.

**ALEX:** Meaning consumers really pulled back when prices went up in those markets?

**JORDAN:** Exactly. And here's an interesting insight from the call - Van de Put said penetration didn't really decline, but frequency and quantity of purchases did. So people are still buying chocolate, just less often and in smaller amounts.

**ALEX:** That's a crucial distinction for investors to understand. Now, what's their strategy for 2026?

**JORDAN:** They're taking a multi-pronged approach. First, they're keeping chocolate pricing flat for 2026 - no more increases despite their higher hedged costs. Second, they're significantly ramping up advertising and brand investment, focusing specifically on getting consumers back to normal consumption patterns.

**ALEX:** And they mentioned some interesting innovation partnerships, didn't they?

**JORDAN:** Yes! The Biscoff collaboration was apparently very successful in 2025, and they're planning to take it "to the next level" in 2026. Van de Put seemed really excited about their innovation pipeline, particularly in Europe.

**ALEX:** Let's talk numbers. What's their guidance for 2026?

**JORDAN:** They're projecting organic sales growth of 0% to 2% for 2026. That's pretty conservative, and they admitted they built in flexibility because of uncertainty around how competitors might react to the cocoa price volatility.

**ALEX:** The emerging markets story seems more positive though.

**JORDAN:** Absolutely. Emerging markets finished 2025 with high single-digit growth, and they expect th

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown! Today we're digging into McDonald's second quarter 2026 results, and there's a lot to unpack — some real strategic news alongside a leadership change. Before we get into it, quick note: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Yeah, and this one's juicy, Alex — because it's not the usual "everything's great" call. McDonald's actually came out and said, in Chris Kempczinski's words, "we don't have a strategy problem, we simply didn't execute."

ALEX: Right, so let's start with the numbers. Systemwide sales grew 4% in constant currency, global comparable sales up 1.3%. Adjusted EPS came in at $3.38, up 5% on a constant currency basis. Solid, but not spectacular.

JORDAN: And the real story is the U.S. — comp sales grew just 0.8% in the quarter, which was below expectations. International actually carried the day here, with IOM up 1.5% and the international developmental licensed markets up 1.9%, led by Japan posting its tenth straight quarter of positive guest counts.

ALEX: So what actually went wrong in the U.S.? CFO Ian Borden broke it into pieces. They launched this new "everyday affordable price" menu — 10 items under $3 — in late April, but execution was spotty. Only about 60 to 65% of restaurants actually followed the recommended pricing.

JORDAN: And here's the kicker — to fund that value push, they pulled back on digital offers and killed the Buy One, Add One for a dollar promotion, which apparently really annoyed their most loyal, high-frequency customers. Kempczinski flat-out called it "a bad trade."

ALEX: Management said that alone accounted for about two-thirds of the traffic miss. The rest came down to their FIFA-themed marketing campaign in June underperforming expectations.

JORDAN: There was also this operational overload problem — Chris painted a great picture of it, basically saying "put yourself in a restaurant manager's shoes." You've got K-Pop Demon Hunters merchandise going up, then three weeks later you're flipping the value menu, then a brand-new beverage platform launches, then FIFA. Crew members are getting whiplash, service times went up, satisfaction scores went down.

ALEX: It's a good reminder that even a company with McDonald's scale and marketing muscle can trip over its own to-do list. Too much "new" at once, poorly sequenced.

JORDAN: Right, and it bled into July too — Borden mentioned U.S. comps were actually slightly negative to start Q3. So this isn't fully behind them yet.

ALEX: Now here's where it gets interesting — there's a leadership shakeup. Skye Anderson, previously COO of McDonald's USA, is stepping in as the new President of McDonald's U.S., effective immediately. Joe Erlinger, who ran the U.S. business for nearly seven years, is leaving the company.

JORDAN: Chris was pretty deliberate about framing this as a planned transition, not a panic move — he name-checked Anderson's 26-year track record, including a stint leading the U.S. West zone where she drove over 30% comp sales growth. But the timing, right after a rough quarter, is obviously going to raise eyebrows.

ALEX: On the brighter side — beverages. McDonald's launched a new beverage platform in the U.S., Canada, and Germany in May, and early results are beating expectations. Higher checks, strong food attachment, and more than half the traffic is coming after the lunch rush — which is exactly the low-volume window they want to fill.

JORDAN: They're also leaning into Red Bull Energizers rolling out in the U.S. soon, and Australia just launched the platform in mid-July. This seems like a l

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# Beta Finch Podcast Script: McDonald's Q1 2026 Earnings

**ALEX**: Welcome to Beta Finch, your AI-powered earnings breakdown. I'm Alex, and with me as always is Jordan. Today we're diving into McDonald's Q1 2026 results, and wow, there's a lot to unpack here. Jordan, before we get started, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN**: Thanks Alex, and yeah - McDonald's certainly delivered some interesting headlines this quarter. On the surface, the numbers look pretty solid - global comparable sales up 3.8%, system-wide sales growing 6% in constant currency. But when you dig deeper, there are some real challenges brewing beneath those golden arches.

**ALEX**: Absolutely. Let's start with the good news. The U.S. business showed resilience with 3.9% comparable sales growth, and they're gaining market share in nearly all their top 10 markets globally. That's impressive in this environment. But Jordan, what really caught my attention was CEO Chris Kempczinski's emphasis on their "3 for 3" strategy - value, marketing, and menu innovation.

**JORDAN**: Right, and the value piece is particularly crucial here. They've completely revamped their McValue platform with unanimous franchisee support - that's key. We're talking about items under $3 and a new $4 breakfast meal deal. Kempczinski was pretty emphatic about this, saying "McDonald's is not going to get beat on value and affordability."

**ALEX**: That's a bold statement, but they're backing it up with action. What's interesting is they're applying lessons from international markets back to the U.S. Most of their major international markets already had this dual approach - both everyday affordable items and meal bundles. France was apparently the exception, which might explain some of their struggles there.

**JORDAN**: Speaking of struggles, let's talk about the elephant in the room - those U.S. company-operated store margins. CFO Ian Borden was brutally honest, calling them "not acceptable." That's pretty remarkable transparency from a major corporation.

**ALEX**: It really is. And when you connect the dots, this ties into a bigger strategic question about McDonald's ownership structure. They're essentially saying some of their franchisees are running restaurants better than McDonald's corporate is running their own locations. That's... not ideal.

**JORDAN**: Exactly. And it sounds like they're seriously considering refranchising more company-operated stores. Kempczinski said they're "always looking to put restaurants in the hands of the best operator," which is diplomatic corporate-speak for "we might be selling these to franchisees who can run them better."

**ALEX**: Let's shift to international markets for a moment. The UK really stood out as a success story - they're on their third consecutive quarter of market share gains with mid-to-high single-digit comp growth. Jordan, what's working there?

**JORDAN**: It's that same formula - they introduced something called "Meal Deal Plus" for £5.59, which gives customers more flexibility. Plus they're executing well on marketing campaigns like the "Friends" TV show promotion. Australia's another bright spot using similar tactics. But then you have France struggling, which shows this isn't automatic - you have to execute consistently.

**ALEX**: And speaking of execution, they're rolling out their new beverage platform globally. Yesterday, all U.S. restaurants started offering refreshers and crafted sodas under the McCafe brand, with Red Bull-infused energy drinks coming later this year.

**JORDAN**: That timing on Red Bull is interesti

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**BETA FINCH PODCAST SCRIPT**

**[INTRO MUSIC]**

ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, and I'm here with my co-host Jordan to dive into McDonald's Q4 2025 results. Jordan, this was quite the quarter for the Golden Arches.

JORDAN: Absolutely, Alex! And before we dig in, I need to mention - this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

ALEX: Thanks for that reminder, Jordan. Now, let's talk numbers. McDonald's delivered some impressive results - system-wide sales hit nearly $140 billion, up 5.5% in constant currency for the full year. But what really caught my eye was that Q4 comp sales growth of 5.7% globally. That's pretty strong in what they're calling a "challenging industry backdrop."

JORDAN: Right, and breaking that down by segment - the U.S. was particularly strong at 6.8% comp growth, well above expectations. What's interesting is they had positive guest counts, which is always a key indicator of sustainable growth. CEO Chris Kempczinski mentioned they achieved their highest quarterly comparable guest count gap to competitors "in recent history."

ALEX: That's a fancy way of saying they're stealing customers from the competition! And speaking of the U.S., their value strategy seems to be working. They launched McValue early in the year, then relaunched Extra Value Meals in September. The results? They gained share with low-income consumers in December and saw meaningful improvement in value and affordability scores.

JORDAN: The marketing machine was firing on all cylinders too. The MONOPOLY promotion became one of their largest digital customer acquisition events ever - they now have 46 million 90-day active users in their U.S. loyalty app alone. But get this - the Grinch Meal campaign set new sales records, including the highest single sales day in McDonald's history!

ALEX: 50 million pairs of Grinch-themed socks sold globally! They literally became the largest seller of socks in the world for nearly a week. Only McDonald's could pull that off.

JORDAN: The international segments held up well too. International Operated Markets grew comp sales 5.2% - that's three consecutive quarters above 4% growth. The U.K., Germany, and Australia all delivered mid-to-high single-digit comp growth, with each market gaining market share.

ALEX: Now, let's talk about what's coming next because this is where it gets really interesting. They're accelerating restaurant openings - targeting 2,600 gross openings in 2026, up from 2,275 in 2025. That puts them on track for 50,000 restaurants by end of 2027.

JORDAN: The capital expenditure guidance reflects this growth - they're expecting $3.7 to $3.9 billion in CapEx for 2026, up from $3.4 billion in 2025. CFO Ian Borden was clear this increase was planned and keeps them on track with their December 2023 investor day targets.

ALEX: But here's what I found most intriguing - the menu innovation pipeline. New Chief Restaurant Experience Officer Jill McDonald outlined some ambitious plans. They're rolling out "Best Burger" to nearly all markets by end of 2026, and the Big Arch burger is gaining permanent spots on menus after successful pilots.

JORDAN: And beverages - this could be huge, Alex. They're targeting a $100 billion global beverage opportunity with new offerings under the McCafe brand. Energy drinks, indulgent iced coffees, fruity refreshers, crafted sodas. They even mentioned continuing their Red Bull collaboration. Their beverage test in 500+ U.S. restaurants exceeded expectations and drove incremental occasions across different dayparts.

ALEX: The chicken category focus is smart to

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown! Today we're diving into Mastercard's second quarter 2026 results, and there's a lot to unpack — big numbers, a leadership shakeup, and some fascinating moves into AI-driven commerce.

JORDAN: Yeah, this one's got a bit of everything. But before we get into it —

ALEX: Right, quick disclaimer: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Good, now let's get into it. Mastercard posted net revenue up 12% year-over-year, adjusted net income up 16%, and EPS of $5.04. That's a strong quarter, and honestly it came in above what management was expecting.

ALEX: It really did. And one number that jumped out to me — value-added services, that's all the fraud, security, and consulting stuff Mastercard layers on top of its payments network — grew 18%. That's outpacing the core payments business by a good margin.

JORDAN: Which tells you where the growth engine really is right now. Gross dollar volume worldwide was up 8%, cross-border volume up 12%, and switched transactions — that's transactions actually processed on Mastercard's network — grew 9%. All pretty healthy.

ALEX: Let's talk about the elephant in the room first, though: the leadership transition. This was CFO Sachin Mehra's last earnings call in that role — he's moving to a new position as Chief Business Officer. Ling Hai, who's been running the Asia Pacific, Europe, Middle East and Africa region, steps in as CFO starting August 3rd.

JORDAN: It was a pretty warm moment on the call, honestly. CEO Michael Miebach thanked Mehra for seven-plus years in the seat, and Mehra himself got a little sentimental, thanking analysts and investors for the relationship. Ling Hai even said he's looking forward to "leading the next earnings call."

ALEX: Smooth transition, no red flags — just feels like normal succession planning at a company that's performing well.

JORDAN: Agreed. Now, strategically, there were a few things I found really interesting. First, this switching technology partnership in the UAE. Mastercard is now building out the actual domestic payments switching infrastructure for the Central Bank of the UAE, working alongside their local scheme called Jaywan.

ALEX: Which is a bit of a shift, right? Normally we think of Mastercard as just the network sitting on top of transactions. Here they're actually building and operating switching infrastructure locally.

JORDAN: Exactly — Miebach called it "run anything anywhere," a strategy they've been building since 2022. They've done something similar in South Africa, and they're clearly eyeing this modular approach as a way to get access to transaction volume they wouldn't otherwise touch — even domestic transactions that don't run through Mastercard's global switch.

ALEX: There's also a Latin America push — expanding their Alipay+ partnership into Mexico with Clip, a fintech with a huge merchant network. Remember, Mexico is a market where over 70% of consumer payments are still cash-based, so there's a massive digitization opportunity there.

JORDAN: And speaking of frontier stuff — Mastercard rolled out something called Agent Pay for Machines. This is genuinely new territory: it's designed to let AI agents autonomously pay for things like API calls, cloud compute, or data access, at machine speed, with over 30 partners already signed on including Coinbase, Cloudflare, and Checkout.com.

ALEX: This is the "agentic commerce" trend everyone's talking about. Miebach made an interesting distinction on the call — consumer and B2B agent-driven purchases can basically run through existing card rails just fine, but this true machine-to-machine, micro-transaction world is a genuinely new category, and Mast

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# Beta Finch Podcast Script: Mastercard Q1 2026 Earnings

**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we cut through the corporate speak to bring you what really matters from the latest earnings calls. I'm Alex, and I'm joined as always by my co-host Jordan. Today we're diving into Mastercard's Q1 2026 results - and folks, there's a lot to unpack here.

Before we jump in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Thanks Alex. And what a quarter this was for Mastercard! The numbers are pretty impressive - net revenue up 12% and net income jumping 15% year-over-year on a currency-neutral basis. EPS came in at $4.60, which included a nice 10-cent boost from share buybacks.

**ALEX:** That's solid growth, but what caught my attention was how they're navigating some pretty significant headwinds. CEO Michael Miebach was pretty upfront about the geopolitical tensions affecting their cross-border business, particularly related to the Middle East conflict. Jordan, what did you make of their approach to this challenge?

**JORDAN:** It's interesting, Alex. They're seeing pressure on cross-border travel metrics - growth slowed from 8% to just 2% in the first four weeks of April. But here's what I found compelling: Miebach talked about how they immediately pivoted to help customers understand shifting spending patterns. Within 24 hours of the conflict escalating, they had a website up for Middle East customers showing where spending was moving.

**ALEX:** That's the kind of agility you want to see from management. And they're not just sitting back - they're actively helping customers adapt. Speaking of adaptation, let's talk about some of the more futuristic stuff they're working on. This whole AI agent commerce thing sounds pretty wild.

**JORDAN:** Oh, the agentic commerce initiative is fascinating! So basically, they're preparing for a world where AI agents can make purchases on your behalf. They've got something called "Mastercard Agent Pay" and they're working with heavy hitters like OpenAI, Google, and Microsoft. What's really smart is they've developed "verifiable intent" - basically a tamper-proof record of what you actually authorized an AI agent to do.

**ALEX:** That sounds like it could be huge down the road, but where are we in terms of actual volume and adoption?

**JORDAN:** Miebach was honest about this - they're still in early stages for volume. But the infrastructure building is critical. They've enabled nearly all Mastercards globally for Agent Pay, and they're setting the standards for how this whole ecosystem will work. It's classic Mastercard - get in early, help build the rails, then benefit as adoption scales.

**ALEX:** And speaking of getting in early, they're making a big bet on stablecoins with their planned BVNK acquisition. Help our listeners understand what this is all about.

**JORDAN:** Sure. So BVNK is basically a platform that helps with the messy parts of digital assets - sending, receiving, converting, and storing stablecoins. Mastercard sees stablecoins as becoming a meaningful part of money movement, especially for B2B payments, cross-border transactions, and "me-to-me" transfers like funding your own wallet.

The revenue model is basis points on volume, and this opens up addressable markets that Mastercard doesn't participate in today. Plus, BVNK has those hard-to-get licenses and regulatory tools that make this space work.

**ALEX:** It sounds like they're positioning themselves for a multi-rail future - not just cards, but also real-time payments and digital assets. Now, let's talk about their bread and butter value-added services. This segment grew 18% - what's drivi

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**ALEX**: Welcome to Beta Finch, your AI-powered earnings breakdown where we decode the latest corporate results to help you understand what's really happening in the markets. I'm Alex.

**JORDAN**: And I'm Jordan. Before we dive in, this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**ALEX**: Thanks Jordan. Today we're breaking down Mastercard's Q4 2025 earnings call, and wow - this was a masterclass in how to deliver consistent growth in an uncertain world. The headline numbers here are impressive: 15% revenue growth on a currency-neutral basis, with their value-added services segment absolutely crushing it at 22% growth.

**JORDAN**: Yeah Alex, those VAS numbers really caught my attention. But let's start with the big picture - Mastercard hit $4.76 in earnings per share, up 20% year-over-year. What's interesting is how broad-based this growth was. They're not just relying on one region or one business line.

**ALEX**: Exactly. And CEO Michael Miebach was pretty confident in his opening remarks. He emphasized three key factors driving their success: focus, innovation, and diversification. But Jordan, what really stood out to me was this idea of a "virtuous cycle" between their payment network and services offerings. Can you break that down?

**JORDAN**: It's actually quite elegant when you think about it. More transactions flowing through their network means more data. More data enables better services and analytics they can sell to banks and merchants. Those better services help their partners grow, which drives more transactions back through the network. Rinse and repeat. They mentioned that 60% of their value-added services revenue is "network-linked," meaning it directly benefits from transaction growth.

**ALEX**: That's a powerful moat. Now, let's talk about some of the big strategic wins they announced. The Capital One renewal was huge news - they're extending their credit partnership and Capital One will use more Mastercard services across their entire business.

**JORDAN**: Right, and this came up multiple times in the Q&A. What's significant is that Capital One chose to deepen their relationship with Mastercard even as they're integrating the Discover network they acquired. That's a strong vote of confidence in Mastercard's value proposition. Miebach emphasized that banks choose Mastercard for their global acceptance, security, and digital capabilities - not just price.

**ALEX**: Speaking of big wins, they had some impressive international expansion stories. A nearly 10 million card migration in Turkey with Yapi Credi, new partnerships across Latin America with Scotiabank, and some exclusive deals in South Africa that could increase their market share by multiple percentage points.

**JORDAN**: The international story is really compelling. Remember, about 70% of their business comes from outside the US, so these wins matter. But Alex, I want to pivot to something that came up in the Q&A that I think investors should pay attention to - the regulatory environment.

**ALEX**: Oh yes, the Credit Card Competition Act discussion. Miebach was pretty direct about this - he called it a "race to the bottom for the cheapest network option, but not the safest." His argument is that there's been little progress on the bill since 2023, and there's united opposition because it takes payment choice away from consumers and could create cybersecurity risks.

**JORDAN**: And there was also discussion about the potential 10% interest rate cap on credit cards. While Mastercard doesn't set interest rates, Miebach acknowledged they're actively engaged in industry discussions about affordability. He emphasized the unintended consequences - like potentially cutting off credit acces

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown, bringing you the numbers and the narrative from Wall Street's biggest movers. I'm Alex, joined as always by Jordan. Today we're digging into Lam Research's June quarter, fiscal Q4 2026 — and Jordan, this one's a barnburner.

Before we get into it, quick disclaimer: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: With that out of the way — Alex, Lam just closed out fiscal 2026 with records stacked on records. Fourth straight quarter of record revenue, highest gross margin in 20 years, record operating margin, record EPS. This is a semiconductor equipment maker riding the AI capex wave about as well as anyone.

ALEX: Let's hit the headline numbers. June quarter revenue came in at $6.72 billion, up 15% sequentially and 30% year-over-year. Gross margin hit 52%, operating margin 38.4%, diluted EPS a record $1.82 — all above the high end of guidance. For the full fiscal year, revenue was $23.2 billion with EPS of $5.82, up 41% from fiscal 2025.

JORDAN: And the guide for September is even bigger — $8.1 billion, plus or minus $400 million. That's more than 20% sequential growth. CEO Tim Archer also raised his calendar 2026 wafer fab equipment spending outlook to the "low $150 billion range," up from the prior $140 billion call.

ALEX: What jumped out to me was NAND. Revenue there literally doubled sequentially. Archer tied that directly to AI — bigger context windows, persistent memory requirements, all of it pushing customers to upgrade their fabs to 200-plus layer NAND architectures.

JORDAN: Right, and this is where the story gets interesting for the long haul. Archer said Lam's served available market — SAM — per wafer in NAND could double again as layer counts climb from 128-layer to 500-plus layer devices. More layers means more etch and deposition steps, and etch and deposition is Lam's bread and butter.

ALEX: They also talked a lot about advanced packaging — TSV etch and electroplating for things like HBM. That segment's growth outlook has basically been revised upward every quarter this year — from 40%, to 50%, now to over 70% year-over-year growth.

JORDAN: And it's not just chasing today's demand. Archer mentioned future AI packages could be nine times the size of a standard reticle — three times larger than today's chips — which is pushing the whole industry toward panel-level packaging instead of traditional wafers. Lam's already shipped panel-format tools into development programs, so they're trying to get ahead of that transition.

ALEX: Let's talk margins for a second, because CFO Doug Bettinger got some pointed questions on this. Analysts pushed him on how Lam gets from today's 51-52% gross margin to the "mid-50s" long-term target they've now laid out — up from the "high-40s to 50%" framework from their 2025 investor day.

JORDAN: His answer was basically: it's a mix of scale, operational efficiency — a lot of credit went to their global manufacturing footprint, including that Malaysia facility JPMorgan's analyst asked about — plus new product introductions and, yes, pricing. But he was clear it's going to take "several years," not quarters.

ALEX: One exchange I loved was the debate over 2027. Multiple analysts tried to get Bettinger to put a number on next year's growth, and he wouldn't bite, but he kept saying things like "pretty darn good year" and that he feels "incrementally good" about each successive quarter. The industry is still undersupplied — there are reportedly eight to ten new fabs coming online globally between now and the end of 2027.

JORDAN: That undersupply point matters. Bettinger also updated a framework they'd f

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**BETA FINCH PODCAST SCRIPT**

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we decode the latest corporate results so you don't have to. I'm Alex, and I'm joined as always by my co-host Jordan. Today we're diving into Lam Research's Q3 2026 earnings call, and wow, what a quarter this was for the semiconductor equipment giant.

But before we jump in, I need to share an important disclaimer: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Thanks Alex, and you're absolutely right about this being a standout quarter. Lam just posted their third consecutive record revenue quarter at $5.84 billion - that's up 9% sequentially and a massive 24% year-over-year. But the real headline here might be their Customer Support Business Group hitting $2 billion in quarterly revenue for the first time ever.

**ALEX:** That's incredible growth, and what's really catching my attention is how CEO Tim Archer talked about this AI-driven semiconductor boom. Jordan, they actually raised their wafer fabrication equipment spending forecast from $135 billion to $140 billion for 2026, and Archer said there's a "bias to the upside." What's driving this optimism?

**JORDAN:** It's all about AI demand creating this perfect storm for Lam. Think about it - AI workloads need more advanced memory, more complex chip architectures, and that means more deposition and etching processes, which is exactly Lam's sweet spot. Archer mentioned their served available market as a percentage of total wafer fab equipment spending is expanding to the "mid-30s percent" and heading toward the "high 30s" in the coming years.

**ALEX:** And speaking of memory, there was some fascinating commentary about NAND flash memory. Apparently, AI is changing the entire storage landscape. Archer said they expect total data center memory bits this year to exceed both PC and mobile segments combined. That's a massive shift.

**JORDAN:** Absolutely, and here's where it gets really interesting for Lam's business. They had previously said that about $40 billion in conversion spending would be needed over several years to upgrade existing NAND capacity to produce devices with more than 200 layers. Now they're saying that conversion is being "pulled forward" with most of the spending happening before the end of 2027. That's a significant acceleration.

**ALEX:** Let's talk profitability because the numbers here are impressive. Gross margins hit 49.9% - at the high end of guidance - and they're guiding for 50.5% next quarter. CFO Doug Bettinger attributed this to improved factory efficiencies and better tool performance. Jordan, what stood out to you about their operational improvements?

**JORDAN:** What I found fascinating was how they're leveraging technology to drive these margins. They talked about their Dextro cobots - these are automated maintenance robots - and their Equipment Intelligence services. Archer mentioned that customers using Dextro in production are seeing higher output and in some cases improved yield from existing capacity. That's the kind of value-add service that commands premium pricing.

**ALEX:** The geographical breakdown was interesting too. China came in at 34% of revenue, but Bettinger expects that to decline in the June quarter. Meanwhile, both Korea and Taiwan hit record revenue levels at 23% each. It seems like the growth is really coming from leading-edge customers outside of China.

**JORDAN:** Right, and that ties into their technology leadership story. During the Q&A, there was this great example where a customer actually switched to Lam's tools in the middle of their production ramp because of "superior def

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown. I'm Alex, and I'm here with my co-host Jordan to dive into Lam Research's Q2 2026 earnings call. Before we get started, I want to remind our listeners that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Thanks Alex. And wow, what a quarter for Lam Research! The semiconductor equipment maker absolutely crushed it with record revenues of $5.34 billion - that's their tenth consecutive quarter of growth. They beat the midpoint of guidance and exceeded expectations across the board.

ALEX: The numbers really tell the story here. For the full year 2025, they hit record revenues of $20.6 billion, up 27% year-over-year. But what's even more impressive is the profitability - gross margins of 49.9%, operating margins of 34.1%, and earnings per share of $4.89, up 49% from the prior year.

JORDAN: And looking ahead, CEO Tim Archer and CFO Doug Bettinger painted a picture of an industry that's absolutely on fire. They're projecting wafer fabrication equipment spending - that's WFE - to jump from about $110 billion in 2025 to $135 billion in 2026. That's roughly 23% growth!

ALEX: But here's the fascinating part - and this came up multiple times in the Q&A - the industry is actually constrained by clean room space shortages. Tim Archer mentioned that chipmakers are essentially sold out, which is creating this pent-up demand situation.

JORDAN: Right, it's almost like a luxury problem to have. The demand is there, the orders are there, but customers literally don't have the physical space to install all the equipment they want. Doug Bettinger mentioned they expect 2026 to be "second-half weighted" because of these constraints, with growth ramping as more clean room space comes online.

ALEX: The AI boom is really driving everything here. Lam is particularly well-positioned because AI chips require more complex manufacturing processes - specifically more deposition and etching, which is exactly what Lam specializes in. Archer talked about how they're seeing accelerated adoption of advanced technologies like gate-all-around transistors and 3D advanced packaging.

JORDAN: One product that really stood out was their Aqara conductor etch system. They've doubled its installed base over the past year and are winning production contracts for the most advanced chip manufacturing. Tim Archer explained that as critical dimensions keep shrinking - we're talking 10 to 20% smaller with each new technology node - Lam's tools become even more essential.

ALEX: The memory business is particularly interesting. DRAM was a standout, making up 23% of systems revenue, up from 16% in the previous quarter. This is largely driven by high-bandwidth memory or HBM demand for AI applications. But what caught my attention was their advanced packaging business - they expect it to grow more than 40% in 2026.

JORDAN: And then there's NAND flash memory, which has been a bit of a sleeper story. While it was down sequentially in Q2, management is seeing new use cases emerging, particularly for AI inference applications. They mentioned that for every 2-3 million AI accelerators sold, they estimate a one-point increase in NAND bit demand growth.

ALEX: Let's talk about the geographic mix because it's quite telling. China represented 35% of revenue, down from 43% in the prior quarter. Management expects China to be roughly flat year-over-year in 2026, while everywhere else grows substantially. This shift is partly due to regulatory changes but also reflects where the cutting-edge demand is coming from.

JORDAN: The guidance for Q3 2026 shows continued momentum - they're expecting revenue of $5.7

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