Doug Bettinger
Chief Financial Officer at Lam Research
Great. Thank you, Tim. Good afternoon, everyone, and thank you for joining our call today during what I know is a very busy earnings season. We delivered strong financial results in calendar year 2024 with revenue of $16.2 billion and diluted earnings per share of $3.36. We're obviously pleased with the company's continued strong execution.
For calendar year 2024, CSBG revenue increased 11% to $6.6 billion, exceeding our expectations. Gross margin came in at 48.2%, which was the highest annual result since LAM were merged with Novelis in 2013. Let's look at the details of our December quarter financial results. Our revenue, gross margin, operating margin and earnings per share were all above the midpoint of our guided range. Revenue for the December quarter was $4.38 billion, which was an increase of 5% from the prior quarter. Our deferred revenue balance at quarter-end was $2 billion, essentially flat with the September quarter. I do believe our deferred revenue balance will trend lower into calendar year 2025, but will likely fluctuate from quarter-to-quarter.
From a market segment perspective, December quarter systems revenue in-memory was 50%, up from 35% in the prior quarter. Within memory, non-volatile memory increased coming in at 24% of our systems revenue, up from 11% in the prior quarter. This market segment has reached the high point since the end of 2022, driven by NAND spending on tech conversions from 1XX layer class devices to 256 layer. We expect these conversions to continue in calendar year 2025. DRAM represented 26% of systems revenue compared with 24% in the September quarter. DRAM spending was focused on tech upgrades to the 1 Alpha, 1 beta and some initial ramp of 1 gamma nodes to enable and high-bandwidth memory. HBM investments in our tools enabling through-silicon VIA capability continues to be strong.
Foundry represented 35% of our systems revenue, a decrease from the percentage concentration in the September quarter of 41%. Growth for gate-all-around node spending partially offset the decline in mature node spending. The logic and other market segment was 15% of our systems revenue in the December quarter, down from the prior quarter level of 24%. The decrease was driven by reduced spending in both leading-edge as well as well as specialty technology nodes. Now I'll discuss the regional composition of our total revenue. The China region accounted for 31%, which was down from 37% in the prior quarter. Most of our China revenue continued to come from domestic Chinese customers. The next largest geographic concentration was Korea at 25% of revenue in the December quarter, an increase compared with a September quarter level of 18%.
And finally, Taiwan and the United States rounded out the remainder of the top four regions. The customer support business group generated almost $1.8 billion in revenue for the December quarter, consistent with the September quarter and 20% higher than the same-period in 2023. Sequentially, growth in upgrade revenue largely offset the decline that we saw in Reliance systems. While spares and the Reliant product-line continue to be the two largest components of CSBG revenue generation, we achieved record upgrade revenue, demonstrating the strength of that growing installed-base.
Turning to gross margin performance. The December quarter came in at 47.5%, which was above the midpoint of our guided range, but was down from the September quarter level of 48.2%. This was primarily a result of unfavorable customer mix, which we foreshadowed in the last earnings call. We've improved elements of our cost structure during the past two years and expanded the gross margin contribution from our Asia operations strategies by a little more than 100 basis-points as we exited calendar year 2024.
We expect incremental benefit to gross margins as we continue to scale production on a go-forward basis from this strategy. Operating expenses for December were in-line with our expectations at $735 million, up from the prior quarter amount of $722 million. The increase was primarily due to higher incentive compensation tied to the company's increased profitability. R&D accounted for 67% of total operating expenses. Operating margin in the current quarter was 30.7%, a little bit below the September quarter level of 30.9% and near the high-end of our guidance range, primarily because of that higher revenue and the stronger gross margin performance.
And I'd just reiterate what Tim mentioned that we delivered a 160 basis-point improvement in operating margin for calendar year 2024. The non-GAAP tax-rate for the quarter was 13.2% within the range of our expectations. Our estimate for the March 2025 quarter is for the tax-rate to be in the low-to mid-teens range. Other income and expense for the December quarter came in at $11 million in income compared with $13 million in income in the September quarter. The slight fluctuation in NOI&E was due to lower interest income, which was somewhat offset by lower foreign-exchange losses and a little bit of gain in equity investments. OINE will continue to be subject to market-related fluctuations that will cause some level of volatility quarter-to-quarter. And as we sit here today, I do believe OI&E will have a slight negative bias in the March quarter.
On the capital return side of things, we allocated approximately $650 million to open-market share repurchases and we paid $298 million in dividends in the December quarter. For the 2024 calendar year, we returned 98% of free-cash flow, totaling $4 billion, which was at the high-end of our long-term capital return plans of 75% to 100% of free-cash flow. For the December quarter, diluted earnings per share came in at $0.91. The diluted share count was roughly 1.29 billion shares, which was a reduction from the September quarter. During 2024, we repurchased nearly 34 million shares through our share buyback program, and we have $9.2 billion remaining on our Board authorized share repurchase plan.
Let me pivot to the balance sheet. Our cash and short-term investments totaled $5.7 billion at the end-of-the December quarter, down from $6.1 billion at the end-of-the September quarter. The main driver of the cash decrease was obviously our capital return activity. Day sales outstanding was 69 days in the December quarter, an increase from 64 days in the September quarter. Inventory at the December quarter-end totaled $4.4 billion, a slight increase from the September quarter as we prepare for higher revenues in the March 2025 quarter. Inventory turns were 2.1 times, flat from the prior quarter level. We will continue to manage inventory levels to the best of our ability to align with customer demand.
We're pleased to announce that we upsized our revolving credit facility from $1.5 billion to $2 billion. Additionally, I just mentioned that we have $500 million of unsecured notes maturing in March this year, which we intend to simply pay-off using cash on the balance sheet. We may choose to refinance this notional amount in the future as we continue to monitor the interest-rate environment. By bolstering our liquidity with the credit facility, we've created some optionality and flexibility here. Non-cash expenses for the December quarter included approximately $82 million for equity compensation, $83 million in depreciation and $13 million in amortization.
Capital expenditures in the December quarter were $188 million, up $78 million from the September quarter. Spending was mainly centered on lab-related investments in the United States and Asia and manufacturing facilities, supporting our global strategy to be close to customers' development and manufacturing locations. We ended the December quarter with approximately 18,300 regular full-time employees, which is an increase of approximately 600 people from the prior quarter. Growth was predominantly in-field and factory roles to support increased tool installation as well as growing manufacturing activities.
Now let's turn to our non-GAAP guidance for the March 2025 quarter. We're expecting revenue of $4.65 billion, plus or minus $300 million. Gross margin up 48%, plus or minus 1 percentage point. We anticipate roughly consistent levels of customer concentration. Operating margin of 32% plus or minus 1 percentage point. This guidance accounts for the normal seasonal increase in operating expenses that we always see at the beginning of the calendar year. And finally, earnings per share of $1 plus or minus $0.10 based on a share count of approximately 1.29 billion shares. I would mention that as we look into 2025, we plan to continue to deliver incremental leverage to the bottom-line.
At the same time, we will be growing R&D and continuing to grow investment in a digital transformation project that we initially launched in 2023. Each of these investments is expected to enable future financial benefits to the P&L that we plan to show you in February. So let me wrap-up. We executed well in calendar year 2024. We delivered 11% growth in CSBG and 160 basis-point improvement in operating margin, both of which exceeded our expectations from the beginning of last year. We've made key investments in our product portfolio to drive serve the available market and share opportunity and we've grown the global infrastructure to collaborate and deliver innovative solutions for our customers.
We also grew spending in that digital transformation program. We look-forward to sharing more details on the strength of our product portfolio as well as an updated long-term financial model at our Investor Day in New York City on February 19. We hope to see you there.
Operator, that concludes our prepared remarks. Jim and I would now like to open up the call for questions. We will now begin the question-and-answer session.
