01—Abstract
Summary
Summary of the 10-K filed August 6, 2021. Cited figures are marked; the original filing is the authoritative source.
KLA Corporation, a global leader in process control and process-enabling solutions for the semiconductor and electronics industries, demonstrated robust revenue growth in fiscal year 2021, with total revenues reaching $6.92 billiona, a 19% increase year-over-year.
This growth was primarily driven by strong demand in the Semiconductor Process Control segment, fueled by increased investments in 5G, high-performance computing, and advanced packaging. The company's diversified product portfolio, encompassing inspection, metrology, deposition, and etching solutions, caters to critical stages of semiconductor, PCB, and display manufacturing, enabling customers to improve yields and reduce costs. Financially, KLA reported net income attributable to KLA of $2.08 billionb for FY2021, a significant increase from $1.22 billion in FY2020.
This strong performance is supported by a gross margin that improved to 60%. The company maintained a healthy liquidity position with $2.49 billionc in cash, cash equivalents, and marketable securities as of June 30, 2021.
KLA also actively returned capital to shareholders through dividends and share repurchases. Despite strong results, the company faces ongoing risks related to supply chain constraints, particularly due to COVID-19 impacts, and customer concentration, with a few key customers accounting for a substantial portion of revenue.
02—Key points
Key Highlights
- KLA Corporation reported total revenues of $6.92 billion for fiscal year 2021, a 19% increase compared to the prior year, driven by strong demand across its key segments.
- Net income attributable to KLA was $2.08 billion in FY2021, a substantial rise from $1.22 billion in FY2020, reflecting strong operational performance.
- Gross margin improved to 60% in FY2021, up from 58% in FY2020, indicating enhanced profitability on sales.
- The Semiconductor Process Control segment remains the largest revenue driver, showing a 21% increase year-over-year, supported by demand for inspection and metrology solutions.
- The company ended FY2021 with a strong liquidity position, holding $2.49 billion in cash, cash equivalents, and marketable securities.
- KLA continues to invest in Research and Development (R&D), with R&D expenses increasing by 7% to $928.5 million in FY2021, underscoring its commitment to innovation.
- The company repurchased $938.6 million of its common stock in FY2021 and declared a quarterly cash dividend of $1.05 per share, signaling a commitment to returning capital to shareholders.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed August 6, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $6.92B$5.81B | +19.2% |
| Cost of Revenue | $2.77B$2.45B | +13.2% |
| Gross Profit | $4.15B$3.36B | +23.5% |
| R&D Expenses | $928.49M$863.86M | +7.5% |
| SG&A Expenses | $729.60M$734.15M | −0.6% |
| Interest Expense | $157.33M$160.27M | −1.8% |
| Net Income | $2.08B$1.22B | +70.8% |
| EPS (Basic) | $1.35$0.78 | +73.8% |
| EPS (Diluted) | $1.34$0.77 | +73.6% |
| Shares Outstanding (Basic) | 1.54B1.57B | −1.7% |
| Shares Outstanding (Diluted) | 1.55B1.58B | −1.6% |
05—Questions
Frequently Asked Questions
What are KLA Corporation's primary business segments and their performance in FY2021?
KLA Corporation operates across four reportable segments: Semiconductor Process Control, Specialty Semiconductor Process, PCB, Display and Component Inspection, and Other. In FY2021, Semiconductor Process Control was the largest segment, with revenues increasing by 21% to $5.73 billion. Specialty Semiconductor Process and PCB, Display and Component Inspection also saw revenue growth of 12% each, driven by demand in advanced packaging, high-performance computing, and 5G infrastructure. The 'Other' segment's revenue significantly decreased.
What were KLA's key financial results for the fiscal year ended June 30, 2021?
For the fiscal year ended June 30, 2021, KLA reported total revenues of $6.92 billion, a 19% increase from the previous year. Net income attributable to KLA was $2.08 billion, resulting in diluted earnings per share of $13.37. The company's gross margin improved to 60%, and it maintained a robust cash position of $2.49 billion.
What are the main risks and challenges KLA Corporation faces, as highlighted in the filing?
Key risks for KLA include potential supply chain disruptions (exacerbated by COVID-19), extended lead times for components, and the concentration of its customer base, with a few major customers accounting for a significant portion of revenue. Other risks involve the cyclical nature of the semiconductor industry, intense competition, geopolitical factors affecting international sales, and the need for continuous innovation to keep pace with technological advancements.
How did KLA manage its capital and shareholder returns in FY2021?
KLA generated strong operating cash flow, totaling $2.19 billion in FY2021. The company used its liquidity for strategic investments in R&D ($928.5 million), capital expenditures, and returning capital to shareholders. This included $938.6 million in stock repurchases and paying $559.4 million in dividends, demonstrating a balanced approach to reinvestment and shareholder returns.
06—Continue