10-KPeriod: FY2022

KLA CORP Annual Report, Year Ended Jun 30, 2022

Filed August 5, 2022For Securities:KLAC

Summary

KLA Corporation's 2022 10-K filing details a strong year of growth, driven by robust demand across its semiconductor process control and specialty semiconductor process segments. Total revenues increased significantly, reflecting increased customer investments in advanced semiconductor manufacturing technologies to support market trends like AI, 5G, and automotive electrification. The company's comprehensive portfolio of inspection, metrology, and process-enabling solutions positions it as a critical partner for semiconductor manufacturers navigating complex technological advancements and yield optimization challenges. While demand remains strong, the company highlighted increasing supply chain constraints and macro-economic uncertainties, particularly in PC and mobile device markets, which it is monitoring closely. KLA's financial health appears solid, with substantial cash reserves and effective management of its debt obligations. The company also continued its commitment to returning capital to shareholders through dividends and significant share repurchases.

Financial Highlights

55 data points
Beta

Revenue

$9.21B

61.0% Gross Margin

Net Income

$3.32B

36.1% Net Margin

EPS (Diluted)

$2.19

Total Assets

$12.60B

Cash & Equivalents

$1.58B

Free Cash Flow

$3.01B

Financial Statements
Beta
Revenue$9.21B
Cost of Revenue$3.59B
Gross Profit$5.62B
R&D Expenses$1.11B
SG&A Expenses$860.01M
Interest Expense$160.34M
Net Income$3.32B
EPS (Basic)$2.21
EPS (Diluted)$2.19
Shares Outstanding (Basic)1.50B
Shares Outstanding (Diluted)1.52B

Key Highlights

  • 1Total revenues saw a substantial increase of 33% year-over-year, reaching $9.21 billion, driven by strong demand in the Semiconductor Process Control segment.
  • 2Net income attributable to KLA Corporation grew by 59.7% to $3.32 billion, demonstrating strong profitability.
  • 3The company's backlog significantly increased to $13.11 billion as of June 30, 2022, up from $4.69 billion in the prior year, indicating strong future revenue potential.
  • 4KLA repurchased a significant amount of its common stock, with $3.23 billion remaining available under its repurchase program at year-end, including a large accelerated share repurchase (ASR) agreement.
  • 5The company continues to invest heavily in Research and Development (R&D), with R&D expenses increasing by 19% to $1.11 billion, underscoring its commitment to innovation and maintaining a technological edge.
  • 6International revenues represented approximately 90% of total revenues, with Asia (China, Taiwan, Korea) being the dominant geographic region, highlighting KLA's global reach and reliance on the Asian semiconductor manufacturing ecosystem.
  • 7Gross margin improved slightly to 61% from 60% in the prior year, reflecting strong demand and favorable product mix, partially offset by increased service and manufacturing costs.

Frequently Asked Questions

KLA Corporation experienced significant revenue growth driven by strong demand for its products, particularly in the Semiconductor Process Control and Specialty Semiconductor Process segments. This demand was fueled by key market trends such as Artificial Intelligence (AI), 5G telecommunications, and the increasing electrification and digitalization of the automotive industry, all of which necessitate advanced semiconductor devices and manufacturing capabilities.

KLA Corporation is actively managing supply chain challenges by planning further ahead and increasing purchase commitments for critical components. The company works closely with its suppliers to identify and mitigate potential gaps to ensure continuity of supply, though it notes that lead times remain extended.

While KLA Corporation sees overall strong demand from its customers, it is closely monitoring macroeconomic uncertainties and their potential impact on consumer demand. The company has observed some softening in PC and mobile device markets and a weakening in memory pricing in those areas, which could lead to earnings volatility if customers push out or cancel deliveries.

KLA Corporation is returning capital to shareholders through regular quarterly cash dividends and a substantial stock repurchase program. In fiscal year 2022, the company paid significant dividends and executed large share repurchases, including an accelerated share repurchase (ASR) agreement, demonstrating a commitment to enhancing shareholder value.