10-KPeriod: FY2023

KLA CORP Annual Report, Year Ended Jun 30, 2023

Filed August 4, 2023For Securities:KLAC

Summary

KLA Corporation, a leading supplier of process control and yield management solutions for the semiconductor and related electronics industries, reported robust performance for the fiscal year ended June 30, 2023. Total revenues increased by 14% to $10.5 billion, driven primarily by strong demand in the Semiconductor Process Control segment. The company's strategic focus on advanced technologies and its comprehensive product portfolio positions it well within the dynamic electronics manufacturing landscape. Despite a macroeconomic slowdown impacting semiconductor device demand in the latter part of the fiscal year, KLA demonstrated resilience. The company maintained a strong gross margin and continued to invest in research and development to fuel future innovation. KLA's operations are largely international, with a significant portion of revenues generated in Asia, though the company also navigates evolving export regulations impacting its business in China. KLA remains committed to returning capital to shareholders through dividends and share repurchases.

Financial Highlights

55 data points
Beta

Revenue

$10.50B

59.8% Gross Margin

Net Income

$3.39B

32.3% Net Margin

EPS (Diluted)

$2.42

Total Assets

$14.07B

Cash & Equivalents

$1.93B

Free Cash Flow

$3.33B

Financial Statements
Beta
Revenue$10.50B
Cost of Revenue$4.22B
Gross Profit$6.28B
R&D Expenses$1.30B
SG&A Expenses$986.33M
Interest Expense$296.94M
Net Income$3.39B
EPS (Basic)$2.43
EPS (Diluted)$2.42
Shares Outstanding (Basic)1.39B
Shares Outstanding (Diluted)1.40B

Key Highlights

  • 1Total revenues increased by 14% year-over-year to $10.5 billion, driven by strong demand across key segments.
  • 2The Semiconductor Process Control segment saw an 18% revenue increase, highlighting the company's core strength.
  • 3Gross margin remained strong at 59.8%, demonstrating effective cost management despite increased service and manufacturing costs.
  • 4Research and Development expenses increased by 17% to $1.3 billion, underscoring KLA's commitment to innovation.
  • 5The company generated substantial operating cash flow of $3.7 billion, enabling continued investment and capital returns.
  • 6KLA returned approximately $1.31 billion to shareholders through stock repurchases and $733 million in dividends.
  • 7The company ended the fiscal year with $3.24 billion in cash, cash equivalents, and marketable securities, indicating a strong liquidity position.

Frequently Asked Questions

KLA Corporation's primary revenue driver was its Semiconductor Process Control segment, which experienced an 18% increase in revenue. Strong demand for inspection and metrology products, along with growth in specialty semiconductor markets, contributed significantly to overall revenue growth. The Specialty Semiconductor Process segment also saw an increase, while the PCB, Display and Component Inspection segment experienced a decrease due to market softening.

KLA Corporation maintained a strong gross margin of 59.8% in fiscal year 2023, a slight decrease from 61.0% in the prior year, primarily due to increased service and manufacturing costs, partially offset by higher revenue volumes. The company increased R&D spending by 17% to $1.3 billion, reflecting its commitment to innovation. Selling, General, and Administrative (SG&A) expenses also increased by 15%, driven by factors such as facilities, depreciation, and travel expenses. Despite these investments and cost increases, KLA demonstrated effective cost management and profitability.

KLA Corporation ended the fiscal year with a strong liquidity position, reporting $3.24 billion in cash, cash equivalents, and marketable securities. This increase was primarily driven by strong operating cash flow of $3.7 billion. The company generated significant net cash from operating activities, which, along with its existing cash reserves and a $1.5 billion revolving credit facility, is expected to be sufficient to meet its liquidity requirements for at least the next 12 months, including working capital needs, capital expenditures, dividends, stock repurchases, and debt obligations.

KLA Corporation highlighted several risks, including vulnerability to weakening financial markets and global economic conditions, risks associated with international operations (tariffs, trade policies, political instability), the potential impact of evolving U.S. government regulations and export controls on business in China, cybersecurity threats, supply chain disruptions, and the highly concentrated nature of its customer base. The company also noted the competitive landscape and the need to continuously innovate to maintain its technological advantage.