01—Abstract
Summary
Summary of the 10-Q filed January 24, 2014. Cited figures are marked; the original filing is the authoritative source.
KLA Corp. (KLAC) reported its financial results for the quarter ending December 30, 2013.
Total revenues for the quarter were $705.1 milliona, a 5% increase year-over-year, driven by growth in both product and service revenues. Net income for the quarter was $139.2 million, or $0.83 per diluted share, representing a significant improvement from the prior year's quarter. The company maintains a strong balance sheet with total assets of $5.44 billion and substantial liquidity, including $793.4 million in cash and cash equivalents and $2.16 billion in marketable securities.
The company highlighted robust new order activity for its process control and yield management equipment across memory, foundry, and logic markets, indicating positive future demand. R&D expenses increased year-over-year, reflecting continued investment in advanced product and technology development, which is crucial for KLAC's competitive position. Management expressed confidence in the long-term growth drivers of the industry and the company's ability to navigate market cyclicality.
02—Key points
Key Highlights
- Total revenues increased 5% year-over-year to $705.1 million for the quarter.
- Net income grew to $139.2 million, or $0.83 per diluted share, compared to $106.6 million in the prior year's quarter.
- The company ended the quarter with a strong liquidity position, holding $793.4 million in cash and cash equivalents and $2.16 billion in marketable securities.
- Product revenues saw a year-over-year increase, driven by higher shipment backlog due to demand for advanced technologies.
- Service revenues also increased, reflecting a larger installed base of post-warranty systems.
- Research and Development (R&D) expenses rose 11% year-over-year, demonstrating continued investment in innovation and new product development.
- The company's gross margin improved to 59.5% from 54.8% in the prior year's quarter, indicating improved operational efficiency and favorable product mix.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2014, KLA Corp kept $0.20.
- Revenue$705.1M100.0%
- Cost of revenue−$285.8M40.5%
- Gross profit$419.3M59.5%
- Operating costs−$231.3M32.8%
- Operating income$188.0M26.7%
- Interest, other & tax−$48.7M6.9%
- Net income$139.2M19.7%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2014filed January 24, 2014Financial Statements
Q2 FY2014 against Q2 FY2013
| Line item | Q2 FY2014Q2 FY2013 | Change |
|---|---|---|
| Revenue | $705.13M$673.01M | +4.8% |
| Cost of Revenue | $285.81M$303.92M | −6.0% |
| Gross Profit | $419.31M$369.10M | +13.6% |
| R&D Expenses | $134.59M$121.61M | +10.7% |
| SG&A Expenses | $96.75M$94.24M | +2.7% |
| Operating Expenses | $517.15M$519.76M | −0.5% |
| Operating Income | $187.98M$153.25M | +22.7% |
| Interest Expense | $13.31M$13.43M | −0.9% |
| Net Income | $139.25M$106.63M | +30.6% |
| EPS (Basic) | $0.08$0.06 | +31.2% |
| EPS (Diluted) | $0.08$0.06 | +31.7% |
| Shares Outstanding (Basic) | 1.66B1.66B | +0.1% |
| Shares Outstanding (Diluted) | 1.68B1.69B | −0.5% |
05—Questions
Frequently Asked Questions
What was KLA Corp.'s revenue performance in this quarter compared to the prior year?
KLA Corp. reported total revenues of $705.1 million for the quarter ended December 31, 2013, representing a 5% increase compared to $673.0 million in the same quarter of the previous year. This growth was driven by increases in both product and service revenues.
How did KLA Corp.'s profitability change in this quarter?
Profitability significantly improved. Net income for the quarter was $139.2 million, or $0.83 per diluted share, compared to $106.6 million, or $0.63 per diluted share, in the prior year's quarter. This represents a substantial year-over-year increase in both net income and earnings per share.
What is the company's current financial health and liquidity position?
KLA Corp. maintains a strong financial position. As of December 31, 2013, the company had total assets of $5.44 billion, with significant liquidity. This included $793.4 million in cash and cash equivalents and $2.16 billion in marketable securities, totaling over $3 billion in readily available funds.
What are the key drivers for the company's revenue growth?
Revenue growth was primarily driven by an increase in product revenues, attributed to higher shipment backlog resulting from customer adoption of new device architectures and leading-edge process technologies. Service revenues also increased, reflecting a growing number of post-warranty systems installed at customer sites.
06—Continue