10-QPeriod: Q1 FY2018

KLA CORP Quarterly Report for Q1 Ended Sep 30, 2017

Filed October 27, 2017For Securities:KLAC

Summary

KLA CORP (KLAC) reported strong financial performance for the quarter ended September 30, 2017, with total revenues of $969.6 million, a significant increase of 29% year-over-year. This growth was primarily driven by a substantial rise in product revenue, up 35% to $760.8 million, indicating robust demand from memory and logic customers for next-generation technology and capacity expansions. The company also saw a healthy increase in service revenue, up 11% year-over-year to $208.8 million. Net income for the quarter surged to $280.9 million, or $1.78 per diluted share, a significant improvement from $178.1 million, or $1.13 per diluted share, in the prior year's comparable quarter. This reflects strong operational execution and increased sales volume. The company maintained a solid gross margin of 63.5% and managed its operating expenses effectively, with R&D and SG&A expenses growing at a slower pace than revenue. KLA CORP's liquidity position remains strong, with $3.06 billion in cash, cash equivalents, and marketable securities, providing ample resources for operations, dividends, and potential future investments.

Financial Highlights

49 data points
Beta

Revenue

$969.58M

63.6% Gross Margin

Net Income

$280.94M

29.0% Net Margin

EPS (Diluted)

$0.18

Total Assets

$5.69B

Cash & Equivalents

$1.32B

Free Cash Flow

$357.87M

Financial Statements
Beta
Revenue$969.58M
Cost of Revenue$353.12M
Gross Profit$616.46M
R&D Expenses$146.69M
SG&A Expenses$107.43M
Interest Expense$30.58M
Net Income$280.94M
EPS (Basic)$0.18
EPS (Diluted)$0.18
Shares Outstanding (Basic)1.57B
Shares Outstanding (Diluted)1.58B

Key Highlights

  • 1Total revenues increased by 29% year-over-year to $969.6 million.
  • 2Product revenues saw a significant jump of 35% year-over-year, reaching $760.8 million, driven by strong demand in memory and logic markets.
  • 3Net income increased by 57.7% year-over-year to $280.9 million.
  • 4Diluted earnings per share rose to $1.78 from $1.13 in the prior year's quarter.
  • 5Gross margin remained strong at 63.5%.
  • 6Cash, cash equivalents, and marketable securities totaled $3.06 billion as of September 30, 2017, indicating a healthy liquidity position.
  • 7The company declared and paid a regular quarterly cash dividend of $0.59 per share.

Frequently Asked Questions

The substantial 29% year-over-year increase in total revenues to $969.6 million was primarily driven by strong demand from memory and logic customers for next-generation technology and capacity expansions, which boosted product revenues by 35% year-over-year. Service revenues also contributed positively with an 11% year-over-year increase.

KLA CORP demonstrated strong profitability improvement. Net income grew significantly by 57.7% to $280.9 million, and diluted earnings per share increased to $1.78 from $1.13 in the same quarter last year. This reflects the benefits of increased sales volume and effective cost management.

KLA CORP maintains a strong liquidity position. As of September 30, 2017, the company held $3.06 billion in cash, cash equivalents, and marketable securities, providing ample financial flexibility for operations, strategic investments, and shareholder returns.

During the quarter, KLA CORP made significant principal payments on its term loans, reducing the outstanding balance. The company continues to manage its debt obligations, which primarily consist of Senior Notes and term loans, and reported compliance with all financial covenants under its credit facility.