01—Abstract
Summary
Summary of the 10-Q filed October 27, 2017. Cited figures are marked; the original filing is the authoritative source.
KLA CORP (KLAC) reported strong financial performance for the quarter ended September 30, 2017, with total revenues of $969.6 milliona, 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 millionb, 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 billionc in cash, cash equivalents, and marketable securities, providing ample resources for operations, dividends, and potential future investments.
02—Key points
Key Highlights
- Total revenues increased by 29% year-over-year to $969.6 million.
- Product revenues saw a significant jump of 35% year-over-year, reaching $760.8 million, driven by strong demand in memory and logic markets.
- Net income increased by 57.7% year-over-year to $280.9 million.
- Diluted earnings per share rose to $1.78 from $1.13 in the prior year's quarter.
- Gross margin remained strong at 63.5%.
- Cash, cash equivalents, and marketable securities totaled $3.06 billion as of September 30, 2017, indicating a healthy liquidity position.
- The company declared and paid a regular quarterly cash dividend of $0.59 per share.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2018filed October 27, 2017Financial Statements
Q1 FY2018 against Q1 FY2017
| Line item | Q1 FY2018Q1 FY2017 | Change |
|---|---|---|
| Revenue | $969.58M$750.67M | +29.2% |
| Cost of Revenue | $353.12M$277.84M | +27.1% |
| Gross Profit | $616.46M$472.84M | +30.4% |
| R&D Expenses | $146.69M$129.23M | +13.5% |
| SG&A Expenses | $107.43M$94.39M | +13.8% |
| Interest Expense | $30.58M$30.73M | −0.5% |
| Net Income | $280.94M$178.10M | +57.7% |
| EPS (Basic) | $0.18$0.11 | +57.0% |
| EPS (Diluted) | $0.18$0.11 | +57.5% |
| Shares Outstanding (Basic) | 1.57B1.56B | +0.4% |
| Shares Outstanding (Diluted) | 1.58B1.57B | +0.5% |
05—Questions
Frequently Asked Questions
What drove the significant increase in KLA CORP's revenue this quarter?
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.
How did KLA CORP's profitability change compared to the previous year?
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.
What is the company's current liquidity position?
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.
Are there any significant changes in the company's debt structure?
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.
06—Continue