01—Abstract
Summary
Summary of the 10-Q filed January 26, 2018. Cited figures are marked; the original filing is the authoritative source.
KLA Corp (KLAC) reported revenue of $975.8 milliona for the three months ended December 31, 2017, a 11% increase year-over-year.
Net income for the quarter was a loss of $134.3 millionb, or -$0.86 per diluted share, primarily impacted by a significant provisional tax provision related to the Tax Cuts and Jobs Act of 2017. Excluding this tax impact, the company demonstrated operational strength with increased revenue driven by memory and logic customer investments. The company's cash position remains strong, with $1.07 billion in cash and cash equivalents and $1.68 billion in marketable securities as of December 31, 2017.
Despite the net loss for the quarter due to the tax impact, the company's operational performance shows positive trends in revenue growth and a strong gross margin of 64%c. Key financial highlights include a 20% year-over-year increase in total revenues for the first six months of the fiscal year and continued investment in research and development to support future technological advancements. The company also continued its shareholder return program, paying a quarterly dividend and repurchasing shares.
02—Key points
Key Highlights
- Total revenues increased by 11% year-over-year to $975.8 million for the three months ended December 31, 2017.
- A net loss of $134.3 million was reported for the quarter, largely due to a $442.0 million provisional tax provision related to the Tax Cuts and Jobs Act of 2017.
- Gross margin remained strong at 64.4% for the quarter, indicating healthy operational profitability before extraordinary tax items.
- Cash and cash equivalents stood at $1.07 billion and marketable securities at $1.68 billion as of December 31, 2017, reflecting a solid liquidity position.
- Product revenues saw an 11% increase year-over-year, driven by investments from memory and logic customers.
- Research and Development expenses increased by 20% year-over-year to $156.7 million, highlighting the company's commitment to innovation.
- The company repaid $250 million of Senior Notes at maturity and reduced its overall debt.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2018filed January 26, 2018Financial Statements
Q2 FY2018 against Q2 FY2017
| Line item | Q2 FY2018Q2 FY2017 | Change |
|---|---|---|
| Revenue | $975.82M$876.88M | +11.3% |
| Cost of Revenue | $347.00M$318.51M | +8.9% |
| Gross Profit | $628.82M$558.38M | +12.6% |
| R&D Expenses | $156.70M$130.91M | +19.7% |
| SG&A Expenses | $105.27M$93.53M | +12.5% |
| Interest Expense | $27.37M$30.62M | −10.6% |
| Net Income | -$134.32M$238.25M | −156.4% |
| EPS (Basic) | $-0.09$0.15 | −156.6% |
| EPS (Diluted) | $-0.09$0.15 | −156.6% |
| Shares Outstanding (Basic) | 1.57B1.56B | +0.2% |
| Shares Outstanding (Diluted) | 1.57B1.57B | −0.3% |
05—Questions
Frequently Asked Questions
What caused the net loss in the current quarter?
The net loss of $134.3 million for the three months ended December 31, 2017, was primarily due to a significant provisional tax provision of $442.0 million recognized as a result of the enactment of the Tax Cuts and Jobs Act of 2017. This includes a transition tax on foreign earnings and the re-measurement of deferred tax assets and liabilities.
How did KLA Corp's revenue perform compared to the prior year?
KLA Corp's total revenues increased by 11% year-over-year to $975.8 million for the three months ended December 31, 2017. Product revenues grew by 11% and service revenues grew by 11%, driven by customer investments in memory and logic technologies and an increasing installed base of systems.
What is the company's liquidity and cash position?
As of December 31, 2017, KLA Corp maintained a strong liquidity position with $1.07 billion in cash and cash equivalents and $1.68 billion in marketable securities, totaling $2.76 billion. The company generated $503 million in net cash from operating activities for the six months ended December 31, 2017.
How is the company investing for the future?
The company continues to invest in research and development, with R&D expenses increasing by 20% year-over-year to $156.7 million for the three months ended December 31, 2017. This investment is focused on addressing customer yield challenges and developing technologies for future semiconductor manufacturing nodes.
06—Continue