Summary
KLA Corp. (KLAC) reported strong financial performance for the six months ended December 31, 2018. Total revenues grew by 14% year-over-year to $2.21 billion, driven by a 10% increase in product revenue and a significant 26% rise in service revenue. This growth reflects robust demand in the memory and wafer inspection sectors, supported by customer investments in next-generation technologies and capacity expansion. The company's adoption of ASC 606, a new revenue recognition standard, has impacted revenue reporting, generally leading to earlier recognition. Net income for the six-month period was $765 million, a substantial increase from $146.6 million in the prior year, partly due to the favorable impact of ASC 606 and improved operational efficiencies. KLA Corp. continues to navigate the cyclical semiconductor industry, with memory capital equipment spending projected to decline while leading-edge foundry and logic capital equipment spending is expected to ramp, indicating a favorable business mix shift. The company also provided an update on its proposed merger with Orbotech, Ltd., which is still pending regulatory approval.
Financial Highlights
50 data points| Revenue | $1.12B |
| Cost of Revenue | $408.26M |
| Gross Profit | $711.64M |
| R&D Expenses | $165.90M |
| SG&A Expenses | $112.46M |
| Interest Expense | $26.54M |
| Net Income | $369.10M |
| EPS (Basic) | $2.43 |
| EPS (Diluted) | $2.42 |
| Shares Outstanding (Basic) | 152.15M |
| Shares Outstanding (Diluted) | 152.65M |
Key Highlights
- 1Total revenues increased by 14% to $2.21 billion for the six months ended December 31, 2018, compared to the same period last year.
- 2Service revenue saw a substantial increase of 26%, indicating strong demand for maintenance and support services.
- 3Net income significantly improved to $765 million from $146.6 million year-over-year.
- 4The company's cash, cash equivalents, and marketable securities stood at $2.69 billion as of December 31, 2018.
- 5KLA Corp. adopted ASC 606 (Revenue from Contracts with Customers) effective July 1, 2018, impacting revenue recognition timing.
- 6The proposed merger with Orbotech, Ltd. is still in progress, awaiting regulatory approval.
- 7The company returned approximately $787 million to stockholders through dividends and stock repurchases during the six months ended December 31, 2018.