01—Abstract
Summary
Summary of the 10-Q filed February 4, 2021. Cited figures are marked; the original filing is the authoritative source.
KLA Corporation (KLAC) reported strong financial results for the quarter ending December 31, 2020.
Total revenues increased by 9% year-over-year to $1.65 billiona, driven by robust demand in the Semiconductor Process Control segment, which saw an 11% revenue increase. Net income attributable to KLA grew significantly to $457.3 million, up from $380.6 million in the prior year's comparable quarter. This growth reflects higher revenues and effective cost management.
The company maintained a healthy gross margin of 59.4%b, an improvement from 58.0% in the prior year, indicating strong pricing power and operational efficiency. KLA also continued to return capital to shareholders through dividends and share repurchases, demonstrating a commitment to shareholder value.
02—Key points
Key Highlights
- Total revenues increased by 9% to $1.65 billion for the three months ended December 31, 2020, compared to $1.51 billion in the same period last year.
- Net income attributable to KLA increased by 20% to $457.3 million ($2.94 per diluted share) for the three months ended December 31, 2020, compared to $380.6 million ($2.40 per diluted share) in the prior year.
- Gross margin improved to 59.4% from 58.0% year-over-year, driven by a favorable mix of products and services sold and higher revenue volume.
- The Semiconductor Process Control segment, the company's largest, saw revenues grow by 11% year-over-year to $1.38 billion.
- The company reported strong operating cash flow generation, with $1.07 billion for the six months ended December 31, 2020.
- KLA continues to invest in research and development, with R&D expenses increasing by 4% to $229.1 million for the quarter, reflecting a commitment to innovation.
- The company maintained a strong liquidity position with $2.30 billion in cash, cash equivalents, and marketable securities as of December 31, 2020.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2021filed February 4, 2021Financial Statements
Q2 FY2021 against Q2 FY2020
| Line item | Q2 FY2021Q2 FY2020 | Change |
|---|---|---|
| Revenue | $1.65B$1.51B | +9.4% |
| Cost of Revenue | $669.73M$633.62M | +5.7% |
| Gross Profit | $981.14M$875.84M | +12.0% |
| R&D Expenses | $229.06M$220.75M | +3.8% |
| SG&A Expenses | $181.91M$192.25M | −5.4% |
| Interest Expense | $38.88M$40.47M | −3.9% |
| Net Income | $457.25M$380.56M | +20.2% |
| EPS (Basic) | $0.30$0.24 | +22.3% |
| EPS (Diluted) | $0.29$0.24 | +22.5% |
| Shares Outstanding (Basic) | 1.54B1.57B | −1.9% |
| Shares Outstanding (Diluted) | 1.56B1.59B | −1.9% |
05—Questions
Frequently Asked Questions
What drove the revenue growth in the quarter?
Revenue growth was primarily driven by strong demand from memory and logic customers within the Semiconductor Process Control segment, as well as continued growth in the 5G infrastructure market, high-performance computing, and ongoing work-from-home requirements. These factors more than offset softer demand in the FPD market.
How did KLA manage its expenses during the quarter?
KLA demonstrated effective cost management. Selling, General and Administrative (SG&A) expenses decreased by 5% year-over-year due to lower travel-related expenses and reduced intangible amortization. While Research and Development (R&D) expenses increased by 4% to support innovation, overall cost controls contributed to the significant increase in net income.
What is KLA's current financial health and liquidity position?
KLA maintains a strong financial position. As of December 31, 2020, the company had $2.30 billion in cash, cash equivalents, and marketable securities, providing ample liquidity. Operating cash flow was robust, and the company reported no outstanding borrowings under its revolving credit facility, indicating healthy financial management.
How is KLA returning capital to shareholders?
KLA continues to return capital through regular quarterly cash dividends and share repurchases. The company declared a quarterly cash dividend of $0.90 per share and actively repurchased shares under its authorized program, aiming to offset dilution and return excess cash to stockholders.
06—Continue