10-QPeriod: Q2 FY2021

KLA CORP Quarterly Report for Q2 Ended Dec 31, 2020

Filed February 4, 2021For Securities:KLAC

Summary

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 billion, 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%, 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.

Financial Highlights

53 data points
Beta

Revenue

$1.65B

59.4% Gross Margin

Net Income

$457.25M

27.7% Net Margin

EPS (Diluted)

$0.29

Total Assets

$9.81B

Cash & Equivalents

$1.43B

Free Cash Flow

$501.94M

Financial Statements
Beta
Revenue$1.65B
Cost of Revenue$669.73M
Gross Profit$981.14M
R&D Expenses$229.06M
SG&A Expenses$181.91M
Interest Expense$38.88M
Net Income$457.25M
EPS (Basic)$0.30
EPS (Diluted)$0.29
Shares Outstanding (Basic)1.54B
Shares Outstanding (Diluted)1.56B

Key Highlights

  • 1Total 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.
  • 2Net 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.
  • 3Gross 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.
  • 4The Semiconductor Process Control segment, the company's largest, saw revenues grow by 11% year-over-year to $1.38 billion.
  • 5The company reported strong operating cash flow generation, with $1.07 billion for the six months ended December 31, 2020.
  • 6KLA 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.
  • 7The company maintained a strong liquidity position with $2.30 billion in cash, cash equivalents, and marketable securities as of December 31, 2020.

Frequently Asked Questions

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.

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.

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.

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.