01—Abstract
Summary
Summary of the 10-Q filed October 28, 2021. Cited figures are marked; the original filing is the authoritative source.
KLA Corporation (KLAC) reported strong financial performance for the quarter ending September 29, 2021, with total revenues reaching $2.08 billiona, a significant increase of 35% year-over-year.
This growth was driven by robust demand across its key segments, particularly Semiconductor Process Control, which saw revenues climb 40%. Net income attributable to KLA surged to $1.07 billionb, a substantial rise from $420.6 million in the prior year's comparable quarter, boosted by higher revenues and a notable non-recurring tax benefit of $394.5 million related to intellectual property transfers to its Singapore subsidiary. Diluted EPS also saw a significant jump to $6.96 from $2.69.
The company maintains a strong liquidity position with over $2.6 billionc in cash, cash equivalents, and marketable securities, supporting its ongoing share repurchase program and dividend payments. Despite strong results, the company continues to monitor supply chain constraints related to the COVID-19 pandemic and geopolitical factors impacting global trade.
02—Key points
Key Highlights
- Total revenues increased by 35% to $2.08 billion for the three months ended September 30, 2021, compared to $1.54 billion for the same period in 2020.
- Net income attributable to KLA Corporation more than doubled to $1.07 billion ($6.96 diluted EPS) from $420.6 million ($2.69 diluted EPS) year-over-year.
- The Semiconductor Process Control segment, the largest revenue contributor, saw a 40% increase in revenue to $1.78 billion.
- Gross margin improved to 61.0% from 59.7% year-over-year, driven by higher revenue volume.
- The company ended the quarter with a strong liquidity position, holding $2.62 billion in cash, cash equivalents, and marketable securities.
- KLA repurchased approximately 1.19 million shares of common stock for $399.7 million during the quarter, reflecting its commitment to returning capital to shareholders.
- A significant non-recurring tax benefit of $394.5 million positively impacted net income due to intra-entity intellectual property transfers.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2022filed October 28, 2021Financial Statements
Q1 FY2022 against Q1 FY2021
| Line item | Q1 FY2022Q1 FY2021 | Change |
|---|---|---|
| Revenue | $2.08B$1.54B | +35.4% |
| Cost of Revenue | $813.62M$620.56M | +31.1% |
| Gross Profit | $1.27B$918.06M | +38.4% |
| R&D Expenses | $258.15M$219.04M | +17.9% |
| SG&A Expenses | $193.26M$172.63M | +12.0% |
| Interest Expense | $38.31M$39.39M | −2.7% |
| Net Income | $1.07B$420.57M | +154.0% |
| EPS (Basic) | $0.70$0.27 | +158.7% |
| EPS (Diluted) | $0.70$0.27 | +158.7% |
| Shares Outstanding (Basic) | 1.52B1.55B | −1.9% |
| Shares Outstanding (Diluted) | 1.53B1.56B | −1.9% |
05—Questions
Frequently Asked Questions
What was the primary driver of KLA's revenue growth in this quarter?
KLA's revenue growth was primarily driven by strong demand for its process control and yield management solutions, particularly in the Semiconductor Process Control segment. This was supported by increased customer investments in advanced technologies, 5G infrastructure, and the automotive market, as well as the broad adoption of semiconductors across various industries.
How did the non-recurring tax benefit affect KLA's net income?
KLA recorded a significant non-recurring tax benefit of $394.5 million during the quarter related to intra-entity transfers of intellectual property rights to its Singapore subsidiary. This benefit substantially boosted net income attributable to KLA, contributing to the large increase in profitability compared to the prior year.
What is KLA's liquidity position and how is it managing its capital?
KLA maintained a strong liquidity position with $2.62 billion in cash, cash equivalents, and marketable securities as of September 30, 2021. The company actively manages its capital through share repurchases, paying regular dividends, and investing in acquisitions and operations. The company also has access to a $1 billion unsecured revolving credit facility, of which none was outstanding at the end of the quarter.
Are there any significant risks or challenges highlighted in this filing for KLA?
KLA continues to monitor supply chain constraints, particularly those exacerbated by the COVID-19 pandemic, which have led to extended lead times and shortages of critical components. The company also faces risks related to the global trade environment, geopolitical factors, cybersecurity threats, and the cyclical nature of the semiconductor industry. Additionally, its business is subject to concentration risk due to a limited number of key customers.
06—Continue