01—Abstract
Summary
Summary of the 10-Q filed October 28, 2022. Cited figures are marked; the original filing is the authoritative source.
KLA Corporation (KLAC) reported strong financial results for the quarter ending September 29, 2022, with total revenues of $2.72 billiona, a significant increase of 31% year-over-year.
This growth was primarily driven by robust demand in the Semiconductor Process Control segment, particularly in metrology and inspection portfolios, as well as growth in the advanced packaging and specialty semiconductor markets. The company demonstrated solid profitability, with net income attributable to KLA of $1.03 billionb, and diluted EPS of $7.20.
While revenues and net income were slightly down from the immediate prior quarter, the year-over-year performance shows substantial improvement. KLA also maintained a strong balance sheet with over $2.95 billionc in cash, cash equivalents, and marketable securities, and generated $1.01 billion in cash flow from operations, underscoring its financial health and operational efficiency.
02—Key points
Key Highlights
- Total revenues increased by 31% year-over-year to $2.72 billion, driven by strong demand across key segments.
- Net income attributable to KLA was $1.03 billion, translating to diluted EPS of $7.20.
- The Semiconductor Process Control segment was the primary revenue driver, showing a 35% year-over-year increase.
- The company maintained a healthy liquidity position with $2.95 billion in cash, cash equivalents, and marketable securities.
- Operating cash flow remained strong at $1.01 billion for the quarter.
- KLA announced new U.S. government regulations impacting semiconductor and high-performance computing technology exports to China, which could materially impact future revenue, estimated between $500 million to $900 million in calendar year 2023.
- The company repurchased approximately 257,000 shares of common stock for $89.6 million during the quarter.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2023filed October 28, 2022Financial Statements
Q1 FY2023 against Q1 FY2022
| Line item | Q1 FY2023Q1 FY2022 | Change |
|---|---|---|
| Revenue | $2.72B$2.08B | +30.7% |
| Cost of Revenue | $1.04B$813.62M | +28.0% |
| Gross Profit | $1.68B$1.27B | +32.5% |
| R&D Expenses | $318.51M$258.15M | +23.4% |
| SG&A Expenses | $253.98M$193.26M | +31.4% |
| Interest Expense | $74.39M$38.31M | +94.2% |
| Net Income | $1.03B$1.07B | −4.0% |
| EPS (Basic) | $0.72$0.70 | +3.1% |
| EPS (Diluted) | $0.72$0.70 | +3.4% |
| Shares Outstanding (Basic) | 1.42B1.52B | −6.9% |
| Shares Outstanding (Diluted) | 1.43B1.53B | −7.1% |
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 products, especially its metrology and inspection portfolios within the Semiconductor Process Control segment. Growth was also supported by continued expansion in the advanced packaging and specialty semiconductor markets.
What is the potential impact of the new U.S. export regulations on China?
The new U.S. government regulations concerning semiconductor and high-performance computing technology exports to China are complex and are being assessed by KLA. The company estimates a potential combined gross direct impact on revenue, based on existing backlog, in the range of $500 million to $900 million in calendar year 2023. KLA is working to comply with these regulations and is applying for necessary export licenses.
How has KLA's financial position evolved compared to the prior year?
KLA's financial position shows significant improvement year-over-year. Total revenues grew by 31% to $2.72 billion, and net income attributable to KLA increased to $1.03 billion. The company also maintained a strong and growing liquidity position with cash, cash equivalents, and marketable securities totaling $2.95 billion.
What is the company's approach to returning capital to shareholders?
KLA continues to return capital to shareholders through regular quarterly cash dividends and share repurchases. During the quarter, the company paid $188.0 million in dividends and repurchased approximately $89.6 million of its common stock. The company also has an ongoing stock repurchase program with substantial remaining authorization.
06—Continue