10-QPeriod: Q1 FY2023

KLA CORP Quarterly Report for Q1 Ended Sep 30, 2022

Filed October 28, 2022For Securities:KLAC

Summary

KLA Corporation (KLAC) reported strong financial results for the quarter ending September 29, 2022, with total revenues of $2.72 billion, 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 billion, 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 billion in cash, cash equivalents, and marketable securities, and generated $1.01 billion in cash flow from operations, underscoring its financial health and operational efficiency.

Financial Highlights

51 data points
Beta

Revenue

$2.72B

61.8% Gross Margin

Net Income

$1.03B

37.7% Net Margin

EPS (Diluted)

$0.72

Total Assets

$13.12B

Cash & Equivalents

$1.82B

Free Cash Flow

$927.19M

Financial Statements
Beta
Revenue$2.72B
Cost of Revenue$1.04B
Gross Profit$1.68B
R&D Expenses$318.51M
SG&A Expenses$253.98M
Interest Expense$74.39M
Net Income$1.03B
EPS (Basic)$0.72
EPS (Diluted)$0.72
Shares Outstanding (Basic)1.42B
Shares Outstanding (Diluted)1.43B

Key Highlights

  • 1Total revenues increased by 31% year-over-year to $2.72 billion, driven by strong demand across key segments.
  • 2Net income attributable to KLA was $1.03 billion, translating to diluted EPS of $7.20.
  • 3The Semiconductor Process Control segment was the primary revenue driver, showing a 35% year-over-year increase.
  • 4The company maintained a healthy liquidity position with $2.95 billion in cash, cash equivalents, and marketable securities.
  • 5Operating cash flow remained strong at $1.01 billion for the quarter.
  • 6KLA 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.
  • 7The company repurchased approximately 257,000 shares of common stock for $89.6 million during the quarter.

Frequently Asked Questions

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.

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.

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.

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.