Summary
KLA Corporation (KLAC) reported third-quarter fiscal year 2024 results showing a year-over-year decline in total revenues, primarily driven by a decrease in product revenue. This dip is attributed to the broader semiconductor industry slowdown, characterized by supply chain rebalancing and reduced capital expenditure plans by memory and foundry/logic customers. Despite the revenue contraction, service revenues saw a notable increase, up 12% year-over-year, indicating strength in the company's service offerings and installed base. The company recorded significant goodwill and purchased intangible asset impairment charges, totaling $219.0 million in the second quarter and $70.5 million in the third quarter of fiscal year 2024. These impairments were primarily related to the company's decision to exit the Display business. While these charges impacted profitability, the underlying operational performance, excluding these non-recurring items, should be assessed by investors. KLA continues to manage its liquidity effectively, with a robust cash position and available credit facilities.
Financial Highlights
51 data points| Revenue | $2.36B |
| Cost of Revenue | $993.88M |
| Gross Profit | $1.37B |
| R&D Expenses | $321.59M |
| SG&A Expenses | $237.51M |
| Interest Expense | $79.98M |
| Net Income | $601.54M |
| EPS (Basic) | $4.46 |
| EPS (Diluted) | $4.43 |
| Shares Outstanding (Basic) | 134.95M |
| Shares Outstanding (Diluted) | 135.86M |
Key Highlights
- 1Total revenues decreased by 3% year-over-year to $2.36 billion, primarily due to a 7% drop in product revenue, reflecting the semiconductor industry slowdown.
- 2Service revenues increased by 12% year-over-year to $590.5 million, demonstrating resilience and growth in the service segment.
- 3The company recorded significant goodwill and purchased intangible asset impairment charges totaling $70.5 million in the current quarter and $219.0 million in the prior quarter, largely due to the decision to exit the Display business.
- 4Net income attributable to KLA was $601.5 million, or $4.43 per diluted share, a decrease from the prior year's quarter, partly due to the goodwill impairment charge.
- 5Cash, cash equivalents, and marketable securities stood at $4.29 billion as of March 31, 2024, providing substantial liquidity.
- 6Geographically, China remains a significant market, contributing 42% of total revenues, despite ongoing U.S. export control regulations.
- 7The company repurchased $375.7 million of common stock during the quarter, continuing its capital return program to shareholders.