10-QPeriod: Q1 FY2025

KLA CORP Quarterly Report for Q1 Ended Sep 30, 2024

Filed October 31, 2024For Securities:KLAC

Summary

KLA Corporation (KLAC) reported a strong fiscal first quarter for FY2025, with total revenues increasing by 19% year-over-year to $2.84 billion. This growth was driven by a robust increase in product revenue, up 20% to $2.20 billion, and a 15% rise in service revenue to $644 million. The company's Semiconductor Process Control segment was the primary revenue driver, experiencing a 21% increase and accounting for 91% of total segment revenue. Net income also saw a significant boost, rising to $946 million from $741 million in the prior year's comparable quarter, leading to diluted EPS of $7.01, up from $5.41. The company continues to benefit from strong demand for its inspection and metrology products, particularly in advanced packaging and memory markets, supported by global investments in domestic semiconductor capacity and AI-driven technologies. Despite geopolitical tensions and evolving export regulations impacting certain markets, KLA demonstrated resilience and effective operational management. The company maintained a healthy balance sheet, with total assets increasing to $15.68 billion and substantial liquidity through cash, cash equivalents, and marketable securities totaling $4.63 billion.

Financial Highlights

47 data points
Beta

Revenue

$2.84B

59.6% Gross Margin

Net Income

$945.85M

33.3% Net Margin

EPS (Diluted)

$0.70

Total Assets

$15.68B

Cash & Equivalents

$1.98B

Free Cash Flow

$934.85M

Financial Statements
Beta
Revenue$2.84B
Cost of Revenue$1.15B
Gross Profit$1.69B
R&D Expenses$323.14M
SG&A Expenses$251.04M
Net Income$945.85M
EPS (Basic)$0.70
EPS (Diluted)$0.70
Shares Outstanding (Basic)1.34B
Shares Outstanding (Diluted)1.35B

Key Highlights

  • 1Total revenues increased by 19% year-over-year to $2.84 billion.
  • 2Product revenue grew 20% to $2.20 billion, while service revenue increased 15% to $644 million.
  • 3Net income rose to $946 million, an increase of 28% compared to the prior year's quarter.
  • 4Diluted earnings per share (EPS) was $7.01, up from $5.41 in the same period last year.
  • 5The Semiconductor Process Control segment saw revenue growth of 21%, demonstrating its continued strength.
  • 6The company maintained strong liquidity with $4.63 billion in cash, cash equivalents, and marketable securities.
  • 7KLA Corporation reiterated its commitment to returning capital to shareholders through dividends and stock repurchases.

Frequently Asked Questions

KLA's revenue growth was primarily driven by strong demand for its inspection and metrology products, particularly in advanced packaging and memory markets. Increased investments in domestic semiconductor capacity globally and the development of AI-driven technologies also contributed significantly. The Semiconductor Process Control segment, especially Wafer Inspection, showed robust performance.

KLA demonstrated resilience by effectively navigating evolving export regulations and geopolitical tensions. While these factors, particularly those impacting sales to China, present challenges, the company actively seeks export licenses and has seen some success. Diversification of its customer base and geographic regions, coupled with continued demand from other markets, helped mitigate these impacts.

KLA maintains a strong financial position with $4.63 billion in cash, cash equivalents, and marketable securities as of September 30, 2024. The company has $6.70 billion in outstanding senior notes and maintains an undrawn $1.50 billion revolving credit facility. Operating cash flow remains strong, providing ample liquidity for operations, capital expenditures, dividends, and stock repurchases.

KLA highlighted several risks, including the cyclical nature of the semiconductor industry, potential impacts from global economic slowdowns, evolving export regulations (particularly concerning China), intense competition, supply chain disruptions, and cybersecurity threats. The company also noted the importance of continued investment in R&D to maintain its technology advantage and adapt to rapid industry changes.