10-QPeriod: Q3 FY2025

KLA CORP Quarterly Report for Q3 Ended Mar 31, 2025

Filed May 1, 2025For Securities:KLAC

Summary

KLA Corporation (KLAC) reported a strong third quarter of fiscal year 2025, with total revenues of $3.06 billion, a significant 30% increase year-over-year. This growth was primarily driven by robust demand in the Semiconductor Process Control segment, particularly in wafer inspection and patterning products, fueled by customer investments in AI and advanced technologies. The company also saw a healthy increase in service revenues due to its growing installed base. Profitability also improved, with gross margin increasing to 61.6% from 57.9% in the prior year's quarter, benefiting from higher revenue volumes and improved manufacturing efficiencies. Net income more than doubled year-over-year to $1.09 billion, or $8.16 per diluted share, reflecting strong operational execution. The company continued to return capital to shareholders through $506.7 million in share repurchases and $225.8 million in dividends.

Financial Highlights

50 data points
Beta

Revenue

$3.06B

61.6% Gross Margin

Net Income

$1.09B

35.5% Net Margin

EPS (Diluted)

$0.82

Total Assets

$15.19B

Cash & Equivalents

$1.86B

Free Cash Flow

$990.02M

Financial Statements
Beta
Revenue$3.06B
Cost of Revenue$1.18B
Gross Profit$1.89B
R&D Expenses$338.04M
SG&A Expenses$248.91M
Net Income$1.09B
EPS (Basic)$0.82
EPS (Diluted)$0.82
Shares Outstanding (Basic)1.33B
Shares Outstanding (Diluted)1.33B

Key Highlights

  • 1Total revenues reached $3.06 billion, a 30% increase year-over-year, driven by strong demand in Semiconductor Process Control.
  • 2Gross margin improved to 61.6% from 57.9% in the prior year's quarter, reflecting higher revenue volumes and operational efficiencies.
  • 3Net income more than doubled to $1.09 billion, with diluted EPS of $8.16, significantly up from $4.43 in the prior year's quarter.
  • 4The Semiconductor Process Control segment, the largest contributor, saw a 31% revenue increase, particularly strong in wafer inspection and patterning products.
  • 5Service revenues grew by 13% year-over-year, indicating the positive impact of an expanding installed base.
  • 6The company repurchased $506.7 million of its common stock and paid $225.8 million in dividends, demonstrating a commitment to returning capital to shareholders.
  • 7Remaining performance obligations (RPO) stood at $8.91 billion as of March 31, 2025, indicating strong future revenue visibility.

Frequently Asked Questions

KLA Corp delivered a strong financial performance in Q3 FY25. Total revenues grew 30% year-over-year to $3.06 billion, while net income more than doubled to $1.09 billion. Gross margin improved to 61.6% due to higher volumes and operational efficiencies.

The primary driver of revenue growth is the Semiconductor Process Control segment, which saw a 31% increase. This is attributed to strong demand for wafer inspection and patterning products, fueled by customer investments in AI and advanced technologies. Service revenues also increased by 13% due to a growing installed base.

KLA Corp is actively returning capital to shareholders. In Q3 FY25, the company repurchased $506.7 million of its common stock and paid $225.8 million in dividends. The company also maintains a strong liquidity position with $4.03 billion in cash, cash equivalents, and marketable securities, and has $8.91 billion in remaining performance obligations providing good future revenue visibility.

The company continues to navigate evolving U.S. export control regulations impacting sales to China. While KLA is taking measures to comply and applying for licenses, there's an ongoing risk that these regulations could materially affect future business. The company also faces general risks related to global trade policies and tariffs.