Core Viewpoint - KLA (KLAC) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. KLA's Earnings Outlook - For the fiscal year ending June 2025, KLA is expected to earn $32.04 per share, reflecting a 35% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for KLA has risen by 2.1%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - KLA's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Revenue and Growth - The company reported that services revenue accounted for approximately 23% of total revenues, driven by an increase in the installed base of KLA systems [161]. - Total revenues for the three months ended March 31, 2025, were $3,063.0 million, a 30% increase from $2,359.8 million in the same period of 2024 [191]. - Product revenues for the three months ended March 31, 2025, were $2,393.8 million, a 35% increase from $1,769.4 million in the same period of 2024 [191]. - Service revenues for the three months ended March 31, 2025, increased to $669.2 million, up 13% from $590.5 million in the same period of 2024 [193]. - Total revenues for the nine months ended March 31, 2025, reached $8,981.4 million, a 24% increase from $7,243.5 million in the same period of 2024 [191]. - Revenue from customers in China accounted for 34% of total revenues for the nine months ended March 31, 2025, and 26% for the three months ended March 31, 2025 [194]. - The company experienced a significant revenue increase in Taiwan, with revenues rising 128% to $988.5 million for the three months ended March 31, 2025 [192]. - Total revenues for reportable segments increased by $703.8 million, or 30%, for the three months ended March 31, 2025, compared to the same period in 2024, reaching $3,063,869 thousand [195]. Financial Performance - Gross margin improved to 61.6% for the three months ended March 31, 2025, compared to 57.9% in the same period of 2024 [191]. - Net income for the three months ended March 31, 2025, was $1,088.4 million, up from $601.5 million in the same period of 2024, reflecting a significant increase of 81% [1]. - Diluted net income per share increased to $8.16 for the three months ended March 31, 2025, compared to $4.43 in the same period of 2024 [1]. - Gross profit in the Semiconductor Process Control segment increased by $421.7 million, or 31%, for the three months ended March 31, 2025, compared to the same period in 2024 [202]. - Gross profit in the PCB and Component Inspection segment increased by 102% for the nine months ended March 31, 2025, compared to the same period in 2024 [202]. Expenses and Charges - R&D expenses for the three months ended March 31, 2025, increased by $16.5 million, or 5%, compared to the same period in 2024, totaling $338,043 thousand [204]. - SG&A expenses for the three months ended March 31, 2025, increased by $11.4 million (5%) to $248.9 million compared to $237.5 million in the same period of 2024 [208]. - SG&A expenses for the nine months ended March 31, 2025, rose by $52.6 million (7%) to $767.0 million compared to $714.4 million in the same period of 2024 [209]. - A goodwill and purchased intangible assets impairment charge of $239.1 million was recorded in the PCB and Component Inspection segment during the second quarter of fiscal 2025 [210]. - The company recorded a goodwill impairment charge of $230.4 million in the PCB and Component Inspection segment during the second quarter of fiscal 2025 [182]. Government Regulations and Market Conditions - The U.S. government has imposed export licensing requirements on certain semiconductor technologies for customers in China, impacting the company's ability to provide products and services [166]. - The 2023 BIS Rules, effective November 2023, update export controls on advanced computing semiconductors and manufacturing equipment, further complicating compliance for the company [170]. - The company is continuously assessing the impact of government regulations and tariffs on financial results, particularly concerning operations in China [174]. - The recent imposition of tariffs by the U.S. government is expected to adversely impact the company's results of operations, with ongoing uncertainty regarding their duration and extent [173]. - Recent improvements in the semiconductor environment are attributed to rising semiconductor content across end-markets and strategic investments in legacy nodes [164]. Cash Flow and Capital Management - Cash, cash equivalents, and marketable securities totaled $4.03 billion as of March 31, 2025, a decrease of $475.4 million from June 30, 2024, primarily due to stock repurchases and debt repayment [226]. - Net cash provided by operating activities was $2.92 billion for the nine months ended March 31, 2025, compared to $2.42 billion in the same period of 2024 [224]. - Net cash provided by operating activities increased to $2.92 billion for the nine months ended March 31, 2025, up from $2.42 billion in the same period of 2024, reflecting a $501 million increase primarily due to higher customer collections [230]. - Net cash used in investing activities improved to $122.9 million for the nine months ended March 31, 2025, compared to a cash outflow of $(1.34) billion in the prior year, driven by a $1.48 billion increase in net proceeds from the sale of available-for-sale securities [231]. - Net cash used in financing activities rose to $3.16 billion for the nine months ended March 31, 2025, compared to $1.16 billion in the same period of 2024, largely due to a $750 million increase in debt repayment and $458.8 million in common stock repurchases [232]. Investments and Credit - As of March 31, 2025, the company had $5.95 billion in senior unsecured notes, with compliance to all covenants under the Indenture [233]. - The company has an unsecured Revolving Credit Facility of up to $1.50 billion, with no outstanding borrowings as of March 31, 2025, and a leverage ratio of 1.08 to 1.00 [234]. - The company maintains a credit rating of A from Fitch Inc. and S&P Global Ratings, and A2 from Moody's Investors Service as of March 31, 2025 [240]. - The company intends to indefinitely reinvest $65.9 million of cash held by foreign subsidiaries, with $999.3 million of total cash held abroad [227]. - As of March 31, 2025, the company had an investment portfolio of fixed income securities valued at $2.02 billion, subject to interest rate risk [243]. Sustainability Initiatives - The company entered into a long-term virtual power purchase agreement in January 2025 to support its goal of 100% renewable electricity by 2030 [241].

Core Insights - KLA Corporation reported strong third-quarter fiscal 2025 results, with non-GAAP earnings of $8.41 per share, exceeding estimates by 4.34% and showing a year-over-year increase of 59.9% [1] - Revenues reached $3.06 billion, a 29.8% increase year over year, surpassing estimates by 1.92% [1] Financial Performance - KLA's earnings have consistently beaten the Zacks Consensus Estimate over the past four quarters, with an average surprise of 6.35% [2] - Semiconductor Process Control revenues, which account for 89.4% of total revenues, increased by 30.7% year over year to $2.74 billion, despite a slight sequential decline of 1% [2] - Product revenues, making up 78.2% of total revenues, rose 35.3% year over year to $2.39 billion, while service revenues increased by 13.3% to $669.2 million [4] Segment Analysis - Within Semiconductor Process Control, Foundry and Logic represented approximately 71% of revenues, while Memory constituted about 29%, with DRAM accounting for 76% and NAND for 24% [3] - Specialty Semiconductor Process revenues were $156.5 million, up 19.8% year over year [3] - PCB and Component Inspection revenues increased by 26.4% year over year to $168.6 million [3] Regional Revenue Breakdown - Taiwan and China were the largest contributors to revenue, accounting for 32% and 26%, respectively [5] - Other contributions included Korea (12%), Japan (11%), North America (10%), Europe (6%), and the rest of Asia (3%) [5] Operating Metrics - The non-GAAP gross margin for the third quarter was 63%, exceeding the company's guidance by 50 basis points [6] - Research and development expenses rose by 5.1% year over year to $338 million, while selling, general and administrative expenses increased by 4.8% to $248.9 million [6] Cash Flow and Balance Sheet - As of March 31, 2025, cash, cash equivalents, and marketable securities totaled $4.03 billion, up from $3.78 billion at the end of the previous quarter [9] - Operating cash flow for the quarter was $1.07 billion, an increase from $849.5 million in the prior quarter, with free cash flow at $990 million [9] Future Guidance - For the fourth quarter of fiscal 2025, KLA expects revenues of $3.075 billion, indicating a year-over-year growth of 16.27% [11] - Non-GAAP earnings are projected at $8.53 per share, suggesting a year-over-year growth of 20.15% [11] - The company anticipates a non-GAAP gross margin of 63% and operating expenses of $595 million for the upcoming quarter [12]

Group 1 - The analyst has 5 years of experience managing a technology fund and has a background in Mechanical Engineering [1] - The focus of the analysis is on investment opportunities in the semiconductor sector, robotics, and energy [1] - The investment strategy emphasizes growth at a reasonable price with a mid- to long-term horizon, targeting companies in oligopolistic sectors with high barriers to entry [1] Group 2 - The analyst has previously worked in the oil and gas sector before transitioning to global equities [1] - The analyst completed CFA Level II in 2024, indicating a commitment to professional development in investment management [1] - The analyst aims to provide small investors with valuable investment ideas through published articles [1]

Core Insights - KLA reported a revenue of $3.06 billion for the quarter ended March 2025, marking a 29.8% increase year-over-year, with an EPS of $8.41 compared to $5.26 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $3.01 billion by 1.92%, and the EPS also surpassed the consensus estimate of $8.06 by 4.34% [1] Revenue Breakdown - Product revenue reached $2.39 billion, exceeding the three-analyst average estimate of $2.35 billion, reflecting a year-over-year increase of 35.3% [4] - Service revenue was reported at $669.21 million, above the three-analyst average estimate of $657.04 million, representing a year-over-year growth of 13.3% [4] - Revenue from PCB, Display, and Component Inspection was $168.55 million, surpassing the estimated $140.55 million, with a year-over-year change of 26.4% [4] - Specialty Semiconductor Process revenue was $156.50 million, compared to the average estimate of $145.14 million, indicating a 19.8% year-over-year increase [4] - Semiconductor Process Control revenue was $2.74 billion, slightly above the $2.72 billion average estimate, showing a year-over-year growth of 30.7% [4] Stock Performance - KLA shares have returned +0.8% over the past month, while the Zacks S&P 500 composite experienced a -0.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - KLA reported revenue of $3,060,000,000 for the March quarter, exceeding the guidance midpoint of $3,000,000,000, with a non-GAAP diluted EPS of $8.41 and GAAP diluted EPS of $8.16 [7][15] - The gross margin was 63%, about 50 basis points higher than the guidance midpoint, driven by a stronger product mix within the Process Control segment [15][21] - Free cash flow for the quarter was $990,000,000, with a total of $3,500,000,000 over the past twelve months, resulting in a free cash flow margin of 30% [13][18] Business Line Data and Key Metrics Changes - KLA's advanced packaging revenue grew to over $500,000,000 in calendar 2024 and is expected to exceed $850,000,000 in calendar 2025, reflecting strong customer adoption [12] - The services business grew to $669,000,000 in March, marking a 13% year-over-year increase, despite challenges from U.S. Government export controls [12][47] - The Process Control segment maintained a strong global share, with a notable increase in advanced wafer level packaging market share, moving from third position in 2019 to a leading position in 2025 [10][11] Market Data and Key Metrics Changes - KLA's market share in the WFE and process control markets remained strong, with a 30% year-over-year revenue increase attributed to investments in leading-edge logic and high bandwidth memory [11][19] - The company expects WFE to grow by mid-single digits percentage in 2025, driven by investments in leading-edge foundry and logic, partially offset by lower demand from China [19][24] - KLA's exposure to the Chinese market was approximately 26% in March, with expectations of it being around 30% for the year, despite potential declines due to export controls [56][57] Company Strategy and Development Direction - KLA's strategy focuses on capital return, with a commitment to increasing dividends and share repurchases, announcing a 12% increase in quarterly dividends and a new $5,000,000,000 share repurchase authorization [14][18] - The company aims to leverage its unique product portfolio to support technology transitions and ensure high-volume production, particularly in advanced packaging and AI infrastructure [20][24] - KLA plans to postpone its Investor Day to early to mid-2026, hoping for a more stable macro environment to discuss growth strategies [9][33] Management's Comments on Operating Environment and Future Outlook - Management noted that despite macro uncertainties, there has been no change in customer demand or investment plans, indicating confidence in continued growth [8][9] - The company highlighted the importance of AI as a key driver for growth, with increasing complexity in semiconductor design and production [11][62] - Management expressed optimism about the 2026 outlook, citing ongoing investments in AI infrastructure and the need for capacity expansion among customers [61][70] Other Important Information - KLA's balance sheet remains strong, with $4,000,000,000 in cash and cash equivalents, and a debt of $5,900,000,000, supporting growth strategies and capital returns [18] - The company is adapting its product offerings to meet the evolving needs of the advanced packaging market, particularly in high bandwidth memory and hybrid bonding technologies [51][93] Q&A Session Summary Question: Impact of tariffs on equipment and systems - Management acknowledged the fluidity of tariff impacts and the potential headwinds on gross margins, particularly in the service business, while emphasizing their ability to manage global manufacturing operations [27][30][34] Question: Growth outlook for services - The services business is expected to grow in the low double digits for the year, slightly below long-term targets due to export control impacts [46][48] Question: Competitive positioning in advanced packaging - KLA has seen significant growth in advanced packaging, particularly in CoAOS, and is well-positioned to capitalize on the increasing demand for high bandwidth memory [49][51] Question: Revenue expectations from China - Management expects China to contribute around 30% of revenue for the year, with potential fluctuations due to macroeconomic factors [56][57] Question: Factors influencing gross margin guidance - The increase in gross margin guidance is attributed to product mix improvements and scale benefits from advanced packaging, despite tariff impacts [72][74]

Financial Data and Key Metrics Changes - KLA reported revenue of $3,060 million for the March quarter, exceeding the guidance midpoint of $3,000 million, with a non-GAAP diluted EPS of $8.41 and GAAP diluted EPS of $8.16, both at the upper end of guidance ranges [5][12] - The gross margin was 63%, about 50 basis points higher than the guidance midpoint, driven by a stronger product mix within the Process Control segment [12][18] - Quarterly free cash flow was $990 million, with total capital returns of $733 million, including $507 million in share repurchases and $226 million in dividends [10][11] Business Line Data and Key Metrics Changes - KLA's advanced packaging revenue grew to over $500 million in calendar 2024 and is expected to exceed $850 million in calendar 2025, reflecting strong customer adoption [9][15] - The services business grew to $669 million in March, marking a 13% year-over-year increase, despite challenges from U.S. government export controls [10][12] - The process control share of the advanced wafer level packaging market has grown significantly, moving from third position in 2019 to a leading position expected in 2025 [7][8] Market Data and Key Metrics Changes - KLA maintained a strong global share in the WFE and process control markets, with a notable share gain in advanced wafer level packaging [7][8] - The company expects the WFE market to grow by mid-single digits in 2025, driven by investments in leading-edge foundry and logic, and high bandwidth memory [15][16] Company Strategy and Development Direction - KLA's strategy focuses on capital return and confidence in business opportunities, with a commitment to assertive capital allocation [6][11] - The company is adapting its product offerings to support advanced packaging and AI infrastructure, which are critical for future growth [9][17] - KLA plans to postpone its Investor Day to early 2026, hoping for a more stable macro environment to discuss growth strategies [6][30] Management's Comments on Operating Environment and Future Outlook - Management noted that despite macro uncertainties, there has been no change in customer demand or investment plans [6][30] - The company remains optimistic about growth opportunities in leading-edge logic, high bandwidth memory, and advanced packaging, despite potential impacts from global trade uncertainties [15][21] - KLA's management emphasized the importance of customer discussions and alignment with shipment requirements in a fluid business environment [17][21] Other Important Information - KLA announced a 12% increase in its quarterly dividend to $1.90 per share and a new $5 billion share repurchase authorization [14] - The company expects gross margins for the year to be approximately 62.5%, factoring in potential tariff impacts [18][19] Q&A Session Summary Question: Impact of tariffs on equipment and systems - Management acknowledged the fluidity of tariff impacts and the potential headwinds on gross margins, particularly in the service business [24][26][30] Question: Competitive positioning in e-beam inspection - KLA has seen significant progress in e-beam inspection, doubling revenues and gaining market share due to strong customer evaluations and interoperability with optical tools [34][36][38] Question: Full year outlook on services growth - Services growth is expected to trend around 10% for the year, slightly below long-term targets due to impacts from export controls [43][46] Question: Advanced Packaging competitive positioning - KLA's differentiation lies in adapting front-end solutions for back-end applications, particularly in CoAOS, driving significant growth in advanced packaging [47][49][50] Question: Outlook for China revenue - Management expects China to represent around 30% of total business for the year, with potential fluctuations in quarterly performance [54][56] Question: Factors influencing 2026 outlook - The company remains optimistic about continued growth driven by AI infrastructure investments, despite uncertainties in the macro environment [58][62][68]

[Fiscal 2025 Third Quarter Financial Highlights](index=1&type=section&id=Fiscal%202025%20Third%20Quarter%20Financial%20Highlights) [Q3 FY2025 Performance Summary](index=1&type=section&id=Q3%20FY2025%20Performance%20Summary) KLA reported strong Q3 FY2025 results, with **$3.06 billion** revenue and **$8.16** GAAP diluted EPS, exceeding guidance Q3 FY2025 Key Financial Results (GAAP & Non-GAAP) | Metric | Q3 FY 2025 | Q2 FY 2025 | Q3 FY 2024 | | :--- | :--- | :--- | :--- | | **GAAP Results** | | | | | Total Revenues | $3,063 million | $3,077 million | $2,360 million | | Net Income | $1,088 million | $825 million | $602 million | | Net Income per Diluted Share | $8.16 | $6.16 | $4.43 | | **Non-GAAP Results** | | | | | Net Income | $1,121 million | $1,098 million | $715 million | | Net Income per Diluted Share | $8.41 | $8.20 | $5.26 | - Total revenues for Q3 FY2025 were **$3.06 billion**, with GAAP net income of **$1.09 billion** and GAAP net income per diluted share of **$8.16**[2](index=2&type=chunk) - CEO Rick Wallace stated that results were above the midpoint of guidance and that the company has received no indications of demand changes from customers for calendar year 2025 despite global trade uncertainties[3](index=3&type=chunk) [Capital Returns Program](index=1&type=section&id=Capital%20Returns%20Program) The company enhanced its capital return program, increasing quarterly dividend by **11.8%** to **$1.90 per share** and authorizing **$5 billion** for repurchases - The Board of Directors approved an increase in the quarterly dividend level to **$1.90 per share** from **$1.70 per share**, marking the 16th consecutive annual increase[7](index=7&type=chunk) - An additional **$5 billion** has been authorized for share repurchases, supplementing the existing authorization which had approximately **$457 million** remaining as of March 31, 2025[7](index=7&type=chunk) - Total capital returns for Q3 FY2025 amounted to **$732.5 million**, and **$2.37 billion** for the last nine months[4](index=4&type=chunk) [Fourth Quarter Fiscal 2025 Guidance](index=1&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Guidance) Q4 FY2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Total Revenues | $3.075 billion +/- $150 million | | GAAP Gross Margin | 61.7% +/- 1.0% | | Non-GAAP Gross Margin | 63.0% +/- 1.0% | | GAAP Diluted EPS | $8.28 +/- $0.78 | | Non-GAAP Diluted EPS | $8.53 +/- $0.78 | [Consolidated Financial Statements (Unaudited)](index=4&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) [Statements of Operations](index=5&type=section&id=Statements%20of%20Operations) Q3 FY225 total revenues grew **30%** year-over-year to **$3.06 billion**, with net income increasing **81%** to **$1.09 billion** Statement of Operations Highlights (Three Months Ended March 31) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Total revenues** | **$3,063,029** | **$2,359,830** | | Product Revenue | $2,393,821 | $1,769,369 | | Service Revenue | $669,208 | $590,461 | | Costs of revenues | $1,175,689 | $993,885 | | R&D | $338,043 | $321,590 | | **Net income** | **$1,088,416** | **$601,541** | | **Diluted EPS** | **$8.16** | **$4.43** | [Balance Sheets](index=4&type=section&id=Balance%20Sheets) As of March 31, 2025, total assets were **$15.19 billion**, liabilities **$11.18 billion**, and equity **$4.00 billion** Balance Sheet Summary | (In thousands) | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,858,022 | $1,977,129 | | Marketable securities | $2,170,600 | $2,526,866 | | **Total assets** | **$15,188,307** | **$15,433,566** | | Total current liabilities | $3,909,929 | $4,660,774 | | Long-term debt | $5,883,322 | $5,880,199 | | **Total liabilities** | **$11,183,568** | **$12,065,238** | | **Total stockholders' equity** | **$4,004,739** | **$3,368,328** | [Statements of Cash Flows](index=6&type=section&id=Statements%20of%20Cash%20Flows) Operating cash flow reached **$1.07 billion**, free cash flow **$990 million**, with **$735 million** used in financing activities Cash Flow Summary (Three Months Ended March 31) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $1,072,159 | $909,978 | | Net cash used in investing activities | ($319,803) | ($858,046) | | Net cash provided by (used in) financing activities | ($735,199) | $138,924 | | Net increase in cash and cash equivalents | $19,744 | $183,113 | - Key uses of cash in financing activities for Q3 FY2025 included **$506.7 million** for common stock repurchases and **$225.8 million** for dividend payments[16](index=16&type=chunk) [Supplemental Financial Information (Unaudited)](index=7&type=section&id=Supplemental%20Financial%20Information%20(Unaudited)) [Segment Information](index=7&type=section&id=Segment%20Information) Semiconductor Process Control drove Q3 FY2025 revenue to **$2.74 billion**, a **30.7%** increase, with all segments growing Segment Revenues (Three Months Ended March 31) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Semiconductor Process Control | $2,738,817 | $2,096,005 | | Specialty Semiconductor Process | $156,500 | $130,649 | | PCB and Component Inspection | $168,552 | $133,399 | | **Total revenues for reportable segments** | **$3,063,869** | **$2,360,053** | [GAAP to Non-GAAP Reconciliation](index=7&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliation) Q3 FY2025 non-GAAP net income was **$1.12 billion** (**$8.41** diluted EPS), adjusted from GAAP **$1.09 billion** (**$8.16** diluted EPS) Q3 FY2025 GAAP to Non-GAAP Net Income Reconciliation | (In thousands) | Amount (in thousands) | | :--- | :--- | | GAAP net income | $1,088,416 | | Acquisition-related charges | $53,663 | | Income tax effect of non-GAAP adjustments | ($18,306) | | Discrete tax items | ($3,113) | | **Non-GAAP net income** | **$1,120,660** | - The company provides reconciliations for its Q4 FY2025 guidance, bridging GAAP EPS to non-GAAP EPS and GAAP Gross Margin to non-GAAP Gross Margin[22](index=22&type=chunk)[23](index=23&type=chunk) - Non-GAAP adjustments exclude items not indicative of core operating results, such as amortization of intangible assets, restructuring costs, and certain impairment charges, to enhance comparability[24](index=24&type=chunk) [Free Cash Flow and Capital Returns](index=8&type=section&id=Free%20Cash%20Flow%20and%20Capital%20Returns) Free cash flow for Q3 FY2025 was **$990 million**, with **$732.5 million** returned to shareholders via dividends and repurchases Free Cash Flow and Capital Returns (Three Months Ended March 31) | (In thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Free cash flow** | **$990,024** | **$838,185** | | Payments of dividends | $225,774 | $197,154 | | Common stock repurchases | $506,745 | $372,251 | | **Capital returns** | **$732,519** | **$569,405** |

Q3 Fiscal 2025 Earnings Quarter Ended March 31, 2025 • Reported April 30, 2025 These forward-looking statements are based on current information and expectations and involve a number of risks and uncertainties. Actual results may differ materially from those projected in such statements due to various factors, including but not limited to: the impact of tariffs on our business; our vulnerability to a weakening in the condition of the financial markets and the global economy; risks related to our internation ...

Core Insights - KLA Corporation reported strong financial results for Q3 FY 2025, with GAAP net income of $1.09 billion and revenues of $3.06 billion, exceeding guidance expectations [1][9] - The company remains optimistic about demand in the semiconductor manufacturing sector despite global trade uncertainties, highlighting its relevance in AI investments [2][8] - KLA announced a quarterly dividend increase to $1.90 per share and authorized an additional $5 billion for stock repurchases, reflecting confidence in long-term value [6][9] Financial Performance - Total revenues for Q3 FY 2025 were $3,063 million, compared to $3,077 million in Q2 FY 2025 and $2,360 million in Q3 FY 2024 [3] - GAAP net income increased to $1,088 million from $825 million in Q2 FY 2025 and $602 million in Q3 FY 2024 [3] - Non-GAAP net income for Q3 FY 2025 was $1,121 million, with a diluted EPS of $8.41, up from $8.20 in Q2 FY 2025 and $5.26 in Q3 FY 2024 [4] Segment Performance - Semiconductor Process Control segment generated revenues of $2,738,817 thousand in Q3 FY 2025, up from $2,096,005 thousand in Q3 FY 2024 [17] - Specialty Semiconductor Process and PCB and Component Inspection segments also showed growth, contributing $156,500 thousand and $168,552 thousand respectively in Q3 FY 2025 [17] Cash Flow and Capital Returns - Cash flow from operating activities for Q3 FY 2025 was $1.07 billion, with free cash flow of $990 million [9][18] - Capital returns for the quarter totaled $732.5 million, including dividends and stock repurchases [9][18] Guidance for Q4 FY 2025 - KLA expects total revenues for Q4 FY 2025 to be in the range of $3.075 billion +/- $150 million, with GAAP gross margin projected at 61.7% +/- 1.0% [10][19]