KLA(KLAC) - 2025 Q3 - Quarterly Results

Fiscal 2025 Third Quarter Financial Highlights Q3 FY2025 Performance Summary 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] - 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] Capital Returns Program 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] - 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] - Total capital returns for Q3 FY2025 amounted to $732.5 million, and $2.37 billion for the last nine months[4] Fourth Quarter Fiscal 2025 Guidance 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) Statements of Operations 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 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 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] Supplemental Financial Information (Unaudited) Segment Information 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 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][23] - 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] Free Cash Flow and Capital Returns 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 |