KLA(US:KLAC)2025-05-01 20:03Revenue 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].