KLA Corp Q3 Earnings Surpass Estimates, Revenues Increase Y/Y

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]