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KLA(KLAC) - 2025 Q3 - Earnings Call Transcript
2025-04-30 21:00
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]
KLA(KLAC) - 2025 Q3 - Earnings Call Transcript
2025-04-30 21:00
KLA (KLAC) Q3 2025 Earnings Call April 30, 2025 05:00 PM ET Speaker0 Good afternoon. My name is Margot, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the KLA Corporation March Quarter twenty twenty five Earnings Conference Call and Webcast. All participants' lines have been placed in a listen only mode to prevent any background noise. After the speakers' remarks, there will be a question and answer Thank you. I will now turn the call over to Kevin Kessel, Vice Pre ...
KLAC Set to Report Q3 Earnings: What's in the Cards for the Stock?
ZACKS· 2025-04-28 17:35
KLA Corporation (KLAC) is set to report its third-quarter fiscal 2025 results on April 30.For the third quarter of fiscal 2025, KLAC expects revenues of $3 billion, plus/minus $150 million. The Zacks Consensus Estimate for revenues is pegged at $3.01 billion, indicating an increase of 27.36% from the year-ago quarter’s reported figure.KLA expects non-GAAP earnings of $8.05 per share, plus/minus 60 cents. The consensus mark for earnings is pegged at $8.06 per share, which has moved down by a penny over the p ...