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Natalie.Sullivan


KLA Corporation's Financial Performance and Future Outlook

2023-12-30

KLA Corporation recently held its earnings conference call to discuss the results of the June 2023 quarter and provide an outlook for the September quarter. The call, featuring CEO Rick Wallace and CFO Bren Higgins as speakers, presented the discussion on a non-GAAP financial basis, unless otherwise specified.

During the call, the speakers highlighted the risks and uncertainties faced by KLA Corporation, as reflected in their risk factor disclosure in SEC filings. Despite these risks, KLA's June quarter results surpassed expectations. The company reported a revenue of $2.355 billion, marking a 5% decline year-over-year and a 3% decline sequentially.

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One important aspect discussed during the call was the significance of R&D investments for KLA. The company emphasized that R&D investments are crucial for their products, as they play a vital role in the R&D process and the early ramp phase. Faster time to yield is critical in these stages, making R&D investments essential.

The speakers also highlighted the factors driving KLA's performance in the June quarter. They mentioned KLA's market leadership and process control, growth in critical wafer and reticle infrastructure, and strong revenues from unpatterned wafer inspection and metrology products. The KLA services business also experienced growth, reaching $539 million, a 5% increase year over year.

Financial performance was a key focus of the call. KLA reported non-GAAP earnings per share of $5.40 for the quarter, with a non-GAAP gross margin of 61.2% and a non-GAAP operating margin of 38.1%. The company generated $959 million in cash flow from operations and $880 million in free cash flow during the June quarter. KLA had a total of $3.24 billion in cash, cash equivalents, and marketable securities at the end of the quarter.

Looking ahead, KLA provided guidance for the September quarter, with an expected total revenue of $2.35 billion, plus or minus $125 million. The breakdown of semi PC systems revenue is forecasted to be approximately 70% for foundry/logic and 30% for memory. The memory segment mix is expected to be about 90% DRAM.

The call also addressed important business questions related to KLA's outlook for the semiconductor process control systems business, the impact of EUV adoption on process control, the company's market position in China, and the expected growth of the blank wafer business, among others.

Overall, the KLA Corporation earnings conference call provided valuable insights into the company's financial performance, market position, and future prospects. Investors and stakeholders gained a deeper understanding of KLA's business strategies, growth drivers, and potential challenges.