KLA Corporation Reports Fiscal 2025 Third Quarter Results; Announces an Increase in the Dividend Level to $1.90 Per Share and a $5 billion Increase in Share Repurchase Authorization

Total revenues were $3.06 billion, above the midpoint of the guidance range of $3.0 billion +/- $150 million; GAAP diluted EPS was $8.16 and non-GAAP diluted EPS was $8.41, both above the midpoints of the respective guidance ranges; Cash flow from operating activities for the quarter and last nine months were $1.07 billion and $2.92 billion, respectively, and free cash flow was $990.0 million and $2.68 billion, respectively; Capital returns for the quarter and last nine months were $732.5 million and $2.37 billion, respectively; and The Board of Directors approved an increase to the quarterly dividend level to $1.90 per share beginning with the dividend expected to be declared in May 2025 and an additional $5 billion for repurchases of our common stock. , /PRNewswire/ -- KLA Corporation (NASDAQ: KLAC) today announced financial and operating results for its third quarter of fiscal year 2025, which ended on March 31, 2025, and reported GAAP net income of $1.09 billion and GAAP net income per diluted share of $8.16 on revenues of $3.06 billion. "KLA's March quarter results were above the midpoint of our guidance ranges and established a strong start to the calendar year. Though global trade dynamics are driving uncertainty across the global economy, to date, we have received no indications of demand changes from our customers for calendar year 2025," said Rick Wallace, president and CEO, KLA Corporation. "We remain encouraged by KLA's growing relevancy in semiconductor manufacturing. Our leadership in process control is a key enabler of today's leading-edge AI investments by our customers and continues to be affirmed through recently published market share results. Our capital return announcements today reflect this confidence in the long-term value of KLA. As always, the KLA Operating Model continues to be fundamental as we make critical investments to drive differentiation across our product portfolio, and it guides our execution against long-term strategic objectives." GAAP Results Q3 FY 2025 Q2 FY 2025 Q3 FY 2024 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 Q3 FY 2025 Q2 FY 2025 Q3 FY 2024 Net Income $1,121 million $1,098 million $715 million Net Income per Diluted Share $8.41 $8.20 $5.26 A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in this release. KLA will discuss the results for its fiscal year 2025 third quarter, along with its outlook, on a conference call today beginning at 2 p.m. PT. A webcast of the call will be available at: www.kla.com. Fourth Quarter Fiscal 2025 Guidance The following details our guidance for the fourth quarter of fiscal 2025 ending in June: Total revenues is expected to be in a range of $3.075 billion +/- $150 million GAAP gross margin is expected to be in a range of 61.7% +/- 1.0% Non-GAAP gross margin is expected to be in a range of 63.0% +/- 1.0% GAAP diluted EPS is expected to be in a range of $8.28 +/- $0.78 Non-GAAP diluted EPS is expected to be in a range of $8.53 +/- $0.78 For additional details and assumptions underlying our guidance metrics, please see the company's published Letter to Shareholders, Earnings Slide Presentation and Earnings Infographic on the KLA investor relations website (ir.kla.com). Such Letter to Shareholders, Earnings Slide Presentation and Earnings Infographic are not incorporated by reference into this earnings release. Dividend Level Increase and Additional Share Repurchase AuthorizationKLA Corporation is also announcing an increase in the quarterly dividend level to $1.90 per share from $1.70 per share, the sixteenth consecutive annual increase in the quarterly dividend level for KLA beginning with the dividend anticipated to be declared in May 2025. The declaration and payment of future dividends is subject to the Board's discretion and will depend on financial and legal requirements and other considerations. The Company is also announcing authorization from the Board of Directors to repurchase up to $5 billion of the Company's common stock. This is in addition to the existing share repurchase authorization, which had approximately $457 million remaining as of March 31, 2025. Repurchases can be made using a variety of methods, which may include open market purchases, privately negotiated transactions, accelerated share repurchase programs, or otherwise, all in accordance with the requirements of the Securities and Exchange Commission and other applicable legal requirements. The specific timing, price and size of purchases will depend on prevailing stock prices, general economic and market conditions, and other considerations. The repurchase programs do not obligate the Company to acquire any particular amount of its common stock, and the repurchase programs may be suspended or discontinued at any time at the Company's discretion. "Today's announcement is consistent with KLA's long-standing confidence in our business model focused on KLA market relevance, product differentiation, free cash flow generation and assertive capital allocation," commented Wallace. About KLA:KLA Corporation ("KLA") develops industry-leading equipment and services that enable innovation throughout the electronics industry. We provide advanced process control and process-enabling solutions for manufacturing wafers and reticles, integrated circuits, packaging and printed circuit boards. In close collaboration with leading customers across the globe, our expert teams of physicists, engineers, data scientists and problem-solvers design solutions that move the world forward. Investors and others should note that KLA announces material financial information including SEC filings, press releases, public earnings calls and conference webcasts using an investor relations website (ir.kla.com). Additional information may be found at: www.kla.com. Note Regarding Forward-Looking Statements:Statements in this press release other than historical facts, such as statements pertaining to the amount and timing of dividends, the amount and timing of share repurchases, total revenues, GAAP and non-GAAP gross margin and GAAP and non-GAAP diluted EPS for the quarter ending June 30, 2025, are forward-looking statements and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current information and expectations and involve a number of risks and uncertainties. Actual results may differ materially from those projected in such statements due to various factors, including, but not limited to: the effect of tariffs on our business; our vulnerability to a weakening in the condition of the financial markets and the global economy; risks related to our international operations; evolving Bureau of Industry and Security of the U.S. Department of Commerce rules and regulations and their impact on our ability to sell products to and provide services to certain customers in China; costly intellectual property disputes that could result in our inability to sell or use the challenged technology; risks related to the legal, regulatory and tax environments in which we conduct our business; increasing attention to environment, social and governance ("ESG") matters and the resulting costs, risks and impact on our business; unexpected delays, difficulties and expenses in executing against our environmental, climate, diversity and inclusion or other ESG targets, goals and commitments; our ability to attract, retain and motivate key personnel; our vulnerability to disruptions and delays at our third party service providers; cybersecurity threats and cyber incidents affecting our and our business partners' systems and networks; our inability to access critical information in a timely manner due to system failures; risks related to acquisitions, integrations, strategic alliances or collaborative arrangements; climate change, earthquake, flood or other natural catastrophic events, public health crises such as the COVID-19 pandemic or terrorism and the adverse impact on our business operations; the war between Ukraine and Russia, escalation of hostilities in the Middle East, and the significant military activity in that region; lack of insurance for losses and interruptions caused by terrorists and acts of war, and our self-insurance of certain risks including earthquake risk; risks related to fluctuations in foreign currency exchange rates; risks related to fluctuations in interest rates and the market values of our portfolio investments; risks related to tax and regulatory compliance audits; any change in taxation rules or practices and our effective tax rate; compliance costs with federal securities laws, rules, regulations, NASDAQ requirements, and evolving accounting standards and practices; ongoing changes in the technology industry, and the semiconductor industry in particular, including future growth rates, pricing trends in end-markets, or changes in customer capital spending patterns; our vulnerability to a highly concentrated customer base; the cyclicality of the industries in which we operate; our ability to timely develop new technologies and products that successfully address changes in the industry; risks related to artificial intelligence; our ability to maintain our technology advantage and protect proprietary rights; our ability to compete in the industry; availability and cost of the materials and parts used in the production of our products; our ability to operate our business in accordance with our business plan; risks related to our debt and leveraged capital structure; we may not be able to declare cash dividends at all or in any particular amount; liability to our customers under indemnification provisions if our products fail to operate properly or contain defects or our customers are sued by third parties due to our products; our government funding for research and development is subject to audit, and potential termination or penalties; we may incur significant restructuring charges or other asset impairment charges or inventory write offs; risks related to receivables factoring arrangements and compliance risk of certain settlement agreements with the government; and risks related to the Court of Chancery of the State of Delaware being the sole and exclusive forum for certain actions and proceedings. For other factors that may cause actual results to differ materially from those projected and anticipated in forward-looking statements in this press release, please refer to KLA's Annual Report on Form 10-K for the year ended June 30, 2024, and other subsequent filings with the Securities and Exchange Commission (including, but not limited to, the risk factors described therein). KLA assumes no obligation to, and does not currently intend to, update these forward-looking statements. KLA Corporation Condensed Consolidated Unaudited Balance Sheets (In thousands) March 31, 2025 June 30, 2024 ASSETS Current assets: Cash and cash equivalents $ 1,858,022 $ 1,977,129 Marketable securities 2,170,600 2,526,866 Accounts receivable, net 2,159,897 1,833,041 Inventories 3,155,777 3,034,781 Other current assets 600,723 659,327 Total current assets 9,945,019 10,031,144 Land, property and equipment, net 1,198,302 1,109,968 Goodwill, net 1,787,532 2,015,726 Deferred income taxes 1,023,292 915,241 Purchased intangible assets, net 495,572 668,764 Other non-current assets 738,590 692,723 Total assets $ 15,188,307 $ 15,433,566 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 429,318 $ 359,487 Deferred system revenue 868,345 985,856 Deferred service revenue 509,075 501,926 Current portion of long-term debt — 749,936 Other current liabilities 2,103,191 2,063,569 Total current liabilities 3,909,929 4,660,774 Long-term debt 5,883,322 5,880,199 Deferred tax liabilities 405,912 486,690 Deferred service revenue 351,931 294,460 Other non-current liabilities 632,474 743,115 Total liabilities 11,183,568 12,065,238 Stockholders' equity: Common stock and capital in excess of par value 2,401,317 2,280,133 Retained earnings 1,646,055 1,137,270 Accumulated other comprehensive loss (42,633) (49,075) Total stockholders' equity 4,004,739 3,368,328 Total liabilities and stockholders' equity $ 15,188,307 $ 15,433,566 KLA Corporation Condensed Consolidated Unaudited Statements of Operations Three Months Ended March 31, Nine Months Ended March 31, (In thousands, except per share amounts) 2025 2024 2025 2024 Revenues: Product $ 2,393,821 $ 1,769,369 $ 7,000,672 $ 5,527,842 Service 669,208 590,461 1,980,749 1,715,670 Total revenues 3,063,029 2,359,830 8,981,421 7,243,512 Costs and expenses: Costs of revenues 1,175,689 993,885 3,544,581 2,917,522 Research and development 338,043 321,590 1,007,345 953,222 Selling, general and administrative 248,905 237,514 767,028 714,403 Impairment of goodwill and purchased intangible assets — 70,474 239,100 289,474 Interest expense 71,889 79,981 229,041 228,417 Other expense (income), net (35,930) (45,622) (121,323) (104,515) Income before income taxes 1,264,433 702,008 3,315,649 2,244,989 Provision for income taxes 176,017 100,467 456,855 319,539 Net income $ 1,088,416 $ 601,541 $ 2,858,794 $ 1,925,450 Net income per share Basic $ 8.21 $ 4.46 $ 21.44 $ 14.20 Diluted $ 8.16 $ 4.43 $ 21.32 $ 14.11 Weighted-average number of shares: Basic 132,607 134,954 133,361 135,638 Diluted 133,303 135,856 134,066 136,428 KLA Corporation Condensed Consolidated Unaudited Statements of Cash Flows Three Months Ended March 31, (In thousands) 2025 2024 Cash flows from operating activities: Net income $ 1,088,416 $ 601,541 Adjustments to reconcile net income to net cash provided by operating activities: Impairment of goodwill — 70,474 Depreciation and amortization 98,091 99,263 Unrealized foreign exchange gain and other 4,558 7,629 Stock-based compensation expense 70,201 56,682 Deferred income taxes (35,437) 11,886 Settlement of treasury lock agreement — 415 Changes in assets and liabilities, net of assets acquired and liabilities assumed in business acquisitions: Accounts receivable 185,975 194,311 Inventories (112,283) 28,359 Other assets 14,309 (111,233) Accounts payable (12,227) (10,238) Deferred system revenue (204,221) 110,442 Deferred service revenue 5,820 54,288 Other liabilities (31,043) (203,841) Net cash provided by operating activities 1,072,159 909,978 Cash flows from investing activities: Business acquisitions, net of cash acquired — (3,682) Acquisition of intellectual property (2,850) — Capital expenditures (82,135) (71,793) Proceeds from capital-related government assistance 315 — Purchases of available-for-sale and equity securities (697,596) (1,172,264) Proceeds from sale of available-for-sale securities 93,085 55,722 Proceeds from maturity of available-for-sale securities 378,471 342,808 Purchases of trading securities (53,418) (46,456) Proceeds from sale of trading securities 43,341 37,619 Proceeds from other investments 984 — Net cash used in investing activities (319,803) (858,046) Cash flows from financing activities: Proceeds from issuance of debt, net of issuance costs — 735,043 Common stock repurchases (506,745) (372,251) Payment of dividends to stockholders (225,774) (197,154) Tax withholding payments related to vested and released restricted stock units (2,680) (24,274) Contingent consideration payable and other, net — (2,440) Net cash provided by (used in) financing activities (735,199) 138,924 Effect of exchange rate changes on cash and cash equivalents 2,587 (7,743) Net increase in cash and cash equivalents 19,744 183,113 Cash and cash equivalents at beginning of period 1,838,278 1,665,054 Cash and cash equivalents at end of period $ 1,858,022 $ 1,848,167 Supplemental cash flow disclosures: Income taxes paid, net $ 197,594 $ 159,848 Interest paid, net of capitalized interest $ 128,814 $ 113,372 Non-cash activities: Dividends payable - financing activities $ 2,247 $ 2,105 Unsettled common stock repurchase - financing activities $ 5,499 $ 10,999 Accrued purchase of land, property and equipment - investing activities $ 24,322 $ 15,378 KLA Corporation Segment Information (Unaudited) The following is a summary of results for each of our three reportable segments and reconciliations to total revenues for the indicated periods: Three Months Ended March 31, Nine Months Ended March 31, (In thousands) 2025 2024 2025 2024 Revenues: Semiconductor Process Control $ 2,738,817 $ 2,096,005 $ 8,069,711 $ 6,425,562 Specialty Semiconductor Process 156,500 130,649 445,241 407,433 PCB and Component Inspection 168,552 133,399 467,615 412,474 Total revenues for reportable segments 3,063,869 2,360,053 8,982,567 7,245,469 Corporate allocations and effects of changes in foreigncurrency exchange rates (840) (223) (1,146) (1,957) Total revenues $ 3,063,029 $ 2,359,830 $ 8,981,421 $ 7,243,512 KLA Corporation Condensed Consolidated Unaudited Supplemental Information Reconciliation of GAAP Net Income to Non-GAAP Net Income Three Months Ended Nine Months Ended (In thousands, except per share amounts) March 31,2025 Dec. 31,2024 March 31,2024 March 31,2025 March 31,2024 GAAP net income $ 1,088,416 $ 824,527 $ 601,541 $ 2,858,794 $ 1,925,450 Adjustments to reconcile GAAP net income tonon-GAAP net income: Acquisition-related charges a 53,663 58,656 58,573 169,013 181,124 Restructuring, severance and other charges b — 2,133 2,042 4,995 3,312 Impairment of goodwill and purchasedintangible assets c — 239,100 70,474 239,100 289,474 Income tax effect of non-GAAP adjustments d (18,306) (23,160) (19,879) (60,952) (63,084) Discrete tax items e (3,113) (2,812) 2,386 (3,692) 4,538 Non-GAAP net income $ 1,120,660 $ 1,098,444 $ 715,137 $ 3,207,258 $ 2,340,814 GAAP net income per diluted share $ 8.16 $ 6.16 $ 4.43 $ 21.32 $ 14.11 Non-GAAP net income per diluted share $ 8.41 $ 8.20 $ 5.26 $ 23.92 $ 17.16 Shares used in diluted net income per sharecalculation 133,303 133,926 135,856 134,066 136,428 Pre-tax Impact of GAAP to Non-GAAP Adjustments Included in Condensed Consolidated Unaudited Statements ofOperations (In thousands) Acquisition -Related Charges Restructuring,Severance andOther Charges Goodwill andPurchasedIntangibleAssetImpairment Total Pre-tax GAAPto Non-GAAPAdjustments Three Months Ended March 31, 2025 Costs of revenues $ 41,838 $ — $ — $ 41,838 Research and development — — — — Selling, general and administrative 11,825 — — 11,825 Total in three months ended March 31, 2025 $ 53,663 $ — $ — $ 53,663 Three Months Ended Dec. 31, 2024 Costs of revenues $ 43,348 $ 429 $ — $ 43,777 Research and development 2,994 1,166 — 4,160 Selling, general and administrative 12,314 538 — 12,852 Impairment of goodwill and purchased intangible assets — — 239,100 239,100 Total in three months ended Dec. 31, 2024 $ 58,656 $ 2,133 $ 239,100 $ 299,889 Three Months Ended March 31, 2024 Costs of revenues $ 44,839 $ 805 $ — $ 45,644 Research and development 867 922 — 1,789 Selling, general and administrative 12,867 315 — 13,182 Impairment of goodwill — — 70,474 70,474 Total in three months ended March 31, 2024 $ 58,573 $ 2,042 $ 70,474 $ 131,089 Free Cash Flow Reconciliation Three Months Ended March 31, Nine Months Ended March 31, (In thousands) 2025 2024 2025 2024 Net cash provided by operating activities $ 1,072,159 $ 909,978 $ 2,916,912 $ 2,415,960 Capital expenditures (82,135) (71,793) (234,851) (216,639) Free cash flow $ 990,024 $ 838,185 $ 2,682,061 $ 2,199,321 Capital Returns Calculation Three Months Ended March 31, Nine Months Ended March 31, (In thousands) 2025 2024 2025 2024 Payments of dividends to stockholders $ 225,774 $ 197,154 $ 650,629 $ 575,520 Common stock repurchases 506,745 372,251 1,724,249 1,265,480 Capital returns $ 732,519 $ 569,405 $ 2,374,878 $ 1,841,000 Fourth Quarter Fiscal 2025 Guidance Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS Three Months Ending June 30, 2025 (In millions, except per share amounts) Low High GAAP net income per diluted share $7.50 $9.06 Acquisition-related charges a 0.38 0.38 Restructuring, severance and other charges b 0.01 0.01 Income tax effect of non-GAAP adjustments d (0.14) (0.14) Non-GAAP net income per diluted share $7.75 $9.31 Shares used in net income per diluted share calculation 132.5 132.5 Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin Three Months Ending June 30, 2025 Low High GAAP gross margin 60.7 % 62.7 % Acquisition-related charges a 1.3 % 1.3 % Non-GAAP gross margin 62.0 % 64.0 % The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for, KLA's financial results presented in accordance with United States GAAP. To supplement our Condensed Consolidated Financial Statements presented in accordance with GAAP, we provide certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain gains, costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user's overall understanding of our operating performance and our prospects in the future. Specifically, we believe that the non-GAAP information, including non-GAAP net income, non-GAAP net income per diluted share, non-GAAP gross margin and free cash flow, provides useful measures to both management and investors regarding financial and business trends relating to our financial performance by excluding certain costs and expenses that we believe are not indicative of our core operating results to help investors compare our operating performances with our results in prior periods as well as with the performance of other companies. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics are inherently subject to significant discretion (for example, determining which costs and expenses to exclude when calculating such a metric). As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP. The following are descriptions of the adjustments made to reconcile GAAP net income to non-GAAP net income: a. Acquisition-related charges primarily include amortization of intangible assets and write-offs due to abandonment of in-process research and development projects. Although we exclude the effect of amortization of all acquired intangible assets from these non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase price accounting arising from acquisitions, and such amortization of intangible assets related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Investors should note that the use of these intangible assets contributed to our revenues earned during the periods presented and are expected to contribute to our future period revenues as well. b. Restructuring, severance and other charges primarily include costs associated with employee severance. c. Impairment of goodwill and purchased intangible assets in the nine months ended March 31, 2025, the three and nine months ended March 31, 2024, and the three months ended Dec. 31, 2024 include non-cash expense recognized as a result of the company's testing for goodwill impairment and long-lived assets impairment. The impairment charge in fiscal 2024 resulted from the downward revision of financial outlook for our PCB and Display reporting units, and the subsequent decision to exit the Company's Display business that was based on many factors, including the cancellation of a significant new technology project by a major customer in the third quarter of fiscal 2024. The impairment charge in fiscal 2025 resulted from the continued deterioration of the long-term forecast for our PCB business. Management believes that it is appropriate to exclude these impairment charges as they are not indicative of ongoing operating results and therefore limit comparability. Management also believes excluding this item helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies. d. Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above. e. Discrete tax items in the three months ended March 31, 2025 include a deferred tax impact relating to the amortization of certain intellectual property as a result of an internal restructuring of ownership rights to better align with how our business operates. Discrete tax items in the nine months ended March 31, 2025 also include the recognition of a deferred tax asset on foreign currency gains/losses resulting from new tax legislation. Discrete tax items in the nine months ended March 31, 2024 include a one-time tax benefit resulting from changes made to our international structure to better align ownership of certain intellectual property rights with how our business operates. Discrete tax items in all periods presented include a tax impact relating to the amortization of the aforementioned tax benefits or similar tax benefits recorded in other periods. SOURCE KLA Corporation WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

KLA Corporation Reports Fiscal 2025 Third Quarter Results; Announces an Increase in the Dividend Level to $1.90 Per Share and a $5 billion Increase in Share Repurchase Authorization

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