KLA Corporation Reports 24% Revenue Growth to $3.08 Billion in Latest Quarter

KLA Corporation reported significant financial growth in its latest quarterly results, with total revenues reaching $3.08 billion for the three months ended December 31, 2024, a 24% increase from $2.49 billion in the same period last year. For the first half of the fiscal year, revenues rose to $5.92 billion, up 21% from $4.88 billion in the prior year. The company's net income for the quarter was $824.5 million, translating to diluted earnings per share of $6.16, compared to $582.5 million and $4.28 per share in the previous year. This growth was driven by a 25% increase in product revenues, which totaled $2.41 billion, and an 18% rise in service revenues, amounting to $667.4 million.

The financial performance reflects a notable recovery in the semiconductor industry, with KLA benefiting from strong demand for its inspection and metrology products. The Semiconductor Process Control segment, which constitutes the majority of KLA's revenue, saw a 26% increase in revenues to $2.76 billion for the quarter. The Specialty Semiconductor Process segment reported a modest 7% growth, while the PCB and Component Inspection segment increased by 13%. The company also noted a significant contribution from its customer base in China, which accounted for 36% of total revenues in the latest quarter, despite ongoing U.S. export restrictions affecting certain sales.

KLA's operational metrics indicate a robust business environment, with a total of $9.14 billion in remaining performance obligations as of December 31, 2024. The company has also made strategic decisions, including an internal reorganization and the exit from the Display business, which is expected to streamline operations and focus on core competencies. The company recorded a goodwill impairment charge of $239.1 million during the quarter, primarily related to the PCB and Component Inspection segment, reflecting the ongoing challenges in that market.

In terms of cash flow, KLA generated $1.84 billion from operating activities in the first half of the fiscal year, an increase from $1.51 billion in the same period last year. However, the company reported a net cash outflow of $2.42 billion in financing activities, largely due to stock repurchases totaling $1.22 billion and the repayment of $750 million in debt. As of December 31, 2024, KLA's cash, cash equivalents, and marketable securities totaled $3.78 billion, down from $4.50 billion at the end of June 2024.

Looking ahead, KLA remains optimistic about its growth prospects, driven by increasing investments in semiconductor manufacturing and the ongoing demand for advanced technologies, including AI and 5G. However, the company acknowledges potential risks, including regulatory changes and market volatility, which could impact its operations and financial performance. KLA's management continues to monitor these factors closely while focusing on innovation and maintaining its competitive edge in the semiconductor equipment industry.