- Total revenues were $3.08
billion, at the upper end of the guidance range of
$2.95 billion +/- $150 million;
- GAAP diluted EPS was $6.16.
Non-GAAP diluted EPS was $8.20, near
the upper end of the guidance range. GAAP EPS was impacted by a
$239.1 million impairment charge for
goodwill and purchased intangible assets, or $1.76 per diluted share.
- Cash flow from operating activities for the quarter and last
twelve months were $849.5 million and
$3.65 billion, respectively, and free
cash flow was $757.2 million and
$3.36 billion, respectively; and
- Capital returns for the quarter and last twelve months were
$876.9 million and $2.88 billion, respectively.
MILPITAS, Calif., Jan. 30,
2025 /PRNewswire/ -- KLA Corporation (NASDAQ: KLAC)
today announced financial and operating results for its second
quarter of fiscal year 2025, which ended on Dec. 31, 2024, and
reported GAAP net income of $824.5
million and GAAP net income per diluted share of
$6.16 on revenues of $3.08 billion.
"KLA's December quarter results were above the midpoint of our
guidance ranges despite navigating through the business impact of
new U.S. government export controls released late in the quarter.
These results supported a strong finish to calendar 2024 for KLA
highlighted by relative revenue growth outperformance and strong
profitability," said Rick Wallace,
president and CEO, KLA Corporation.
"The return to growth at the leading-edge continues to gain
momentum led by expanding AI and high-performance computing
investments. KLA's differentiated portfolio of solutions aligns
exceptionally well in helping enable our customers to navigate
increasing technology complexity, growing design starts and larger
semiconductor devices in an environment of rising semiconductor
demand."
|
GAAP
Results
|
|
Q2 FY
2025
|
Q1 FY
2025
|
Q2 FY
2024
|
|
Total
Revenues
|
$3,077
million
|
$2,842
million
|
$2,487
million
|
|
Net Income
|
$825 million
|
$946 million
|
$583 million
|
|
Net Income per Diluted
Share
|
$6.16
|
$7.01
|
$4.28
|
|
|
|
|
|
Non-GAAP
Results
|
|
Q2 FY
2025
|
Q1 FY
2025
|
Q2 FY
2024
|
|
Net Income
|
$1,098
million
|
$988 million
|
$839 million
|
|
Net Income per Diluted
Share
|
$8.20
|
$7.33
|
$6.16
|
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 second quarter, along with its
outlook, on a conference call today beginning at 3 p.m. P.T. A webcast of the call will be
available at: www.kla.com.
Third Quarter Fiscal 2025 Guidance
The
following details our guidance for the third quarter of fiscal 2025
ending in March:
- Total revenues is expected to be in a range of $3.0 billion +/- $150
million
- GAAP gross margin is expected to be in a range of 60.6% +/-
1.0%
- Non-GAAP gross margin is expected to be in a range of 62.0% +/-
1.0%
- GAAP diluted EPS is expected to be in a range of $7.77 +/- $0.60
- Non-GAAP diluted EPS is expected to be in a range of
$8.05 +/- $0.60
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. Such Letter to Shareholders, Earnings
Slide Presentation and Earnings Infographic are not incorporated by
reference into this earnings release.
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 total revenues, GAAP and non-GAAP gross
margin and GAAP and non-GAAP diluted EPS for the quarter ending
March 31, 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:
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, 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)
|
Dec. 31,
2024
|
|
June 30,
2024
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,838,278
|
|
$
1,977,129
|
|
Marketable
securities
|
1,942,127
|
|
2,526,866
|
|
Accounts receivable,
net
|
2,334,977
|
|
1,833,041
|
|
Inventories
|
3,046,340
|
|
3,034,781
|
|
Other current
assets
|
610,882
|
|
659,327
|
|
Total current assets
|
9,772,604
|
|
10,031,144
|
|
Land, property and
equipment, net
|
1,173,928
|
|
1,109,968
|
|
Goodwill,
net
|
1,785,297
|
|
2,015,726
|
|
Deferred income
taxes
|
1,002,169
|
|
915,241
|
|
Purchased intangible
assets, net
|
548,645
|
|
668,764
|
|
Other non-current
assets
|
719,053
|
|
692,723
|
|
Total
assets
|
$
15,001,696
|
|
$
15,433,566
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
432,891
|
|
$
359,487
|
|
Deferred system
revenue
|
1,072,565
|
|
985,856
|
|
Deferred service
revenue
|
521,424
|
|
501,926
|
|
Current portion of
long-term debt
|
—
|
|
749,936
|
|
Other current
liabilities
|
2,111,378
|
|
2,063,569
|
|
Total current
liabilities
|
4,138,258
|
|
4,660,774
|
|
Long-term
debt
|
5,882,387
|
|
5,880,199
|
|
Deferred tax
liabilities
|
423,626
|
|
486,690
|
|
Deferred service
revenue
|
333,758
|
|
294,460
|
|
Other non-current
liabilities
|
639,118
|
|
743,115
|
|
Total
liabilities
|
11,417,147
|
|
12,065,238
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock and
capital in excess of par value
|
2,346,346
|
|
2,280,133
|
|
Retained
earnings
|
1,284,589
|
|
1,137,270
|
|
Accumulated other
comprehensive loss
|
(46,386)
|
|
(49,075)
|
|
Total stockholders'
equity
|
3,584,549
|
|
3,368,328
|
|
Total liabilities and
stockholders' equity
|
$
15,001,696
|
|
$
15,433,566
|
|
KLA
Corporation
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Unaudited Statements of Operations
|
|
|
|
|
|
|
|
Three Months Ended
Dec. 31,
|
|
Six Months Ended
Dec. 31,
|
|
(In thousands,
except per share amounts)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product
|
$ 2,409,462
|
|
$ 1,921,809
|
|
$ 4,606,851
|
|
$ 3,758,473
|
|
Service
|
667,389
|
|
564,917
|
|
1,311,541
|
|
1,125,209
|
|
Total
revenues
|
3,076,851
|
|
2,486,726
|
|
5,918,392
|
|
4,883,682
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
1,221,461
|
|
976,746
|
|
2,368,892
|
|
1,923,637
|
|
Research and
development
|
346,157
|
|
320,418
|
|
669,302
|
|
631,632
|
|
Selling, general and
administrative
|
267,081
|
|
237,244
|
|
518,123
|
|
476,889
|
|
Impairment of goodwill
and purchased intangible assets
|
239,100
|
|
219,000
|
|
239,100
|
|
219,000
|
|
Interest
expense
|
74,981
|
|
74,202
|
|
157,152
|
|
148,436
|
|
Other expense
(income), net
|
(44,458)
|
|
(32,154)
|
|
(85,393)
|
|
(58,893)
|
|
Income before income
taxes
|
972,529
|
|
691,270
|
|
2,051,216
|
|
1,542,981
|
|
Provision for income
taxes
|
148,002
|
|
108,736
|
|
280,838
|
|
219,072
|
|
Net income
|
$
824,527
|
|
$
582,534
|
|
$ 1,770,378
|
|
$ 1,323,909
|
|
Net income per
share
|
|
|
|
|
|
|
|
|
Basic
|
$
6.18
|
|
$
4.30
|
|
$
13.24
|
|
$
9.74
|
|
Diluted
|
$
6.16
|
|
$
4.28
|
|
$
13.17
|
|
$
9.69
|
|
Weighted-average number
of shares:
|
|
|
|
|
|
|
|
|
Basic
|
133,327
|
|
135,539
|
|
133,730
|
|
135,976
|
|
Diluted
|
133,926
|
|
136,254
|
|
134,415
|
|
136,684
|
|
KLA
Corporation
|
|
|
|
|
Condensed
Consolidated Unaudited Statements of Cash Flows
|
|
|
|
|
Three Months Ended
Dec. 31,
|
|
(In
thousands)
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
824,527
|
|
$
582,534
|
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
|
Impairment of goodwill
and purchased intangible assets
|
239,100
|
|
219,000
|
|
Depreciation and
amortization
|
103,922
|
|
99,063
|
|
Unrealized foreign
exchange (gain) loss and other
|
11,346
|
|
(34,346)
|
|
Stock-based
compensation expense
|
61,841
|
|
48,620
|
|
Deferred income
taxes
|
(68,976)
|
|
(65,158)
|
|
Net gain on sale of
assets
|
(161)
|
|
—
|
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed in
business acquisitions:
|
|
|
|
|
Accounts
receivable
|
(394,604)
|
|
(160,265)
|
|
Inventories
|
64,958
|
|
(21,189)
|
|
Other
assets
|
(90,845)
|
|
(104,872)
|
|
Accounts
payable
|
67,080
|
|
2,692
|
|
Deferred system
revenue
|
195,357
|
|
218,250
|
|
Deferred service
revenue
|
22,927
|
|
68,821
|
|
Other
liabilities
|
(186,957)
|
|
(230,908)
|
|
Net cash provided by
operating activities
|
849,515
|
|
622,242
|
|
Cash flows from
investing activities:
|
|
|
|
|
Proceeds from sale of
assets
|
161
|
|
5,079
|
|
Capital
expenditures
|
(92,323)
|
|
(76,801)
|
|
Purchases of
available-for-sale securities
|
(489,033)
|
|
(451,800)
|
|
Proceeds from sale of
available-for-sale securities
|
183,097
|
|
7,252
|
|
Proceeds from maturity
of available-for-sale securities
|
1,010,660
|
|
427,128
|
|
Purchases of trading
securities
|
(17,276)
|
|
(16,049)
|
|
Proceeds from sale of
trading securities
|
18,420
|
|
16,715
|
|
Net cash provided by (used in) investing activities
|
613,706
|
|
(88,476)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Repayment of
debt
|
(750,000)
|
|
—
|
|
Common stock
repurchases
|
(650,121)
|
|
(437,817)
|
|
Payment of dividends
to stockholders
|
(226,776)
|
|
(196,859)
|
|
Issuance of common
stock
|
47,538
|
|
48,433
|
|
Tax withholding
payments related to vested and released restricted stock
units
|
(3,608)
|
|
(3,005)
|
|
Contingent
consideration payable and other, net
|
—
|
|
(1,676)
|
|
Net cash used in financing activities
|
(1,582,967)
|
|
(590,924)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(19,178)
|
|
10,642
|
|
Net decrease in cash
and cash equivalents
|
(138,924)
|
|
(46,516)
|
|
Cash and cash
equivalents at beginning of period
|
1,977,202
|
|
1,711,570
|
|
Cash and cash
equivalents at end of period
|
$
1,838,278
|
|
$
1,665,054
|
|
Supplemental cash flow
disclosures:
|
|
|
|
|
Income taxes paid,
net
|
$
361,833
|
|
$
506,046
|
|
Interest
paid
|
$
25,059
|
|
$
24,818
|
|
Non-cash
activities:
|
|
|
|
|
Contingent
consideration payable - financing activities
|
$
—
|
|
$
155
|
|
Dividends payable -
financing activities
|
$
2,104
|
|
$
2,132
|
|
Unsettled common stock
repurchase - financing activities
|
$
5,500
|
|
$
10,999
|
|
Accrued purchase of
land, property and equipment - investing activities
|
$
11,354
|
|
$
18,312
|
|
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
Dec. 31,
|
|
Six Months Ended
Dec. 31,
|
|
(In
thousands)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Semiconductor Process
Control
|
$ 2,755,743
|
|
$ 2,194,079
|
|
$ 5,330,894
|
|
$ 4,329,557
|
|
Specialty
Semiconductor Process
|
160,407
|
|
150,065
|
|
288,741
|
|
276,784
|
|
PCB and Component
Inspection
|
161,080
|
|
143,032
|
|
299,063
|
|
279,075
|
|
Total revenues for
reportable segments
|
3,077,230
|
|
2,487,176
|
|
5,918,698
|
|
4,885,416
|
|
Corporate allocations
and effects of changes in foreign currency exchange
rates
|
(379)
|
|
(450)
|
|
(306)
|
|
(1,734)
|
|
Total
revenues
|
$ 3,076,851
|
|
$ 2,486,726
|
|
$ 5,918,392
|
|
$ 4,883,682
|
|
KLA
Corporation
Condensed
Consolidated Unaudited Supplemental Information
Reconciliation of
GAAP Net Income to Non-GAAP Net Income
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
(In thousands,
except per share amounts)
|
|
Dec. 31,
2024
|
|
Sept. 30,
2024
|
|
Dec. 31,
2023
|
|
Dec. 31,
2024
|
|
Dec. 31,
2023
|
|
GAAP net
income
|
|
$ 824,527
|
|
$ 945,851
|
|
$ 582,534
|
|
$
1,770,378
|
|
$
1,323,909
|
|
Adjustments to
reconcile GAAP net income to non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
charges
|
a
|
58,656
|
|
56,694
|
|
59,307
|
|
115,350
|
|
122,551
|
|
Restructuring,
severance and other charges
|
b
|
2,133
|
|
2,862
|
|
1,270
|
|
4,995
|
|
1,270
|
|
Impairment of goodwill
and purchased intangible assets
|
c
|
239,100
|
|
—
|
|
219,000
|
|
239,100
|
|
219,000
|
|
Income tax effect of
non-GAAP adjustments
|
d
|
(23,160)
|
|
(19,486)
|
|
(22,806)
|
|
(42,646)
|
|
(43,205)
|
|
Discrete tax
items
|
e
|
(2,812)
|
|
2,233
|
|
(103)
|
|
(579)
|
|
2,152
|
|
Non-GAAP net
income
|
|
$
1,098,444
|
|
$ 988,154
|
|
$ 839,202
|
|
$
2,086,598
|
|
$
1,625,677
|
|
GAAP net income per
diluted share
|
|
$
6.16
|
|
$
7.01
|
|
$
4.28
|
|
$
13.17
|
|
$
9.69
|
|
Non-GAAP net income per
diluted share
|
|
$
8.20
|
|
$
7.33
|
|
$
6.16
|
|
$
15.52
|
|
$
11.89
|
|
Shares used in diluted
net income per share calculation
|
|
133,926
|
|
134,858
|
|
136,254
|
|
134,415
|
|
136,684
|
|
Pre-tax Impact of
GAAP to Non-GAAP Adjustments Included in Condensed Consolidated
Unaudited Statements of Operations
|
|
|
(In
thousands)
|
Acquisition -
Related
Charges
|
|
Restructuring,
Severance and
Other Charges
|
|
Goodwill and
Purchased
Intangible
Asset
Impairment
|
|
Total Pre-tax
GAAP
to Non-GAAP
Adjustments
|
|
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
Sept. 30, 2024
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
44,090
|
|
$
901
|
|
$
—
|
|
$
44,991
|
|
Research and
development
|
—
|
|
1,087
|
|
—
|
|
1,087
|
|
Selling, general and
administrative
|
12,604
|
|
874
|
|
—
|
|
13,478
|
|
Total in three months
ended Sept. 30, 2024
|
$
56,694
|
|
$
2,862
|
|
$
—
|
|
$
59,556
|
|
Three Months Ended
Dec. 31, 2023
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
46,078
|
|
$
467
|
|
$
—
|
|
$
46,545
|
|
Research and
development
|
—
|
|
417
|
|
—
|
|
417
|
|
Selling, general and
administrative
|
13,229
|
|
386
|
|
—
|
|
13,615
|
|
Impairment of goodwill
and purchased intangible assets
|
—
|
|
—
|
|
219,000
|
|
219,000
|
|
Total in three months
ended Dec. 31, 2023
|
$
59,307
|
|
$
1,270
|
|
$ 219,000
|
|
$
279,577
|
|
Free Cash Flow
Reconciliation
|
|
|
Three Months Ended
Dec. 31,
|
|
Twelve Months Ended
Dec. 31,
|
|
(In
thousands)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net cash provided by
operating activities
|
$
849,515
|
|
$
622,242
|
|
$ 3,647,346
|
|
$ 3,475,952
|
|
Capital
expenditures
|
(92,323)
|
|
(76,801)
|
|
(285,254)
|
|
(308,443)
|
|
Free cash
flow
|
$
757,192
|
|
$
545,441
|
|
$ 3,362,092
|
|
$ 3,167,509
|
|
Capital Returns
Calculation
|
|
|
Three Months Ended
Dec. 31,
|
|
Twelve Months Ended
Dec. 31,
|
|
(In
thousands)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Payments of dividends
to stockholders
|
$
226,776
|
|
$
196,859
|
|
$
819,530
|
|
$
738,730
|
|
Common stock
repurchases
|
650,121
|
|
437,817
|
|
2,060,021
|
|
1,760,240
|
|
Capital
returns
|
$
876,897
|
|
$
634,676
|
|
$ 2,879,551
|
|
$ 2,498,970
|
|
Third Quarter Fiscal 2025
Guidance
Reconciliation of
GAAP Diluted EPS to Non-GAAP Diluted EPS
|
|
|
|
Three Months Ending
March 31, 2025
|
|
(In millions,
except per share amounts)
|
|
Low
|
|
High
|
|
GAAP net income per
diluted share
|
|
$7.17
|
|
$8.37
|
|
Acquisition-related
charges
|
a
|
0.40
|
|
0.40
|
|
Restructuring,
severance and other charges
|
b
|
0.02
|
|
0.02
|
|
Income tax effect of
non-GAAP adjustments
|
d
|
(.14)
|
|
(.14)
|
|
Non-GAAP net income per
diluted share
|
|
$7.45
|
|
$8.65
|
|
Shares used in net
income per diluted share calculation
|
|
133.3
|
|
133.3
|
|
Reconciliation of
GAAP Gross Margin to Non-GAAP Gross Margin
|
|
|
|
Three Months Ending
March 31, 2025
|
|
|
Low
|
|
High
|
|
GAAP gross
margin
|
|
59.6 %
|
|
61.6 %
|
|
Acquisition-related
charges
|
a
|
1.4 %
|
|
1.4 %
|
|
Non-GAAP gross
margin
|
|
61.0 %
|
|
63.0 %
|
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 three and six months ended
Dec. 31, 2024 as well as the three and six months ended Dec. 31,
2023 included 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. 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 and six months ended Dec. 31, 2024 include the
recognition of a deferred tax asset on foreign currency
gains/losses resulting from new tax legislation. Discrete tax items
in the three and six months ended Dec. 31, 2023 included 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 included a tax impact relating to the
amortization of the aforementioned tax benefit or similar tax
benefits recorded in other periods.
|
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content:https://www.prnewswire.com/news-releases/kla-corporation-reports-fiscal-2025-second-quarter-results-302364726.html
SOURCE KLA Corporation
