- For the quarter, total revenues were $2.569 billion, at the upper end of the guidance
range of $2.5 billion +/-
$125 million;
- For the quarter, GAAP diluted EPS attributable to KLA was
$6.18 and non-GAAP diluted EPS
attributable to KLA was $6.60, each
finishing above the midpoints of the respective guidance
ranges;
- Cash flow from operating activities for the quarter and fiscal
year was $892.6 million and
$3.31 billion, respectively, and free
cash flow was $831.9 million and
$3.03 billion, respectively; and
- Capital returns for the quarter and fiscal year were
$667.8 million and $2.51 billion, respectively.
MILPITAS, Calif., July 24,
2024 /PRNewswire/ -- KLA Corporation (NASDAQ: KLAC)
today announced financial and operating results for its fourth
quarter and fiscal year ended June 30, 2024. KLA reported GAAP
net income attributable to KLA of $836.4
million and GAAP diluted earnings per share ("EPS")
attributable to KLA of $6.18 on total
revenues of $2.57 billion for the
fourth quarter of fiscal year 2024. For the fiscal year ended
June 30, 2024, KLA reported GAAP net income attributable to
KLA of $2.76 billion and GAAP diluted
EPS attributable to KLA of $20.28 on
total revenues of $9.81 billion.
"KLA's June quarter results exceeded expectations, including
revenue, gross margin and EPS, which were all above their
respective guidance midpoints, demonstrating the enduring power and
differentiation of the KLA portfolio," said Rick Wallace, President and CEO, KLA Corporation. "We are encouraged by the early
signs of a strengthening market environment for our customers at
the leading edge and are increasingly confident in our plan for
steady improvement throughout the remainder of this calendar year
and into 2025."
|
GAAP
Results
|
|
Q4 FY
2024
|
Q3 FY
2024
|
Q4 FY
2023
|
|
Total
Revenues
|
$2,569
million
|
$2,360
million
|
$2,355
million
|
|
Net Income Attributable
to KLA
|
$836 million
|
$602 million
|
$685 million
|
|
Net Income per Diluted
Share Attributable to KLA
|
$6.18
|
$4.43
|
$4.97
|
|
|
|
|
|
Non-GAAP
Results
|
|
Q4 FY
2024
|
Q3 FY
2024
|
Q4 FY
2023
|
|
Net Income Attributable
to KLA
|
$893 million
|
$715 million
|
$743 million
|
|
Net Income per Diluted
Share Attributable to KLA
|
$6.60
|
$5.26
|
$5.40
|
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 2024 fourth quarter and full year, 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.
First Quarter Fiscal 2025 Guidance
The following
details our guidance for the first quarter of fiscal 2025 ending in
Sept.:
- Total revenues is expected to be in a range of $2.75 billion +/- $150
million
- GAAP gross margin is expected to be in a range of 59.9% +/-
1.0%
- Non-GAAP gross margin is expected to be in a range of 61.5% +/-
1.0%
- GAAP diluted EPS is expected to be in a range of $6.69 +/- $0.60
- Non-GAAP diluted EPS is expected to be in a range of
$7.00 +/- $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
Sept. 30, 2024, 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 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; our ability to identify suitable acquisition
targets and successfully integrate and manage acquired businesses;
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, and the war between
Israel and Hamas, 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 R&D 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,
2023, 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)
|
June 30,
2024
|
|
June 30,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
1,977,129
|
|
$
1,927,865
|
|
Marketable
securities
|
2,526,866
|
|
1,315,294
|
|
Accounts receivable,
net
|
1,833,041
|
|
1,753,361
|
|
Inventories
|
3,034,781
|
|
2,876,784
|
|
Other current
assets
|
659,327
|
|
498,728
|
|
Total current
assets
|
10,031,144
|
|
8,372,032
|
|
Land, property and
equipment, net
|
1,109,968
|
|
1,031,841
|
|
Goodwill,
net
|
2,015,726
|
|
2,278,820
|
|
Deferred income
taxes
|
915,241
|
|
816,899
|
|
Purchased intangibles,
net
|
668,764
|
|
935,303
|
|
Other non-current
assets
|
692,723
|
|
637,462
|
|
Total
assets
|
$
15,433,566
|
|
$
14,072,357
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
359,487
|
|
$
371,026
|
|
Deferred system
revenue
|
985,856
|
|
651,720
|
|
Deferred service
revenue
|
501,926
|
|
416,606
|
|
Current portion of
long-term debt
|
749,936
|
|
—
|
|
Other current
liabilities
|
2,063,569
|
|
2,303,490
|
|
Total current
liabilities
|
4,660,774
|
|
3,742,842
|
|
Long-term
debt
|
5,880,199
|
|
5,890,736
|
|
Deferred tax
liabilities
|
486,690
|
|
529,287
|
|
Deferred service
revenue
|
294,460
|
|
176,681
|
|
Other non-current
liabilities
|
743,115
|
|
813,058
|
|
Total
liabilities
|
12,065,238
|
|
11,152,604
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock and
capital in excess of par value
|
2,280,133
|
|
2,107,663
|
|
Retained
earnings
|
1,137,270
|
|
848,431
|
|
Accumulated other
comprehensive loss
|
(49,075)
|
|
(36,341)
|
|
Total stockholders'
equity
|
3,368,328
|
|
2,919,753
|
|
Total liabilities and
stockholders' equity
|
$
15,433,566
|
|
$
14,072,357
|
|
KLA
Corporation
|
|
|
|
|
|
|
|
Condensed
Consolidated Unaudited Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Twelve Months Ended
June 30,
|
|
(In thousands,
except per share amounts)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Product
|
$
1,954,837
|
|
$
1,816,524
|
|
$
7,482,679
|
|
$
8,379,025
|
|
Service
|
613,898
|
|
538,613
|
|
2,329,568
|
|
2,117,031
|
|
Total
revenues
|
2,568,735
|
|
2,355,137
|
|
9,812,247
|
|
10,496,056
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
1,010,551
|
|
962,949
|
|
3,928,073
|
|
4,218,307
|
|
Research and
development
|
325,759
|
|
317,110
|
|
1,278,981
|
|
1,296,727
|
|
Selling, general and
administrative
|
255,106
|
|
250,857
|
|
969,509
|
|
986,326
|
|
Impairment of goodwill
and purchased intangible assets
|
—
|
|
—
|
|
289,474
|
|
—
|
|
Interest
expense
|
82,836
|
|
73,491
|
|
311,253
|
|
296,940
|
|
Loss on extinguishment
of debt
|
—
|
|
—
|
|
—
|
|
13,286
|
|
Other expense
(income), net
|
(50,560)
|
|
(24,776)
|
|
(155,075)
|
|
(104,720)
|
|
Income before income
taxes
|
945,043
|
|
775,506
|
|
3,190,032
|
|
3,789,190
|
|
Provision for income
taxes
|
108,597
|
|
90,852
|
|
428,136
|
|
401,839
|
|
Net income
|
836,446
|
|
684,654
|
|
2,761,896
|
|
3,387,351
|
|
Less: Net income
attributable to non-controlling interest
|
—
|
|
—
|
|
—
|
|
74
|
|
Net income attributable
to KLA
|
$
836,446
|
|
$
684,654
|
|
$
2,761,896
|
|
$
3,387,277
|
|
Net income per share
attributable to KLA:
|
|
|
|
|
|
|
|
|
Basic
|
$
6.22
|
|
$
5.00
|
|
$
20.41
|
|
$
24.28
|
|
Diluted
|
$
6.18
|
|
$
4.97
|
|
$
20.28
|
|
$
24.15
|
|
Weighted-average number
of shares:
|
|
|
|
|
|
|
|
|
Basic
|
134,462
|
|
136,873
|
|
135,345
|
|
139,483
|
|
Diluted
|
135,342
|
|
137,654
|
|
136,187
|
|
140,235
|
|
KLA
Corporation
|
|
Condensed
Consolidated Unaudited Statements of Cash Flows
|
|
|
|
Three Months Ended
June 30,
|
|
(In
thousands)
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
$
836,446
|
|
$
684,654
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
101,001
|
|
104,813
|
|
Unrealized foreign
exchange loss and other
|
4,214
|
|
17,602
|
|
Asset impairment
charges
|
11,307
|
|
—
|
|
Stock-based
compensation expense
|
58,621
|
|
49,907
|
|
Deferred income
taxes
|
(30,634)
|
|
23,567
|
|
Changes in assets and
liabilities, net of assets acquired and liabilities assumed in
business acquisitions:
|
|
|
|
|
Accounts
receivable
|
(221,958)
|
|
105,096
|
|
Inventories
|
(32,843)
|
|
(144,654)
|
|
Other
assets
|
(65,884)
|
|
(90,591)
|
|
Accounts
payable
|
24,177
|
|
(105,844)
|
|
Deferred system
revenue
|
(8,613)
|
|
117,928
|
|
Deferred service
revenue
|
74,096
|
|
52,672
|
|
Other
liabilities
|
142,685
|
|
143,965
|
|
Net cash provided by
operating activities
|
892,615
|
|
959,115
|
|
Cash flows from
investing activities:
|
|
|
|
|
Capital
expenditures
|
(60,745)
|
|
(78,683)
|
|
Purchases of
available-for-sale securities
|
(602,081)
|
|
(481,096)
|
|
Proceeds from sale of
available-for-sale securities
|
36,816
|
|
50,079
|
|
Proceeds from maturity
of available-for-sale securities
|
488,779
|
|
434,819
|
|
Purchases of trading
securities
|
(21,635)
|
|
(18,852)
|
|
Proceeds from sale of
trading securities
|
18,644
|
|
19,249
|
|
Proceeds from other
investments
|
1,430
|
|
—
|
|
Net cash used in
investing activities
|
(138,792)
|
|
(74,484)
|
|
Cash flows from
financing activities:
|
|
|
|
|
Issuance of common
stock
|
96,501
|
|
90,939
|
|
Common stock
repurchases
|
(470,266)
|
|
(388,825)
|
|
Payment of dividends
to stockholders
|
(197,521)
|
|
(179,510)
|
|
Tax withholding
payments related to vested and released restricted stock
units
|
(47,508)
|
|
(21,102)
|
|
Payment of contingent
consideration payable
|
(67)
|
|
(12,823)
|
|
Net cash used in
financing activities
|
(618,861)
|
|
(511,321)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(6,000)
|
|
(13,958)
|
|
Net increase in cash
and cash equivalents
|
128,962
|
|
359,352
|
|
Cash and cash
equivalents at beginning of period
|
1,848,167
|
|
1,568,513
|
|
Cash and cash
equivalents at end of period
|
$
1,977,129
|
|
$
1,927,865
|
|
Supplemental cash flow
disclosures:
|
|
|
|
|
Income taxes paid,
net
|
$
65,553
|
|
$
43,858
|
|
Interest
paid
|
$
25,171
|
|
$
25,049
|
|
Non-cash
activities:
|
|
|
|
|
Contingent
consideration payable - financing activities
|
$
—
|
|
$
(29)
|
|
Dividends payable -
financing activities
|
$
1,953
|
|
$
2,047
|
|
Unsettled common stock
repurchase - financing activities
|
$
5,500
|
|
$
11,000
|
|
Accrued purchase of
land, property and equipment - investing activities
|
$
13,849
|
|
$
18,445
|
|
KLA
Corporation
|
|
Segment Information
(Unaudited)
|
|
The
following is a summary of results for each of our three reportable
segments and reconciliation to total revenues for the indicated
periods:
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Twelve Months Ended
June 30,
|
|
(In
thousands)
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Semiconductor Process
Control
|
$ 2,307,994
|
|
$ 2,097,479
|
|
$ 8,733,556
|
|
$ 9,324,190
|
|
Specialty
Semiconductor Process
|
121,268
|
|
129,008
|
|
528,701
|
|
543,398
|
|
PCB and Component
Inspection
|
140,017
|
|
128,977
|
|
552,491
|
|
631,604
|
|
Total revenues for
reportable segments
|
2,569,279
|
|
2,355,464
|
|
9,814,748
|
|
10,499,192
|
|
Corporate allocations
and effects of changes in foreign exchange rates
|
(544)
|
|
(327)
|
|
(2,501)
|
|
(3,136)
|
|
Total
revenues
|
$ 2,568,735
|
|
$ 2,355,137
|
|
$ 9,812,247
|
|
$
10,496,056
|
|
KLA
Corporation
|
|
Condensed
Consolidated Unaudited Supplemental Information
|
|
Reconciliation of
GAAP Net Income to Non-GAAP Net Income
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
(In thousands,
except per share amounts)
|
|
June 30,
2024
|
|
March 31,
2024
|
|
June 30,
2023
|
|
June 30,
2024
|
|
June 30,
2023
|
|
GAAP net income
attributable to KLA
|
|
$ 836,446
|
|
$
601,541
|
|
$ 684,654
|
|
$
2,761,896
|
|
$
3,387,277
|
|
Adjustments to
reconcile GAAP net income to non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition-related
charges
|
a
|
58,777
|
|
58,573
|
|
64,564
|
|
239,901
|
|
271,563
|
|
Restructuring,
severance and other charges
|
b
|
17,721
|
|
2,042
|
|
8,135
|
|
21,033
|
|
22,035
|
|
Impairment of goodwill
and purchased intangible assets
|
c
|
—
|
|
70,474
|
|
—
|
|
289,474
|
|
—
|
|
Loss on extinguishment
of debt
|
d
|
—
|
|
—
|
|
—
|
|
—
|
|
13,286
|
|
Income tax effect of
non-GAAP adjustments
|
e
|
(23,227)
|
|
(19,879)
|
|
(20,892)
|
|
(86,311)
|
|
(90,409)
|
|
Discrete tax
items
|
f
|
3,092
|
|
2,386
|
|
6,203
|
|
7,630
|
|
(46,074)
|
|
Non-GAAP net income
attributable to KLA
|
|
$ 892,809
|
|
$
715,137
|
|
$ 742,664
|
|
$
3,233,623
|
|
$
3,557,678
|
|
GAAP net income per
diluted share attributable to KLA
|
|
$
6.18
|
|
$
4.43
|
|
$
4.97
|
|
$
20.28
|
|
$
24.15
|
|
Non-GAAP net income per
diluted share attributable to KLA
|
|
$
6.60
|
|
$
5.26
|
|
$
5.40
|
|
$
23.74
|
|
$
25.37
|
|
Shares used in diluted
net income per share calculation
|
|
135,342
|
|
135,856
|
|
137,654
|
|
136,187
|
|
140,235
|
|
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
Impairment
|
|
Total Pre-tax GAAP
to
Non-GAAP
Adjustments
|
|
Three Months Ended
June 30, 2024
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
45,937
|
|
$
2,240
|
|
$
—
|
|
$
48,177
|
|
Research and
development
|
—
|
|
2,230
|
|
—
|
|
2,230
|
|
Selling, general and
administrative
|
12,840
|
|
13,251
|
|
—
|
|
26,091
|
|
Total in three months
ended June 30, 2024
|
$
58,777
|
|
$
17,721
|
|
$
—
|
|
$
76,498
|
|
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
|
|
Three Months Ended
June 30, 2023
|
|
|
|
|
|
|
|
|
Costs of
revenues
|
$
45,437
|
|
$
2,570
|
|
$
—
|
|
$
48,007
|
|
Research and
development
|
—
|
|
2,727
|
|
—
|
|
2,727
|
|
Selling, general and
administrative
|
19,127
|
|
2,838
|
|
—
|
|
21,965
|
|
Total in three months
ended June 30, 2023
|
$
64,564
|
|
$
8,135
|
|
$
—
|
|
$
72,699
|
|
Free Cash Flow
Reconciliation
|
|
|
|
Three Months Ended
June 30,
|
|
Twelve Months Ended
June 30,
|
|
(In
thousands)
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Net cash provided by
operating activities
|
|
$
892,615
|
|
$
959,115
|
|
$
3,308,575
|
|
$
3,669,805
|
|
Capital
expenditures
|
|
(60,745)
|
|
(78,683)
|
|
(277,384)
|
|
(341,591)
|
|
Free cash
flow
|
|
$
831,870
|
|
$
880,432
|
|
$
3,031,191
|
|
$
3,328,214
|
|
Capital Returns
Calculation
|
|
|
|
Three Months Ended
June 30,
|
|
Twelve Months Ended
June 30,
|
|
(In
thousands)
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Payments of dividends
to stockholders
|
|
$
197,521
|
|
$
179,510
|
|
$
773,041
|
|
$
732,556
|
|
Common stock
repurchases
|
|
470,266
|
|
388,825
|
|
1,735,746
|
|
1,311,864
|
|
Capital
returns
|
|
$
667,787
|
|
$
568,335
|
|
$
2,508,787
|
|
$
2,044,420
|
|
First Quarter Fiscal
2025 Guidance
|
|
Reconciliation of
GAAP Diluted EPS to Non-GAAP Diluted EPS
|
|
|
|
Three Months Ending
Sept. 30, 2024
|
|
(In millions,
except per share amounts)
|
|
Low
|
|
High
|
|
GAAP net income per
diluted share
|
|
$6.09
|
|
$7.29
|
|
Acquisition-related
charges
|
a
|
0.40
|
|
0.40
|
|
Restructuring,
severance and other charges
|
b
|
0.05
|
|
0.05
|
|
Income tax effect of
non-GAAP adjustments
|
e
|
(0.14)
|
|
(0.14)
|
|
Non-GAAP net income per
diluted share
|
|
$6.40
|
|
$7.60
|
|
Shares used in net
income per diluted share calculation
|
|
135.0
|
|
135.0
|
|
Reconciliation of
GAAP Gross Margin to Non-GAAP Gross Margin
|
|
|
|
Three Months Ending
Sept. 30, 2024
|
|
|
Low
|
|
High
|
|
GAAP gross
margin
|
|
58.9 %
|
|
60.9 %
|
|
Acquisition-related
charges
|
a
|
1.5 %
|
|
1.5 %
|
|
Restructuring,
severance and other charges
|
b
|
0.1 %
|
|
0.1 %
|
|
Non-GAAP gross
margin
|
|
60.5 %
|
|
62.5 %
|
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 attributable to KLA, non-GAAP net income per
diluted share attributable to KLA, 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 attributable to KLA to non-GAAP net
income attributable to KLA:
|
a.
|
Acquisition-related
charges primarily include amortization of intangible assets,
transaction costs associated with our acquisitions and
dispositions, as well as intangible asset impairment charges.
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 including associated acceleration of recognition
of certain stock-based and other compensation expenses, gains and
losses from exiting non-core businesses, write downs of certain
right of use assets and fixed assets that were abandoned and
adjustments related to non-controlling interest. Restructuring,
severance and other charges in the twelve months ended June 30,
2023 include a gain on the sale of Orbograph, Ltd. ("Orbograph"),
which was sold in the first quarter of fiscal 2023, partially
offset by certain transaction bonuses triggered by the sale of
Orbograph.
|
|
c.
|
Impairment of goodwill
and purchased intangible assets included non-cash expense
recognized in the three months ended March 31, 2024 and Dec. 31,
2023, following the downward revision of financial outlook for the
PCB and Display reporting units in the second quarter of fiscal
2024 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. 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.
|
Loss on extinguishment
of debt during the twelve months ended June 30, 2023 included a
pre-tax loss on early extinguishment of the $500 million 4.650%
Senior Notes due in Nov. 2024.
|
|
e.
|
Income tax effect of
non-GAAP adjustments includes the income tax effects of the
excluded items noted above.
|
|
f.
|
Discrete tax items in
the twelve months ended June 30, 2024 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. Discrete tax items in the twelve months ended June
30, 2023 also include the following: an adjustment of the net
benefit of the Orbotech Ltd. 2012 to 2018 Israel tax audit
settlement, for which the net benefit includes the liability on the
audit settlement less reductions in unrecognized tax positions and
deferred tax assets and liabilities; a tax expense of $19.8 million
from an internal restructuring; and a tax impact from the sale of
Orbograph.
|
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SOURCE KLA Corporation