KLA (KLAC) Q1 Earnings call transcript Oct 30, 2025
2min read In a recent earnings call, KLA Corporation, a leading provider of semiconductor equipment and services, showcased its robust financial performance and strategic outlook for the future. The call, led by Vice President of Investor Relations and Market Analytics, Kevin Kessel, featured insights from CEO, Rick Wallace, and CFO, Bren Higgins, highlighting the company's continued success and commitment to innovation.
Strengthening Customer Demand and Solid Execution
The call began with KLA's September quarter results, which exceeded expectations and demonstrated strong revenue growth. With a revenue of $2.84 billion and diluted EPS of $7.33, the company showcased its ability to outperform the industry and maintain a steady growth trajectory. The foundry logic and memory segments, in particular, showed double-digit sequential and year-over-year revenue growth, underscoring the company's strength in the semiconductor industry.
The company's success can be attributed to its focus on customer demand and execution. Rick Wallace, CEO, highlighted the signs of strengthening leading-edge logic and memory environment for KLA's top customers, indicating a positive outlook for the company's future growth. The company's execution, driven by its global team, has been instrumental in delivering these results, demonstrating its operational excellence and market leadership.
Investments in AI and Advanced Packaging
KLA's commitment to innovation was evident in its discussions around AI and advanced packaging. The company's investment in AI technology has positioned it well to meet the growing demand for AI chips, which is driving rising process control intensity. Additionally, KLA's early adoption and integration of AI into its products have set it apart from competitors, providing a competitive edge and enabling better performance and customer cost of ownership.
The company's focus on advanced packaging is also noteworthy, with revenue in this category expected to exceed $500 million in CY '24. The growing importance of advanced packaging, driven by the demand for high-performance computing and AI applications, positions KLA as a key player in this market.
Financial Highlights and Outlook
Bren Higgins, CFO, provided a detailed overview of KLA's financial highlights and outlook. The company's September quarter performance was strong from a cash flow and capital returns perspective, with quarterly free cash flow of $935 million and total capital return of $765 million. These figures underscore KLA's financial health and its ability to generate cash and return capital to shareholders.
Looking ahead, KLA's outlook for the December quarter is positive, with expectations for total revenue of $2.95 billion and non-GAAP gross margin of 61.5%. The company's confidence in its business momentum, market share opportunities, and higher expected process control intensity at the leading edge across all segments position KLA for another year of growth in calendar 2025.
Addressing Export Controls and China Exposure
The call also touched upon potential challenges, including export controls and China exposure. KLA remains cautious about the impact of export controls on its business and reiterated its commitment to navigating these challenges. The company's China exposure, currently at 42%, is expected to decline in the December quarter due to the retirement of November 2024 bonds at maturity. However, KLA remains optimistic about its growth prospects, driven by its leadership in the semiconductor industry and its focus on innovation and customer success.
In conclusion, KLA Corporation's September Quarter 2024 Earnings Call provided a comprehensive overview of the company's financial performance and strategic outlook. The company's strong revenue growth, focus on innovation, and operational excellence have positioned it well for continued growth in the semiconductor industry. With a clear focus on customer success and a commitment to delivering differentiated solutions, KLA is poised for another year of success and innovation.
