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KLA's Q4 2025 Earnings Call: Unpacking Key Contradictions in China Revenue, Service Growth, and Technology Projections
Generated by AI AgentAinvest Earnings Call Digest
Thursday, Jul 31, 2025 11:52 pm ET1min read
Aime SummaryChina WFE and revenue impact, service revenue growth expectations, China sales and market share projections, wafer inspection and metrology growth expectations, and 3-nanometer upside for 2025 are the key contradictions discussed in Corporation's latest 2025Q4 earnings call.
Revenue and Financial Performance:
- reported revenue of $3.175 billion for the June quarter, exceeding the guidance midpoint of $3.075 billion.
- Non-GAAP diluted EPS was $9.38, above its guidance range, while GAAP diluted EPS was $9.06, at the upper end of the guidance range.
- The growth was driven by strong investment in leading-edge foundry and logic and high bandwidth memory, as well as robust advanced packaging portfolio performance.
Process Control and Advanced Packaging:
- KLA's advanced packaging systems related revenue is expected to exceed $925 million in calendar 2025, an increase from the previous estimate of $850 million.
- This was primarily due to strong momentum in packaging, supported by adoption of HBM and complex packaging architectures.
- The growth reflects the increasing relevance of process control in advanced packaging and the broader adoption of KLA's portfolio across different sectors.
Free Cash Flow and Capital Returns:
- KLA achieved record free cash flow of over $1 billion for the June quarter, marking the highest quarterly amount to date.
- This was driven by strong operating efficiency and cash generation capabilities, along with consistent dividend growth and share repurchases.
Customer Engagement and Outlook:
- Early customer discussions suggest constructive expectations for calendar year 2026, indicating potential growth.
- The engagement is supported by strong demand in high-performance compute, particularly in AI infrastructure, although China's investment levels are expected to normalize.
- KLA's view of growth is underpinned by its expanding market share, strong share of WFE, and continued momentum in advanced packaging.
Revenue and Financial Performance:
- reported revenue of $3.175 billion for the June quarter, exceeding the guidance midpoint of $3.075 billion.
- Non-GAAP diluted EPS was $9.38, above its guidance range, while GAAP diluted EPS was $9.06, at the upper end of the guidance range.
- The growth was driven by strong investment in leading-edge foundry and logic and high bandwidth memory, as well as robust advanced packaging portfolio performance.
Process Control and Advanced Packaging:
- KLA's advanced packaging systems related revenue is expected to exceed $925 million in calendar 2025, an increase from the previous estimate of $850 million.
- This was primarily due to strong momentum in packaging, supported by adoption of HBM and complex packaging architectures.
- The growth reflects the increasing relevance of process control in advanced packaging and the broader adoption of KLA's portfolio across different sectors.
Free Cash Flow and Capital Returns:
- KLA achieved record free cash flow of over $1 billion for the June quarter, marking the highest quarterly amount to date.
- This was driven by strong operating efficiency and cash generation capabilities, along with consistent dividend growth and share repurchases.
Customer Engagement and Outlook:
- Early customer discussions suggest constructive expectations for calendar year 2026, indicating potential growth.
- The engagement is supported by strong demand in high-performance compute, particularly in AI infrastructure, although China's investment levels are expected to normalize.
- KLA's view of growth is underpinned by its expanding market share, strong share of WFE, and continued momentum in advanced packaging.
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