KLA (KLAC) Q4 2024 earnings summary

Executive summary

• Q4 FY24 revenue reached $2.57B, up 9% year-over-year and sequentially, exceeding guidance midpoints, with strong customer demand, robust free cash flow, and solid execution.

• Non-GAAP net income was $893M and diluted EPS was $6.60; GAAP diluted EPS was $6.18, both above guidance.

• Gross margin (non-GAAP) was 62.5% and operating margin (non-GAAP) was 41%, reflecting operational discipline and market leadership.

• Free cash flow for the quarter was $832M, with a margin of 31–32% and strong cash conversion.

• Management noted early signs of a strengthening market and expects steady improvement into 2025.

Financial highlights

• Quarterly revenue was $2.57B, above the $2.5B guidance midpoint, with Semiconductor Process Control revenue at $2.31B, up 10% year-over-year and sequentially.

• Non-GAAP diluted EPS was $6.60; GAAP diluted EPS was $6.18; non-GAAP net income was $893M; GAAP net income was $836M.

• Gross margin reached 62.5% (non-GAAP), at the upper end of guidance, and operating margin was 41%.

• Free cash flow for Q4 was $832M; cash flow from operations was $893M; total cash and equivalents stood at $4.5B, with $6.7B in debt.

• Share buybacks totaled $470M and dividends paid were $198M in Q4; LTM share buybacks were $1.74B and dividends $773M.

Outlook and guidance

• Q1 FY25 revenue guidance is $2.75B ±$150M; foundry/logic expected to comprise 80% of Semi Process Control revenue, memory 20%.

• Non-GAAP gross margin forecasted at 61.5% ±1 ppt; operating expenses expected at ~$565M; effective tax rate ~13.5%.

• Non-GAAP EPS guidance for Q1 FY25: $7.00 ±$0.60; GAAP EPS: $6.69 ±$0.60.

• Business is transitioning from stabilization to growth, expected to continue through 2024 and into 2025.

• High single-digit to low double-digit revenue growth expected for 2024.