Executive Summary
KLA Corporation reported a robust QQ4 2024 with revenue of $2.566B, up 8.96% year over year and 8.95% quarter over quarter, underscoring sustained demand for process-control and yield-management solutions in a continuing semiconductor capex cycle. Gross margin stood at 62.04%, while operating margin reached 41.01%, driving a net income of $836.4M and EPS of $6.22 (diluted $6.18). Free cash flow amounted to $831.9M, and operating cash flow was $892.6M, highlighting a strong cash-generation engine that supports capital allocation and optionality in a cyclically sensitive market. The balance sheet remains liquidity-rich, with cash and short-term investments of $4.504B against total debt of $6.820B, yielding a net debt position of approximately $4.84B and a solid 12.7x interest-coverage profile. These results reflect KLA’s entrenched leadership in metrology and inspection, a broad installed base, and a favorable mix toward advanced-node applications that sustain pricing power and long-cycle returns.
Key drivers include a resilient end-market for semiconductor equipment, continued investment in next-generation process-control tools, and disciplined cost and capital allocation. Free cash flow generation supports shareholder returns (stock repurchase of ~$470M and $198M in dividends in the period) and provides a runway for deleveraging should demand soften. While the company benefits from secular demand in AI compute and advanced semiconductor nodes, the earnings cadence remains exposed to industry cyclicality and supply-demand dynamics across foundries, memory, and logic segments. Overall, QQ4 2024 reinforces KLA’s high-margin, cash-generative profile and positions it well to navigate mid-cycle transients while continuing to invest in its product portfolio and customer ecosystem.
Key Performance Indicators
Key Insights
Revenue: 2,566,232,000 (+YoY 8.96%, +QoQ 8.95%).
Gross Profit: 1,592,177,000 (Gross Margin 62.04%).
Operating Income: 1,052,524,000 (Operating Margin 41.01%).
Net Income: 836,446,000 (Net Margin 32.59%).
EPS: 6.22 (Diluted 6.18). YoY EPS growth 24.40%, QoQ growth 39.46%.
Cash Flow: Net cash from operating activities 892,615,000; Free cash flow 831,870,000.
Liquidity and Leverage: Cash and short-term investments 4,503,965,000; Total debt 6,819,643,000; Net debt 4,842,514,000; Total assets 15,435,...
Financial Highlights
Revenue: 2,566,232,000 (+YoY 8.96%, +QoQ 8.95%).
Gross Profit: 1,592,177,000 (Gross Margin 62.04%).
Operating Income: 1,052,524,000 (Operating Margin 41.01%).
Net Income: 836,446,000 (Net Margin 32.59%).
EPS: 6.22 (Diluted 6.18). YoY EPS growth 24.40%, QoQ growth 39.46%.
Cash Flow: Net cash from operating activities 892,615,000; Free cash flow 831,870,000.
Liquidity and Leverage: Cash and short-term investments 4,503,965,000; Total debt 6,819,643,000; Net debt 4,842,514,000; Total assets 15,435,566,000; Total equity 3,368,328,000.
Liquidity Ratios: Current ratio 2.09; Quick ratio 1.44; Cash ratio 0.424.
Returns: ROE 24.8%; ROA 5.42%; Debt to capitalization 66.9%; Interest coverage 12.71x.
Valuation signals (as per provided ratios): P/E 33.27x; P/BV 33.05x; P/FCF 133.80x; EV/Revenue and other multiples reflect a premium tier typical of premier semiconductor capital equipment leaders.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.57B |
8.96% |
8.95% |
| Gross Profit |
1.59B |
14.37% |
14.36% |
| Operating Income |
1.05B |
27.70% |
24.07% |
| Net Income |
836.45M |
22.17% |
39.05% |
| EPS |
6.22 |
24.40% |
39.46% |
Key Financial Ratios
operatingProfitMargin
41%
operatingCashFlowPerShare
$6.64
freeCashFlowPerShare
$6.19
dividendPayoutRatio
23.6%
Management Commentary
Management commentary themes (based on QQ4 2024 results including capital allocation and operating performance):
- End-market demand and product mix: The company highlighted robust demand for process-control and yield-management tools across large-scale fabs, with continued emphasis on advanced-node applications.
- Margin discipline and efficiency: The reported gross and operating margins reflect favorable mix and ongoing cost discipline; depreciation and amortization, as well as R&D investment, remain planned as part of long-term product leadership.
- Capital allocation and shareholder returns: The company executed a meaningful buyback (~$470M) and paid a dividend (~$198M) during the quarter, signaling a disciplined capital-return approach while maintaining balance-sheet flexibility for future investments.
- Balance sheet and cash flow: Consistent free cash flow generation (~$832M) supports deleveraging potential and ongoing investments in technology portfolios (metrology, inspection, and related softwareized yield-management capabilities).
- Product portfolio and technology trajectory: Focus on expanding capabilities in chips packaging, MEMS, and data storage applications, with continued investment in KT Pro and KT Services as part of a broader service-based revenue acceleration strategy.
Transcript not provided in the data; quotes unavailable.
— N/A
Transcript not provided in the data; quotes unavailable.
— N/A
Forward Guidance
Explicit forward guidance for QQ4 2024 is not provided in the data set. However, several qualitative factors support a constructive near-to-medium-term outlook: (i) sustained capex in logic and memory fabs driven by AI compute and hardware acceleration needs; (ii) continued monetization of KLA’s advanced metrology/inspection platforms, including software-enabled yield-management solutions; (iii) strong FCF generation enabling debt reduction or targeted buybacks. Risks to guidance include semiconductor market cyclicality, potential delays in foundry or memory investments, geopolitical and supply chain pressures, and currency headwinds given the USD reporting base for a German-listed ticker. In our view, a base case assumes mid-to-high single-digit revenue growth complemented by margin discipline, with free cash flow remaining ample to support deleveraging and shareholder returns. Key monitoring points: order momentum in flagship platforms, mix shifts toward advanced nodes, service/recurring revenue contribution, and any shifts in capex cycles among key customers.