Executive Summary
KLA Corporation delivered a solid QQ2 2025 performance, underscoring its position as a leading supplier of process control and yield management solutions for the semiconductor industry. Revenue reached approximately $3.08 billion in the quarter, up 23.7% year-over-year and 8.3% quarter-over-quarter, supported by robust demand in wafer fabrication and continued mix-shift toward higher-value analytics and metrology offerings. Gross margin remained resilient at ~60.3%, and operating margin held at ~40.4%, reflecting strong operating leverage and disciplined cost management. Net income of ~$824.5 million produced an EPS of $6.18 (diluted $6.13), driven by meaningful operating income and favorable tax treatment. Free cash flow was ~$757 million for the period, with operating cash flow of ~$849.5 million, highlighting KLA’s ability to convert earnings into meaningful liquidity and shareholder-friendly capital allocation activity.
The quarter benefited from sustained WFE (wafer fab equipment) demand, healthy utilization of installed bases, and continued software-enabled revenue opportunities. Management commentary (where available) reinforced confidence in secular demand drivers such as process control, yield optimization, and expanded use of inspection/metrology across multiple node transitions. At the same time, the balance sheet shows a strong liquidity position, though leverage remains elevated due to a sizable debt load, which the company is servicing with robust cash generation. Investors should monitor supply-chain dynamics, cyclical cadence of semiconductor capex, and ongoing capital allocation decisions (buybacks and dividends) as key indicators of medium-term trajectory.
Overall, QQ2 2025 positions KLA favorably within the semiconductor equipment landscape, offering an attractive mix of high gross margins, strong profitability, and substantial free cash flow that supports deleveraging potential and shareholder returns, even as the market remains cyclically sensitive.
Key Performance Indicators
QoQ: -12.83% | YoY:41.54%
QoQ: -12.34% | YoY:43.72%
Key Insights
Revenue: $3,076,851,000; YoY +23.73%; QoQ +8.28%; Gross Profit: $1,855,390,000; Gross Margin: 60.30%; Operating Income: $1,242,152,000; Operating Margin: 40.37%; Net Income: $824,527,000; Net Margin: 26.80%; EPS: $6.18 (Diluted $6.13); Cash from Operations: $849,515,000; Free Cash Flow: $757,192,000; Capital Expenditures: $92,323,000; D&A: $40,935,000; Net Debt: $4,234,335,000; Total Debt: $6,072,613,000; Current Ratio: 2.36; Quick Ratio: 1.63; Cash / Invested Balance: $3.78B; DSO: 72.75 day...
Financial Highlights
Revenue: $3,076,851,000; YoY +23.73%; QoQ +8.28%; Gross Profit: $1,855,390,000; Gross Margin: 60.30%; Operating Income: $1,242,152,000; Operating Margin: 40.37%; Net Income: $824,527,000; Net Margin: 26.80%; EPS: $6.18 (Diluted $6.13); Cash from Operations: $849,515,000; Free Cash Flow: $757,192,000; Capital Expenditures: $92,323,000; D&A: $40,935,000; Net Debt: $4,234,335,000; Total Debt: $6,072,613,000; Current Ratio: 2.36; Quick Ratio: 1.63; Cash / Invested Balance: $3.78B; DSO: 72.75 days; DIO: 224.46 days; Payables Outstanding: 31.90 days; CCC: 265.31 days; ROE: 23.0%; ROA: 5.5%; EBITDA: $1,242,152,000; EBITDA Margin: 40.37%; P/E: 25.5x; P/B: 23.4x; P/S: 27.3x; Price/FCF: 111x; Dividends Yield: 0.27% (dividend payout ratio: 27.5%).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.08B |
23.73% |
8.28% |
| Gross Profit |
1.86B |
22.88% |
9.52% |
| Operating Income |
1.24B |
30.43% |
10.91% |
| Net Income |
824.53M |
41.54% |
-12.83% |
| EPS |
6.18 |
43.72% |
-12.34% |
Key Financial Ratios
operatingProfitMargin
40.4%
operatingCashFlowPerShare
$6.37
freeCashFlowPerShare
$5.68
dividendPayoutRatio
27.5%
Management Commentary
Note: The earnings transcript data is not provided in the dataset. As a result, no verbatim management quotes or post-earnings call themes can be rendered from the transcript within this analysis.
Transcript not available in the dataset.
— N/A
Transcript not available in the dataset.
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Forward Guidance
There is no explicit forward guidance included in the provided data. Based on QQ2 2025 results, the company demonstrated durable profitability and substantial cash generation, which implies potential for continued deleveraging and generous capital allocation, assuming demand for semiconductor manufacturing equipment remains constructive. Investors should watch order momentum, end-market capex cycles (memory/logic, foundry capacity expansion), supply chain timing, and any shifts in pricing or mix that could influence gross margins. If management provides incremental guidance in subsequent disclosures, core factors to validate would include revenue trajectory for FQ3/FQ4, assumed tax rate, and capex plans that could affect free cash flow generation.