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 performance in Semiconductor Process Control and robust free cash flow generation.

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

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

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

• 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.

• Non-GAAP net income was $893M; GAAP net income was $836M.

• Gross margin reached 62.5% (non-GAAP) and 60.7% (GAAP); operating margin was 41% (non-GAAP) and approximately 51.6% (GAAP).

• Free cash flow for Q4 was $831.9M; full-year free cash flow was $3.03B.

• Ended the quarter with $4.5B in cash and $6.7B in debt.

Outlook and guidance

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

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

• Gross margin forecasted at 61.5% ±1 ppt (non-GAAP); operating expenses expected at ~$565M.

• Management anticipates steady improvement through 2024 and into 2025, with high single-digit to low double-digit revenue growth expected for 2024.

• WFE market expected in the mid-$90B range, with a stronger second half of 2024.