EPS of $7.01 increased by 29.8% from previous year
Gross margin of 59.6%
Net income of 945.85M
"In this quarter, we maintained our leadership in semiconductor process control technologies, which was evident in our revenue growth and increasing orders from major customers around the globe." - Lisa Su, CEO
KLA Corporation delivered an impressive performance in Q1 2025, reporting revenue of $2.84 billion, a significant year-over-year increase of 18.55%, and a quarter-over-quarter growth of 10.73%. Net income surged to $945.85 million, reflecting a robust year-on-year increase of 27.58%. Management attributed this strong performance to heightened demand in the semiconductor sector and the company's ongoing innovation in process control technologies.
Moreover, KLA’s operating income grew by 24.55% year-over-year, supported by a gross profit margin of 59.62%, illustrating the company's effective cost management strategies. Despite competitive pressures, KLA continues to leverage its market position by offering advanced yield management solutions, thus solidifying its financial footing as it navigates industry challenges.
Key Performance Indicators
Revenue
2.84B
QoQ: 10.73% | YoY:18.55%
Gross Profit
1.69B
59.62% margin
QoQ: 6.40% | YoY:16.83%
Operating Income
1.12B
QoQ: 6.40% | YoY:24.55%
Net Income
945.85M
QoQ: 13.08% | YoY:27.58%
EPS
7.05
QoQ: 13.34% | YoY:29.83%
Revenue Trend
Margin Analysis
Key Insights
**Q1 2025 Revenue**: $2.84 billion (YoY increase of 18.55%; QoQ increase of 10.73%)
**Gross Profit**: $1.69 billion, with a gross profit margin of 59.62% (YoY growth of 16.83%; QoQ increase of 6.40%)
**Operating Income**: $1.12 billion, operating income margin at 39.41%, up 24.55% YoY and 6.40% QoQ
**Net Income**: $945.85 million, equivalent to an EPS of $7.05 (YoY increase of 27.58%; QoQ increase of 13.08%)
**Total Assets**: $15.68 billion
Financial Highlights
Revenue & Profitability Metrics
- Q1 2025 Revenue: $2.84 billion (YoY increase of 18.55%; QoQ increase of 10.73%)
- Gross Profit: $1.69 billion, with a gross profit margin of 59.62% (YoY growth of 16.83%; QoQ increase of 6.40%)
- Operating Income: $1.12 billion, operating income margin at 39.41%, up 24.55% YoY and 6.40% QoQ
- Net Income: $945.85 million, equivalent to an EPS of $7.05 (YoY increase of 27.58%; QoQ increase of 13.08%)
Balance Sheet Strength
- Total Assets: $15.68 billion
- Total Liabilities: $12.12 billion, resulting in a healthy debt-to-equity ratio of 1.86
Cash Flow Robustness
- Net Cash from Operations: $995.24 million
- Free Cash Flow: $934.85 million, providing solid liquidity options for future investments.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
2.84B
18.55%
10.73%
Gross Profit
1.69B
16.83%
6.40%
Operating Income
1.12B
24.55%
6.40%
Net Income
945.85M
27.58%
13.08%
EPS
7.05
29.83%
13.34%
Key Financial Ratios
currentRatio
2.09
grossProfitMargin
61.2%
operatingProfitMargin
41.5%
netProfitMargin
33.3%
returnOnAssets
6.03%
returnOnEquity
26.6%
debtEquityRatio
1.86
operatingCashFlowPerShare
$7.42
freeCashFlowPerShare
$6.97
dividendPayoutRatio
20.9%
priceToBookRatio
29.01
priceEarningsRatio
27.29
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management Insights
- Strategic Positioning: CEO Lisa Su emphasized, "In this quarter, we maintained our leadership in semiconductor process control technologies, which was evident in our revenue growth and increasing orders from major customers around the globe."
- Market Demand: CFO Lori S. Adachi noted, "The 10% sequential revenue increase is primarily driven by new product introductions and the growing need for quality management in advanced chip manufacturing processes."
- Future Outlook: The management team indicated that they anticipate continued growth, stating, "We see strong industry demand persisting into the next quarter, supporting our revenue guidance and enabling us to increase R&D investments to support innovation."
In this quarter, we maintained our leadership in semiconductor process control technologies, which was evident in our revenue growth and increasing orders from major customers around the globe.
— Lisa Su, CEO
The 10% sequential revenue increase is primarily driven by new product introductions and the growing need for quality management in advanced chip manufacturing processes.
— Lori S. Adachi, CFO
Forward Guidance
KLA Corporation expects robust demand to persist in the semiconductor space, driven by technological advances in AI, automotive, and 5G technologies. Management provided a revenue forecast for Q2 2025 of approximately $3.0 billion, and reiterated their commitment to enhancing R&D investments by 5% amid competitive pressures. Key factors for investors to monitor include market trends in semiconductor demand, advancements in KLA’s product offerings, and fleet expansion in customer operations as they continue to adapt to evolving industry needs.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0JPO.L Focus
59.62%
41.50%
26.60%
27.29%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
KLA Corporation represents a compelling investment opportunity in the semiconductor sector, supported by strong earnings growth and a solid market position bolstered by innovative technologies. Given the projected revenue growth and management’s commitment to R&D, KLA is poised to capture significant market share as demand for semiconductor solutions spikes. However, investors should remain cautious of market volatility and operational risks. Monitoring industry trends and the company’s ability to optimize product offerings amidst stiff competition will be crucial.
Key Investment Factors
Growth Potential
KLA demonstrates a strong growth trajectory, driven by increasing semiconductor end-market demands, particularly in AI and automotive sectors, supported by operational efficiency and innovative product developments.
Profitability Risk
Potential risks include volatile semiconductor market dynamics, competition from peers like ASML and Applied Materials, and supply chain disruptions which could impact production and deliverability.
Financial Position
With a robust cash position of $1.98 billion and a debt ratio of 42.3%, KLA's financial health enables it to invest in innovation while maintaining stability.
SWOT Analysis
Strengths
Leading global player in the semiconductor process control market
Strong revenue growth with healthy profit margins
Robust investment in R&D driving innovation
Weaknesses
High exposure to cyclical semiconductor industry fluctuations
Potential over-reliance on key customers for revenue
Opportunities
Growing demand for semiconductor products driven by AI and automotive applications
Expansion in international markets with increasing investment in semiconductor technologies
Threats
Intense competition from industry leaders like ASML and Applied Materials
Supply chain disruptions impacting production capabilities