KLA Corporation reported a solid QQ4 2024 (June quarter) with revenue reaching $2.566B, marking sequential and year-over-year growth driven by stronger demand at the leading edge and favorable product mix. The company delivered a gross margin of approximately 62% and GAAP diluted EPS of $6.18 (non-GAAP $6.60), topping guidance midpoints. Management attributed the outperformance to a richer product mix, higher volumes, and ongoing monetization of AI-enabled process control capabilities, including a sizable advance in advanced packaging opportunities, now estimated at over $500M for calendar 2024. Free cash flow remained robust at $832M for the quarter, with 12-month free cash flow of about $3B (roughly 31% FCF margin). The quarter also showcased improving services profitability and utilization across segments, consistent with rising end-market demand.
Looking ahead, management reaffirmed a constructive medium-term outlook. They expect the WFE market to be in the mid-$90B range for calendar 2024, with the second half stronger than the first, and they signaled a return to growth in 2025 across logic/foundry and memory, aided by AI-driven demand and a continued ramp in leading-edge nodes. September quarter guidance called for revenue of $2.75B +/- $150M, with ~80% Foundry/Logic and ~20% Memory; gross margin around 61.5% +/- 1pp; GAAP EPS near $6.69 +/- $0.60 and non-GAAP EPS around $7 +/- $0.60. While near-term results reflect a diversified mix and favorable pricing/mix dynamics, the longer-term thesis rests on expanding opportunities in advanced packaging, memory process control (HBM/DDR3...), and sustainment of share gains in a strengthening leading-edge environment. Investors should monitor WFE demand signals, memory recovery timing (particularly DRAM/HBM), packaging adoption, and policy/regulatory developments affecting China exposure.