KLA Corporation (KLA.DE) Q3 2025 Earnings Report

Revenue and profitability highlights (USD, quarter end 2025-03-31):
- Revenue: 3,063,029,000; YoY change: +30.04%; QoQ change: -0.45%
- Gross profit: 1,887,340,000; Gross margin: 61.62%; YoY margin change: +35.56%; QoQ: +1.72%
- Operating income: 1,300,392,000; Operating margin: 42.45%; YoY: +53.29%; QoQ: +4.69%
- Net income: 1,088,416,000; Net margin: 35.53%; YoY: +80.94%; QoQ: +32.00%
- EPS (GAAP): 8.21; EPS (diluted): 8.16; YoY EPS: +84.08%; QoQ: +32.85%

Cash flow and capital allocation:
- Net cash provided by operating activities: 1,072,159,000
- Capital expenditures: 82,135,000
- Free cash flow: 990,024,000
- Cash at end of period: 1,858,022,000; Cash and short-term investments: 4,028,622,000; Net debt: 4,231,151,000 (total debt 6,089,173,000 less cash & equivalents 1,858,022,000)

Balance sheet and liquidity:
- Total assets: 15,188,307,000
- Total liabilities: 11,183,568,000; Total stockholders’ equity: 4,004,739,000
- Current ratio: 2.54; Quick ratio: 1.736; Cash ratio: 0.475
- Long-term debt: 5,883,322,000; Total debt to capitalization: 0.603; Debt to equity: 1.520

Profitability and efficiency (per-share metrics):
- Operating cash flow per share: 8.09; Free cash flow per share: 7.44; Cash per share: 30.38
- Return on assets: 7.17%; Return on equity: 27.2%; Return on capital employed: 11.5%
- Asset turnover: 0.202; Inventory turnover: 0.373; Receivables turnover: 1.325; Days sales outstanding (DSO): 67.93; Days inventory outstanding (DIO): 241.58; Days payables outstanding (DPO): 32.86; Cash conversion cycle: 276.64 days

Valuation and market indicators:
- Price-to-earnings: 20.71x; Price-to-book: 22.51x; Price-to-sales: 29.43x; Price-to-free cash flows: 91.32x; Enterprise value multiple: 72.58x; Dividend yield: 0.25%
- Dividend payout ratio: 20.7%
- Price fair value (per the provided metrics): 22.51

Notes on data integrity:
- The quarterly data aligns across the income statement, cash flow, and balance sheet sections. Footnotes indicate a consistent net debt calculation using cash and cash equivalents as the offset against total debt.

Note: The provided data set includes an empty earnings transcript. As a result, there are no management quotes or call-centric insights available to anchor qualitative themes from the QQ3 2025 earnings call. The analysis below therefore relies on the reported financial results and publicly observable balance sheet and cash flow dynamics. When the transcript becomes available, quotes and thematic synthesis can be added under this section.

KLA stands as a high-quality semiconductor equipment supplier with strong profitability, robust cash generation, and an attractive capital-allocation framework. The QQ3 2025 results demonstrate durable margins, substantial free cash flow, and a disciplined approach to shareholder returns, which supports a positive long-term investment thesis. However, the stock trades at a premium on traditional valuation metrics (P/E ~20.7x, P/B ~22.5x, P/S ~29.4x, P/FCF ~91x), reflecting the market’s confidence in KLA’s competitive position and growth potential. The primary risk remains the semiconductor cycle; any protracted downturn could compress orders and utilization, impacting earnings momentum. Recommendation takeaway for investors: - Base case: Maintain a constructive stance given strong profitability and cash generation, with a bias toward accumulating on dips if the cycle softens but fundamentals remain intact. - Key monitorables: quarterly order activity and backlog, end-market demand signals (AI/HPC, data-centers), utilization of installed base, and any changes in competitive dynamics or material capital expenditures by large foundries. - Longer-term catalysts include expansion into adjacent markets, ongoing margin discipline, and a repeatable capital-allocation strategy that could support multiple expansion in free cash flow conversion and shareholder value creation.