KLA Shares Rise on Q2 Earnings & Revenues Beat, Optimistic Q3 Outlook

KLA Corporation KLAC reported second-quarter fiscal 2025 non-GAAP earnings of $8.20 per share, beating the Zacks Consensus Estimate by 6.08%. The figure jumped 11.9% year over year.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Revenues increased 23.7% year over year to $3.08 billion, surpassing the Zacks Consensus Estimate by 4.88%.KLA shares rose 3.71% in the pre-market trading, following strong quarterly results, with profitability across all segments despite challenges from new U.S. export controls. The company's strong AI and high-performance computing investments, advanced packaging growth, and solid cash flow and capital returns drove its shares.KLA Corporation Price, Consensus and EPS Surprise  KLA Corporation price-consensus-eps-surprise-chart | KLA Corporation QuoteKLAC’s Segmental DetailsIn terms of reportable segments, Semiconductor Process Control revenues (89.6% of total revenues) increased 25.6% year over year to $2.76 billion. Sequentially, the segment experienced 7% growth. Foundry & Logic accounted for about 76%, whereas Memory constituted about 24% of Semiconductor Process Control revenues. Within memory, about 76% came from DRAM and 24% from NAND.Specialty Semiconductor Process revenues (5.2% of total revenues) were $160.4 million, up 6.9% year over year and 25% sequentially.PCB and Component Inspection revenues (5.2% of total revenues) increased 12.6% year over year to $161.1 million and 17% on a sequential basis.KLAC Top-Line DetailsProduct revenues (accounted for 78.3% of total revenues) increased 25.4% year over year to $2.41 billion. Service revenues (21.7% of total revenues) increased 18.1% year over year to $667.4 million.In terms of major products, Wafer Inspection and Patterning Systems (including metrology and reticle inspection) accounted for 51% and 17%, respectively, of KLA’s total revenues in the fiscal second quarter. Wafer Inspection revenues increased 34% year over year and 14% sequentially to $1.56 billion. Patterning revenues moved up 23% year over year and down 8% sequentially to $531 million. In terms of regional breakdown of revenues, China and Taiwan led revenue contributions with 36% and 29%, respectively. Korea accounted for 12%, North America 9% and Japan 7%. Europe contributed 4%, whereas the remaining 3% came from the rest of Asia.KLA’s Operating DetailsIn the second quarter of fiscal 2025, the non-GAAP gross margin was 61.7%, 20 basis points (bps) above the mid of the guidance range.Research and development (R&D) expenses increased 8% year over year to $346.2 million. As a percentage of revenues, R&D expenses decreased 160 bps year over year to 11.3%.Selling, general and administrative (SG&A) expenses increased 12.6% year over year to $267.1 million. As a percentage of revenues, SG&A expenses decreased 90 bps year over year to 8.7%.Non-GAAP operating expenses were $596 million, up 6.4% sequentially. Non-GAAP operating expenses comprised $342 million in R&D and $254 million in SG&A expenses.The fiscal second-quarter non-GAAP operating margin was 42.3%, up 80 bps sequentially.KLAC Balance Sheet & Cash FlowAs of Dec. 31, 2024, cash, cash equivalents and marketable securities totaled $3.78 billion compared with $4.63 billion as of Sept. 30, 2024.Long-term debt at the end of the fiscal second quarter was $5.88 billion, unchanged from the figure reported in the previous quarter.Cash flow from operating activities was $849.5 million for the reported quarter, down from $995.2 million in the prior quarter. The free cash flow was $757.2 million for the fiscal second quarter.In the fiscal third quarter, KLAC paid out $226.8 million in dividends and repurchased $650.1 million worth of shares.KLAC 3Q25 GuidanceFor third-quarter fiscal 2025, revenues are expected to be $3.0 billion, plus/minus $150 million. The Zacks Consensus Estimate for revenues is pegged at $2.90 billion, indicating 23.10% year-over-year growth.KLA expects non-GAAP earnings of $8.05 per share, plus/minus 60 cents. The Zacks Consensus Estimate for non-GAAP earnings is pegged at $7.63 per share, suggesting year-over-year growth of 45.06%.The company expects a non-GAAP gross margin of 62%, plus/minus 1%. Operating expenses are expected to be $585 million for the March-end quarter.Zacks Rank & Stocks to ConsiderCurrently, KLA carries a Zacks Rank #4 (Sell). Pitney Bowes PBI, Paylocity Holding PCTY and Qualcomm QCOM are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.Pitney Bowes sports a Zacks Rank #1 (Strong Buy) at present, and Paylocity Holding and Qualcomm carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.Pitney Bowes’ shares have skyrocketed 115.6% over the past year. PBI is set to report its fourth-quarter 2024 results on Feb. 11.Paylocity Holding shares have gained 28.4% over the past year. PCTY is set to report its second-quarter fiscal 2025 results on Feb. 6.Qualcomm shares have risen 15.3% over the past year. 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Click to get this free report QUALCOMM Incorporated (QCOM): Free Stock Analysis Report KLA Corporation (KLAC): Free Stock Analysis Report Pitney Bowes Inc. (PBI): Free Stock Analysis Report Paylocity Holding Corporation (PCTY): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks