KLA Posts Q3 EPS $9.40 and 11.5% Revenue Rise, FCF Slumps 37%
KLA reported Q3 non-GAAP EPS of $9.40, beating estimates by $0.25, and revenue rose 11.5% to $3.42 billion. However, free cash flow fell to $622.3 million from $990 million a year earlier, and shares slid 7.2% despite guidance for Q4 revenue of $3.575 billion ±$200 million.
1. Q3 Earnings and Revenue Beat
KLA reported adjusted EPS of $9.40 for the quarter ended March 31, exceeding consensus by $0.25, and achieved revenue of $3.42 billion, up 11.5% from $3.06 billion a year earlier. GAAP diluted EPS was $9.12, and strong top-line performance reflected robust demand for its semiconductor process-control tools.
2. Free Cash Flow Decline
Operating cash flow for Q3 reached $707.5 million, but free cash flow dropped to $622.3 million versus $990 million in the prior year quarter, a 37% decline. The year-to-date free cash flow totaled $4.01 billion, driven by ongoing capital expenditures and working capital investments.
3. Q4 Guidance and Capital Returns
For Q4, KLA forecasts revenue of $3.575 billion ±$200 million and adjusted EPS of $9.87 ±$1.00, with midpoints above consensus. The Board approved a 17th consecutive annual dividend increase to $2.30 per share and authorized an additional $7 billion for share repurchases, underscoring confidence in cash flow generation.