Analysis of Reportable Segments
KLA Corp. operates in 4 segments: Semiconductor Process Control; Specialty Semiconductor Process; PCB and Component Inspection; and Other.
Segment Profit Margin
KLA Corp., profit margin by reportable segment
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor Process Control | 64.46% | 63.89% | 65.21% | 64.61% | 63.81% | 63.48% |
| Specialty Semiconductor Process | 53.51% | 51.88% | 53.12% | 55.99% | 55.70% | 52.13% |
| PCB and Component Inspection | 28.77% | 35.03% | 45.54% | 48.06% | 43.40% | 46.80% |
| Other | — | — | — | -9.20% | -1.74% | 23.57% |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
- Semiconductor Process Control
- The profit margin for this segment demonstrates a generally stable and strong performance over the observed periods. Starting at 63.48% in mid-2019, the margin experienced a slight upward trend, peaking at 65.21% in mid-2022. Subsequently, there was a minor decline, with the margin balancing out at 64.46% by mid-2024. This suggests sustained profitability with minimal volatility within this segment.
- Specialty Semiconductor Process
- The profit margin for this segment shows some fluctuation over the period but remains predominantly above 50%. The margin improved from 52.13% in mid-2019 to a peak of 55.99% in mid-2021. After this, it declined somewhat, reaching 51.88% in mid-2023, before a slight recovery to 53.51% in mid-2024. The data indicates moderate variability, though margins remain relatively healthy.
- PCB and Component Inspection
- This segment exhibits a notably downward trend in profit margins across the periods. Beginning at 46.8% in mid-2019, the margin decreased with some fluctuation, dropping sharply to 28.77% by mid-2024. The decline is particularly pronounced after mid-2021, suggesting challenges impacting profitability in this area.
- Other
- The "Other" category shows negative profit margins during the periods where data is available. From a small positive margin of 23.57% in mid-2019, the margin turned negative in mid-2020 (-1.74%) and further declined to -9.2% in mid-2021. Data beyond this point is missing, but the available figures indicate consistent losses in this category during the earlier years.
Segment Profit Margin: Semiconductor Process Control
KLA Corp.; Semiconductor Process Control; segment profit margin calculation
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Segment gross profit | 5,629,302) | 5,957,573) | 5,167,679) | 3,705,222) | 3,028,167) | 2,590,434) |
| Revenues | 8,733,556) | 9,324,190) | 7,924,822) | 5,734,825) | 4,745,446) | 4,080,822) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 64.46% | 63.89% | 65.21% | 64.61% | 63.81% | 63.48% |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Segment profit margin = 100 × Segment gross profit ÷ Revenues
= 100 × 5,629,302 ÷ 8,733,556 = 64.46%
- Revenues
- Revenues in the Semiconductor Process Control segment showed a steady upward trend from June 30, 2019, to June 30, 2023. The revenues increased from approximately 4.08 billion USD in 2019 to a peak of around 9.32 billion USD in 2023. However, this was followed by a decline in 2024, dropping to approximately 8.73 billion USD, indicating a slight contraction after several years of growth.
- Segment Gross Profit
- Segment gross profit experienced sustained growth over the five-year period from 2019 through 2023, rising from approximately 2.59 billion USD to nearly 5.96 billion USD. Despite this strong trajectory, a decrease was observed in 2024, with gross profit falling to about 5.63 billion USD, mirroring the decline seen in revenues during the same period.
- Segment Profit Margin
- The segment profit margin remained relatively stable over the analyzed period, fluctuating within a narrow range between approximately 63.48% and 65.21%. The highest margin was recorded in 2022 at 65.21%, after which it declined slightly to 63.89% in 2023, before rising marginally again to 64.46% in 2024. This stability suggests consistent cost management relative to revenues throughout the years.
- Overall Trend Analysis
- The Semiconductor Process Control segment demonstrated robust growth in both revenues and gross profit through 2023, with a notable peak in 2022 for profit margin. The slight declines observed in 2024 may indicate emerging market or operational challenges but did not substantially affect profit margins, which remained stable. This pattern suggests that while demand or sales volumes may have softened, profitability controls and cost efficiencies were maintained effectively within the segment.
Segment Profit Margin: Specialty Semiconductor Process
KLA Corp.; Specialty Semiconductor Process; segment profit margin calculation
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Segment gross profit | 282,910) | 281,942) | 242,520) | 206,706) | 183,641) | 78,800) |
| Revenues | 528,701) | 543,398) | 456,579) | 369,216) | 329,700) | 151,164) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 53.51% | 51.88% | 53.12% | 55.99% | 55.70% | 52.13% |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Segment profit margin = 100 × Segment gross profit ÷ Revenues
= 100 × 282,910 ÷ 528,701 = 53.51%
The data reflects the financial performance of the Specialty Semiconductor Process segment over a six-year period ending June 30, 2024.
- Segment Gross Profit
- There is a consistent and substantial increase in segment gross profit from 2019 to 2024. The figure rose sharply from $78.8 million in 2019 to approximately $282.9 million in 2024. This represents more than a threefold increase over the period.
- Revenues
- Revenues also exhibit a significant upward trend, climbing from $151.2 million in 2019 to a peak of $543.4 million in 2023, followed by a slight decline to $528.7 million in 2024. Despite the minor decrease in the last reporting period, the overall revenue growth remains strong and positive.
- Segment Profit Margin
- The segment profit margin has remained relatively stable, fluctuating modestly around the low to mid-50% range. It started at approximately 52.1% in 2019, reaching its highest point near 56.0% in 2021. More recently, the margin dipped slightly to 51.9% in 2023 before a moderate recovery to 53.5% in 2024.
Overall, the segment demonstrates robust growth in both gross profit and revenue, suggesting successful business expansion and operational efficiency. The segment profit margin's stability in the low to mid-50% range indicates consistent profitability despite changes in revenue scale. The slight decrease in revenue during the last period warrants attention but does not substantially affect the broader growth trajectory observed throughout the years.
Segment Profit Margin: PCB and Component Inspection
KLA Corp.; PCB and Component Inspection; segment profit margin calculation
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Segment gross profit | 158,960) | 221,251) | 378,964) | 390,571) | 315,723) | 155,765) |
| Revenues | 552,491) | 631,604) | 832,176) | 812,620) | 727,451) | 332,810) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | 28.77% | 35.03% | 45.54% | 48.06% | 43.40% | 46.80% |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Segment profit margin = 100 × Segment gross profit ÷ Revenues
= 100 × 158,960 ÷ 552,491 = 28.77%
The analysis of the "PCB and Component Inspection" segment over the six-year period reveals distinct trends in revenues, segment gross profit, and profit margins.
- Revenue Trends
- Revenues demonstrated a strong upward trajectory from June 30, 2019, to June 30, 2022, increasing from approximately $333 million to over $832 million. However, from June 30, 2022, onward, revenues experienced a notable decline, falling to about $552 million by June 30, 2024. This reversal indicates a peak in the fiscal year ending 2022 followed by a significant decrease over the subsequent two years.
- Segment Gross Profit
- Segment gross profit displayed a similar pattern to revenues initially, rising substantially from approximately $156 million in 2019 to nearly $391 million in 2021. Despite a slight dip in 2022 to around $379 million, gross profit declined sharply thereafter, reaching approximately $159 million by 2024. This sharp reduction in gross profit aligns with the observed decrease in revenues during the same period.
- Segment Profit Margin
- The segment profit margin exhibited variability over the six-year period. Starting at 46.8% in 2019, it decreased moderately to 43.4% in 2020 but rose again, peaking at 48.06% in 2021. After 2021, the margin declined steadily to 28.77% by 2024. This downward trend in margins suggests that profitability relative to sales has weakened significantly in the last two years under review.
Overall, the data indicate that after a period of growth in both revenues and gross profit culminating around 2021-2022, the segment has experienced a contraction in sales accompanied by a substantial decline in profitability up to the most recent fiscal year ending June 2024. The declining profit margin further underscores increasing pressure on cost efficiency or pricing power within the segment during this interval.
Segment Profit Margin: Other
KLA Corp.; Other; segment profit margin calculation
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Segment gross profit | —) | —) | —) | (68) | (63) | 1,102) |
| Revenues | —) | —) | —) | 739) | 3,614) | 4,676) |
| Segment Profitability Ratio | ||||||
| Segment profit margin1 | — | — | — | -9.20% | -1.74% | 23.57% |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Segment profit margin = 100 × Segment gross profit ÷ Revenues
= 100 × 0 ÷ 0 = —
- Segment Gross Profit
- The segment gross profit displayed a notable decline over the observed periods. Starting at 1,102 thousand US dollars in June 2019, the segment experienced negative values in the subsequent two years, registering -63 thousand in June 2020 and -68 thousand in June 2021. Data for the years ending June 2022 through June 2024 are not provided, preventing further analysis of recent trends.
- Revenues
- Revenues exhibited a downward trajectory from June 2019 to June 2021. Beginning at 4,676 thousand US dollars in June 2019, revenues decreased to 3,614 thousand in June 2020 and then sharply dropped to 739 thousand in June 2021. No data are available beyond 2021, which limits the ability to assess any subsequent recovery or further decline.
- Segment Profit Margin
- The segment profit margin followed a similar downward trend, starting at a healthy 23.57% in June 2019. It then turned negative in the following periods, registering -1.74% in June 2020 and worsening to -9.2% in June 2021. The absence of data for later years precludes analysis of whether this negative trend continued or reversed.
- Summary of Trends
- Overall, the "Other" reportable segment experienced a significant deterioration in financial performance from 2019 through 2021. Revenues and gross profit both declined notably, with gross profit turning negative and revenues dropping substantially. Correspondingly, the segment profit margin shifted from a positive figure to increasingly negative values, indicating reduced profitability and potential operational challenges within this segment. The lack of data from 2022 onwards restricts the ability to determine if these adverse trends persisted or if corrective measures improved financial outcomes in subsequent periods.
Revenues
KLA Corp., revenues by reportable segment
US$ in thousands
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor Process Control | 8,733,556) | 9,324,190) | 7,924,822) | 5,734,825) | 4,745,446) | 4,080,822) |
| Specialty Semiconductor Process | 528,701) | 543,398) | 456,579) | 369,216) | 329,700) | 151,164) |
| PCB and Component Inspection | 552,491) | 631,604) | 832,176) | 812,620) | 727,451) | 332,810) |
| Other | —) | —) | —) | 739) | 3,614) | 4,676) |
| Total | 9,814,748) | 10,499,192) | 9,213,577) | 6,917,400) | 5,806,211) | 4,569,472) |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
- Semiconductor Process Control Segment
- The revenue for the Semiconductor Process Control segment shows a consistent upward trend from June 30, 2019, to June 30, 2023, increasing from approximately $4.08 billion to $9.32 billion. However, in the most recent period ending June 30, 2024, there is a noticeable decline to about $8.73 billion. Despite this recent decrease, the segment remains the dominant contributor to total revenues, reflecting strong, though somewhat volatile, demand within this category.
- Specialty Semiconductor Process Segment
- This segment demonstrates steady growth over the six-year period, rising from $151 million in mid-2019 to a peak of approximately $543 million in mid-2023. The revenue decreases slightly to about $529 million in the latest period, indicating minor volatility but overall strength in specialized semiconductor processing solutions. The pattern suggests incremental expansion and resilience relative to total revenues.
- PCB and Component Inspection Segment
- Revenues for the PCB and Component Inspection segment show a significant increase from $333 million in 2019 to a peak of $832 million in 2022. This is followed by a sharp decline in the subsequent years, falling to $632 million in 2023 and further down to $552 million in 2024. This indicates a reduction in demand or competitive pressures in this segment, resulting in declining revenue despite prior growth.
- Other Segment
- The 'Other' category has minimal impact on total revenue, with revenues fluctuating at relatively low levels and missing data in the last three years. This suggests either discontinuation or insignificance of this segment in recent reporting periods.
- Total Revenues
- Total revenues increased steadily from approximately $4.57 billion in 2019 to a peak of around $10.50 billion in 2023. However, in the latest period ending June 30, 2024, total revenues have declined to about $9.81 billion. This reduction correlates with the decreased revenues in the Semiconductor Process Control and PCB and Component Inspection segments, which are the major contributors to total income. The overall trend indicates robust growth followed by a recent contraction.
Segment gross profit
KLA Corp., segment gross profit by reportable segment
US$ in thousands
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|---|
| Semiconductor Process Control | 5,629,302) | 5,957,573) | 5,167,679) | 3,705,222) | 3,028,167) | 2,590,434) |
| Specialty Semiconductor Process | 282,910) | 281,942) | 242,520) | 206,706) | 183,641) | 78,800) |
| PCB and Component Inspection | 158,960) | 221,251) | 378,964) | 390,571) | 315,723) | 155,765) |
| Other | —) | —) | —) | (68) | (63) | 1,102) |
| Total | 6,071,172) | 6,460,766) | 5,789,163) | 4,302,431) | 3,527,468) | 2,826,101) |
Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
- Overall Gross Profit Trend
- The total segment gross profit demonstrates an upward trend from June 30, 2019, to June 30, 2023, increasing from approximately $2.83 billion to around $6.46 billion. However, there is a decline in the fiscal year ending June 30, 2024, with gross profit decreasing to about $6.07 billion.
- Semiconductor Process Control Segment
- This segment shows consistent growth over the first five periods, rising from roughly $2.59 billion in June 2019 to nearly $5.96 billion in June 2023. The peak is followed by a decrease in June 2024 to about $5.63 billion. The segment remains the largest contributor to total gross profit throughout the entire period.
- Specialty Semiconductor Process Segment
- There is a steady increase in gross profit from $78.8 million in June 2019 to approximately $283 million in June 2024. The growth is gradual but consistent over the six-year span, suggesting expanding operations or improved profitability in this segment.
- PCB and Component Inspection Segment
- This segment exhibits considerable volatility. After growing significantly from $155.8 million in June 2019 to $390.6 million in June 2021, it declines steadily over the subsequent years to $159 million in June 2024. The sharp reduction after 2021 indicates potential operational challenges or market contractions affecting this segment.
- Other Segment
- The 'Other' category holds minimal absolute values and exhibits fluctuations around zero, including negative figures in 2020 and 2021, with no data reported for the later years. Its impact on total gross profit is insignificant.
- Insights and Implications
- The significant increase in total gross profit over the initial five years is predominantly driven by the Semiconductor Process Control segment’s expansion. The Specialty Semiconductor Process segment also contributes to growth, albeit on a smaller scale. The decline in the final reported year is mainly attributable to reductions in the Semiconductor Process Control and PCB and Component Inspection segments. The pronounced volatility and downward trend in the PCB and Component Inspection segment post-2021 warrant attention, as it may reflect shifting market dynamics or internal challenges. Overall, the data suggest a company undergoing expansion in core semiconductor process control products, while facing headwinds in inspection-related segments.