KLA Corp.

KLA's revenues rose 9% year over year in the quarter ended Dec. 31, 2021, benefiting from semiconductor process control (SPC) sales (11% growth year over year). Foundry and memory end markets were both solid and accounted for 49% and 41% of SPC segment revenues. Services, which consists of mostly recurring revenues, grew 13% year over year and accounted for 25% of total revenues. For calendar year 2020, total sales rose a strong 15% despite COVID-19-related supply chain disruptions and general macroeconomic weakness. Its profitability remains resilient and 2020 free operating cash flow (FOCF) reached $1.8 billion, an increase of nearly $600 million compared to calendar 2019. We believe KLA will grow in line with or exceed overall WFE industry growth

...Profitability has remained resilient through the COVID-19 pandemic. We raised our rating on KLA Corp. in February 2020, just before the onset of COVID-19, to reflect its strong operating performance and cash flow generation through the semiconductor industry cycles and our expectation that the company would expand in line with or exceed wafer fab equipment (WFE) industry growth over the next several years. Our view on KLA, as well as the overall technology sector, was tested immediately with the onset of COVID-19 but KLA's business model remained resilient, reflecting the growing importance of its process control equipment in an economy that is becoming more dependent on semiconductors as enterprises accelerate their digital transformation. KLA's revenues rose 9% year over year in the quarter ended Dec. 31, 2021, benefiting from semiconductor process control (SPC) sales (11% growth year over year). Foundry and memory end markets were both solid and accounted for 49% and 41% of SPC segment...

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