KLA Corp (NASDAQ:KLAC) stock rose 2.41% (As on July 25, 11:17:49 AM UTC-4, Source: Google Finance) after the company forecast revenue and profit for its fiscal first quarter above expectations after posting better-than-expected results for the preceding three months. A surge in AI applications is driving demand for high-end chips benefiting a battery of chip producers as well as ancillary suppliers such as KLA. KLA, which is one of the U.S. firms facing a government curb on exports of certain technologies to China, reported that its revenue contribution from the country rose to 44% from 30% a year ago. In Foundry/Logic, the continuation of scaling and incorporation of new technologies and slowly rising capital intensity continue to be a long-term tailwind. In Memory, technology development investments supporting AI and HBM and an improving supply/demand environment are positioning memory markets for a return to growth in 2025. Further, this marked another quarter of strong performance from the portfolio BBP products. The KLA Services business grew to $614 million in the June quarter, up 4% sequentially and 14% year-over-year, at the upper end of the long-term annual revenue growth target for Services of 12% to 14%. Utilization rates of existing installed capacity are steadily rising across all business segments as end-market demand improves. Quarterly free cash flow was $832 million, and last-twelve-month free cash flow was $3 billion, with free cash flow margin of 31% over the same period.

KLAC in the fourth quarter of FY 24 has reported the adjusted earnings per share of $6.60, beating the analysts’ estimates for the adjusted earnings per share of $6.15, according to LSEG data. The company had reported the adjusted revenue growth of 9 percent to $2.57 billion in the fourth quarter of FY 24, beating the analysts’ estimates for revenue of $2.52 billion. Non-GAAP gross margin was 62.5% and Non-GAAP operating margin was 41%. Revenue for the Semiconductor Process Control segment for the June quarter, including its associated Services business, was $2.3 billion, up 10% sequentially and 10% on a year-over-year basis.

The chip-making equipment maker expects its current quarter revenue at $2.75 billion, plus or minus $150 million. Analysts were expecting $2.62 billion according to LSEG data. It also projected an adjusted earnings range with a mid-point of $7 per share, exceeding analysts’ consensus estimate of $6.50. Q1 FY25 Non-GAAP gross margin is expected to be in a range of 61.5% +/- 1.0%