Have you assessed how the international operations of KLA (KLAC) performed in the quarter ended June 2025? For this maker of equipment for manufacturing semiconductors, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.
In the modern, closely-knit global economic landscape, the capacity of a business to access foreign markets is often a key determinant of its financial well-being and growth path. Investors now place great importance on grasping the extent of a company's dependence on international markets, as it sheds light on the firm's earnings stability, its skill in leveraging various economic cycles and its broad growth potential.
Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.
In our recent assessment of KLAC's quarterly performance, we discovered notable trends in its overseas revenue sections, which are typically modeled and scrutinized by Wall Street analysts.
For the quarter, the company's total revenue amounted to $3.17 billion, experiencing an increase of 23.6% year over year. Next, we'll explore the breakdown of KLAC's international revenue to understand the importance of its overseas business operations.
Exploring KLAC's International Revenue Patterns
Europe & Israel generated $125.06 million in revenues for the company in the last quarter, constituting 3.9% of the total. This represented a surprise of -9.67% compared to the $138.44 million projected by Wall Street analysts. Comparatively, in the previous quarter, Europe & Israel accounted for $170.06 million (5.6%), and in the year-ago quarter, it contributed $119.12 million (4.6%) to the total revenue.
Of the total revenue, $478.17 million came from Korea during the last fiscal quarter, accounting for 15.1%. This represented a surprise of +11.03% as analysts had expected the region to contribute $430.68 million to the total revenue. In comparison, the region contributed $378.55 million, or 12.4%, and $175.14 million, or 6.8%, to total revenue in the previous and year-ago quarters, respectively.
During the quarter, Taiwan contributed $873.72 million in revenue, making up 27.5% of the total revenue. When compared to the consensus estimate of $845.97 million, this meant a surprise of +3.28%. Looking back, Taiwan contributed $988.47 million, or 32.3%, in the previous quarter, and $523.55 million, or 20.4%, in the same quarter of the previous year.
Japan accounted for 11.9% of the company's total revenue during the quarter, translating to $377.17 million. Revenues from this region represented a surprise of +22.61%, with Wall Street analysts collectively expecting $307.63 million. When compared to the preceding quarter and the same quarter in the previous year, Japan contributed $338.65 million (11.1%) and $171.02 million (6.7%) to the total revenue, respectively.
China accounted for 30.2% of the company's total revenue during the quarter, translating to $958.85 million. Revenues from this region represented a surprise of +3.9%, with Wall Street analysts collectively expecting $922.88 million. When compared to the preceding quarter and the same quarter in the previous year, China contributed $792.88 million (25.9%) and $1.15 billion (44.6%) to the total revenue, respectively.
Rest of Asia generated $80.58 million in revenues for the company in the last quarter, constituting 2.5% of the total. This represented a surprise of -34.52% compared to the $123.05 million projected by Wall Street analysts. Comparatively, in the previous quarter, Rest of Asia accounted for $100.44 million (3.3%), and in the year-ago quarter, it contributed $124.32 million (4.8%) to the total revenue.
Revenue Forecasts for the International Markets
For the current fiscal quarter, it is anticipated by Wall Street analysts that KLA will post revenues of $3.16 billion, which reflects an increase of 11.1% the same quarter in the previous year. The revenue contributions are expected to be 4.3% from Europe & Israel ($136.97 million), 14.5% from Korea ($456.24 million)26% from Taiwan ($819.48 million)9.6% from Japan ($303.39 million)29.9% from China ($942.41 million) and 3.4% from Rest of Asia ($106.58 million).
Analysts expect the company to report a total annual revenue of $12.71 billion for the full year, marking an increase of 4.6% compared to last year. The expected revenue contributions from Europe & Israel, Korea, Taiwan, Japan, China and Rest of Asia are projected to be 4.8% ($605.7 million), 14.4% ($1.82 billion)27% ($3.43 billion)9.3% ($1.19 billion)28.6% ($3.64 billion) and 3.8% ($481.12 million) of the total revenue, in that order.
Key Takeaways
Relying on international markets for revenues, KLA faces both prospects and perils. Thus, tracking the company's international revenue trends is essential for accurately projecting its future trajectory.
With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.
At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.
The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.
Currently, KLA holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Reviewing KLA's Recent Stock Price Trends
Over the preceding four weeks, the stock's value has diminished by 1.1%, against an upturn of 2.7% in the Zacks S&P 500 composite. In parallel, the Zacks Computer and Technology sector, which counts KLA among its entities, has appreciated by 6.3%. Over the past three months, the company's shares have seen an increase of 15.6% versus the S&P 500's 13.2% increase. The sector overall has witnessed an increase of 24.3% over the same period.
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KLA Corporation (KLAC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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