What changed in Kla's 10-Q for the quarter ended March 31, 2026

No corresponding language in the FY2025 10-Q.

No corresponding language in the FY2025 10-Q.

Working capital was $6.04 billion as of March 31, 2025, which represents an increase of $664.7 million compared to our working capital of $5.37 billion as of June 30, 2024. As of March 31, 2025, our principal sources of liquidity consisted of $4.03 billion of cash, cash equivalents and, marketable securities, as well as $1.50 billion availability under our Revolving Credit Facility. Our liquidity may be affected by many factors, some of which are based on the normal ongoing operations of the business, spending for business acquisitions, and other factors such as uncertainty in the global and regional economies and the semiconductor, semiconductor-related and electronic device industries. Although cash requirements will fluctuate based on the [removed] timing and extent of these factors, we believe that cash generated from operations, together with the liquidity provided by existing cash and cash equivalents balances, marketable securities and our $1.50 billion Revolving Credit Facility, will be sufficient to satisfy our liquidity requirements associated with working capital needs, capital expenditures, cash dividends, stock repurchases and other contractual obligations, including repayment of outstanding debt, for at least the next 12 months.

[removed] The possible negative effects on our future business of export licenses not being granted could be material and could disrupt our supply chain and product shipment, and impair our ability to complete product development in a timely manner, or our ability to support existing customers of covered products or supply customers of covered products outside the impacted regions, and may require us to transition certain operations out of one or more of the identified countries. Failure to obtain export licenses could also result in a substantial reduction to our RPO or require us to return substantial deposits received from customers in China for purchase orders.

[removed] During the second quarter of fiscal 2025, we noted a continued deterioration of the long-term forecast for our PCB business, which is part of our PCB and Component Inspection reportable segment, and completed an internal reorganization affecting the composition of reporting units within our Specialty Semiconductor Process and PCB and Component Inspection reportable segments. These two events triggered goodwill and purchased intangible assets impairment tests, which resulted in a $239.1 million goodwill and purchased intangible assets impairment charge in the PCB and Component Inspection reportable segment.

[removed] Furthermore, in December 2024 and January 2025, the U.S. government again issued incremental regulations (the "2024 BIS Rules" and the "2025 BIS Rules," respectively) adding even more companies to the U.S. Entity List and revising the definition of advanced DRAM, further restricting our ability to provide certain items and services to facilities in China producing advanced DRAM ICs. We are taking appropriate measures to comply with all BIS Rules, and will continue to apply for export licenses, when required, to avoid disruption to our customers' operations. To the extent that we or our customers are able to obtain export licenses in the future, we will increase remaining performance obligations ("RPO") for the products we can ship to the customers or services we can provide the customers under the export license. There can be no assurance that export licenses applied for by either us or our customers, now or in the future, will be granted.

[removed] As of March 31, 2025, $999.3 million of our $4.03 billion of cash, cash equivalents and marketable securities were held by our foreign subsidiaries and branch offices. We currently intend to indefinitely reinvest $65.9 million of the cash, cash equivalents and marketable securities held by our foreign subsidiaries for which we assert that earnings are permanently reinvested. If, however, a portion of these funds were to be repatriated to the United States, we would be required to accrue and pay state and foreign taxes of approximately 1% - 22% of the funds repatriated. The amount of taxes due will depend on the amount and manner of the repatriation, as well as the location from which the funds are repatriated. We have accrued state and foreign tax on the remaining cash of $933.4 million of the $999.3 million held by our foreign subsidiaries and branch offices. As such, these funds can be returned to the U.S. without accruing any additional U.S. tax expense.

Working capital was [removed] $6.04 billion as of March 31, [removed] 2025, which represents an increase of [removed] $664.7 million compared to our working capital of [removed] $5.37 billion as of June 30, [removed] 2024. As of March 31, [removed] 2025, our principal sources of liquidity consisted of [removed] $4.03 billion of cash, cash equivalents [removed] and, marketable securities, as well as $1.50 billion availability under our Revolving Credit Facility. Our liquidity may be affected by many factors, some of which are based on the normal ongoing operations of the business, spending for business acquisitions, and other factors such as uncertainty in the global and regional economies and the semiconductor, semiconductor-related and electronic device industries. Although cash requirements will fluctuate based on the timing and extent of these factors, we believe that cash generated from operations, together with the liquidity provided by existing cash and cash equivalents balances, marketable securities and our $1.50 billion Revolving Credit Facility, will be sufficient to satisfy our liquidity requirements associated with working capital needs, capital expenditures, cash dividends, stock repurchases and other contractual obligations, including repayment of outstanding debt, for at least the next 12 months.

We have in place a Credit Agreement ("Credit Agreement") for an unsecured Revolving Credit Facility ("Revolving Credit Facility") with a maturity date of [removed] June 8, 2027 that allows us to borrow up to $1.50 billion. Subject to the terms of the Credit Agreement, the Revolving Credit Facility may be increased by an amount up to [removed] $250.0 million in the aggregate. As of March 31, [removed] 2025, we had no outstanding borrowings under the Revolving Credit Facility. We were in compliance with all covenants under the Credit Agreement as of March 31, [removed] 2025 (the leverage ratio was [removed] 1.08 to 1.00, compared to a maximum leverage ratio of [removed] 3.50 to 1.00 on a quarterly basis covering the trailing four consecutive fiscal quarters for each fiscal quarter). Considering our current liquidity position, short-term financial forecasts and ability to prepay the Revolving Credit Facility, if necessary, we expect to continue to be in compliance with our financial covenants at the end of our fiscal year ending June 30, [removed] 2025.

As of March 31, [removed] 2025, we had an aggregate principal amount of senior, unsecured notes totaling $5.95 billion [removed] ("Senior Notes"). For additional information on these Senior Notes, see Note 7 "Debt" to our Condensed Consolidated Financial Statements. [removed] In November 2024, we repaid $750.0 million of Senior Notes. As of March 31, [removed] 2025, we were in compliance with all of our covenants under the Indenture associated with the Senior Notes.

Net cash [removed] provided by (used in) investing activities during the nine months ended March 31, [removed] 2025 was $122.9 million compared to [removed] $(1.34) billion during the nine months ended March 31, [removed] 2024. This increase in cash [removed] provided resulted from an increase in net [removed] proceeds from sale of available-for-sale securities of [removed] $1.48 billion, a decrease in cash used in business acquisitions of $3.7 million and an increase in net proceeds from sales of trading securities of $1.2 million, partially offset by [removed] an increase in capital expenditures of $18.2 million, a decrease in proceeds from [removed] sale of assets of $4.9 million and $2.9 million of cash used for intellectual property acquisitions.

[removed] Recently, the semiconductor industry environment has improved as the emergence of disruptive technologies such as [removed] AI and continuing advancement of innovation, as well as rising semiconductor content across end-markets and strategic investments in legacy nodes fuel growth. Our customers' investments in AI as well as High-performance computing ("HPC") continue to drive demand for our advanced packaging portfolio, which contributes to our success in market diversification. Our foundry/logic customers are slowly increasing their capital intensity, as they maintain a robust design environment and continue to scale as well as incorporate new technologies and larger die sizes. Additionally, technology development investments supporting AI and high bandwidth memory are improving the environment for memory device manufacturers. While we continue to invest in technological innovation, factors such as delays from customers in adopting new chips and technology methods, could impact process control capital intensity. Push out or cancellation of deliveries to our customers could still cause earnings volatility, due to the timing of revenue recognition as well as increased risk of inventory-related charges.