Q2 Fiscal 2023 Earnings

Quarter Ended December 31, 2022 • Reported On January 26, 2023

KLA Non-Confidential | Unrestricted 1

 Forward Looking Statements
Statements in this letter other than historical facts, such as statements pertaining to: (i) future industry demand for semiconductors and WFE; (ii) future development of regulatory
landscape; (iii) our market position for the future; (iv) our forecast of financial measures for the following quarter and 2023; (v) our long-term financial targets and underlying
assumptions; (vi) our future investment plan on R&D, technology and infrastructure; and (vii) future shareholder returns, are forward-looking statements and subject to the Safe
Harbor provisions created by the Private Securities Litigation Reform Act of 1995.

These forward-looking statements are based on current information and expectations and involve a number of risks and uncertainties. Actual results may differ materially from those
projected in such statements due to various factors, including but not limited to: the impact of the COVID-19 pandemic on the global economy and on our business, financial condition
and results of operations, including the supply chain constraints we are experiencing as a result of the pandemic; economic, political and social conditions in the countries in which we,
our customers and our suppliers operate, including rising inflation and interest rates, Russia’s invasion of Ukraine and global trade policies; disruption to our manufacturing facilities or
other operations, or the operations of our customers, due to natural catastrophic events, health epidemics or terrorism; ongoing changes in the technology industry, and the
semiconductor industry in particular, including future growth rates, pricing trends in end-markets, or changes in customer capital spending patterns; our ability to timely develop new
technologies and products that successfully anticipate or address changes in the semiconductor industry; our ability to maintain our technology advantage and protect our proprietary
rights; our ability to compete with new products introduced by our competitors; our ability to attract, onboard and retain key personnel; cybersecurity threats, cyber incidents
affecting our and our customers, suppliers and other service providers’ systems and networks and our and their ability to access critical information systems for daily business
operations; liability to our customers under indemnification provisions if our products fail to operate properly or contain defects or our customers are sued by third parties due to our
products; exposure to a highly concentrated customer base; availability and cost of the wide range of materials used in the production of our products; our ability to operate our
business in accordance with our business plan; legal, regulatory and tax environments in which we perform our operations and conduct our business and our ability to comply with
relevant laws and regulations; increasing attention to ESG Matters and the resulting costs, risks and impact on our business; our ability to pay interest and repay the principal of our
current indebtedness is dependent upon our ability to manage our business operations, our credit rating and the ongoing interest rate environment, among other factors; our ability or
the ability of our customers to obtain licenses for the sale of certain products or provision of certain services to customers in China, pursuant to regulations recently issued by the
Bureau of Industry and Security of the U.S. Department of Commerce, which could impact our business, financial condition and results of operations; instability in the global credit and
financial markets; our exposure to currency exchange rate fluctuations, or declining economic conditions in those countries where we conduct our business; changes in our effective
tax rate resulting from changes in the tax rates imposed by jurisdictions where our profits are determined to be earned and taxed, expiration of tax holidays in certain jurisdictions,
resolution of issues arising from tax audits with various authorities or changes in tax laws or the interpretation of such tax laws; our ability to identify suitable acquisition targets and
successfully integrate and manage acquired businesses; and unexpected delays, difficulties and expenses in executing against our environmental, climate, inclusion and diversity or
other ESG targets, goals and commitments. For other factors that may cause actual results to differ materially from those projected and anticipated in forward-looking statements in
this press release, please refer to KLA Corporation’s Annual Report on Form 10-K for the year ended June 30, 2022, and other subsequent filings with the Securities and Exchange
Commission. KLA Corporation assumes no obligation to, and does not currently intend to, update these forward-looking statements

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Semiconductor Industry Demand Environment
Long-Term Secular Drivers Demonstrate Strategic Value of Semiconductors
There are many fundamental drivers propelling long-term growth of the Semiconductor industry, underscoring the strategic importance of semiconductors and
the semiconductor supply chain. The digital transformation of our lives is expanding beyond consumer to multiple end markets and technology-based services.
The increasing investment and focus on regionalization of semiconductor production demonstrates the growing strategic nature of semiconductors in the global
economy.

Semiconductor Device Manufacturers Reducing Near-Term Capex Plans in Response to Market Conditions
The Semiconductor industry is facing a combination of factors, including inflation, a weakening global economy, and ongoing supply chain challenges. As a
result, semiconductor demand (particularly in Process Control and consumer markets) has been impacted, with memory device manufacturers and
foundry/logic customers taking steps to adjust factory utilizations and reduce capacity investment plans. Despite these near-term headwinds, semiconductor
producers continue to prioritize investments in R&D of next generation technologies.

Customer R&D Investment Remains a Top Priority for Capex Investment

As the market leader in Process Control, KLA plays a critical role in enabling technology transitions in advanced semiconductor manufacturing. Despite the near-
term demand and macroeconomic headwinds, customers continue to invest in technology transitions in every segment. KLA benefits from these investments as
we are on the critical path to enabling advanced semiconductor device R&D, faster yield ramps and higher, more stable yields in production. Calendar 2022 was
a year of strong relative performance for KLA vs. the WFE industry, demonstrating the critical nature of Process Control and KLA’s market leadership.

The strategic nature of semiconductors in the global economy continues to grow

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December Quarter and Calendar 2022 Business Highlights
KLA’s Strong Relative Performance in CY22 Driven by Execution and Market Leadership
KLA continues to deliver strong relative outperformance versus peers, as market leadership in some of the largest and fastest-growing markets in WFE fuels growth. As a result, KLA
1 substantially outperformed overall WFE market growth in CY22. Looking ahead, the stage is set for another year of relative strength for KLA in CY23, as KLA’s leadership in critical
markets such as optical wafer inspection and reticle inspection are positioned to demonstrate resiliency in a year of contraction in overall WFE demand.

Record Demand for KLA’s Reticle Inspection Portfolio Drives Strong Patterning Systems Growth in CY22
Patterning systems revenue grew 17% sequentially and was up 69% on a year-over-year basis driven by strong EUV mask shop inspection growth in 5nm and below applications, as
2 well as growth in mask shop and wafer fab applications in mature nodes. KLA’s reticle inspection business plays a critical role in quality control during manufacturing of both DUV
and EUV reticles, and ongoing monitoring to ensure reticle fidelity in high-volume wafer manufacturing. We expect KLA’s strong reticle inspection growth in CY22 to be reflected in
expanding market leadership in this key enabling market for advanced semiconductor technology development for future periods.

10 th Consecutive Quarter of Growth and Record Quarterly Revenue for Specialty Semiconductor Segment
KLA delivered record revenue and the 10th consecutive quarter of sequential growth in our Specialty Semiconductor Process segment. As we discussed at our June 2022 Investor
3 Day, KLA is intensifying our efforts in Advanced Packaging and Automotive electronics, leveraging the combined portfolios of both the Semiconductor Process Control and
Electronics, Packaging, and Components (EPC) groups. We are broadening our product portfolio and developing a comprehensive suite of products and technologies as part of a
portfolio of inspection systems and process tools designed to help Automotive customers achieve their zero-defect goals.

Services Business Delivers Consistent, Strong Growth in CY22, Demonstrating Durability and Resiliency
KLA Services business grew 14% year-over-year in Q4 and was up 15% on a full year basis in CY22, just above the 12% to 14% long-term revenue growth target. Services is driven by
4 our growing installed base, increasing customer adoption of long-term service agreements, and expansion of Service opportunities in the legacy nodes. KLA’s Services business is
unique in our industry for having nearly all our Service revenue generated from “Pure Services,” or service contracts and break-fix maintenance, and does not include other revenue
sources such as equipment upgrades or sales of refurbished equipment. This speaks to the durability and resiliency of Services revenue.

KLA Completes $3 Billion Accelerated Share Repurchase; Total Capital Returns Topped $5 Billion in CY22
The December quarter was another exceptional period from a capital returns perspective, as we completed the $3 billion Accelerated Share Repurchase component of the $6
5 billion share repurchase authorization announced in June. Total capital returns in the quarter were $539 million, comprised of $355 million in share repurchases and $184 million in
dividends paid. Total capital returns over the 12 months ended December 31 were $5.2 billion, or 173% of free cash flow, and included $4.5 billion in share repurchases and $689
million in dividends. We completed the $3 billion Accelerated Share Repurchase (ASR) announced late in Q2 of CY22.

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KLA’s Priorities in Calendar 2023

Stabilize our
spending levels

Support our Develop and

customers train our
workforce

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The KLA Operating Model
Consistent Strategy and Execution
 Application of common processes and discipline
 Cascades throughout the organization
 Strong focus on talent development

Management By Metrics
 Culture of performance and accountability
 Expectation of continuous improvement
 Superior margins driven by market leadership and differentiation

Financial Discipline and Rigor

 Exert efficiency and operating discipline in our investments
 Strong track record of high returns
 Focused on enhancing shareholder value

Focused on driving sustainable profitability and growth

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 A Year In Review – CY22 Marked 7th Consecutive Year of Growth
28% 18%
Revenue Growth FCF Growth*
Revenue $10,484M FCF $2,986M

28% 37%
Gross Profit Growth* DilutedEPS Growth*
Gross Profit $6,540M EPS $25.28

31% Voyager 1035 inline defect monitor for advanced

$5,172M
Op. Profit Growth* logic and memory chip manufacturing Capital Returns
Op. Profit $4,462M Dividends + Buybacks

Strong Growth Demonstrating Market Leadership and the Critical Nature of Process Control
* Non-GAAP metric – Please refer to Appendix for reconciliation to GAAP . Free Cash Flow (FCF) = Cash Flow from Operating Activities minus Capital Expenditures. * Diluted net income per share is computed independently for each of the quarters presented based on the weighted-average
fully diluted shares outstanding for each quarter. Therefore, the sum of quarterly diluted net income per share information may not equal annual (or other multiple-quarter calculations of) diluted net income per share.

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December Quarter 2022 Income Statement Highlights

$2,984M 61.0% 42.4% $1,048M

Revenue Gross Margin* Operating Margin* Net Income*

$7.38
392x or “Gen5”: The market Diluted EPS*
leading broadband plasma
(BBP) optical patterned wafer
inspection system

$6.89
GAAP Diluted EPS

* Non-GAAP metric – please refer to the appendix for reconciliation to GAAP

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 Breakdown of Revenue by Reportable Segments and End Markets
Revenue Y/Y Q/Q Revenue Revenue CY22 Q2-FY23:
Q2-FY23 Growth Growth % CY22 Growth Semi Process Control
End Market
Semiconductor System Revenue
Process Control $2,657 +29% +11% 89% $9,144 +32%
(Systems + Services)
77%
Specialty Semiconductor
Process $158 +40% +24% 5% $528 +31%
(Systems + Services)

PCB, Display and 23%

Component Inspection $170 -10% -15% 6% $812 -4%
(Systems + Services)

1 Amounts may not sum due to rounding

Foundry & Logic Memory
Total: $2,9841 +27% +10% $10,484 +28%

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Breakdown of Revenue by Major Product and Regions
Revenue Y/Y Q/Q Revenue Revenue CY22 Q2-FY23
Q2-FY23 Growth Growth % CY22 Growth Revenue by Region
Wafer
$1,257 +14% +14% 42% $4,382 +27%
Inspection
12%
26% 6%
Patterning $861 +69% +17% 29% $2,696 +52%

Specialty
Semi Process $146 +39% +27% 5% $477 +34%
23%
20%
PCB, Display and
Comp. Inspection $109 -11% -19% 4% $546 -7%
9% 4%

Services $520 +14% -2% 17% $2,049 +15% North America Europe
China SEA
Other 1 $91 +63% -17% 3% $334 +53% Japan Korea

1 Included in the Semiconductor Process Control Segment

Taiwan
Total: $2,984 +27% +10% $10,484 +28%

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Strong Balance Sheet With No Bond Maturities Until 2024
Balance Sheet Summary 1 ($M) Bond Maturity Profile Investment Grade Credit Ratings
Total Cash2 $ 2,866
Bonds Outstanding $5.95B Moody’s A2
Working Capital $ 4,650
Total Assets $ 13,729 Weighted Average Rate 4.64% S&P A-
Debt3 $ 6,114 Weighted Average
19.6 years Fitch A-
Total Shareholders’ Equity $ 2,603 Maturity

1,275 Bond Maturity Profile $M

Bonds Drawn Revolver Undrawn Revolver Cash

2,866

1,275 1,200
800
1,000 750 800
750 400
225 250
Liquidity CY24 … CY27 … CY29 … CY32 … CY34 … CY49 CY50 … CY52 … CY62
1 As of 12/31/22; 2 Total Cash includes Cash, Cash Equivalents and Marketable Securities;
3 Includes $225M in revolving credit facility (Revolver) drawings less $61M in un-amortized debt issuance discounts and costs.

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FCF Generation Fuels Consistent Capital Return to Shareholders

Free Cash Flow 1 and FCF Margin 2

Investment Market
in Growth and Leadership and 3.0
New Products Differentiated
Solutions 2.5

Value 1.8
Creation
1.3
1.2

Strong Margins 31%

Capital Returns 30%
23% 29%
to Shareholders and FCF 28%

CY18 CY19 CY20 CY21 CY22

FCF $B FCF Margin %

1 Free Cash Flow (FCF) = Cash Flow from Operating Activities minus Capital Expenditures
2 FCF Margin defined as FCF/Revenue; Non-GAAP metric – Please refer to Appendix for reconciliation to GAAP

Committed to long-term >85% FCF returned to shareholders through dividends and share repurchases

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 Return to Shareholders Across Both Share Repurchases & Dividends
Share Repurchases 1 Track Record of Dividend Increases

June 2022: Announced 13th consecutive annual dividend

increase to $1.30/share quarterly from $1.05 (24% increase)
5.20

4.70
4,483

~$228 ~15% 3.50

3.90

Avg price per Dividend CAGR 3.10

share since 2017 ~ 2,800 2006 - 2022 2.84

2.26
2.04 2.10
1.90
1.70
1.50
1,403
1.20
1,062
0.80

$/per share
672 681 0.60 0.60
0.48 0.54

107
$M

2 3
CY17 CY18 CY19 CY20 CY21 CY22 Remaining CY06 CY07 CY08 CY09 CY10 CY11 CY12 CY13 CY14 CY154 CY16 CY17 CY18 CY19 CY20 CY21 CY22 NTM
Share
1 Settlement Date basis Repurchase
2 Includes $3B ASR announced in June 2022 and completed in December 2022 quarter Authorization
3 Includes the remaining amount of the $6B repurchase authorization announced June 2022
4 Excludes $16.50 per share special dividend in CY15

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 Free Cash Flow and Capital Returns Highlights
$355M
$595M Dec Quarter
Share Buyback
Dec Quarter
Free Cash Flow*
$4,483M
LTM Share Buyback 1
20%
Dec Quarter
Free FCF Margin*
$184M
Dec Quarter
Dividends Paid
57%
Dec Quarter Surfscan SP-7: The latest generation in KLA’s market-
$689M
FCF Conversion* leading unpatterned wafer inspection portfolio
LTM Dividends Paid
* Free Cash Flow (FCF) = Cash Flow from Operating Activities minus Capital Expenditures. FCF Margin = FCF/Revenue. FCF Conversion = FCF / Non-GAAP Net Income. Non-GAAP metric
1 Includes $900 million pursuant to Forward Contract for Accelerated Share Repurchases – Refer to Appendix for Reconciliation to GAAP. Capital Returns = Dividends + Share Repurchases

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Guidance for Q3 FY2023 – March 2023 Quarter

March 2023 Quarter Guidance

Macro Assumptions
Revenue $2,200M to $2,500M
Semi PC Revenue By End Market
 Foundry/Logic: 85%
Non-GAAP
60.5% to 62.5%  Memory: 15%
Gross Margin*
Model Assumptions
GAAP Diluted  Non-GAAP Operating Expenses*: ~$545M
$4.06 to $5.46
EPS  Other Income & Expense (OIE)*, Net: ~$62M
 Effective Tax Rate: ~13.5%
Diluted EPS* $4.52 to $5.92  Diluted Share Count: ~139M

* Non-GAAP metric – Refer to Appendix for Reconciliation to GAAP

Driving profitable growth and delivering shareholder value

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Appendix
Reconciliation of Financial Results
Reconciliation of Non-GAAP Financial Measures

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Reconciliation of Free Cash Flow and Related Metrics

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Reconciliation of Guidance
Q3 FY2023 Guidance Range:

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Reconciliation of Non-GAAP Financial Measures

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