KLA (KLAC) 10-K risk factor changes: FY2024 vs FY2023

If any of the following risks occur or persist, our business, financial condition and results of operations could be materially [removed: harmed,] [added: harmed] and the price of our common stock could significantly decline.

- We have a highly concentrated customer base; [removed: and]

- Prevailing local and global economic conditions may negatively affect the purchasing decisions of our [removed: customers.][added: customers; and]

- We may incur significant restructuring charges or other asset impairment charges or inventory write-offs; [removed: and]

- We are subject to risks related to receivables factoring arrangements, and compliance risk of certain settlement agreements with the [removed: government.][added: government; and]

A majority of our annual revenues are derived from outside the [removed: US,] [added: U.S.,] and we maintain significant operations outside the [removed: US.][added: U.S. We are exposed to numerous risks as a result of the international nature of our business and operations.]

[added: -] We are exposed to [removed: numerous] risks [removed: as a result of] [added: related to] the [removed: international nature] [added: use] of [removed: our business] [added: AI by us] and [removed: operations.][added: our competitors.]

- Political instability, geopolitical tensions, natural disasters, legal or regulatory changes, acts of war such as [removed: Russia’s invasion of] [added: the wars between Russia and] Ukraine or [added: Israel and Hamas and further escalation thereof, or] terrorism in regions where we, our customers or our suppliers have operations or where we or they do business;

In October 2022, BIS published the [added: 2022] BIS Rules [added: (the “2022 BIS Rules”)] that introduce restrictions related to semiconductor, semiconductor manufacturing, supercomputer, and advanced computing items and end uses.

These rules impose restrictions on our ability to sell, [removed: ship,] [added: ship] and support certain equipment and otherwise conduct business with certain counterparties, primarily including China-based companies involved in advanced semiconductor manufacturing.

Further, the [added: 2022] BIS Rules impose [removed: new] restrictions on the activities of U.S. persons with respect to certain items that are not subject to the Export Administration Regulations (“EAR”), which departs from BIS’ typical practice of controlling items that are subject to the EAR, and could further restrict our ability to conduct business in China.

[removed: The] BIS [removed: Rules are complex, and BIS] could revise or expand [removed: them] [added: the 2023 BIS Rules] in response to public comments.

We [removed: are applying] [added: will continue to apply] for export licenses, when required, in an effort to avoid disruption to our and our customers’ operations, but there can be no assurance that export licenses applied for by either us or our [removed: customers] [added: customers, now or in the future,] will be granted.

[removed: If pending and future] [added: Failure to obtain] export [removed: license applications are not granted, or additional restrictions are imposed, or if regulators adopt new interpretations of existing regulations, the potential impact on us] [added: licenses] could [removed: be material by harming] [added: also harm] our RPO, requiring us to return substantial deposits received from customers in China for purchase orders, and/or further limiting our ability to meet our contractual obligations and sell our products or provide services to our customers in China.

Our revenue from sales of products and provision of services to customers in China was [removed: 27%, 29%] [added: 43%, 27%] and [removed: 26%] [added: 29%] for fiscal years [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] respectively.

[added: We have controls and procedures] designed to maintain compliance with U.S. and other applicable export control laws and regulations; however, we cannot guarantee that such controls and procedures will be successful in preventing violations or allegations of violations, of increasingly complex and often conflicting regulations worldwide.

The complexity and evolving nature of the rules and regulations, and the fact that Commerce or other relevant regulators might adopt interpretations of regulations that differ from those of the Company, [removed: increases] [added: increase] our risk of non-compliance.

We have policies and procedures designed to promote compliance with applicable [removed: law,] [added: laws,] but there can be no assurance our policies and procedures will prove completely effective in ensuring compliance by all our personnel, business partners and representatives, for whose misconduct we may under some circumstances be legally responsible.

For instance, in response to [removed: Russia’s invasion of] [added: the war between Russia and] Ukraine, the U.S., European Union and other countries have imposed sanctions against Russia, Belarus and certain other regions, entities and individuals, and may impose additional sanctions, export controls or other measures.

[added: Any failure to comply with applicable environmental laws, regulations or requirements may subject us to a range of] consequences, including fines, suspension of certain of our business activities, limitations on our ability to sell our products, obligations to remediate environmental contamination, and criminal and civil liabilities or other sanctions.

For example, in March 2022, the SEC published a proposed rule that would require companies to provide significantly expanded climate-related [removed: disclosures in their Form 10-K,] [added: disclosures,] which may require us to incur significant additional costs to comply and impose increased oversight obligations on our management and Board of Directors.

In addition, we [removed: may,] [added: may] from time to [removed: time,] [added: time] be involved in legal proceedings or claims regarding employment, immigration, contracts, product performance, product liability, antitrust, [removed: environmental regulations,] [added: ESG, IP, export controls, cybersecurity and data privacy, tax,] securities, unfair competition and other matters.

[removed: This may result in increased costs, changes in demand for certain types of products, enhanced] compliance [removed: or disclosure obligations] and [added: disclosure] costs, [removed: or other adverse] [added: and may also result in further] impacts on our business, financial condition or results of [removed: operations.][added: operations, including changes in demand for certain types of products.]

Identification, [removed: assessment,] [added: assessment] and disclosure of such matters is complex.

[removed: Unfavorable] [added: Any unfavorable] ESG ratings could lead to [removed: increased] [added: or increase any] negative investor sentiment toward us, our [removed: customers,] [added: customers] or our industry, which could negatively impact our share price as well as our access to and cost of capital.

To the extent ESG matters negatively impact our reputation, [removed: it] [added: they] may also impede our ability to compete as effectively to recruit or retain [removed: employees,] [added: employees or customers,] which may adversely affect our operations.

Although we [removed: may participate in various voluntary frameworks] [added: have engaged,] and [removed: certification programs, or establish] [added: expect to continue to engage, in certain] voluntary ESG initiatives, to improve the ESG profile of our operations and product offerings, we cannot guarantee that such efforts will have the intended [removed: results.][added: results, including whether we are able to measure and disclose related data of sufficient quality or timeliness or in accordance with particular methodological practices.]

[removed: Our] [added: Although several of these goals have been validated by SBTi, our] estimates concerning the timing and cost of implementing [removed: this and other] [added: our] goals are subject to risks and uncertainties, some of which are outside of our control.

Any failure, or perceived failure, to [added: disclose in keeping with best practices, regulations, or other stakeholder expectations or to] successfully achieve our voluntary goals, or the manner in which we achieve some or any portion of our goals, could adversely impact our reputation or, to the extent related to [added: our] sustainability-linked capital sources, financial condition and results of operations.

Our ESG efforts [added: have included, and] may [removed: also include] [added: in] the [added: future include further] adoption, or expansion, of certain ESG practices or policies, which may require us to expend additional resources to implement or to forego certain business opportunities to the extent others in our value chain do not meet pertinent requirements of such policies.

[added: By contrast, any] failure, or perceived failure, to conform to such policies could have an adverse impact on our reputation and business activities.

Moreover, despite the voluntary nature of such efforts, we may receive [added: increasing scrutiny and] pressure from external sources, such as lenders, [removed: investors] [added: investors, proxy advisory firms, rating agencies] or other [added: investor advocacy] groups, to adopt more [added: transparent or] aggressive climate or other ESG-related initiatives; however, we may not agree that such initiatives will be appropriate for our business, and we may not be able to implement such initiatives because of potential costs or technical or operational obstacles.

In addition, we note that [removed: certain ESG matters are becoming less “voluntary” as] regulators, including the SEC, [removed: begin proposing and adopting] [added: have adopted, or are considering adopting,] regulations regarding ESG matters, including, but not limited to, climate change-related matters.

Such ESG matters [removed: may] also impact [added: at least certain of] our suppliers and customers, which may compound or cause new impacts on our business, financial condition or results of operations.

The expansion of high technology companies worldwide and the elevated demand for talent from the growth in the demand for semiconductors [removed: following the onset of the COVID-19 pandemic] [added: in recent years] has increased demand and competition for qualified personnel.

[removed: If we are unable to attract, onboard and retain key personnel,] or if we are not able to attract, assimilate, onboard and retain additional highly qualified employees to meet our current and future needs, our business and operations could be harmed.

These providers may be susceptible to “cyber incidents,” such as software vulnerabilities, cyber-attacks aimed at theft of sensitive data, inadvertent cyber-security compromises, attacks aimed at operational disruption at the target or [removed: third party] [added: third-party] service providers, all of which are outside of our control.

We depend on [removed: secure] information technology for our business and are exposed to risks related to cybersecurity threats and cyber incidents affecting our, our customers’, suppliers’ and other service providers’ systems and networks.

In the conduct of our business, we [added: and certain of our third-party providers] collect, use, transmit and store data on information systems and networks, including [removed: systems] [added: systems, software, hardware] and networks owned and maintained by KLA and/or by third-party [removed: providers.][added: providers (collectively, “IT Systems”).]

This data includes confidential information, transactional information and IP belonging to us, our customers and our business partners, as well as [removed: personally identifiable] [added: personal] information of [removed: individuals.][added: individuals (collectively, “Confidential Information”).]

- Our Amended and Restated Bylaws (“Bylaws”) designate the Court of Chancery of the State of Delaware as the sole forum for certain actions, which may discourage claims against the Company.

- Slowing growth, increased unemployment changes in fiscal and/or monetary policies in the countries where we operate;

In October 2023, BIS issued the 2023 BIS Rules (the “2023 BIS Rules”) designed to update export controls on advanced computing semiconductors and semiconductor manufacturing equipment, as well as items that support supercomputing applications and end-uses, to certain D1, D4 and/or D5 countries in Supplement No. 1 of Part 740 of the U.S. Export Administration Regulations, including China.

The 2023 BIS Rules adjust the parameters included in the 2022 BIS Rules that determine whether an advanced computing chip is restricted and impose new measures to address risks of circumvention of the controls established by the 2022 BIS Rules.

The 2023 BIS Rules are very complex and, in January 2024, KLA, among other companies, submitted comments to BIS on the 2023 BIS Rules.

Commerce has also added, and may continue to add, China-based entities to the U.S. Entity List, imposing export restrictions to entities that could disrupt or prevent our product shipment, and further disrupt our revenue recognition and business operations, and our ability to support our customers in China.

If pending and future export license applications are not granted, or additional restrictions are imposed, or if regulators adopt new interpretations of existing regulations, the potential impact on us could be material by disrupting our supply chain and product shipment, impairing 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 requiring us to transition certain operations out of one or more of the identified countries.

Current and proposed restrictions on per- and polyfluoroalkyl substances (“PFAS”) may negatively impact our supply chain due to potentially decreased availability, or non-availability, of PFAS-containing products or commercially feasible alternatives.

This has increased, and may in the future continue to increase, certain of our

For example, we have adopted certain GHG emissions reduction targets for Scope 1, 2 and 3 emissions.

In addition, standards for calculating and disclosing emissions and other sustainability metrics continue to evolve, which can result in inconsistencies or other changes to data over time, revisions to our strategies and targets, or our ability to achieve them, subjecting us to additional scrutiny.

For example, we have recently elected to align our emissions reporting with the SBTi methodology, which will result in certain changes to our emissions metrics from historical calculations; however, to the extent the SBTi methodology is ultimately deemed to be not in keeping with regulatory standards or best practices, we may be subject to additional scrutiny or costs.

Standards for ESG metrics and reporting continue to evolve due to a variety of factors, and our disclosures may evolve as well; however, we cannot guarantee that our approach will align with any particular methodology or stakeholder expectations.

Simultaneously, there are efforts by some stakeholders, including certain policymakers, to reduce companies’ efforts on certain environmental, social and sustainability-related matters, which could subject us to increased activism or litigation.

If we are unable to attract, onboard and retain key personnel,

Moreover, we have acquired and continue to acquire companies with cybersecurity vulnerabilities and/or unsophisticated security measures, which may expose us to significant cybersecurity, operational and financial risks.

Remote and hybrid working arrangements at our company (and at many third-party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.

We and our third-party providers regularly experience cyber-attacks and events and on occasion incidents involving unauthorized access to systems and data and, although no such attacks, events or incidents have materially impacted our operations or financial results, there can be no assurance that such attacks, events or incidents will not be material to KLA in the future.

As such, we may be unable to anticipate these techniques, implement adequate preventative measures, or adequately identify, investigate and recover from cybersecurity incidents.

There can also be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our IT Systems and Confidential Information.

We prioritize the remediation of identified security vulnerabilities based on known and anticipated risks, and we aim to patch vulnerabilities within reasonable timeframes.

However, we are unable to comprehensively identify all vulnerabilities (particularly as related to third-party software and systems), apply patches or

confirm that mitigating measures are in place, or ensure that any patches will be applied by us or our third parties before exploitation by a threat actor.

If attackers are able to exploit vulnerabilities before patches are installed or mitigating measures are implemented, significant compromises could impact our systems and data.

Certain of these events may become more frequent or intense as a result of climate change, and climate change may also contribute to chronic changes such as sea-level rise or changes to meteorological or hydrological patterns that may also disrupt our or our suppliers’ operations or otherwise adversely impact our business.

operations and financial condition.

Even where insured, there is a risk that an insurer may deny or limit coverage or may become financially incapable of covering claims.

In October 2023, war between Israel and Hamas began, which has resulted in significant military activity in the region.

Following the war between Israel and Hamas, the Houthis launched a number of attacks on marine vessels traversing the Red Sea, which marine vessels were thought to either be in route towards Israel or to be partly owned by Israeli businessmen.

The Red Sea is a vital maritime route for international trade and major shipping companies announced suspensions of operations following these attacks.

Disruptions in shipping routes in the Red Sea could result in delays in shipping our products to customers, which could delay the timing of revenue recognition.

Our insurance does not cover losses we suffer attributable to war.

was enacted into law on December 22, 2017.

The Tax Act also provides that a percentage of foreign earnings under the Global Intangible Low-Taxed Income (“GILTI”) regime is taxable in the U.S. and a percentage of U.S. earnings under the Foreign Derived Intangible Income (“FDII”) regime is not subject to tax in the U.S. For tax years beginning on January 1, 2026, the percentage of GILTI that is taxable in the U.S. increases from 50% to 62.5% and the percentage of FDII not subject to tax in the U.S. decreases from 37.5% to 21.875%.

The change in GILTI and FDII percentages can have a material and adverse impact to our effective tax rate beginning in the quarter ending September 30, 2026.

On August 16, 2022, the enactment of the Inflation Reduction Act (“IRA”) introduced a corporate alternative minimum tax (“CAMT”) that is effective for us beginning in the quarter ended September 30, 2023.

The CAMT applies a 15% minimum income tax rate on certain large corporations.

We are not expecting to have any effective tax rate impact from the CAMT but changes to U.S. tax laws or the interpretation of such tax laws may result in CAMT liability which can have a material and adverse impact to our future effective tax rates.

The OECD continues to advance its work under the BEPS 2.0 initiative to develop the framework for Pillar Two - which aims to implement a global minimum tax of 15%.

Many countries have enacted or drafted legislation using the Pillar Two framework to propose domestic tax laws requiring a minimum tax rate of 15% (“top-up tax”) on income earned in the respective countries.

We have controls and procedures

Any failure to comply with applicable environmental laws, regulations or requirements may subject us to a range of

In addition, organizations that provide information to investors on corporate governance and related matters have developed rating processes on evaluating companies on their approach to ESG matters.

Such ratings are used by some investors to inform their investment and voting decisions.

For example, in August 2022, we announced new targets to reduce our Scope 1 and 2 emissions by 50% from our 2021 baseline to 2030 and achieve net zero Scope 1 and 2 emissions by 2050.

By contrast, any

otherwise cause disruptions to our business operations.

We have experienced cyber-related attacks in the past, and expect to experience cyber-related attacks and incidents in the future.

Our security measures may also be breached due to employee errors, malfeasance, or otherwise.

Third parties may also attempt to influence employees, users, suppliers or customers to disclose sensitive information in order to gain access to our, our customers’ or business partners’ data.

may suffer.

These laws, rules and

New technology trends, such as AI, require us to keep pace with evolving regulations and industry standards.

In the United States alone, numerous current and proposed regulatory frameworks relating to the use of AI in products and services exist.

We expect the legal and regulatory environment relating to emerging technologies such as AI will continue to develop and may increase business costs, create compliance risks and increase potential liability.

Additionally, governments are considering the new issues in intellectual property law that AI creates, which could result in different IP rights in technology we create with AI.

The increasing focus on the strategic importance of AI technologies has already resulted in regulatory restrictions that target products and services capable of enabling or facilitating AI, and may in the future result in additional restrictions impacting some or all of our product and service offerings.

Such restrictions could include additional unilateral or multilateral export controls on certain products or technology, including but not limited to AI technologies.

The primary driver of technology

third parties for strategic technology used in certain products.

environment, future business levels, our customers’ willingness and ability to place orders, lead-times, and future revenue and cash flow.

Additionally, under our Revolving Credit Facility, we are

could adversely impact our operating results, financial condition and ability to operate our business.

Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors, [added: including but not limited to those discussed in Part I Item 1A “Risk Factors” and elsewhere in this Annual Report on Form 10-K (see “Special Note Regarding Forward-Looking Statements”).]

Discussions and analysis of fiscal year [removed: 2022] [added: 2023] as compared against fiscal year [removed: 2021] [added: 2022] have been omitted and can be found in Item 7 of our Annual Report on Form 10-K for the fiscal year ended June 30, [removed: 2022,] [added: 2023,] filed with the SEC.

The pervasive and increasing needs for semiconductors in many consumer and industrial products, the rapid proliferation of new applications for more advanced semiconductor devices, and the increasing complexity associated with leading edge semiconductor manufacturing [removed: drives] [added: drive] demand for our process control and yield management solutions.

Continuing advancement of [removed: technology] [added: innovation] spurred by the [removed: economic,] [added: performance,] power and [removed: performance] [added: price] benefits of being at the leading edge, increasing involvement in legacy nodes as semiconductor content increases, and innovation and growth of new enabling technologies are fueling long-term growth for the semiconductor equipment industry.

End-market demand drivers that are expected to continue in the long term are related to [removed: AI,] [added: high performance computing, AI including 2-nanometer chip technology,] the deployment of 5G telecommunications technology and associated high-end mobile devices, the electrification and digitization of the automotive industry, the revival of personal computer demand and associated innovations to support remote work, virtual collaboration, remote learning and entertainment, and the growth of the [removed: Internet of Things (“IoT”).][added: IoT.]

Push out or cancellation of deliveries to our customers could [added: still] cause earnings volatility, due to the timing of revenue recognition as well as increased risk of inventory-related charges.

We are organized into three reportable [removed: segments.][added: segments, as follows:]

- [removed: PCB, Display] [added: PCB] and Component Inspection: a range of inspection, testing and measurement, and direct imaging for patterning products used by manufacturers of PCBs, FPDs, advanced packaging, MEMS and other electronic components.

China [removed: is emerging as] [added: remains] a major region for manufacturing of [added: legacy node] logic and memory chips, adding to its role as the world’s largest consumer of ICs.

Chinese government initiatives [added: around self-sustainability] are propelling China to expand its domestic manufacturing capacity and attracting investment from semiconductor manufacturers from Taiwan, Korea, Japan and the U.S. Although China is currently seen as an important long-term growth region for the semiconductor and electronics capital equipment sector, Commerce has adopted regulations and added certain China-based entities to the U.S. Entity [removed: List,] [added: List (a list of parties that are generally ineligible to receive U.S.-regulated items without prior licensing from BIS),] restricting our ability to provide products and services to such entities without a license.

In addition, in October 2022, [added: BIS issued] the [added: 2022] BIS [removed: Rules] [added: Rules, which] imposed export licensing requirements for certain U.S. semiconductor and high-performance computing technology (including wafer fab equipment), for the use of such [removed: technology for certain end uses in]

[added: technology for certain end uses in] China, and for the provision of support by U.S. Persons to certain advanced IC fabs located in China.

In particular, the [added: 2022] BIS Rules impose export license requirements effectively on all KLA products and services to customers located in China that fabricate:

KLA is also restricted from providing certain U.S. origin tools, software and technology to certain wafer fab equipment manufacturers [removed: and maskshops] located in China, absent an export license.

We are taking appropriate measures to comply with [removed: such regulations] [added: all BIS Rules,] and [removed: are applying] [added: will continue to apply] for export licenses, when required, to avoid disruption to our customers’ operations.

While some export licenses have been obtained by us or our customers, there can be no assurance that export licenses applied for by either us or our [removed: customers] [added: customers, now or in the future,] will be granted.

[removed: The BIS Rules are complex, and while they have not significantly impacted our operations] [added: Failure] to [removed: date, the possible negative effects on our future business of] [added: obtain] export licenses [removed: not being granted] could [removed: be material and could] [added: also] result in a substantial reduction to our RPO or require us to return substantial deposits received from customers in China for purchase orders.

We are continuously assessing the aggregate potential impact of [removed: the existing] [added: government] regulations [removed: and BIS Rules] on our financial results and operations.

See Part [removed: I,] [added: I] Item 1A “Risk Factors” in this report for more information regarding how such actions by the U.S. government or another country could significantly impact our ability to provide our products and services to existing and potential customers, especially in China, and adversely affect our business, financial condition and results of operations.

| (Dollar amounts in thousands, except diluted net income per share) | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Total revenues | | | $ | [removed: 10,496,056] [added: 9,812,247] | | | | | $ | [removed: 9,211,883] [added: 10,496,056] | | | | | $ | [removed: 6,918,734] [added: 9,211,883] | |

| Costs of revenues | | | $ | [removed: 4,218,307] [added: 3,928,073] | | | | | $ | [removed: 3,592,441] [added: 4,218,307] | | | | | $ | [removed: 2,772,165] [added: 3,592,441] | |

| Gross margin | | | 60 | | % | | | | [removed: 61] [added: 60] | | % | | | | [removed: 60] [added: 61] | | % |

| Net income attributable to KLA | | | $ | [removed: 3,387,277] [added: 2,761,896] | | | | | $ | [removed: 3,321,807] [added: 3,387,277] | | | | | $ | [removed: 2,078,292] [added: 3,321,807] | |

| Diluted net income per share attributable to KLA | | | $ | [removed: 24.15] [added: 20.28] | | | | | $ | [removed: 21.92] [added: 24.15] | | | | | $ | [removed: 13.37] [added: 21.92] | |

[removed: The transaction consideration, including any sales incentives, is allocated between separate] [added: Management uses judgments in identifying] performance [removed: obligations of an arrangement based on] [added: obligations, determining] the stand-alone selling price (“SSP”) for each distinct [removed: product or service.][added: performance obligation and allocating consideration from an arrangement to the individual performance obligations based on the SSP.]

[added: Revenue Recognition.] We recognize revenue from [removed: product] sales at a point in time when we have satisfied our performance obligation by transferring control of the [removed: product] [added: goods or services] to the customer.

We typically have [removed: more than one] [added: established] SSP [added: ranges] for individual products and services due to the stratification of these products by customers and circumstances.

In these instances, we use information such as the size of the customer, geographic [removed: region,] [added: region] as well as customization of the products in determining the [removed: SSP.][added: SSP ranges.]

In instances where the SSP is not directly observable, we determine the SSP using information that includes market conditions, entity-specific [removed: factors,] [added: factors] including discounting strategies, information about the customer or class of customer that is reasonably available and other observable inputs.

[removed: As outlined above, we use] [added: Additionally, management also uses] judgments to evaluate whether or not the customer has obtained control of the product and consider several indicators in evaluating whether or not control has transferred to the [removed: customer.][added: customer, which could also impact the timing of revenue recognition, and could have a material effect on our financial position and results of operations.]

[removed: The fair value of IPR&D is initially capitalized as an intangible asset with an indefinite life] [added: Goodwill] and [removed: assessed] [added: Long-Lived Assets Impairment. We assess goodwill] for impairment [removed: thereafter] [added: annually as well as] whenever events or changes in circumstances indicate that the carrying value of [removed: the IPR&D assets] [added: a reporting unit] may not be recoverable.

The carrying value of [removed: product] inventory is reduced for estimated obsolescence equal to the difference between its cost and the estimated net realizable value based on assumptions about future demand for meeting our product manufacturing [removed: plans.][added: plans and our customers’ support requirements.]

The estimate of net realizable value of inventory is impacted by assumptions regarding general semiconductor market conditions, manufacturing schedules, technology changes, new product introductions and possible alternative uses, and [removed: require] [added: requires] us to use significant judgment that may include uncertain elements.

See Note [removed: 15 “Litigation and Other Legal Matters” and Note 16 “Commitments] [added: 7 “Goodwill] and [removed: Contingencies”] [added: Purchased Intangible Assets”] to our Consolidated Financial Statements for [removed: additional] [added: further] details.

[removed: Goodwill] [added: Long-lived assets, including both tangible] and [removed: Purchased Intangible Assets - Impairment Assessments. We review goodwill] [added: purchased intangible assets, are tested] for impairment [removed: annually during our third fiscal quarter or] whenever events or changes in circumstances indicate [removed: the] [added: that their] carrying [removed: value] [added: amounts] may not be [removed: fully] recoverable.

See Note 7 “Goodwill and Purchased Intangible Assets” [added: in the Notes] to [removed: our] [added: the] Consolidated Financial Statements for additional information.

We determine the fair value of a reporting unit using the [removed: market approach when deemed appropriate and the necessary information is available, or the] income approach [removed: which uses discounted cash flow (“DCF”) analysis,] or [added: market approach, or] a combination of both.

If multiple valuation methodologies are used, the results are [added: judgmentally] weighted.

The market approach estimates the fair value of [removed: the] [added: a] reporting unit by utilizing the market comparable [removed: method] [added: method,] which [removed: is based on] [added: uses] revenue and earnings multiples from comparable companies.

Recently, the semiconductor industry environment has improved as the emergence of disruptive technologies such as AI and continuing advancement of innovation, as well as rising semiconductor content across end-markets and strategic investments in legacy nodes fuel growth.

Our foundry/logic customers are slowly increasing their capital intensity, as they continue to scale and incorporate new technologies.

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.

In March 2024, we made the decision to exit the Display business by announcing the end of manufacturing of most Display products by December 31, 2024, but we will continue to provide services to the installed base of Display products for existing customers.

In October 2023, BIS issued additional rules that went into effect in November 2023.

These 2023 BIS Rules are designed to update export controls on advanced computing semiconductors and semiconductor manufacturing equipment, as well as items that support supercomputing applications and end-uses, to arms embargoed countries, including China.

The 2023 BIS Rules adjust the parameters included in the 2022 BIS Rules that determine whether an advanced computing chip is restricted and impose new measures to address risks of circumvention of the controls established by the 2022 BIS Rules.

The 2023 BIS Rules are very complex and, in January 2024, KLA, among other companies, submitted comments to the BIS on the 2023 BIS Rules.

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.

In accordance with SEC guidance, the estimates within our accounting policies that we believe are the most critical to an investor’s understanding of our financial condition and results of operations, including those requiring more complex management judgment, are discussed below.

To determine when to recognize revenue, we

perform the following five steps: (1) identify the contract with customers, (2) identify the performance obligations in the contract, (3) determine the transaction consideration, (4) allocate the transaction consideration to the performance obligations in the contract, and (5) recognize revenue when, or as, a performance obligation is satisfied.

If in any period we anticipate an adverse change in assumptions such as future demand or market conditions to be less favorable than our previous estimates, additional inventory write-downs may be required and would be reflected in cost of revenues, resulting in a negative impact to our gross margin in that period.

On the other hand, if in any period we are able to sell inventories that had been written down in a previous period to a level below the ultimate realized selling price, related revenue would be recorded with a lower or no offsetting charge to cost of revenues resulting in a net benefit to our gross margin in that period.

Events or changes in circumstances that could affect the likelihood that we will be required to recognize an impairment charge for goodwill include, but are not limited to, declines in our stock price or market capitalization, declines in our market share and declines in revenues or profits at our reporting units.

If the fair value of a reporting unit is less than its carrying value, a goodwill impairment charge is recorded for the difference.

The income approach is estimated through discounted cash flow analysis.

The estimated fair value of a reporting unit is computed by adding the present value of the estimated annual discounted cash flows over a discrete projection period to the residual value of the business at the end of the projection period.

This valuation technique requires us to use significant estimates and assumptions, including long-term growth rates, discount rates and other inputs.

The estimated growth rates for the projection period are based on our internal forecasts of anticipated future performance of the business.

The residual value is estimated using a perpetual nominal growth rate, which is based on projected long-range inflation and long-term industry projections.

The discount rates are calculated as the weighted average cost of capital of comparable peer companies, adjusted for company-specific risk.

Due to the downward revision of financial outlook for our PCB and Display businesses, we performed a quantitative goodwill impairment assessment and recorded impairment losses related to goodwill of $192.6 million in the second quarter of fiscal 2024.

In March 2024, we made the decision to exit the Display business but continue to provide services to the installed base for the discontinued product lines.

This decision triggered a quantitative impairment assessment for the Display reporting unit as of March 31, 2024, which resulted in a total goodwill impairment charge of $70.5 million in the third quarter of fiscal 2024.

Events or changes in circumstances that could affect the likelihood that we will be required to recognize an impairment charge for long-lived assets primarily include declines in our operating cash flows from the use of these assets.

We determine the fair value of purchased intangible assets using the income approach, primarily by applying the relief-from-royalty or multi-period excess-earnings methods.

In connection with the downward revision of financial outlook for our PCB and Display businesses noted above, we recorded impairment losses related to purchased intangible assets of $26.4 million during the second quarter of fiscal 2024.

As a result of the Company's decision to exit the Display business, also described above, an immaterial purchased intangible asset impairment charge was recorded in the third quarter of fiscal 2024.

There can be no assurance that the estimates and assumptions used in our fair value calculations will prove to be an accurate prediction of the future.

If our assumptions are not realized, or if there are future changes in any of the assumptions due to a change in economic conditions or otherwise, it is possible that a further impairment charge may need to be recorded in the future.

Income Taxes. The calculation of our effective tax rate involves significant judgment in the application of complex tax laws among various tax jurisdictions worldwide; identifying uncertain tax positions; and estimating the amount of deferred tax assets that will be realized in the future.

We believe that our tax positions and judgments are reasonable, but actual results may differ.

If one or more taxing authorities were to successfully overturn our tax positions, it could have a material adverse effect on our effective tax rate, results of operations, or cash flows.

We recorded unrecognized tax benefits of $245.7 million and $213.1 million for the years ended June 30, 2024 and June 30, 2023, respectively.

Any changes to these factors can result in a material change to tax expense.

Our calculations of deferred tax assets and liabilities are based on estimates and judgments related to uncertainties in the application of complex tax laws and projections of future taxable income.

We recorded a valuation allowance of $289.5 million and $259.2 million for the years ended June 30, 2024 and June 30, 2023, respectively, primarily related to California credit carry-forwards.

Based on the enacted income apportionment rules in California, our future California income tax liability will not be sufficient to fully utilize the credit carry-forwards.

including but not limited to those discussed in Item 1A “Risk Factors” and elsewhere in this Annual Report on Form 10-K (see “Special Note Regarding Forward-Looking Statements”).

As we get further into 2023, the macro-driven slowdown continues to have an impact on semiconductor device demand as the semiconductor industry rebalances its supply chain and inventory levels.

As a result, memory device manufacturers and foundry/logic customers are reducing their capacity expansion-focused capital expenditure plans for calendar 2023.

While we continue to invest in technological innovation, we are focusing on moderating our spending levels to reflect the changing environment.

Prior to July 1, 2022, we had a fourth segment, Other, but core assets from that segment were sold, making it non-operational and the segment was eliminated.

The remaining three segments are as follows:

There is a likelihood of system reallocation of products to other customers where supply is meaningfully below demand for those products.

We discuss the development and selection of the critical accounting estimates with the Audit Committee of our Board of Directors on a quarterly basis, and the Audit Committee has reviewed our related disclosure in this Annual Report on Form 10-K.

The accounting policies that reflect our more significant estimates, judgments and assumptions and which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

Revenue Recognition. We primarily derive revenue from the sale of process control and process-enabling solutions for the semiconductor and related electronics industries, maintenance and support of all these products, installation and training services, and the sale of spare parts.

Our portfolio includes yield enhancement and production solutions for manufacturing wafers and reticles, ICs, packaging, PCBs and FPDs, as well as comprehensive support and services across our installed base.

Our solutions are generally not sold with a right of return, nor have we experienced significant returns from or refunds to our customers.

We account for a contract with a customer when there is approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable.

Our revenues are measured based on consideration stipulated in the arrangement with each customer, net of any sales incentives and amounts collected on behalf of third parties, such as sales taxes.

The revenues are recognized as separate

performance obligations that are satisfied by transferring control of the product or service to the customer.

Our arrangements with our customers include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations.

A product or service is considered distinct if it is separately identifiable from other deliverables in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer.

Management considers a variety of factors to determine the SSP, such as historical stand-alone sales of products and services, discounting strategies and other observable data.

From time to time, our contracts are modified to account for additional, or to change existing, performance obligations.

Our contract modifications are generally accounted for prospectively.

*Product Revenue*

We use judgment to evaluate whether control has transferred by considering several indicators, including whether:

- We have a present right to payment;

- The customer has legal title;

- The customer has physical possession;

- The customer has significant risk and rewards of ownership; and

- The customer has accepted the product, or whether customer acceptance is considered a formality based on history of acceptance of similar products (for example, when the customer has previously accepted the same tool, with the same specifications, and when we can objectively demonstrate that the tool meets all of the required acceptance criteria, and when the installation of the system is deemed perfunctory).

Not all of the indicators need to be met for us to conclude that control has transferred to the customer.

In circumstances in which revenue is recognized prior to the product acceptance, the fair value of revenue associated with our performance obligations to install the product is deferred and recognized as revenue at a point in time, once installation is complete.

We enter into volume purchase agreements with some of our customers.

We adjust the transaction consideration for estimated credits earned by our customers for such incentives.

These credits are estimated based upon the forecasted and actual product sales for any given period and agreed-upon incentive rate.

The estimate is reviewed for material changes and updated at each reporting period.

We offer perpetual and term licenses for software products.

The primary difference between perpetual and term licenses is the duration over which the customer can benefit from the use of the software, while the functionality and the features of the software are the same.

Software is generally bundled with post-contract customer support (“PCS”), which includes unspecified software updates that are made available throughout the entire term of the arrangement.

Revenue from software licenses is recognized at a point in time, when the software is made available to the customer.

Revenue from PCS is deferred at contract inception and recognized ratably over the service period, or as services are performed.

*Services Revenue*

All of the potential changes noted below are based on sensitivity analyses performed on our financial position as of June 30, [removed: 2023.][added: 2024.]

As of June 30, [removed: 2023,] [added: 2024,] we had an investment portfolio of fixed income securities of [removed: $1.23] [added: $1.71] billion.

If market interest rates were to increase immediately and uniformly by 100 bps from levels as of June 30, [removed: 2023,] [added: 2024,] the fair value of the portfolio would have declined by [removed: $12.4] [added: $16.1] million.

As of June 30, [removed: 2023,] [added: 2024,] the fair value and the book value of our Senior Notes due in various fiscal years ranging from 2025 to 2063 were [removed: $5.69] [added: $6.26] billion and [removed: $5.89] [added: $6.63] billion, respectively.

As of June 30, [removed: 2023,] [added: 2024,] we had no borrowings under the Revolving Credit Facility.

As of June 30, [removed: 2023] [added: 2024] the annual commitment fee was [removed: 8.5] [added: 6] bps.

Additionally, as of June 30, [removed: 2023,] [added: 2024,] if our credit ratings were downgraded to be below investment grade, the maximum potential increase to our annual commitment fee for the Revolving Credit Facility, using the highest range of the ranges discussed above, is estimated to be approximately $1 million.

As of June 30, [removed: 2023,] [added: 2024,] the fair value of our investment in the marketable equity security, which began publicly trading on the Tokyo Stock Exchange on April 5, 2021, was [removed: $18.2] [added: $25.6] million.

Assuming a decline of 50% in market prices, the aggregate value of our investment in the marketable equity security could decrease by approximately [removed: $9] [added: $13] million, based on the value as of June 30, [removed: 2023.][added: 2024.]

See Note 5 “Marketable Securities” to our Consolidated Financial Statements in Part II, Item 8; “Liquidity and Capital Resources” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part [removed: II,] [added: II] Item 7; and “Risk Factors” in Part [removed: I,] [added: I] Item 1A of this Annual Report on Form 10-K for a description of recent market events that may affect the value of the investments in our portfolio that we held as of June 30, [removed: 2023.][added: 2024.]

As of June 30, [removed: 2023,] [added: 2024,] we had net forward and option contracts to purchase [removed: $329.7] [added: $254.1] million in foreign currency in order to hedge certain currency exposures (see Note 17 “Derivative Instruments and Hedging Activities” to our Consolidated Financial Statements for additional details).

If we had entered into these contracts on June 30, [removed: 2023,] [added: 2024,] the U.S. dollar equivalent would have been [removed: $353.3] [added: $274.9] million.

A 10% adverse move in all currency exchange rates affecting the contracts would decrease the fair value of the contracts by [removed: $74.5] [added: $124.1] million.

KLA Corporation and its majority-owned subsidiaries (“KLA” or the “Company” and also referred to as “we,” “our,” [removed: “us,”] [added: “us”] or similar references) [removed: is a supplier] [added: are suppliers] of industry-leading equipment and services that enables innovation throughout the electronics industry.

We provide advanced process control and process-enabling solutions for manufacturing wafers, reticles/masks, chemicals/materials, integrated circuits (“IC” or “chip”), packaged [removed: ICs,] [added: ICs and] printed circuit boards [removed: (“PCB”) and flat panel displays (“FPD”),] [added: (“PCB”),] as well as comprehensive support and services across our installed base.

Our suite of advanced products, coupled with our unique [removed: yield management] [added: process control] software and services, allow us to deliver the solutions our customers need to achieve their [removed: productivity] [added: technology advancement and high volume production] goals by significantly improving yields, [added: while simultaneously] reducing waste, [removed: reducing] risks and [removed: reducing] costs.

This improves [removed: their] [added: our customers’] overall profitability and return on investment.

We are organized into three reportable segments: Semiconductor Process Control; Specialty Semiconductor Process; and [removed: PCB, Display] [added: PCB] and Component Inspection.

Within the Semiconductor Process Control segment, our comprehensive portfolio of inspection, metrology and software products, as well as related services, help IC, wafer, reticle/mask and chemical/materials manufacturers achieve target yields throughout the entire fabrication process, from R&D to [removed: final] [added: high] volume production.

Within the [removed: PCB, Display] [added: PCB] and Component Inspection segment, we sell products and services that enable electronic device manufacturers to inspect, test and measure PCBs, IC [removed: substrates, FPDs] [added: substrates] and packaged ICs to verify their quality, pattern the desired electronic circuitry on the relevant substrate and perform three-dimensional shaping of metalized circuits on multiple surfaces.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act [removed: of 1934, as amended,] are available free of charge on [removed: the] [added: our] website as soon as reasonably practicable after they are electronically filed with or furnished to the [removed: United States Securities and Exchange Commission (“SEC”).][added: SEC.]

Investors and others should note that we [added: may] announce material financial information to investors using [removed: an] [added: our] investor relations website (ir.kla.com), which includes our SEC filings, press releases, public earnings calls and conference webcasts.

The fabrication of a semiconductor chip (or “semiconductor”) is accomplished by depositing a series of film layers that act as conductors, semiconductors or insulators [removed: on bare wafers.]

The growth of virtual engagement and the pace of digitization has been driven by COVID-19 related travel [removed: restrictions and quarantines,] [added: restrictions,] work from home [removed: requirements,] [added: activities,] and advances in healthcare and industrial applications.

Intertwined in these areas, spurred by the requirements of [removed: big data,] [added: AI,] is the growth in demand for memory chips.

[removed: The People’s Republic of] China [removed: (“China”) continues to emerge] [added: remains] as a major region for the manufacturing of [added: legacy node] logic and memory chips, adding to its role as the world’s largest consumer of ICs.

The Chinese government initiatives [added: around self-sustainability] are propelling China to expand its domestic manufacturing capacity.

Although China is currently seen as an important long-term growth region for the semiconductor capital equipment sector, Commerce has added certain China-based entities to the U.S. Entity List (a list of parties that are generally ineligible to receive U.S. regulated items without prior licensing from [removed: BIS,] [added: BIS),] restricting our ability to provide products and services to such entities without a license.

Our key R&D activities during the fiscal year ended June 30, [removed: 2023] [added: 2024] involved the development of process control and process-enabling solutions for a broad range of industries including [removed: semiconductors, PCBs] [added: semiconductors] and [removed: displays.][added: PCBs.]

For the fiscal years ended June 30, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] the following customers each accounted for more than 10% of total revenues, primarily in the Semiconductor Process Control segment:

| [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| [removed: Samsung Electronics Co., Ltd.] | | | | | | Samsung Electronics Co., Ltd. | | | | | | Samsung Electronics Co., Ltd. | | |

We focus on providing comprehensive resources for the full breadth of process control, process-enabling and yield management solutions for manufacturing and testing wafers and reticles, a wide variety of ICs, PCBs, IC [removed: substrates, packaging, and flat] [added: substrates] and [removed: flexible panel displays] [added: packaging] as well as general materials research.

International revenues accounted for approximately [removed: 88%, 90%] [added: 89%, 88%] and [removed: 89%] [added: 90%] of our total revenues in the fiscal years ended June 30, [removed: 2023, 2022] [added: 2024, 2023] and [removed: 2021,] [added: 2022,] respectively.

Although we attempt to manage some of the currency risk inherent in non-U.S. dollar product sales through hedging activities, there can be no assurance that [added: such efforts will be adequate.]

[removed: We provide advanced process control and process-enabling] solutions for manufacturing wafers, reticles, ICs, packaging, PCBs, IC substrates and flat and flexible panel displays.

We also [removed: produce] [added: make] products that support chemical/materials quality control, and process tool development and qualification.

| | | | Chip Manufacturing: Defect Inspection and Review Inspection and review tools are used to identify, locate, characterize, review, and analyze defects on various surfaces of patterned and unpatterned wafers. | | | 39xx Series, 29xx Series, [removed: C20x] [added: C30x] Series, eSL10™, Voyager® Series, 8 Series, Puma™ Series, CIRCL™ Series, Surfscan® Series, Surfscan® SP Ax Series, [removed: eDR7xxx™] [added: eDR®] Series. | | |

| | | | Wafer Manufacturing: Defect Inspection and Review, [added: Metrology,] and [removed: Metrology] [added: In Situ Process Management] Wafer defect inspection, review and metrology systems are used to help wafer/substrate manufacturers manage quality throughout the wafer fabrication process by detecting defects, characterizing surface quality and assessing wafer geometry. | | | Surfscan® Series, Surfscan® SP Ax Series, [removed: eDR7xxx™] [added: eDR®] Series, WaferSight™ Series, [removed: Candela® Series,] MicroSense® wafer geometry product [removed: family.] [added: family, SensArray® product family, Candela® Series, QualiSurf® Series.] | | |

| | | | Reticle Manufacturing: Defect Inspection, Metrology and In Situ Process Management Reticle inspection and metrology systems help reticle blank, patterned optical reticle, patterned EUV reticle, and chip manufacturers identify defects, pattern placement errors, and process issues during reticle manufacturing. In addition to reducing yield risk during production, these systems also support outgoing and incoming reticle quality control. | | | Teron™ SL6xx Series, Teron™ 6xx Series, TeraScan™ 5xx Series, X5.x™ Series, FlashScan® Series, LMS IPRO Series, [removed: Microsense® wafer geometry] [added: SensArray®] product family. | | |

| | | | Chip Manufacturing: Chemistry Process Control Chemical process control equipment qualifies incoming supplies, manages tool inputs, adjusts chamber/bath conditions and monitors process waste. | | | QualiSurf® Series, Quali-Line Quanta® Series, [removed: Quali-Line] [added: Quali-Line®] Prima® Series, QualiLab Elite® Series. | | |

| | | | Packaging Manufacturing: Wafer Inspection and Metrology, Chemistry Process [removed: Control] [added: Control, In Situ Process Management] Wafer inspection and metrology systems for advanced wafer-level packaging help packaging manufacturers detect, resolve and monitor excursions to provide greater control of quality for improved device performance. Chemistry process monitoring systems analyze and monitor wet chemicals used in wafer-level packaging (WLP), panel-level packaging (PLP), and IC substrates. | | | Kronos™ Series, CIRCL™-AP, irArcher® Series, PWG5™ with XT Option, QualiSurf® Series, Quali-Fill® Libra® Series, QualiLab Elite® Series, [removed: Quali-Dose] [added: Quali-Dose®, SensArray® product family.] | | |

| | | | Semiconductor Software Solutions Software solutions centralize and analyze the data produced by inspection, metrology and process systems for chip, wafer, reticle and packaging manufacturing. These solutions provide run-time process control, defect excursion identification, process corrections and defect classification to accelerate yield learning rates and reduce production risk. Patterning simulation software allows researchers to evaluate advanced patterning technologies, such as EUV lithography and multiple patterning techniques. | | | Klarity® product family, 5D Analyzer®, OVALiS, [added: aiSIGHT™,] Anchor product family, RDC, FabVision® Series, ProDATA™, PROLITH™, I-PAT®, SPOT®. | | |

| | | | General Purpose/Lab Application Specialty Semiconductor Manufacturing, Benchtop Metrology, Surface Characterization, Material Strength Characterization and Electrical Property Measurement. | | | Candela® Series, HRP® -260, Zeta™ Series, [removed: Tencor™] [added: Tencor®] P Series, Nano Indenter® Series, Alpha-Step® Series, Filmetrics® F Series, Filmetrics® R Series, iMicro, iNano®, Filmetrics® Profilm3D® Series, T150 UTM, NanoFlip, InSEM® HT. | | |

The [removed: PCB, Display] [added: PCB] and Component Inspection segment enables electronic device manufacturers to inspect, test and measure PCBs, IC substrates, [removed: FPDs] [added: flat panel displays (“FPD”)] and packaged ICs to verify their quality, pattern the desired electronic circuitry on the relevant substrate and perform three-dimensional shaping of metalized circuits on multiple surfaces.

The [removed: PCB, Display] [added: PCB] and Component Inspection segment offers a variety of solutions and products, including:

| [removed: PCB, Display] [added: PCB] and Component Inspection | | | | | | | | |

| | | | Display Inspection and electrical testing systems to identify and classify defects, as well as systems to repair defects for the display market. | | | [added: Castor™,] Orbotech Sirius™ Series, Orbotech [removed: Quantum™ Series, Orbotech] Flare™ Series, Orbotech Array Checker™ Series, Orbotech Ignite™ Series, Orbotech Prism™ Series, Orbotech OASIS™. | | |

Whether a manufacturing site is producing wafers, reticles, ICs, [removed: display] [added: FPD] or PCB products, our highly trained service teams collaborate with customers to determine the best products and services to meet technology and business requirements.

Our backlog, which represents our remaining performance obligation (“RPO”) to deliver products and services, totaled [removed: $11.40] [added: $9.83] billion and [removed: $13.11] [added: $11.40] billion as of June 30, [removed: 2023] [added: 2024] and [removed: 2022,] [added: 2023,] respectively, and primarily consists of sales orders where written customer requests have been received.

We expect to recognize approximately [removed: 40%] [added: 59%] to [removed: 50%] [added: 64%] of these performance obligations as revenue [removed: beyond] [added: in] the next 12 months, [added: 29% to 34% in the subsequent 12 months and the remainder thereafter,] but this estimate is subject to constant [removed: change depending on the following:][added: change.]

Macro-economic factors and the effect on customer behavior: [removed: The supply chain disruptions caused by the pandemic as well as elevated demand levels in recent years have led to] [added: Our] customers [removed: agreeing to purchase] [added: are currently purchasing] equipment from us with lead times that are longer than our historical experience.

As customers try to balance the evolution of their technological, production or market needs with the timing and content of orders placed with us, there is increased risk of order modifications, [removed: pushouts,] [added: pushouts] or cancellations.

on bare wafers.

Refer to “Backlog” section below for information regarding export licenses now required for certain products and services sold to China.

We provide advanced process control and process-enabling

In March 2024, we made the decision to exit our business of manufacturing flat and flexible panel displays (“Display”) by announcing the end of manufacturing of most Display products by December 31, 2024, but we will continue to provide services to the installed base of Display products for existing customers.

The timing of revenue recognition of our RPO is evaluated quarterly and is largely driven by multiple variables, many of which are beyond our control, such as: the readiness of customer fabs, end market needs for capacity, changes in the estimated versus actual start time of customers’ projects, timing of delivery and installation dates, supply chain constraints and changes in regulations.

The estimated amount and timing of revenue recognition are also dependent on the following:

As part of its responsibilities, the steering committee partners with policy owners to promote KLA's ESG goals within all KLA policies, such as our Standards of Business Conduct.

We have developed and implemented a cybersecurity risk management process intended to protect the confidentiality, integrity and availability of our critical systems and information.

For more information on our cybersecurity efforts, initiatives and governance, refer to Item 1C “Cybersecurity” in this Annual Report on Form 10-K.

As part of our drive to be better, we have established environmental sustainability goals.

In 2023, we announced that we are submitting our climate goals, including a goal for Scope 3 emissions reductions, to the Science Based Target Initiative (SBTi) for validation, which was recently received.

In 2023, we established a global waste and water policy to guide our efforts in

these spaces as well.

We continue to monitor various climate-related risks even if some are not currently expected to have a material impact on KLA’s business or financial condition for assessed time horizons.

Our 2023 Global Impact Report is expected to be published in the first quarter of fiscal 2025.

to peer comparisons and internal equity.

We also provide incentive bonus or profit sharing to employees.

Our benefits are designed to meet the needs of employees and their families.

We offer in-person and virtual workout classes.

We offer employees the opportunity to pursue coaching and therapy sessions through our Employee Assistance Program, and we host seminars on financial literacy and planning and other wellness topics.

*A Culture of Inclusion*

We continued our campaign on Inclusion For All through fiscal 2024.

As we emerged from the global pandemic, many employees continued to seek connections.

We continue to monitor developments in our communities to help us be able to adjust practices and controls as needed.

In 2023, we continued to make progress expanding our ISO 14001 and ISO 45001 programs across our main production and R&D facilities.

As of year-end 2023, our sites in Singapore; Newport, Wales; Milpitas, California; and Migdal Ha’emek, Israel are certified to ISO 14001 and our Wales site is also certified to ISO 45001.

Prior to July 1, 2022, we had a fourth segment, Other, but core assets from that segment were sold, making it non-operational and the segment was eliminated.

Additionally, FPDs are manufactured using processes similar to ICs (e.g., film deposition, photolithography, etching) except using glass as the starting substrate.

such efforts will be adequate.

However, more recently, we have seen the macro-driven slowdown have an impact on consumers’ semiconductor device demand, causing the semiconductor industry to rebalance its supply chain and inventory levels.

As a result, some of our customers began adjusting their capacity expansion-focused capital expenditure plans for calendar year 2023.

This, in turn, makes it more difficult for us to navigate potential timing disparities between, on the one hand, our ability to manufacture, deliver and install products and, on the other hand, the requirements of our customers.

It also has the potential to cause earnings volatility for us as it can affect our revenue recognition and increase the likelihood of inventory-related charges.

In addition, because customers can potentially change delivery schedules or delay or cancel orders, our shipment backlog at any date is not necessarily indicative of business volumes or actual sales for any succeeding periods.

equipment), for the use of such technology for certain end uses in China, and for the provision of support by U.S. persons to certain advanced IC fabs located in China.

As part of its responsibilities, the steering committee evaluates our policies and practices including our Code of Business Conduct to promote an effective outcome and adherence by our employees.

KLA unveiled four new products which serve as an enabler for electric vehicle (“EV”) technologies.

Our devices help customers make the necessary high-power, energy-efficient compound semiconductors which are needed throughout the entire EV assembly.

In addition to 24/7 monitoring through our KLA Security Operations Center, we engage in other initiatives such as cybersecurity assessments, employee training on cybersecurity issues and compliance monitoring.

Our cybersecurity efforts are spearheaded by our Chief Information Security Officer, and cybersecurity updates are provided to the Audit Committee quarterly, or more frequently as needed.

As part of our drive to be better, we have established goals around climate and energy, waste, and water management.

globally.

We also provide bonus plans and profit sharing to employees who do not receive RSUs.

We offer in-person and virtual workout classes as well as seminars on mindfulness, meditation and other wellness topics.

We also offer courses on financial literacy and planning to help our employees prepare for their financial futures.

*Inclusion and Diversity*

Over the last fiscal year, we increased our I&D efforts in several ways.

In fiscal year 2022, we introduced a new campaign called Inclusion For All.

Our Enterprise Leadership Program, a comprehensive, two-year management training program that we offer, helps to prepare KLA employees to fill future leadership roles.

In fiscal year 2023, several of our managers and leaders went through the program.

As we began to emerge from the global pandemic in 2022, many employees sought connection as never before.

KLA’s top priority during the COVID-19 pandemic has been and continues to be protecting the health and safety of our employees and their families, our customers and our community.

As COVID-19 restrictions alleviate, KLA has adjusted work practices and controls to promote employee safety as they return to the office and in conformance with the local regulations.

KLA continues to monitor the COVID-19 situation in our communities in the event controls need to be reestablished to protect our employees and our business commitments.

The goal is to execute these plans over the course of 2023-2024.

In calendar 2022, we built the foundations for these systems as we move to integrate our EHS management systems globally.

In the remainder of calendar 2023, that work continues as we are deploying the system elements across our key manufacturing locations.

specific safety training certifications.

| | | | For the [removed: Fiscal Year Ended] [added: fiscal year ended] | | | June 30, [removed: 2023] [added: 2024] | | |

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the [removed: Act).][added: Act) Yes ☐ No x]

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant based upon the closing price of the registrant’s stock, as of December 31, [removed: 2022,] [added: 2023,] was approximately [removed: $52.14] [added: $78.54] billion.

The registrant had [removed: 136,720,074] [added: 134,425,022] shares of common stock outstanding as of July [removed: 17, 2023.][added: 22, 2024.]

Portions of the Proxy Statement for the [removed: 2023] [added: 2024] Annual Meeting of Stockholders (“Proxy Statement”) to be filed pursuant to Regulation 14A within 120 days after the registrant’s fiscal year ended June 30, [removed: 2023,] [added: 2024,] are incorporated by reference into Part III of this report.

| | | | | | | [Special Note Regarding Forward-Looking [removed: Statements](#i91684fd3dc5042b0b621e61839641767_10)] [added: Statements](#i36a35c07919f42079eb525a0cac45367_10)] | | | [removed: [ii](#i91684fd3dc5042b0b621e61839641767_10)] [added: [ii](#i36a35c07919f42079eb525a0cac45367_10)] | | |

| Item 1. | | | | | | [removed: [Business](#i91684fd3dc5042b0b621e61839641767_16)] [added: [Business](#i36a35c07919f42079eb525a0cac45367_16)] | | | [removed: [1](#i91684fd3dc5042b0b621e61839641767_16)] [added: [1](#i36a35c07919f42079eb525a0cac45367_16)] | | |

| Item 1A. | | | | | | [Risk [removed: Factors](#i91684fd3dc5042b0b621e61839641767_19)] [added: Factors](#i36a35c07919f42079eb525a0cac45367_19)] | | | [removed: [14](#i91684fd3dc5042b0b621e61839641767_19)] [added: [14](#i36a35c07919f42079eb525a0cac45367_19)] | | |

| Item 1B. | | | | | | [Unresolved Staff [removed: Comments](#i91684fd3dc5042b0b621e61839641767_22)] [added: Comments](#i36a35c07919f42079eb525a0cac45367_22)] | | | [removed: [33](#i91684fd3dc5042b0b621e61839641767_22)] [added: [35](#i36a35c07919f42079eb525a0cac45367_22)] | | |

| Item 2. | | | | | | [removed: [Properties](#i91684fd3dc5042b0b621e61839641767_25)] [added: [Properties](#i36a35c07919f42079eb525a0cac45367_25)] | | | [removed: [33](#i91684fd3dc5042b0b621e61839641767_25)] [added: [36](#i36a35c07919f42079eb525a0cac45367_25)] | | |

| Item 3. | | | | | | [Legal [removed: Proceedings](#i91684fd3dc5042b0b621e61839641767_28)] [added: Proceedings](#i36a35c07919f42079eb525a0cac45367_28)] | | | [removed: [33](#i91684fd3dc5042b0b621e61839641767_28)] [added: [36](#i36a35c07919f42079eb525a0cac45367_28)] | | |

| Item 4. | | | | | | [Mine Safety [removed: Disclosures](#i91684fd3dc5042b0b621e61839641767_31)] [added: Disclosures](#i36a35c07919f42079eb525a0cac45367_31)] | | | [removed: [33](#i91684fd3dc5042b0b621e61839641767_31)] [added: [36](#i36a35c07919f42079eb525a0cac45367_31)] | | |

| Item 5. | | | | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i91684fd3dc5042b0b621e61839641767_37)] [added: Securities](#i36a35c07919f42079eb525a0cac45367_37)] | | | [removed: [34](#i91684fd3dc5042b0b621e61839641767_37)] [added: [37](#i36a35c07919f42079eb525a0cac45367_37)] | | |

| Item 6. | | | | | | [removed: [\[Reserved\]](#i91684fd3dc5042b0b621e61839641767_40)] [added: [\[Reserved\]](#i36a35c07919f42079eb525a0cac45367_40)] | | | [removed: [35](#i91684fd3dc5042b0b621e61839641767_40)] [added: [38](#i36a35c07919f42079eb525a0cac45367_40)] | | |

| Item 7. | | | | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i91684fd3dc5042b0b621e61839641767_43)] [added: Operations](#i36a35c07919f42079eb525a0cac45367_43)] | | | [removed: [35](#i91684fd3dc5042b0b621e61839641767_43)] [added: [38](#i36a35c07919f42079eb525a0cac45367_43)] | | |

| Item 7A. | | | | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i91684fd3dc5042b0b621e61839641767_85)] [added: Risk](#i36a35c07919f42079eb525a0cac45367_85)] | | | [removed: [53](#i91684fd3dc5042b0b621e61839641767_85)] [added: [52](#i36a35c07919f42079eb525a0cac45367_85)] | | |

| Item 8. | | | | | | [Financial Statements and Supplementary [removed: Data](#i91684fd3dc5042b0b621e61839641767_88)] [added: Data](#i36a35c07919f42079eb525a0cac45367_88)] | | | [removed: [54](#i91684fd3dc5042b0b621e61839641767_88)] [added: [53](#i36a35c07919f42079eb525a0cac45367_88)] | | |

| | | | | | | [Consolidated Balance Sheets as [removed: of](#i91684fd3dc5042b0b621e61839641767_91)] [added: of](#i36a35c07919f42079eb525a0cac45367_91)] June 30, [added: 2024 [and](#i36a35c07919f42079eb525a0cac45367_91)] 2023 [removed: [and](#i91684fd3dc5042b0b621e61839641767_91) 2022] | | | [removed: [55](#i91684fd3dc5042b0b621e61839641767_91)] [added: [54](#i36a35c07919f42079eb525a0cac45367_91)] | | |

| | | | | | | [Consolidated Statements of Operations for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_94)] [added: ended](#i36a35c07919f42079eb525a0cac45367_94)] June 30, [removed: 2023] [added: 2024] | | | [removed: [56](#i91684fd3dc5042b0b621e61839641767_94)] [added: [55](#i36a35c07919f42079eb525a0cac45367_94)] | | |

| | | | | | | [Consolidated Statements of Comprehensive Income for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_97)] [added: ended](#i36a35c07919f42079eb525a0cac45367_97)] June 30, [removed: 2023] [added: 2024] | | | [removed: [57](#i91684fd3dc5042b0b621e61839641767_97)] [added: [56](#i36a35c07919f42079eb525a0cac45367_97)] | | |

| | | | | | | [Consolidated Statements of Stockholders’ Equity for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_100) [](#i91684fd3dc5042b0b621e61839641767_100)June] [added: ended](#i36a35c07919f42079eb525a0cac45367_100) [](#i36a35c07919f42079eb525a0cac45367_100)June] 30, [removed: 2023] [added: 2024] | | | [removed: [58](#i91684fd3dc5042b0b621e61839641767_100)] [added: [57](#i36a35c07919f42079eb525a0cac45367_100)] | | |

| | | | | | | [Consolidated Statements of Cash Flows for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_103)] [added: ended](#i36a35c07919f42079eb525a0cac45367_103)] June 30, [removed: 2023] [added: 2024] | | | [removed: [59](#i91684fd3dc5042b0b621e61839641767_103)] [added: [58](#i36a35c07919f42079eb525a0cac45367_103)] | | |

| | | | | | | [Notes to Consolidated Financial [removed: Statements](#i91684fd3dc5042b0b621e61839641767_106)] [added: Statements](#i36a35c07919f42079eb525a0cac45367_106)] | | | [removed: [60](#i91684fd3dc5042b0b621e61839641767_106)] [added: [59](#i36a35c07919f42079eb525a0cac45367_106)] | | |

| | | | | | | [Report of Independent Registered Public Accounting [removed: Firm](#i91684fd3dc5042b0b621e61839641767_181)] [added: Firm](#i36a35c07919f42079eb525a0cac45367_184)] | | | [removed: [102](#i91684fd3dc5042b0b621e61839641767_181)] [added: [102](#i36a35c07919f42079eb525a0cac45367_184)] | | |

| | | | | | | [Schedule II Valuation and Qualifying [removed: Accounts](#i91684fd3dc5042b0b621e61839641767_184)] [added: Accounts](#i36a35c07919f42079eb525a0cac45367_187)] | | | [removed: [104](#i91684fd3dc5042b0b621e61839641767_184)] [added: [104](#i36a35c07919f42079eb525a0cac45367_187)] | | |

| Item 9. | | | | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i91684fd3dc5042b0b621e61839641767_187)] [added: Disclosure](#i36a35c07919f42079eb525a0cac45367_190)] | | | [removed: [104](#i91684fd3dc5042b0b621e61839641767_187)] [added: [104](#i36a35c07919f42079eb525a0cac45367_190)] | | |

| Item 9A. | | | | | | [Controls and [removed: Procedures](#i91684fd3dc5042b0b621e61839641767_190)] [added: Procedures](#i36a35c07919f42079eb525a0cac45367_193)] | | | [removed: [104](#i91684fd3dc5042b0b621e61839641767_190)] [added: [104](#i36a35c07919f42079eb525a0cac45367_193)] | | |

| Item 9B. | | | | | | [Other [removed: Information](#i91684fd3dc5042b0b621e61839641767_193)] [added: Information](#i36a35c07919f42079eb525a0cac45367_196)] | | | [removed: [105](#i91684fd3dc5042b0b621e61839641767_193)] [added: [105](#i36a35c07919f42079eb525a0cac45367_196)] | | |

| Item 9C. | | | | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i91684fd3dc5042b0b621e61839641767_196)] [added: Inspections](#i36a35c07919f42079eb525a0cac45367_199)] | | | [removed: [105](#i91684fd3dc5042b0b621e61839641767_193)] [added: [105](#i36a35c07919f42079eb525a0cac45367_196)] | | |

| Item 10. | | | | | | [Directors, Executive Officers and Corporate [removed: Governance](#i91684fd3dc5042b0b621e61839641767_202)] [added: Governance](#i36a35c07919f42079eb525a0cac45367_205)] | | | [removed: [106](#i91684fd3dc5042b0b621e61839641767_202)] [added: [106](#i36a35c07919f42079eb525a0cac45367_205)] | | |

| Item 11. | | | | | | [Executive [removed: Compensation](#i91684fd3dc5042b0b621e61839641767_205)] [added: Compensation](#i36a35c07919f42079eb525a0cac45367_208)] | | | [removed: [106](#i91684fd3dc5042b0b621e61839641767_205)] [added: [106](#i36a35c07919f42079eb525a0cac45367_208)] | | |

| Item 12. | | | | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i91684fd3dc5042b0b621e61839641767_208)] [added: Matters](#i36a35c07919f42079eb525a0cac45367_211)] | | | [removed: [106](#i91684fd3dc5042b0b621e61839641767_208)] [added: [106](#i36a35c07919f42079eb525a0cac45367_211)] | | |

| Item 13. | | | | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i91684fd3dc5042b0b621e61839641767_211)] [added: Independence](#i36a35c07919f42079eb525a0cac45367_214)] | | | [removed: [106](#i91684fd3dc5042b0b621e61839641767_211)] [added: [106](#i36a35c07919f42079eb525a0cac45367_214)] | | |

| Item 14. | | | | | | [Principal Accountant Fees and [removed: Services](#i91684fd3dc5042b0b621e61839641767_214)] [added: Services](#i36a35c07919f42079eb525a0cac45367_217)] | | | [removed: [106](#i91684fd3dc5042b0b621e61839641767_214)] [added: [106](#i36a35c07919f42079eb525a0cac45367_217)] | | |

| Item 15. | | | | | | [removed: [Exhibit](#i91684fd3dc5042b0b621e61839641767_220)[s](#i91684fd3dc5042b0b621e61839641767_220) [and] [added: [Exhibits and] Financial Statement [removed: Schedules](#i91684fd3dc5042b0b621e61839641767_220)] [added: Schedules](#i36a35c07919f42079eb525a0cac45367_223)] | | | [removed: [106](#i91684fd3dc5042b0b621e61839641767_220)] [added: [106](#i36a35c07919f42079eb525a0cac45367_223)] | | |

| Item 16. | | | | | | [Form 10-K [removed: Summary](#i91684fd3dc5042b0b621e61839641767_226)] [added: Summary](#i36a35c07919f42079eb525a0cac45367_229)] | | | [removed: [108](#i91684fd3dc5042b0b621e61839641767_226)] [added: [109](#i36a35c07919f42079eb525a0cac45367_229)] | | |

*This report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of [removed: 1934.][added: 1934, as amended (the “Securities Exchange Act”).]

Such forward-looking statements include those regarding, among others: [removed: the future impacts of the COVID-19 pandemic;] forecasts of the future results of our operations, including profitability; orders for our products and capital equipment generally; sales of semiconductors; the investments by our customers in advanced technologies and new materials; growth of revenue in the semiconductor industry, the semiconductor capital equipment industry and our business; technological trends in the semiconductor industry; future developments or trends in the global capital and financial markets; our future product offerings and product features; the success and market acceptance of new products; timing of shipment of order backlog; our future product shipments and product and service revenues; our future gross margins; our future research and development (“R&D”) expenses and selling, general and administrative (“SG&A”) expenses; international sales and operations; our ability to maintain or improve our existing competitive position; success of our product offerings; creation and funding of programs for R&D; results of our investment in leading edge technologies; the effects of hedging transactions; the effect of the sale of trade receivables and promissory notes from customers; the effect of future compliance with laws and regulations; our future effective income tax rate; our recognition of tax benefits; the effects of any audits or litigation; future payments of dividends to our stockholders; the completion of any acquisitions of third parties, or the technology or assets thereof; benefits received from any acquisitions and development of acquired technologies; sufficiency of our existing cash balance, investments, cash generated from operations and the unfunded portion of our Revolving Credit Facility (as defined below in Item 1A “Risk Factors”) to meet our operating and working capital requirements, including debt service and payment thereof; future dividends, and stock repurchases; our compliance with the financial covenants under the Credit Agreement (as defined below in Item 1A “Risk Factors”) for our Revolving Credit Facility; the adoption of new accounting pronouncements; our repayment of our outstanding indebtedness; and our environmental, social and governance (“ESG”) related targets, goals and commitments.*

*•Evolving Bureau of Industry and Security (“BIS”) of the U.S. Department of Commerce (“Commerce”) rules and regulations [added: (the “BIS Rules”)] and their impact on our ability to sell products to and provide services to certain customers in [removed: China;*][added: People’s Republic of China (“China”);*]

*•Our vulnerability to disruptions and delays at our [removed: third party] [added: third-party] service providers;*

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| Item 1C. | | | | | | [Cybersecurity](#i36a35c07919f42079eb525a0cac45367_1832) | | | [35](#i36a35c07919f42079eb525a0cac45367_1832) | | |

| | | | | | | [Signatures](#i36a35c07919f42079eb525a0cac45367_232) | | | [110](#i36a35c07919f42079eb525a0cac45367_232) | | |

*•The war between Ukraine and Russia, and the war between Israel and Hamas, and the significant military activity in those regions;*

*•Risks related to artificial intelligence;*

*•Risks related to the Court of Chancery of the State of Delaware being the sole and exclusive forum for certain actions and proceedings.*

Yes ☐ No x

| | | | | | | [Signatures](#i91684fd3dc5042b0b621e61839641767_229) | | | [109](#i91684fd3dc5042b0b621e61839641767_229) | | |

Cybersecurity Risk Management and Strategy

We have a cybersecurity risk management process intended to protect the confidentiality, integrity and availability of our critical systems and information.

We design and assess our process based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”).

This does not imply that we meet any particular technical standards, specifications or requirements, only that we use the NIST CSF as a guide to help us identify, assess and manage cybersecurity risks relevant to our business.

Our cybersecurity risk management process is integrated into our overall risk management process, and shares common methodologies, reporting channels and governance processes that apply across the risk management process to other legal, compliance, strategic, operational and financial risk areas.

Key elements of our cybersecurity risk management process include, but are not limited to, the following:

- Risk assessments designed to help identify material risks from cybersecurity threats to our critical systems and information;

- A cybersecurity team principally responsible for managing (1) our cybersecurity risk assessment processes, (2) our security controls, and (3) our response to cybersecurity incidents;

- The use of external service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes;

- Cybersecurity awareness training of our workforce;

- A cybersecurity incident response plan and processes for responding to cybersecurity incidents; and

- Risk management processes based on our assessment of the respective risk profile of key third parties.

We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.

See Part I Item 1A “Risk Factors – *We depend on information technology for our business and are exposed to risks related to cybersecurity threats and cyber incidents affecting our, our customers’, suppliers’ and other service providers’ systems and networks.*”

Cybersecurity Governance

Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit Committee (the “Committee”) oversight of cybersecurity risks, including oversight of management’s implementation of our cybersecurity risk management process.

The Committee receives quarterly reports from management on our cybersecurity risks.

In addition, management updates the Committee, where it deems appropriate, regarding cybersecurity incidents it considers to be significant or potentially significant.

The Committee reports to the full Board regarding its activities, including those related to cybersecurity.

The full Board also regularly receives briefings from management on our cyber risk management process.

Board members receive presentations on cybersecurity topics from management or external experts as part of the Board’s continuing education on topics that impact public companies.

Our management team, including our Chief Legal Officer and Chief Information Security Officer (“CISO”), is responsible for assessing and managing our material risks from cybersecurity threats.

The team has primary responsibility for our overall cybersecurity risk management process and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants.

Our CISO has a degree with a focus on information technology, and is a Certified Information Systems Auditor with over 20 years of experience in information technology related roles, including building and leading cybersecurity, risk management and information protection teams.

Our CISO reports to our Chief Legal Officer who oversees cybersecurity, and holds a Carnegie Mellon University Software Engineering Institute CERT Certificate for Cybersecurity Oversight.

The other members of the operational cybersecurity team collectively have decades of relevant education and experience and maintain a wide range of industry certifications.

We invest in regular, ongoing cybersecurity training for the cybersecurity team.

Our management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, which may include: briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our information technology environment.

As of June 30, [removed: 2023,] [added: 2024,] we owned or leased a total of approximately 5 million square feet of space for research, engineering, marketing, service, sales and administration worldwide primarily in the U.S., [removed: Israel,] Singapore, [added: Israel, India,] China, [removed: Germany] and [removed: Taiwan.][added: Belgium.]

Information regarding our principal properties as of June 30, [removed: 2023] [added: 2024] is set forth below:

(1)Includes [removed: 426,726] [added: 421,132] square feet of property owned at our location in Serangoon, Singapore, where the land on which this building resides is leased.

| Owned(1) | | | 1,134,127 | | | | | | 1,086,070 | | | | | | 2,220,197 | | |

| Leased | | | 612,631 | | | | | | 2,523,446 | | | | | | 3,136,077 | | |

| Total | | | 1,746,758 | | | | | | 3,609,516 | | | | | | 5,356,274 | | |

| Owned(1) | | | 1,108,483 | | | | | | 873,619 | | | | | | 1,982,102 | | |

| Leased | | | 645,678 | | | | | | 2,186,211 | | | | | | 2,831,889 | | |

| Total | | | 1,754,161 | | | | | | 3,059,830 | | | | | | 4,813,991 | | |

On August [removed: 3, 2023,] [added: 1, 2024,] we announced that our Board of Directors had declared a quarterly cash dividend of [removed: $1.30] [added: $1.45] per share to be paid on September [removed: 1, 2023] [added: 3, 2024] to stockholders of record as of the close of business on August 15, [removed: 2023.][added: 2024.]

As of July [removed: 17, 2023,] [added: 22, 2024,] there were [removed: 408] [added: 413] holders of record of our common stock.

The following is a summary of stock repurchases for each month during the fourth quarter of the fiscal year ended June 30, [removed: 2023.][added: 2024.]

(1)Our Board of Directors has authorized a program that permits us to repurchase our common stock, including a [removed: $6.00] [added: $2.00] billion increase approved by the Board in [removed: June 2022.][added: the first quarter of fiscal 2024.]

As of June 30, [removed: 2023,] [added: 2024,] approximately [removed: $1.91] [added: $2.18] billion remained available for repurchases under our repurchase program.

*Notwithstanding any statement to the contrary in any of our previous or future filings with the SEC, the following information relating to the price performance of our common stock shall not be deemed “filed” with the [removed: Commission] [added: SEC] under the Securities Exchange Act [removed: of 1934] and shall not be incorporated by reference into any such filings.*

The following graph compares the cumulative [removed: 5-year] [added: five-year] total return attained by stockholders on our common stock relative to the cumulative total returns of the S&P 500 Index and the Philadelphia Semiconductor Index (“PHLX”).

The graph tracks the performance of a $100 investment in our common stock and in each of the indices (with the reinvestment of all dividends) from June 30, [removed: 2018] [added: 2019] to June 30, [removed: 2023.][added: 2024.]

[removed: ][added: ]

| | | | June [removed: 2018] [added: 2019] | | | | | | June [removed: 2019] [added: 2020] | | | | | | June [removed: 2020] [added: 2021] | | | | | | June [removed: 2021] [added: 2022] | | | | | | June [removed: 2022] [added: 2023] | | | | | | June [removed: 2023] [added: 2024] | | |

| April 1, 2024 to April 30, 2024 | | | 247,051 | | | | | | $ | 674.14 | | | | | 247,051 | | | | | | $ | 2,478,282,516 | |

| May 1, 2024 to May 31, 2024 | | | 223,638 | | | | | | $ | 728.15 | | | | | 223,638 | | | | | | $ | 2,315,441,164 | |

| June 1, 2024 to June 30, 2024 | | | 168,498 | | | | | | $ | 802.35 | | | | | 168,498 | | | | | | $ | 2,180,246,686 | |

| Total | | | 639,187 | | | | | | | | | | | | 639,187 | | | | | | | | |

(3)Average price paid per share and approximate dollar value of shares that may yet be purchased under the plans or programs exclude the excise tax imposed on certain stock repurchases as part of the IRA, or other fees, costs or expenses that may be applicable to the repurchases.

| KLA Corporation | | | $100.00 | | | | | | $167.96 | | | | | | $283.88 | | | | | | $282.67 | | | | | | $435.50 | | | | | | $747.40 | | |

| S&P 500 | | | $100.00 | | | | | | $107.51 | | | | | | $151.36 | | | | | | $135.29 | | | | | | $161.80 | | | | | | $201.54 | | |

| PHLX Semiconductor | | | $100.00 | | | | | | $139.33 | | | | | | $236.62 | | | | | | $183.13 | | | | | | $266.96 | | | | | | $402.02 | | |

| April 1, 2023 to April 30, 2023 | | | 310,000 | | | | | | $ | 375.18 | | | | | 310,000 | | | | | | $ | 2,177,535,982 | |

| May 1, 2023 to May 31, 2023 | | | 348,430 | | | | | | $ | 402.18 | | | | | 348,430 | | | | | | $ | 2,037,403,240 | |

| June 1, 2023 to June 30, 2023: | | | 272,954 | | | | | | $ | 466.90 | | | | | 272,954 | | | | | | $ | 1,909,961,490 | |

| Total | | | 931,384 | | | | | | | | | | | | 931,384 | | | | | | | | |

(3)Average price paid per share excludes any excise tax imposed on certain stock repurchases as part of the Inflation Reduction Act of 2022.

| KLA Corporation | | | $100.00 | | | | | | $118.58 | | | | | | $199.17 | | | | | | $336.62 | | | | | | $335.19 | | | | | | $516.42 | | |

| S&P 500 | | | $100.00 | | | | | | $110.42 | | | | | | $118.70 | | | | | | $167.13 | | | | | | $149.39 | | | | | | $178.66 | | |

| PHLX Semiconductor | | | $100.00 | | | | | | $113.31 | | | | | | $157.88 | | | | | | $268.11 | | | | | | $207.50 | | | | | | $302.48 | | |

| [Consolidated Balance Sheets as [removed: of](#i91684fd3dc5042b0b621e61839641767_91)] [added: of](#i36a35c07919f42079eb525a0cac45367_91)] June 30, [added: 2024 [and](#i36a35c07919f42079eb525a0cac45367_91)] 2023 [removed: [and](#i91684fd3dc5042b0b621e61839641767_91) 2022] | | | [removed: [55](#i91684fd3dc5042b0b621e61839641767_91)] [added: [54](#i36a35c07919f42079eb525a0cac45367_91)] | | |

| [Consolidated Statements of Operations for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_94)] [added: ended](#i36a35c07919f42079eb525a0cac45367_94)] June 30, [removed: 2023[](#i91684fd3dc5042b0b621e61839641767_94)] [added: 2024[](#i36a35c07919f42079eb525a0cac45367_94)] | | | [removed: [56](#i91684fd3dc5042b0b621e61839641767_94)] [added: [55](#i36a35c07919f42079eb525a0cac45367_94)] | | |

| [Consolidated Statements of Comprehensive Income for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_97)] [added: ended](#i36a35c07919f42079eb525a0cac45367_97)] June 30, [removed: 2023] [added: 2024] | | | [removed: [57](#i91684fd3dc5042b0b621e61839641767_97)] [added: [56](#i36a35c07919f42079eb525a0cac45367_97)] | | |

| [Consolidated Statements of Stockholders’ Equity for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_100)] [added: ended](#i36a35c07919f42079eb525a0cac45367_100)] June 30, [removed: 2023] [added: 2024] | | | [removed: [58](#i91684fd3dc5042b0b621e61839641767_100)] [added: [57](#i36a35c07919f42079eb525a0cac45367_100)] | | |

| [Consolidated Statements of Cash Flows for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_103)] [added: ended](#i36a35c07919f42079eb525a0cac45367_103)] June 30, [removed: 2023] [added: 2024] | | | [removed: [59](#i91684fd3dc5042b0b621e61839641767_103)] [added: [58](#i36a35c07919f42079eb525a0cac45367_103)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i91684fd3dc5042b0b621e61839641767_106)] [added: Statements](#i36a35c07919f42079eb525a0cac45367_106)] | | | [removed: [60](#i91684fd3dc5042b0b621e61839641767_106)] [added: [59](#i36a35c07919f42079eb525a0cac45367_106)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i91684fd3dc5042b0b621e61839641767_181)] [added: Firm](#i36a35c07919f42079eb525a0cac45367_184)] (PCAOB ID 238) | | | [removed: [102](#i91684fd3dc5042b0b621e61839641767_181)] [added: [102](#i36a35c07919f42079eb525a0cac45367_184)] | | |

| [Schedule II Valuation and Qualifying [removed: Accounts](#i91684fd3dc5042b0b621e61839641767_184)] [added: Accounts](#i36a35c07919f42079eb525a0cac45367_187)] | | | [removed: [104](#i91684fd3dc5042b0b621e61839641767_184)] [added: [104](#i36a35c07919f42079eb525a0cac45367_187)] | | |

| (In thousands, except par value) | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | |

| Cash and cash equivalents [removed: |] [added: at beginning of period] | | [removed: $] | 1,927,865 | | | | | [removed: $] | 1,584,908 | | [added: | | | | 1,434,610 | | |]

| Marketable securities | | | [removed: 1,315,294] [added: 2,526,866] | | | | | | [removed: 1,123,100] [added: 1,315,294] | | |

| Accounts receivable, net | | | [added: $ | 1,833,041 | | | | | $ |] 1,753,361 | | | | | [added: $] | 1,811,877 | | | [added: | | $ | 79,680 | | | | | 5 | | % | | | | $ | (58,516) | | | | | (3) | | % |]

| Inventories | | | [removed: 2,876,784] [added: 3,034,781] | | | | | | [removed: 2,146,889] [added: 2,876,784] | | |

| Other current assets | | | [removed: 498,728] [added: 659,327] | | | | | | [removed: 502,137] [added: 498,728] | | |

| Total current assets | | | [removed: 8,372,032] [added: 10,031,144] | | | | | | [removed: 7,168,911] [added: 8,372,032] | | |

| Land, property and equipment, net | | | [removed: 1,031,841] [added: 1,109,968] | | | | | | [removed: 849,929] [added: 1,031,841] | | |

| Deferred income taxes | | | [removed: 816,899] [added: 915,241] | | | | | | [removed: 579,173] [added: 816,899] | | |

| Purchased intangible assets, net | | | [removed: 935,303] [added: 668,764] | | | | | | [removed: 1,194,414] [added: 935,303] | | |

| Other non-current assets | | | [removed: 637,462] [added: 692,723] | | | | | | [removed: 484,612] [added: 637,462] | | |

| Total assets | | | $ | [removed: 14,072,357] [added: 15,433,566] | | | | | $ | [removed: 12,597,088] [added: 14,072,357] | |

| [removed: LIABILITIES, NON-CONTROLLING INTEREST] [added: LIABILITIES] AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | |

| Accounts payable | | | $ | [removed: 371,026] [added: 359,487] | | | | | $ | [removed: 443,338] [added: 371,026] | |

| Deferred system revenue | | | [removed: 651,720] [added: 985,856] | | | | | | [removed: 500,969] [added: 651,720] | | |

| Deferred service revenue | | | [removed: 416,606] [added: 501,926] | | | | | | [removed: 381,737] [added: 416,606] | | |

| Other current liabilities | | | [removed: 2,303,490] [added: 2,063,569] | | | | | | [removed: 1,545,039] [added: 2,303,490] | | |

| Total current liabilities | | | [removed: 3,742,842] [added: 4,660,774] | | | | | | [removed: 2,871,083] [added: 3,742,842] | | |

| Long-term debt | | | [removed: 5,890,736] [added: 5,880,199] | | | | | | [removed: 6,660,718] [added: 5,890,736] | | |

| Deferred tax liabilities | | | [removed: 529,287] [added: 486,690] | | | | | | [removed: 658,937] [added: 529,287] | | |

| Deferred service revenue | | | [removed: 176,681] [added: 294,460] | | | | | | [removed: 124,618] [added: 176,681] | | |

| Other non-current liabilities | | | [removed: 813,058] [added: 743,115] | | | | | | [removed: 882,642] [added: 813,058] | | |

| Total liabilities | | | [removed: 11,152,604] [added: 12,065,238] | | | | | | [removed: 11,197,998] [added: 11,152,604] | | |

| Common stock, $0.001 par value, 500,000 shares authorized, [removed: 279,995] [added: 280,649] and [removed: 279,210] [added: 279,995] shares issued, [removed: 136,750] [added: 134,425] and [removed: 141,804] [added: 136,750] shares outstanding, as of June 30, [removed: 2023] [added: 2024] and June 30, [removed: 2022,] [added: 2023,] respectively | | | [removed: 137] [added: 134] | | | | | | [removed: 142] [added: 137] | | |

| Capital in excess of par value | | | [removed: 2,107,526] [added: 2,279,999] | | | | | | [removed: 1,061,798] [added: 2,107,526] | | |

| Retained earnings | | | [removed: 848,431] [added: 1,137,270] | | | | | | [removed: 366,882] [added: 848,431] | | |

| Accumulated other comprehensive loss | | | [removed: (36,341)] [added: (49,075)] | | | | | | [removed: (27,471)] [added: (36,341)] | | |

| Total [removed: KLA] stockholders’ equity | | | [removed: 2,919,753] [added: 3,368,328] | | | | | | [removed: 1,401,351] [added: 2,919,753] | | |

| Total liabilities and stockholders’ equity | | | $ | [removed: 14,072,357] [added: 15,433,566] | | | | | $ | [removed: 12,597,088] [added: 14,072,357] | |

| (In thousands, except per share amounts) | | | [removed: 2023] [added: 2024] | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | |

| Product | | | $ | [removed: 8,379,025] [added: 7,482,679] | | | | | $ | [removed: 7,301,428] [added: 8,379,025] | | | | | $ | [removed: 5,240,316] [added: 7,301,428] | |

| Service | | | [removed: 2,117,031] [added: 2,329,568] | | | | | | [removed: 1,910,455] [added: 2,117,031] | | | | | | [removed: 1,678,418] [added: 1,910,455] | | |

| Cash and cash equivalents | | | $ | 1,977,129 | | | | | $ | 1,927,865 | |

| Accounts receivable, net | | | 1,833,041 | | | | | | 1,753,361 | | |

| Goodwill, net | | | 2,015,726 | | | | | | 2,278,820 | | |

| Current portion of long-term debt | | | 749,936 | | | | | | — | | |

| Impairment of goodwill and purchased intangible assets | | | 289,474 | | | | | | — | | | | | | — | | |

| Other comprehensive loss | | | — | | | | | | — | | | | | | — | | | | | | (12,734) | | | | | | (12,734) | | | | | | — | | | | | | (12,734) | | |

| Repurchase of common stock | | | (3,032) | | | | | | (42,133) | | | | | | (1,700,368) | | | | | | — | | | | | | (1,742,501) | | | | | | — | | | | | | (1,742,501) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balances as of June 30, 2024 | | | 134,425 | | | | | | $ | 2,280,133 | | | | | $ | 1,137,270 | | | | | $ | (49,075) | | | | | $ | 3,368,328 | | | | | $ | — | | | | | $ | 3,368,328 | |

| Net income | | | $ | 2,761,896 | | | | | $ | 3,387,351 | | | | | $ | 3,322,060 | |

| Impairment of goodwill and purchased intangible assets | | | 289,474 | | | | | | 9,905 | | | | | | 5,962 | | |

| Loss on extinguishment of debt | | | — | | | | | | 13,286 | | | | | | — | | |

Refer to Note 7 “Goodwill and Purchased Intangible Assets” for information related to determining the fair value of a reporting unit.

We determine whether long-lived assets are recoverable based on the forecasted undiscounted future cash flows that are expected to be generated by the lowest-level associated asset grouping.

If the undiscounted cash flows used in the recoverability test are less than the long-lived assets’ carrying value, we recognize an impairment loss for the amount that the carrying value exceeds the fair value.

We determine the fair value of long-lived assets using the income approach, primarily by applying the relief-from-royalty or multi-period excess-earnings methods, when deemed appropriate.

| 2024 | | | | | | 2023 | | |

Current income tax expense represents taxes paid or payable for the current period.

A valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on historical and projected future taxable income over the periods in which the temporary differences are expected to be recovered or settled.

This income is effectively taxed at a 10.5% tax rate in general.

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures*.

The new guidance requires enhanced disclosures about significant segment expenses.

Early adoption is permitted on a retrospective basis.

We are currently evaluating the impact of this ASU on our segment disclosures.

In December 2023, the FASB issued ASU 2023-09, *Income Taxes (Topic 740), Improvements to Income Tax Disclosures*.

The new guidance requires enhanced disclosures about income tax expenses.

Early adoption is permitted on a prospective basis.

We are currently evaluating the impact of this ASU on our annual income tax disclosures.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

The timing of revenue recognition of our RPO is evaluated quarterly and is largely driven by multiple variables, many of which are beyond our control, such as: the readiness of customer fabs, end market needs for capacity, changes in the estimated versus actual start time of customers’ projects, timing of delivery and installation dates, supply chain constraints and changes in regulations.

In October 2023, the U.S. government issued additional regulations that went into effect in November 2023.

These additional rules are designed to update export controls on advanced computing semiconductors and semiconductor manufacturing equipment, as well as items that support supercomputing applications and end-uses, to arms embargoed countries, including China.

They adjust the parameters included in the existing regulations that determine whether an advanced computing chip is restricted and impose new measures to address risks of circumvention of the controls established in October 2022.

The regulations are very complex and, in January 2024, KLA, among other companies, submitted comments to the government regarding these regulations.

The fair value of our cash

| U.S. Treasury securities | | | 716,148 | | | | | | 476,230 | | | | | | 239,918 | | | | | | — | | |

| Total cash equivalents and marketable securities(1) | | | 3,283,969 | | | | | | 2,193,502 | | | | | | 1,090,467 | | | | | | — | | |

| EDSP | | | 303,365 | | | | | | 272,816 | | | | | | 30,549 | | | | | | — | | |

| Total financial assets(1) | | | $ | 3,623,837 | | | | | $ | 2,466,318 | | | | | $ | 1,157,519 | | | | | $ | — | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Goodwill | | | 2,278,820 | | | | | | 2,320,049 | | |

| Non-controlling interest in consolidated subsidiaries | | | — | | | | | | (2,261) | | |

| Total stockholders’ equity | | | 2,919,753 | | | | | | 1,399,090 | | |

| | | | | | | | | | | | | | | | | | |

| Balances as of June 30, 2020 | | | 155,461 | | | | | | $ | 2,090,268 | | | | | $ | 654,930 | | | | | $ | (79,774) | | | | | $ | 2,665,424 | | | | | $ | 15,586 | | | | | $ | 2,681,010 | |

| Adoption of ASC 326 | | | — | | | | | | — | | | | | | (5,530) | | | | | | — | | | | | | (5,530) | | | | | | — | | | | | | (5,530) | | |

| Net loss attributable to non-controlling interest | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (939) | | | | | | (939) | | |

| Other comprehensive income | | | — | | | | | | — | | | | | | — | | | | | | 4,217 | | | | | | 4,217 | | | | | | — | | | | | | 4,217 | | |

| Repurchase of common stock | | | (3,658) | | | | | | (55,414) | | | | | | (889,193) | | | | | | — | | | | | | (944,607) | | | | | | — | | | | | | (944,607) | | |

| Net issuance on exercise of option by non-controlling interest | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 127 | | | | | | 127 | | |

| Gain on fair value adjustment of marketable equity securities | | | — | | | | | | — | | | | | | (26,719) | | |

| Purchase of non-controlling interest | | | (4,295) | | | | | | — | | | | | | — | | |

| Cash and cash equivalents at beginning of period | | | 1,584,908 | | | | | | 1,434,610 | | | | | | 1,234,409 | | |

Comparability. Effective on the first day of fiscal 2022, we adopted an Accounting Standards Update (“ASU”) to simplify the accounting for income taxes in Accounting Standards Codification (“ASC”) 740, Income Taxes (“ASC 740”), on a prospective basis.

We also adopted an ASU to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity, on a modified retrospective basis.

The adoption of these updates had no material impact on our Consolidated Financial Statements.

previously recognized allowance for credit losses with an offsetting entry to the security’s amortized cost basis.

If impairment indicators are present, we are required to perform a recoverability test by comparing the carrying value of the asset to the following: in the case of finite-lived intangible assets, the sum of the estimated undiscounted future cash flows attributable to these long-lived assets, or in the case of indefinite-lived intangible assets, its fair value.

The former is performed when the fair value of a reporting unit historically has significantly exceeded the carrying value of its net assets and, based on current operations, is expected to continue to do so.

We determine the fair value of a reporting unit using the income approach which uses discounted cash flow analysis, the market approach when deemed appropriate and the necessary information is available, or a combination of both.

If the fair value of a reporting unit is less than its carrying value, a goodwill impairment charge is recorded for the difference.

See Note 7 “Goodwill and Purchased Intangible Assets” for additional information.

Any further impairment charges could have a material adverse effect on our operating results and net asset value in the quarter and fiscal year in which we recognize the impairment charge.

An impairment loss is recognized when

estimated future cash flows expected to result from the use of the asset, including disposition, are less than the carrying value of the asset.

Such an impairment charge would be measured as the excess of the carrying value of the asset over its fair value.

based upon quoted market prices for comparable instruments adjusted for risk of counterparty non-performance.

The guidance also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

We have determined that a valuation allowance is necessary against a portion of the deferred tax assets, but we anticipate that our future taxable income will be sufficient to recover the remainder of our deferred tax assets.

However, should there be a change in our ability to recover our deferred tax assets that are not subject to a valuation allowance, we could be required to record an additional valuation allowance against such deferred tax assets.

This would result in an increase to our tax provision in the period in which we determine that the recovery is not probable.

On a quarterly basis, we provide for income taxes based upon an estimated annual effective income tax rate.

The effective tax rate is highly dependent upon the geographic composition of worldwide earnings, tax regulations governing each region, availability of tax credits and the effectiveness of our tax planning strategies.

We carefully monitor the changes in many factors and adjust our effective income tax rate on a timely basis.

If actual results differ from these estimates, this could have a material effect on our financial condition and results of operations.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations.

We reevaluate these uncertain tax positions on a quarterly basis.

This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit and new audit activities.

Any change in these factors could result in the recognition of a tax benefit or an additional charge to the tax provision.

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act [removed: of 1934, as amended (the “Exchange Act”))] (“Disclosure Controls”) as of the end of the period covered by this Annual Report on Form 10-K (this “Report”) required by [added: Securities] Exchange Act Rules 13a-15(b) or 15d-15(b).

Based on this evaluation, the CEO and CFO have concluded that as of June 30, [removed: 2023,] [added: 2024,] the end of the period covered by this Report, our Disclosure Controls were effective at a reasonable assurance level.

Attached as exhibits to this Report are certifications of the CEO and CFO, which are required in accordance with Rule 13a-14 of the [added: Securities] Exchange Act.

Disclosure Controls are controls and procedures designed to reasonably assure that information required to be disclosed in our reports filed or submitted under the [added: Securities] Exchange Act, such as this Report, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the [added: Securities] Exchange Act.

Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of June 30, [removed: 2023.][added: 2024.]

The effectiveness of our internal control over financial reporting as of June 30, [removed: 2023] [added: 2024] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which appears in Item 8, “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the [added: Securities] Exchange Act that occurred during the fourth quarter of the fiscal year ended June 30, [removed: 2023] [added: 2024] that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

[removed: In] [added: During] the [removed: fourth quarter of fiscal 2023,] [added: three months ended June 30, 2024,] the following officers [added: of the Company] adopted trading plans to sell [added: and/or gift] shares of our common stock that have been or will be issued upon the vesting of RSUs, or purchased in our [removed: employee stock purchase plan,] [added: Employee Stock Purchase Plan,] that are intended to satisfy the affirmative defense [removed: condition] [added: conditions] set forth in Rule 10b5-1(c) under the [added: Securities] Exchange Act.

| Name of Officer | | | Title of Officer | | | Date of Adoption | | | Duration | | | Maximum Number of Shares to be [removed: Sold*] [added: Sold* ^] | | |

Mr. [removed: Kirloskar’s] [added: Higgins’] trading plan terminates when the last trade is placed under the plan.

The last scheduled trade is on [removed: August 14, 2023;] [added: May 22, 2025;] provided that if any scheduled trades are not placed because of trading conditions set forth in the plan, the trading plan will terminate on [removed: May 3, 2024.][added: June 30, 2025.]

| Bren Higgins | | | Executive Vice President and Chief Financial Officer | | | April 30, 2024 | | | 427 days | | | 19,666 | | |

^ For RSUs that have not vested, the maximum number of shares to be sold does not take into account shares withheld for taxes.

| Virendra Kirloskar | | | Senior Vice President and Chief Accounting Officer | | | May 3, 2023 | | | 366 days | | | 4,712 | | |

| Ahmad Khan | | | President, Semiconductor Process Control | | | June 2, 2023 | | | 179 days* | | | 27,696 | | |

* Mr. Khan’s trading plan terminates when the last trade is placed under the plan.

The last scheduled trade is on November 10, 2023; provided that if any scheduled trades are not placed because of trading conditions set forth in the plan, the trading plan will terminate on November 28, 2023.

For the information required by this Item, see “Proposal Two: Ratification of Appointment of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm for the Fiscal Year Ending June 30, [removed: 2024”] [added: 2025”] in the Proxy Statement, which is incorporated herein by reference.

| [Consolidated Balance Sheets as [removed: of](#i91684fd3dc5042b0b621e61839641767_91)] [added: of](#i36a35c07919f42079eb525a0cac45367_91)] June 30, [added: 2024 [and](#i36a35c07919f42079eb525a0cac45367_91)] 2023 [removed: [and](#i91684fd3dc5042b0b621e61839641767_91) 2022] | | | [removed: [55](#i91684fd3dc5042b0b621e61839641767_91)] [added: [54](#i36a35c07919f42079eb525a0cac45367_91)] | | |

| [Consolidated Statements of Operations for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_94)] [added: ended](#i36a35c07919f42079eb525a0cac45367_94)] June 30, [removed: 2023] [added: 2024] | | | [removed: [56](#i91684fd3dc5042b0b621e61839641767_94)] [added: [55](#i36a35c07919f42079eb525a0cac45367_94)] | | |

| [Consolidated Statements of Comprehensive Income for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_97)] [added: ended](#i36a35c07919f42079eb525a0cac45367_97)] June 30, [removed: 2023] [added: 2024] | | | [removed: [57](#i91684fd3dc5042b0b621e61839641767_97)] [added: [56](#i36a35c07919f42079eb525a0cac45367_97)] | | |

| [Consolidated Statements of Stockholders’ Equity for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_100)] [added: ended](#i36a35c07919f42079eb525a0cac45367_100)] June 30, [removed: 2023] [added: 2024] | | | [removed: [58](#i91684fd3dc5042b0b621e61839641767_100)] [added: [57](#i36a35c07919f42079eb525a0cac45367_100)] | | |

| [Consolidated Statements of Cash Flows for each of the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_103)] [added: ended](#i36a35c07919f42079eb525a0cac45367_103)] June 30, [removed: 2023] [added: 2024] | | | [removed: [59](#i91684fd3dc5042b0b621e61839641767_103)] [added: [58](#i36a35c07919f42079eb525a0cac45367_103)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i91684fd3dc5042b0b621e61839641767_106)] [added: Statements](#i36a35c07919f42079eb525a0cac45367_106)] | | | [removed: [60](#i91684fd3dc5042b0b621e61839641767_106)] [added: [59](#i36a35c07919f42079eb525a0cac45367_106)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i91684fd3dc5042b0b621e61839641767_181)] [added: Firm](#i36a35c07919f42079eb525a0cac45367_184)] (PCAOB ID 238) | | | [removed: [102](#i91684fd3dc5042b0b621e61839641767_181)] [added: [102](#i36a35c07919f42079eb525a0cac45367_184)] | | |

| [Schedule II—Valuation and Qualifying Accounts for the three years in the period [removed: ended](#i91684fd3dc5042b0b621e61839641767_184)] [added: ended](#i36a35c07919f42079eb525a0cac45367_187)] June 30, [removed: 2023] [added: 2024] | | | [removed: [104](#i91684fd3dc5042b0b621e61839641767_184)] [added: [104](#i36a35c07919f42079eb525a0cac45367_187)] | | |

| [removed: [3.2](https://www.sec.gov/Archives/edgar/data/319201/000162828021009547/amendedandrestatedbylawsma.htm)] [added: [3.2](https://www.sec.gov/Archives/edgar/data/319201/000119312522277886/d381333dex31.htm)] | | | | | | [Amended and Restated [removed: Bylaws](https://www.sec.gov/Archives/edgar/data/319201/000162828021009547/amendedandrestatedbylawsma.htm)] [added: Bylaws](https://www.sec.gov/Archives/edgar/data/319201/000119312522277886/d381333dex31.htm)] | | | | | | 8-K | | | | | | No. 000-09992 | | | | | | 3.1 | | | | | | November 4, 2022 | | |

| [4.1](http://www.sec.gov/Archives/edgar/data/319201/000119312514403628/d817441dex41.htm) | | | | | | [Indenture dated November 6, 2014 between KLA-Tencor Corporation and Wells Fargo Bank, National Association, as [removed: trustee](http://www.sec.gov/Archives/edgar/data/319201/000119312514403628/d817441dex41.htm)] [added: trustee](https://www.sec.gov/Archives/edgar/data/319201/000119312514403628/d817441dex41.htm)] | | | | | | 8-K | | | | | | No. 000-09992 | | | | | | 4.1 | | | | | | November 7, 2014 | | |

| [4.2](http://www.sec.gov/Archives/edgar/data/319201/000119312514403628/d817441dex42.htm) | | | | | | [Form of Officer’s Certificate setting forth the terms of the Notes (with form of Notes [removed: attached)](http://www.sec.gov/Archives/edgar/data/319201/000119312514403628/d817441dex42.htm)] [added: attached)](https://www.sec.gov/Archives/edgar/data/319201/000119312514403628/d817441dex42.htm)] | | | | | | 8-K | | | | | | No. 000-09992 | | | | | | 4.2 | | | | | | November 7, 2014 | | |

| [4.5](http://www.sec.gov/Archives/edgar/data/319201/000119312519080819/d725080dex42.htm) | | | | | | [Form of Officer’s Certificate setting forth the terms of the 4.100% Senior Notes due 2029 and 5.000% Senior Notes due 2049 (with form of Notes [removed: attached)](http://www.sec.gov/Archives/edgar/data/319201/000119312519080819/d725080dex42.htm)] [added: attached)](https://www.sec.gov/Archives/edgar/data/319201/000119312519080819/d725080dex42.htm)] | | | | | | 8-K | | | | | | No. 000-09992 | | | | | | 4.2 | | | | | | March 20, 2019 | | |

| [removed: [4.7](https://www.sec.gov/Archives/edgar/data/319201/000031920120000057/klac10-qex41093020.htm)] [added: [4.8](https://www.sec.gov/Archives/edgar/data/319201/000031920120000057/klac10-qex41093020.htm)] | | | | | | [Description of the Registrant’s securities registered under Section 12 of the Securities Act of 1934](https://www.sec.gov/Archives/edgar/data/319201/000031920120000057/klac10-qex41093020.htm) | | | | | | 10-Q | | | | | | No. 000-09992 | | | | | | 4.1 | | | | | | October 30, 2020 | | |

| [10.1](https://www.sec.gov/Archives/edgar/data/319201/000162828018014017/exhibit101eip.htm) | | | | | | [2004 Equity Incentive Plan (as amended and restated (as of November 7, [removed: 2018))*](http://www.sec.gov/Archives/edgar/data/319201/000162828018014017/exhibit101eip.htm)] [added: 2018))*](https://www.sec.gov/Archives/edgar/data/319201/000162828018014017/exhibit101eip.htm)] | | | | | | S-8 | | | | | | No. 228283 | | | | | | 10.1 | | | | | | November 8, 2018 | | |

| [10.7](http://www.sec.gov/Archives/edgar/data/319201/000031920116000105/exhibit101amendedandrestat.htm) | | | | | | [Amended and Restated Executive Severance [removed: Plan*](http://www.sec.gov/Archives/edgar/data/319201/000031920116000105/exhibit101amendedandrestat.htm)] [added: Plan*](https://www.sec.gov/Archives/edgar/data/319201/000031920116000105/exhibit101amendedandrestat.htm)] | | | | | | 8-K | | | | | | No. 000-09992 | | | | | | 10.1 | | | | | | October 20, 2016 | | |

| [10.8](http://www.sec.gov/Archives/edgar/data/319201/000031920115000060/klac10qex10459302015.htm) | | | | | | [Amended and Restated 2010 Executive Severance [removed: Plan*](http://www.sec.gov/Archives/edgar/data/319201/000031920115000060/klac10qex10459302015.htm)] [added: Plan*](https://www.sec.gov/Archives/edgar/data/319201/000031920115000060/klac10qex10459302015.htm)] | | | | | | 10-Q | | | | | | No. 000-09992 | | | | | | 10.45 | | | | | | October 22, 2015 | | |

| [removed: [10.9](https://www.sec.gov/Archives/edgar/data/319201/000031920123000020/klac10qex101033123.htm)] [added: [10.9](https://www.sec.gov/Archives/edgar/data/319201/000031920124000012/klac10-qex10133124.htm)] | | | | | | [Calendar Year [removed: 202](https://www.sec.gov/Archives/edgar/data/319201/000031920123000020/klac10qex101033123.htm)[3](https://www.sec.gov/Archives/edgar/data/319201/000031920123000020/klac10qex101033123.htm)] [added: 202](https://www.sec.gov/Archives/edgar/data/319201/000031920124000012/klac10-qex10133124.htm)[4](https://www.sec.gov/Archives/edgar/data/319201/000031920124000012/klac10-qex10133124.htm)] [Executive Incentive [removed: Plan*+](https://www.sec.gov/Archives/edgar/data/319201/000031920123000020/klac10qex101033123.htm)] [added: Plan*+](https://www.sec.gov/Archives/edgar/data/319201/000031920124000012/klac10-qex10133124.htm)] | | | | | | 10-Q | | | | | | No. 000-09992 | | | | | | 10.1 | | | | | | April [removed: 28, 2023] [added: 26, 2024] | | |

| [10.11](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm) | | | | | | [Form of Restricted Stock [removed: Unit](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm) [Award](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm) [N](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm)[ot](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm)[ification](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm) [and](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm) [A](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm)[greement](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm) [(S](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm)[pecial](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm) [Awards](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm)[)*+](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm)] [added: Unit Award Notification and Agreement (Special Awards)*+](https://www.sec.gov/Archives/edgar/data/319201/000162828022027311/klac10-qex101093022.htm)] | | | | | | 10-Q | | | | | | No. 000-09992 | | | | | | 10.1 | | | | | | October 28, 2022 | | |

| [19.1](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit19106302023.htm) | | | | | | [Policy on Insider Trading and Unauthorized Disclosures](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit19106302023.htm) | | | | | | [added: 10-K] | | | | | | [added: No. 000-09992] | | | | | | [added: 19.1] | | | | | | [added: August 4, 2023] | | |

| [removed: [21.1](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit21106302023.htm)] [added: [21.1](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/exhibit21106302024.htm)] | | | | | | [List of [removed: Subsidiaries](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit21106302023.htm)] [added: Subsidiaries](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/exhibit21106302024.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | |

| [removed: [23.1](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit23106302023.htm)] [added: [23.1](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/exhibit23106302024.htm)] | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit23106302023.htm)] [added: Firm](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/exhibit23106302024.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | |

| [removed: [31.1](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit31106302023.htm)] [added: [31.1](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/exhibit31106302024.htm)] | | | | | | [Certification of Chief Executive Officer under Rule 13a-14(a)/15d - 14(a) of the Securities Exchange Act of [removed: 1934](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit31106302023.htm)] [added: 1934](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/exhibit31106302024.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | |

| [removed: [31.2](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit31206302023.htm)] [added: [31.2](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/exhibit31206302024.htm)] | | | | | | [Certification of Chief Financial Officer under Rule 13a-14(a)/15d - 14(a) of the Securities Exchange Act of [removed: 1934](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit31206302023.htm)] [added: 1934](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/exhibit31206302024.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | |

| [removed: [32](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit3206302023.htm)] [added: [32](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/exhibit3206302024.htm)] | | | | | | [Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section [removed: 1350^](https://www.sec.gov/Archives/edgar/data/319201/000031920123000031/exhibit3206302023.htm)] [added: 1350^](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/exhibit3206302024.htm)] | | | | | | | | | | | | | | | | | | | | | | | | | | |

| [4.7](https://www.sec.gov/Archives/edgar/data/319201/000119312524021853/d723684dex42.htm) | | | | | | [Officer’s Certificate, dated February 1, 2024, including the form of the Company’s 4.700% Senior Notes due 2034](https://www.sec.gov/Archives/edgar/data/319201/000119312524021853/d723684dex42.htm) | | | | | | 8-K | | | | | | No. 000-09992 | | | | | | 4.2 | | | | | | February 1, 2024 | | |

| [10.12](https://www.sec.gov/Archives/edgar/data/319201/000119312523270369/d529224dex101.htm) | | | | | | [KLA Corporation 2023 Incentive Award Plan](https://www.sec.gov/Archives/edgar/data/319201/000119312523270369/d529224dex101.htm) | | | | | | 8-K | | | | | | No. 000-09992 | | | | | | 10.1 | | | | | | November 3, 2023 | | |

| [10.13](https://www.sec.gov/Archives/edgar/data/319201/000031920124000006/klac10-qex102123123.htm) | | | | | | [KLA Corporation 2023 Incentive Award Plan Global Restricted Stock Unit Agreement](https://www.sec.gov/Archives/edgar/data/319201/000031920124000006/klac10-qex102123123.htm) | | | | | | 10-Q | | | | | | No. 000-09992 | | | | | | 10.2 | | | | | | January 26, 2024 | | |

| [97.1](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/klac10kex971.htm) | | | | | | [Policy for Recovery of Erroneously Awarded Compensation](https://www.sec.gov/Archives/edgar/data/319201/000031920124000021/klac10kex971.htm) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| August [removed: 3, 2023] [added: 2, 2024] | | | | | | By: | | | | | | /S/ RICHARD P. WALLACE | | |

| /s/ RICHARD P. WALLACE | | | | | | President, Chief Executive Officer and Director (principal executive officer) | | | | | | August [removed: 3, 2023] [added: 2, 2024] | | |

| /s/ BREN D. HIGGINS | | | | | | Executive Vice President and Chief Financial Officer (principal financial officer) | | | | | | August [removed: 2, 2023] [added: 1, 2024] | | |

| /s/ VIRENDRA A. KIRLOSKAR | | | | | | Senior Vice President and Chief Accounting Officer (principal accounting officer) | | | | | | August [removed: 2, 2023] [added: 1, 2024] | | |

| /s/ ROBERT M. CALDERONI | | | | | | Chairman of the Board and Director | | | | | | August [removed: 2, 2023] [added: 1, 2024] | | |

| /s/ JENEANNE HANLEY | | | | | | Director | | | | | | August [removed: 3, 2023] [added: 1, 2024] | | |

| /s/ EMIKO HIGASHI | | | | | | Director | | | | | | August [removed: 2, 2023] [added: 1, 2024] | | |

| /s/ KEVIN J. KENNEDY | | | | | | Director | | | | | | August [removed: 2, 2023] [added: 1, 2024] | | |

| /s/ MICHAEL R. MCMULLEN | | | | | | Director | | | | | | August [removed: 2, 2023] [added: 1, 2024] | | |

| /s/ GARY B. MOORE | | | | | | Director | | | | | | August [removed: 3, 2023] [added: 1, 2024] | | |

| /s/ MARIE MYERS | | | | | | Director | | | | | | August [removed: 2, 2023] [added: 1, 2024] | | |

| /s/ VICTOR PENG | | | | | | Director | | | | | | August [removed: 2, 2023] [added: 1, 2024] | | |

| /s/ ROBERT A. RANGO | | | | | | Director | | | | | | August 2, [removed: 2023] [added: 2024] | | |

| | | | | | | | | | | | | | | |

| /s/ KIRAN M. PATEL | | | | | | Director | | | | | | August 2, 2023 | | |

| Kiran M. Patel | | | | | | | | | | | | | | |