Bren Higgins
Executive Vice President and Chief Financial Officer at KLA
Thank you, Rick. KLA's quarterly results demonstrated the consistent execution of our global team. Despite the challenges and complexity of the current industry environment, KLA continues to show resourcefulness and the ability to adapt to meeting customers' changing requirements.
Quarterly revenue was $2.36 billion, above the guidance midpoint of $2.3 billion. Non-GAAP diluted EPS was $5.26, above the guidance midpoint of $4.83. GAAP diluted EPS was $4.43, above the guidance midpoint of $4.06. In the March quarter, both non-GAAP and GAAP diluted EPS were negatively impacted by a $62 million charge for excess and obsolete inventory related to the Company's strategic decision to exit the flat panel display business announced on March 18. This charge had a $0.40 impact on EPS. Excluding this item, diluted non-GAAP EPS would have been $5.66.
Non-GAAP gross margin was 59.8% above the top-end of the revised guidance range. Excluding the FPD charge, non-GAAP gross margin would have been 62.4% and roughly flat sequentially. Non-GAAP operating expenses were flat sequentially at $544 million, comprised of $320 million in R&D and $224 million in SG&A. Non-GAAP EPS at the 13.5% guided tax rate would have been $0.04 higher or $5.30.
Non-GAAP operating margin was 36.8%. Non-GAAP other income and expense net was a $34 million expense and the quarterly non-GAAP effective tax rate was 14.2%. Quarterly non-GAAP net income was $715 million, GAAP net income was $602 million, cash flow from operations was $910 million, and free cash flow was $838 million.
The breakdown of revenue by reportable segments, end markets and major products and regions can be found within the shareholder letter and slides.
Turning to the balance sheet. KLA ended the quarter with $4.3 billion in total cash, cash equivalents, and marketable securities, debt of $6.7 billion, and a flexible and attractive bond maturity profile supported by strong investment-grade ratings from all three agencies.
On February 1, KLA issued $500 million of 4.7% senior notes due in 2034 and $250 million of 4.95% senior notes due in 2052. The Company expects to use the net proceeds from the notes operating for general corporate purposes, including the repayment of outstanding indebtedness at or prior to maturity.
Moving to our outlook. We remain encouraged by constructive customer discussions around their future investment plans, which are further supported by recent reports of an improving end market demand environment and customer profitability. Consistent with these industry trends, as we indicated last quarter, we believe our business bottomed from a revenue perspective in the March quarter, and looking ahead through the balance of calendar '24, growth is resuming in the June quarter and we expect business levels to improve as we progress through the year.
For calendar 2024, our high-level outlook remains unchanged. We still expect WFE demand to be roughly flat to modestly up from 2023 and that the second half of the calendar year will be stronger than the first half.
KLA's June quarter guidance is as follows. Revenue of $2.5 billion, plus or minus $125 million. Foundry/Logic revenue from semiconductor customers is forecasted to be approximately 82% and Memory is expected to be 18% of Semi Process Control systems revenue.
Within Memory, DRAM is expected to be about 78% of the segment mix and NAND the remaining 22%. Non-GAAP gross margin is forecasted to be in a range of 61.5%, plus or minus 1 percentage point based on product mix expectations.
For calendar 2024, based on current industry outlook, top-line growth expectations, higher forecasted growth in services, and expected systems product mix, we are modeling non-GAAP gross margins to be relatively stable around the mid-61% range. Variability quarter-to-quarter is typically driven by product mix fluctuations.
Non-GAAP operating expenses are forecasted in the June quarter to be approximately $550 million as our merit adjustment process occurred in the March quarter.
Looking ahead, we continue to expect $5 million to $10 million incremental growth in quarterly operating expenses for the remainder of calendar 2024, supported by expected revenue growth.
Other model assumptions for the June quarter include non-GAAP other income and expense net of approximately a $38 million expense, GAAP diluted EPS is expected to be $5.66 plus or minus $0.60 and non-GAAP diluted EPS of $6.07 plus or minus $0.60. EPS guidance is based on a fully diluted share count of approximately 135.4 million shares.
In conclusion, as we articulated 12 weeks ago, we are encouraged with the indicators of improvement ranging from our customers' conversations to the public reports over the past few months. KLA remains focused on delivering a differentiated product portfolio that anticipates customers' technology roadmap requirements and drives our longer-term growth expectations.
With the KLA operating model guiding best-in-class execution, KLA continues to implement strategic objectives, which are geared to drive outperformance. With a focus on customer success, delivering innovative and differentiated solutions, and operational excellence, KLA is able to deliver industry-leading financial and free cash flow performance and return capital consistently.
The past few years have solidified our confidence in the increasing importance of process control and enabling technology advancements and optimizing yield across a high semiconductor device design mix volume production environment. This bodes well for KLA's long-term growth outlook as near-term industry demand trends are continuing to improve.
In alignment with this, KLA's business is improving and the long-term secular trends driving semiconductor industry demand and investments in WFE remain intact in both legacy and leading-edge markets.
That concludes the prepared remarks. Kevin, let's begin the Q&A.
