KLA (KLAC) risk factors, FY2025 10-K

Other

1. 01If we are unable to timely and appropriately adapt to changes resulting from difficult macroeconomic conditions, our business, financial condition or results of operations may be materially and adversely affected
2. 02Any of the factors above could have a significant negative impact on our business and results of operations
3. 03Additionally, the Chinese government has adopted, and may further adopt, new regulations, in response to U.S. government actions, which could adversely affect our ability to do business in China
4. 04Recently announced and future U.S. tariffs or other restrictions placed on imports, retaliatory trade measures taken by other countries and resulting trade wars may have a material adverse impact on our results of operations
5. 05make and execute business and capital equipment investment plans or increase supply chain complexity, which may have an impact on our ability to source the materials necessary to manufacture our products
6. 06We might be involved in claims or disputes related to IP or other confidential information that may be costly to resolve, prevent us from selling or using the challenged technology and seriously harm our operating results and financial condition
7. 07We are exposed to various risks related to the legal, regulatory and tax environments in which we perform our operations and conduct our business
8. 08Differing expectations, requirements and attention to ESG matters from our stakeholders, including any targets or other ESG initiatives, could result in additional costs or risks or adversely impact our business
9. 09We depend on key personnel to manage our business effectively, and if we are unable to attract, retain and motivate our key employees, our sales and product development could be harmed
10. 10We outsource a number of services to third-party service providers, which decreases our control over the performance of these functions. Disruptions or delays at our third-party service providers could adversely impact our operations
11. 11We 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
12. 12We rely upon certain critical information systems for our daily business operations. Our inability to use or access our information systems at critical points in time could unfavorably impact our business operations
13. 13We cannot provide any assurance that alternate means of conducting our operations (whether through alternate production capacity or service providers or otherwise) would be available if a major disruption were to occur or that, if such alternate means were available, they could be obtained on favorable terms
14. 14We are predominantly uninsured for losses and interruptions caused by terrorist acts and acts of war. If international political instability or geopolitical tensions continue or increase, our business and results of operations could be harmed
15. 15We self-insure certain risks including earthquake risk. If one or more of the uninsured events occurs, we could suffer major financial loss
16. 16We are exposed to foreign currency exchange rate fluctuations. Although we hedge certain currency risks, we may still be adversely affected by changes in foreign currency exchange rates or declining economic conditions in these countries
17. 17We are exposed to fluctuations in interest rates and the market values of our portfolio investments, and an impairment of our investments could harm our earnings. In addition, we and our stockholders are exposed to risks related to the volatility of the market for our common stock
18. 18We are exposed to risks in connection with tax and regulatory compliance audits in various jurisdictions
19. 19A change in our effective tax rate can have a significant adverse impact on our business
20. 20Compliance with federal securities laws, rules and regulations, as well as NASDAQ requirements, has become increasingly complex, and the significant attention and expense we must devote to those areas may have an adverse impact on our business
21. 21A change in accounting standards or practices or a change in existing taxation rules or practices (or changes in interpretations of such standards, practices or rules) can have a significant effect on our reported results and may even affect reporting of transactions completed before the change is effective
22. 22Ongoing changes in the technology industry, as well as the semiconductor industry in particular, could expose our business to significant risks
23. 23We are exposed to risks associated with a highly concentrated customer base
24. 24Any of these factors could have a material adverse effect on our business, financial condition and operating results
25. 25We are exposed to risks related to the use of AI by us, our competitors and other third parties

Risks Related to Our Business Model and Capital Structure

1. 26If we do not develop and introduce new products and technologies in a timely manner in response to changing market conditions or customer requirements, our business could be seriously harmed
2. 27Our success is dependent in part on our technology and other proprietary rights. If we are unable to maintain our lead or protect our proprietary technology, we may lose valuable assets
3. 28We also maintain trademarks on certain of our products and services and claim copyright protection for certain proprietary software and documentation. However, we can give no assurance that our trademarks and copyrights will be upheld or successfully deter infringement by third parties
4. 29Our future performance depends, in part, upon our ability to continue to compete successfully worldwide
5. 30Our business would be harmed if we do not receive parts sufficient in number and performance to meet our production requirements and product specifications in a timely and cost-effective manner
6. 31If we fail to operate our business in accordance with our business plan, our operating results, business and stock price may be significantly and adversely impacted
7. 32We have a leveraged capital structure
8. 33Our leveraged capital structure may adversely affect our financial condition, results of operations and net income per share
9. 34There can be no assurance that we will continue to declare cash dividends at all or in any particular amounts
10. 35We are exposed to risks related to our commercial terms and conditions, including our indemnification of third parties, as well as the performance of our products
11. 36There are risks associated with our receipt of government funding for R&D
12. 37Historically, we have recorded restructuring charges related to our prior global workforce reductions, large excess
13. 38We are exposed to risks related to our receivables factoring and banking arrangements
14. 39We are subject to the risks of additional government actions in the event we were to breach the terms of any settlement arrangement into which we have entered
15. 40Our Bylaws designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain actions and proceedings, which could limit the ability of our stockholders to obtain a judicial forum of their choice for disputes with the Company or its directors, officers or employees