All right. Good morning, everyone. My name is Robert Ruple. I'm the Technology Sector Specialist here at Credit Suisse. Very excited this morning to host Bren Higgins, Executive VP and CFO of KLA Corp. Bren, maybe just to kick things off, sort of when you think about your company, the core IP, the, you know, the strategy and, you know, the markets that you address, you know, what are sort of the key priorities and value proposition for KLA as you think about for investors and the like? No, I'd say thank you for having us, and it's a good question, and I know we'll probably end up talking a lot about 2023 as we go here. I do wanna take just a step back and look at, you know, 2022 has been a really good year for KLA. We started the year expecting to see sequential growth in our business. Over the course of the year, we had guided, we thought, you know, revenue levels would be over 20%. You know, and as we sit here today, you know, we feel very good about our position, obviously, with one quarter to go and take the midpoint of guidance. You know, our guidance is shaping up to be pretty consistent with what we thought. You know, I think it's—y ou know, the December quarter looks about as we expected. When you look at that, we're probably somewhere in the mid-20s in terms of growth, so some upside to that. The profitability model has worked fairly well where, despite some of the cost pressures in the industry, we've been able to maintain. We guided around 63% gross margins, and we're in that range today. We're investing in our business. Our portfolio strategy is really fundamental to how KLA goes to market. Our operating margins expected in the 40s. We did Investor Day in June and talked about our 2026 plan and our views of our different segments, and what we thought 2026 would look like. We talked about an opportunity set of about $14 billion in revenue, ± $500 million, and $38 in earnings. We announced a significant share repurchase authorization of $6 billion, $3 billion of which is in ASR that's ongoing. We feel like the, you know, the company's done very well. If you look at the Semi PC part of the business, which is our wafer fab equipment, semiconductor process control business, considerable outperformance relative to the market, probably in excess of 30% year-over-year against a WFE environment that's maybe mid to high single digits. Strong performance there. Our Electronics, Packaging and Components business, which is our more than Moore's Law part of KLA, up in the high single digits. Our Service business which is a strong anchor for the company, has had nice, you know, growth, accretive obviously over the long term from a growth point of view in the mid double digits, so mid-teens type performance. Market share has been very strong. I mean, KLA is a differentiated supplier. We try to do things and deliver capability to our customers that our competitors can't match. We have a portfolio of products that allows our customers to balance technical requirements with economic objectives and driving productivity in a fab. We gained some share last year. Over the last few years, we've gained about 350 basis points off an already strong position, and would expect this year to be, to be another year of share gain as well, given the relative performance I talked about earlier. I think, you know, when you look at KLA's model, it's about understanding the value that we deliver, and in terms of returns to our customers, sharing in that value with customers. That drives the gross margins we have. Those gross margins allow us to invest. We introduce products faster than our competitors. As I said, we have a portfolio approach, that enables us to continue to deliver new capability to the market, have new things to sell, new things for customers to buy, then also throws off a very strong gross margin that allows us to put the capital to work in different ways. We're strong believers that there's a lot of value trapped in how companies are financed and how cash flows are deployed, I think our history in those areas, both in terms of leverage levels and our capital structure and cash returns to shareholders, I think represents that overall philosophy. You know, as we move into 2023, certainly we're facing a year that looks to be a correction year after three very strong years of growth. Expected some normalization at some point in terms of our longer term modeling, given the last three years of growth have been so far above trend line. We would expect to see some changes here in 2023 as we move forward. I'm sure we'll talk more about that as well. Yeah. Yeah. We'll, maybe we'll dig into a few more of those. You know, as you mentioned on the, I think on the fiscal Q1 conference call, you revised, you know, calendar 2022 down from $95 billion to $90 billion. Obviously generous enough to give us some thoughts on 2023 WFE around $75 billion. You know, can you speak to your expectations as it relates to, you know, foundry versus logic and the mix there? I think it was like 76/24 and, you know, maybe how you see that unfolding next year in terms of dynamics between, you know, kind of bleeding and lagging edge logic. This year, between supply constraints and then some of the recent actions from the U.S. government has affected some of the WFE investment in China. I think as a result of that, you've seen expectations for 2022 coming down from near $100 billion, let's say, in the middle of the year to low $90 billion today. I think that's pretty consistent as people have reported and guided that that's probably about where we'll end up. Our business tends to be more levered to logic and foundry investment. The overall mix has been probably 60/40 this year, likely higher next year because of the reductions that are gonna come in memory. Process control intensity because of the fact that they're designing unique parts and you've got designs moving through fabs that you have higher levels of process control investment, that customers have to spend more to monitor the performance of those designs, the yield given the commitments that they're making, and they're running different process flows. They're deploying new technology and then managing a very high mix environment. All that drives a higher percentage as a percent of wafer fab investment in process control than in the memory space, which is good, and we had a very good year this year. Memory has repair. There's redundancy in designs, more commodity-like parts. As a result of that, you generally have less overall investment. There's been the introduction of EUV lithography in DRAM, and that's been a contributor to our business to support that change, as you need new infrastructure to support that. That's been a driver of the business in memory. In general, foundry logic is kind of our sweet spot, and the dynamics around 7 nm and 5 nm and starting to see 3 nm here moving forward have been extremely compelling for us and certainly around certain product types. You know, I think as we move into 2023, where most of the reductions we'll likely see are likely gonna happen in the memory space. I would expect that, you know, the mix will be even heavier logic and foundry, which tends to help our performance on a relative basis. We've seen, for the reasons I talked about, lack of reuse in our customers' capacity, that we've seen a significant increase in the KLA share of overall WFE, and I would expect that we'll see that increase continue and we'll be able to maintain kind of this mid- 7% from the low-sixe s that we saw last year, as we move into next year. Great. That's a, that's a nice update there. I appreciate it. Just, I know the CapEx budget's obviously, not gonna be set until next year at some point. You know, but given the elevated spend, can you comment at all just, sort of how we should think about linearity around WFE in 2023? I think it is, you know, generally been skewed more towards the, you know, second half of the year. Any you know, any thoughts you can comment at this point? Yeah. You know, it's an interesting question. I think the challenge in it is a lot of, you know, our expectation, we talked about the industry being down about 20% next year, was really coming from, you know, what our customers have been somewhat clear in some of their public statements about what they're expecting to invest next year. One of the challenges is we have very strong, you know, backlogs, and we've been booking above our billing rate for most of the year. We've seen the backlogs grow. We have certain products that are really about enabling customers' technology roadmaps. We're much more levered to R&D and a ramp of a fab than in production, where they have a more predictable environment. That environment with a high mix is changing, there's more participation in production, which has been a driver for growth for the company over the last couple of years. That's there. In general, we're much more levered to the roadmap and the technology evolution and less so to kind of the increment of capacity. As the capacity plans are being adjusted, it has less of an impact on KLA. There's a little bit more maybe resiliency around certain product types and with very long lead times where we still are supply constrained, and I would expect those products to continue to shift into next year, even in a weaker overall environment. It's not falling off, right, fast. You know, I would expect, you know, as we move into the March quarter and, you know, it still feels pretty strong in terms of business levels. I wouldn't expect it to fall off kind of dramatically. You know, whether it plays out, you know, first, I would expect right now, I think first half is probably higher than the second half, based on what we see today. You know, it's not like, you know, I think a lot of times even people would expect, you know, it's just gonna fall off like this, and maybe it has historically. I've been in the industry for a long time. It feels like it's more of a moderation. You know, what the WFE number ends up being versus maybe a run rate we end up at as we move into the second half of the year, maybe that's a, you know, a different question. You know, right now, I think it looks like it's more of a gradual, you know, kind of decline to the through the year than something more dramatic. Gotcha. Gotcha. You know, you touched on this already, but you know, the process control market, you know, you've gained some significant share. Just in kind of outgrowing, you know, the industry, just how much of the outperformance do you attribute to share gains with process control metrology versus your segment performance versus the overall market? Yeah, that's a good question. I think it's a mix. Look, certainly the overall market and the growth of logic and foundry has been a driver for the reasons I talked about earlier. In fact, before EUV was introduced, you had this period of time from about 2012 to 2018 where logic foundry WFE was actually a negative CAGR. Most of the growth in WFE, in fact, all of the growth was coming from memory. As EUV was introduced, you saw a lot of new capability available. You had customers that had invested in new capability. You had new capability that not just leaders, but other follow-on designs kind of migrated to 7 nm and then into 5 nm. We saw a big ramp in the design environment for 7 nm. As customers went to ramp 5 nm, they weren't able to take any of the capacity that they had deployed for 7 nm because it was being consumed in trying to migrate it. There was a period of time where they were able to do that fairly well because the increments of kind of Moore's Law improvement related to multi-patterning were fairly modest. Now you introduce EUV, you got more compelling Moore's Law attributes. You have more designs that are coming in. You have less reuse because customers are consuming capacity, but also they have new technical requirements. That's been a big driver for our business. I also talked about that, you know, I think that as you look at the, you know, our participation in production, that that design environment, every design tests design rules in different ways, and if you're have to deliver a specific volume in a specific product window, you don't wanna start too many wafers. You don't wanna start too few, given the productivity dynamics. You see a lot more process control investment in that environment, where they're managing a lot of designs. You also have a lot of different product flow variants that are also at different nodes that are also drivers for the business as well. Share gain, I mentioned 350 basis points. Most of the share gain in our space or share changes tends to be within the relative performance of certain markets. We have a very broad portfolio of products, and so you have the relative growth rates of those individual segments tends to drive some of the share movement. Optical pattern inspection has been a huge business for KLA, it's the largest business for KLA, probably one of the fastest-growing markets in overall WFE. Because of the dynamics I just talked about, it has really been inflecting, and is a product that we continue to have very, it's really about technology enabling, so very long lead times with. In film measurement, we've had strong results. Reticle inspection is another area where qualifying and inspecting reticles for EUV and increasing EUV layers at each node is also a driver for our reticle inspection business. These have been, I think, factors that have driven some of the share gain. In our markets where we have very strong positions that have also had very good overall relative growth. I think it's a combination of things. I, you know, I think for the first time, given some of these dynamics, you're seeing, you know, some incremental investment in new capabilities, and we're introducing new products that are gonna get customers to spend more. There's some inflections related to, you know, more UV layers, changes that are forthcoming in terms of transistor architecture with gate all around and so on, that gives us some confidence moving forward about the product portfolio we have. Our competitors have to compete with certain technology to try to solve all the problems, right? I think one of the things we do fairly well is we allow our customers to balance their technical requirements where they need more technical solutions, but also there are opportunities for them as they're managing and driving productivity across a fab to buy things that meet their economic requirements. I think being able and somewhat agnostic about what they use to try to sort of meet that kind of combined benefit of technology and economics is a unique value differentiator for KLA versus our point product competitors. Gotcha. More of a longer-term question. You know, you've kind of given us some thoughts as, you know, around the direction of WFE for 2023. You know, given the increased complexity and the lack of 450 mm, you know, do you think we're sort of now kind of in a permanent uptrend for WFE, you know, albeit along the, you know, the cyclical patterns that we, you know, we see in this industry over time? Well, we do believe it. It was a sort of fundamental to our 2026 plan that we presented back in our Investor Day back in June, is that the things you talked about, right? You had significant capital efficiency in terms of reuse. You had wafer transitions. You had kind of inefficient kind of IDM structures that migrated to hyperscale foundries. You had consolidation in the space, drove significant efficiency as a percent of revenue in the overall industry. Capital intensity declined meaningfully, really. You were in an environment where WFE really didn't grow that much. It had some cyclicality, very modest growth. That started to end if you go back to kind of the middle of the last decade. Since then, we've seen capital intensity start to rise. One of the cases we tried to make was explaining that all those things that have driven capital intensity down are now starting to grow. I don't think capital intensity is gonna grow that much faster than underlying semiconductor revenue, but since it's sort of flat and up, it will drive WFE to grow faster moving forward. There's a sort of a structural growth element that has changed in the industry versus over the last number of years versus the previous couple of decades, frankly. We think that that continues. We think that the dynamics around the technology changes and what that means in terms of designs and the changes that have happened to drive more design activity at nodes. TSMC, for example, releasing design libraries, more economic EDA solutions. You're One of the things the industry got, I think got wrong was this view that you'd have fewer and fewer designs at the leading edge because of the cost of design. For the leaders, it's very expensive to design at the next node. To drive returns and to drive demand to consume that capacity as the leaders move on, and you've got leaders that aren't just in mobile, but in data center now driving leading-edge roadmaps. You've got multiple players there. That demand has now caused, you know, this growth in logic and foundry, and I think we'll see that as a percent of the total. Also there's been, I think, pretty good price discipline over the years as the cost decrements that come from Moore's Law that were fairly easy and drove maybe a lack of discipline in pricing have firmed up, and we've seen pricing increase over the last year or so. We'll see, you know, semiconductor revenue grow faster. You hear the numbers that, you know, McKinsey studies and other numbers that are out there around, you know, $1 trillion of semiconductor revenue or more in 2030. All that implies about a 6%-7% growth rate in semiconductor revenue or 2x GDP. We think WFE grows a little faster than that. Based on a lot of the things I talked about, process controls should grow a little faster than that, and KLA should be able to grow a little bit of share, modest share increases as we move forward. We're about mid-50s today. In the markets we're in, it's higher. It's in the, you know, mid-60s or higher. At some point, there is a limit probably to how much share you can gain, but we still think that if we can deliver the right solutions with the go-to-market approach we have, that there is opportunity for us to gain some share. When you add all that together, we think that drives kind of a 10% growth rate in our semi business from 2021. Our EPC, Electronics, Packaging and Components business grows about 10% on market growth and some new product introduction, Service is at 12%-14%, We adjusted that 12%-14% growth rate at Investor Day, talked a lot about the dynamics that were driving that. All that leads you to the $14 billion. With the financial framework in terms of how we run the business, expected profitability levels, cash deployment, and so on, you have the $14 billion in revenue and $38 in earnings. Seems like a pretty solid plan. When you think about—n ot a new theme, obviously, but when you think about the supply and logistical constraints we've seen throughout the industry, maybe just an update on sort of how you're navigating that. You know, you're navigating better than most of your peers. You know, any update on some of these constraints as we, you know, get towards the end of the year here? It's gotten easier around certain electronic components and semiconductors. There for a while it was like whack-a-mole, right? You beat down an issue and another issue would pop up. In some cases, I'm dealing with issues today that weren't issues, six, nine months ago. We still, in certain products, are constrained by our ability to get supply. You know, I think over the last year, our supply chain is a little bit different than some of the process tool guys, where I think they rely on a lot of the same suppliers. They also have higher volumes around common components. I think that put more strain in those businesses. We tend to have more exclusive relationships with suppliers. The kind of inherent lead time on a lot of our components is very long, so we have to make commitments significantly in advance. The downside of that is to add more also takes a long period of time. I know, you know, ASML, as an example, struggles with some of the same challenges around optical components. That sort of establishes though what you think you can sell of those products, the actual volume. Then that volume is fairly predictable, both in terms of the actual quantity, but also the timing. Then you go work all the issues that are underneath it to try to get the parts you need to keep up. I think our supply chain teams have done a great job. Our supply chain management strategy is a lot less about transactional supply and much more about ensuring that we have the capacity of what we need when we need it, and we're willing to, you know, make investments in terms of, you know, extra inventory. We will, you know, hedge long lead time materials. We buy our suppliers long lead time materials. We'll invest in dedicated capacity. I think all that has helped us through this period of time. Although we wished we could ship more, and I have general managers in my business, 'cause I run operations, coming to me, if we could just ship more, I have the demand. Maybe over time, it sort of, you know, works its way out and customers rationalize supply and demand. Certainly that pressure has been in the system. I think it's a little bit better today. We still have some constraints here and there that are affecting us. You know, one of the things, if it does sort of slow down and soften a little bit, we'll have to navigate our way through that in terms of maintaining the capability and capacity we have to support this thesis that I just talked about in terms of longer term growth. Coming off of, you know, a higher level and, you know, absorbing, you know, that increment that was added, if we go through a softening period here as we move through 2023. Some management of that, but I feel pretty good about how we're positioned and how we're positioned to support our support our growth plan. Great. I just wanted to take a quick poll of the audience, see if there are any questions. Looks like Chris has a question here. I don't know if we need a mic up front here. Thank you. Bren, you mentioned services and for 2023 on the earnings call, you talked about, you know, some growing below the long-term average. The Services business is generally a lot more resilient in downturns. Maybe you could speak to that a little bit, you know, on what's driving that in 2023. Also, is there any impact that some others have talked about, some impact from the China business, from service from inability to service tools there? Is that a longer term impact for the Services business? Yeah. Our Service business is a little bit different than, and everybody kinda adds it up a little bit differently. Our service and, you know, there's, you have to kinda dig into, you know, what's kinda traditional break and fix spares service, other upgrades included and things like that. Our business is really core kinda traditional service. Upgrades and things like that are not included in the service stream. 80% of the, of the revenue of our Service business is service contract. It tends to be, I think, a stickier stream, and it's a stream that the service contracts vary. You know, a lot of times they could be on individual tools, sometimes it can be a fab wide. We have the ability, I think, to customize our offerings to customers. We set entitlements. Those offerings are about response times and stocking levels and things like that. Then we can deliver to that entitlement. We have perspective on what the revenue opportunity is, the commitments we've made, and we can then optimize the cost structure underneath. In a more billable environment, it's hard to get efficient because you kinda have to have the burst capacity in case something goes wrong. This'll, enables us, I think, to do it fairly efficiently. When you move into slower environments, customers continue to run the install base, but there are periods of time where you'll see at certain, particularly in some of the legacy parts of the install base, where utilizations will drop off and tools won't break as quickly and as often, and so that has an effect. Some of the service revenue is denominated in local currencies, the strength of the U.S. dollar has had some impact too on service revenue. It's those kind of factors would probably drive us. I think service will continue to grow, and our Service business has had one down year in the last 20 to 25 years, and that was in 2009. It was down about 12% or so. We've talked about it being mid, maybe high single digits as we move into 2023, below that 12%-14% that I talked about. It's really driven by the things I talked about. Really our expectation that we'll see, you know, some softening in certain parts of, you know, consumer markets maybe, and how that affects some of our customers and their install base. Long run trends around service are pretty compelling. As a percent of ASP, we've seen that increase over time. We've shipped a lot of tools. Those tools are now starting to come off of warranty, and that's a driver in the long term for service. 80% of the tools that KLA and Tencor have shipped, kind of in its history, are still in service out there in the field. There's still a lot of tools that we're supporting that were shipped a long time ago. Now you have a lot of growth and rising semiconductor content in some of these legacy markets, automotive, industrial, IoT, communications, where particularly around automotive, we are seeing reliability requirements are changing how customers are looking at service opportunities. I would expect it to moderate some in terms of the growth rate. Over time though, for the reasons I talked about, we would expect it, which is why we adjusted our long-term plan from 9%-11% to 12-14% over time. The history, I think through 2021 has been, you know, somewhere in that kind of range. It's been 11%, 12%, and we think that the drivers I mentioned will add an increment to growth going forward. China is less developed, the service streams in China, that old legacy equipment that we've been driving service on for years and years, the fabs are not that old. The Service business in China as a percent of the total is smaller. Obviously, it will grow over time. It's something we've invested in because you have a fairly disparate footprint of fabs. You had to put the infrastructure in place to be able to support it. Over time, it will be a, you know, a positive stream or a much more positive stream for service, but it's a lower percentage than the kind of the systems mix into China, which is about 20%-25% of our semiconductor process control business. Less of an issue there, but certainly over time, we would expect that to be a growth area. With all the investment that's happening in the legacy part of China, in the infrastructure and wafer and reticle infrastructure, that even there, though there have been some new restrictions, there's still a lot of investment that's happened in these other areas, which will be a good driver for long-term for service. That's helpful. Yeah. Actually, I was curious, the comment you made earlier about next year will be first half weighted, second half slows down. A lot of your customers think of it the opposite, first half inventory correction, hopefully picking up second half into the following year. You could talk about the timing of projects. Was it that they slowed down and that only starts to affect the second half shipments? Just a little more why you, why you see that profile. It's just what we see today, right? Is you just, as you work your way through and you go through your forecast and so on. Now, a lot of, you know, the, we're adding meaningful capacity this quarter, and you'll see that capacity come online, and I think it's the customer's expectation in some cases where what their expected supply is at that point relative to the demand environment they're facing. Now, a lot of the reductions are in memory, and memory tends to be a business that turns fast because you're, you know, so incremental bit supply is coming from more from new wafers versus shrinks and smaller kind of, you know, transistors and achieving bit growth, supply growth through Moore's Law effectively. Because of that, those turns I think tend to be quicker because those capacity investments are bigger investments and are very market-centric. My point is I, you know, A, we're sitting here and we're, you know, in late November and we're talking about, you know, what could be nine to 12 months from now. You know, I think we're in a very good position to react if that's how it plays out. As I sit today, I see kind of a, you know, kind of a, as I said, kind of a more of a gradual reduction through the year as we move forward. Less confidence probably the further out you go, obviously. One follow-up to Chris is on China. As you look at the impact or could you recall how much you cited would be the impact from the restriction? Is it largely memory or do you see meaningful logic getting pulled down by the restriction? We went and we talked about gross direct impact of from, you know, $500 million-$600 million at the low end to about $900 million at the high end. What was incremental to the new regulations in early October was the inclusion of memory in these restrictions. So there was a logic foundry element. It was smaller, but it kind of was there before. Memory is the biggest factor in driving that. Now, in some cases, you're gonna be able to mitigate where you'll be able to ship those tools to others, and that assumes that you're able to continue to pull forward, right? Ultimately, there's a WFE number for the year, and that's how much capacity we'll ship. We continue to work through with our customers in terms of requirements, engaging with the Department of Commerce in terms of, you know, questions about what our customers are doing, what our tools would do to try to mitigate some of that and get some comfort around the licensing process. There obviously there's a lack of predictability there that makes it hard to kind of handicap. As we see it today, and you know, that was the impact in terms of our impact into next year, and it was the incremental increase was really more memory centric. I think we have about 30- seconds here, so any final closing remarks or themes or topics that have been coming up with investors that we didn't get to that we should focus on? Like I said earlier, I think we feel very good about the plan we have. We tried to articulate around our businesses at our Investor Day, some of the growth opportunities. We have exposure, and we love, you know, in process control, obviously, to wafer fab and where our customers are going there to drive, you know, new capability in some of those dynamics. Our acquisition of Orbotech and the creation of our EPC group, Electronics, Packaging and Components group, has exposed us to more of where our customers are going for new capability. It's too expensive to do everything in the front end like they used to. We have exposure there. Of course, those drivers of service creates a nice sort of accretive growth rate over time, but also a profitability stream that gives us comfort in terms of how we're managing the business. The leverage we have in our capital structure, our ability to maintain our dividend and grow it over time. We did raise our dividend a few months ago for the 13th consecutive year. We think the business is well-positioned. We're excited about the plan, and you know, we're happy with where we are. Great. Well, Bren, we really appreciate you, taking the time to speak with everyone today, thanks again. Thank you, Rob. Thanks for having us. Thank you.