Bren Higgins
Executive Vice President and Chief Financial Officer at KLA
Thank you, Rick. As Rick has said, KLA's June quarter results reinforce the success of our execution and strong market position. Revenue was near $2.5 billion, non-GAAP gross margin was 62.4%, and non-GAAP diluted EPS and GAAP EPS were $5.81 and $5.40 respectively. Non-GAAP operating expenses were $514 million, below our expectation of $525 million mostly due to the timing of new employees joining versus our plan. In addition, we also realized a cost benefit from the strong U.S. dollar impact resulting from our global footprint.
Total operating expenses comprised $297 million in R&D and $217 million in SG&A. Given the strong demand backdrop, rapid expansion over the last couple of years and our revenue expectations going forward, we expect to continue our important investment in our global infrastructure and systems to scale the leverageable KLA operating model to facilitate growth. Our investments include new product development programs and volume-dependent resources to support our business expansion as we position the company to execute against our long-term structural growth thesis. As a result, we expect operating expenses to be approximately $530 million in the September quarter and we forecast quarterly operating expenses to continue to trend higher over the balance of 2022 to support our sequential revenue growth expectations.
We will size the company based on our target operating model, which delivers 40% to 50% incremental non-GAAP operating margin leverage on revenue growth over a normalized time horizon. Non-GAAP operating margin was strong at 41.8%, almost one point higher than the guidance midpoint implied. Other income and expense net was $22 million, below guidance of $43 million, with the positive variance from guidance reflecting a gain on a strategic investment that was transacted in the quarter offset by a recurring mark-to-market adjustment of the supply investment. For the September quarter, we forecasted at approximately $75 million to reflect the impact of the new debt issuance. Quarterly effective tax rate was 14.8% higher than the 13.5% guidance due principally to the equity market impact on deferred compensation programs.
At the guided rate, non-GAAP earnings per share would have been $0.09 higher at $5.90. We continue to guide 13.5% is a long-term tax planning rate. Non-GAAP net income was $867 million. GAAP net income was $805 million. Cash flow from operations was $819 million. And free cash flow was $746 million resulting in a free cash flow conversion of 86% and a free cash flow margin of 30%. The breakdown of revenue by reportable segments and end markets and major products and regions can be found within the shareholder letter and slides. Moving to the balance sheet, where we saw a lot of activity this past quarter. KLA ended the quarter with $2.7 billion in total cash, debt of $6.7 billion, and a flexible and attractive bond maturity profile supported by strong investment grade ratings from all three agencies.
In June, S&P upgraded KLA one notch to A- citing improved scale and outlook for further profitable growth. Later in June, we issued $3 billion in new debt and announced the completion of a tender offer for $500 million of senior notes due 2024. These actions reinforce the KLA maintained active and diligent oversight of our cost of capital and awareness of the impact on shareholder value of the appropriate capital structure for our business and productive capital allocation. As demonstrated by the new calendar 2026 financial targets and the capital return actions announced at our recent Investor Day, KLA has confidence in our business over the long-term and is committed to a consistent strategy of cash returns that includes both dividend growth, increasing share repurchases. Consistent with this, we increased our long-term capital returns target, as mentioned earlier. Over the last 12 months, KLA has returned $5.5 billion to shareholders, including $4.9 billion in share repurchases and $639 million in dividends paid.
Turning to our outlook, we have adjusted our overall WFE outlook for calendar '22 to reflect persistent supply chain challenges that are gaining shipments and revenue recognition for many of our peers. We now expect the WFE market to grow in the high single-digits to approximately $95 billion in 2022 off a baseline of roughly $87 billion in calendar 2021. This outlook reflects the continued broad-based strength of demand across customer segments. While we work hard to manage capacity at KLA and with our suppliers, supply chain shortages continue to constrain our ability to meet customer demand. While our supplier engagement strategy, as we discussed at our Investor Day, has been validated through this cycle, supplier visibility remains challenging and has not improved over the past three months.
As indicated in the last couple of quarters, we continue to expect sequential growth through this calendar year and expect KLA's total revenue growth to meet or exceed the low 20% range. The semiconductor process control systems growing several points faster than the company average. Finally, we expect demand to continue exceeding supply during the calendar year's second half. KLA is in position to deliver another year of sustainable outperformance in our semi PC business, which should translate to strong relative growth overall. Looking ahead, as indicated earlier, we are concerned with the macroeconomic environment and how they affect the demand for our customers' products and their capacity plans as we move into calendar 2023. Today, the pressure from customers to deliver remains high and is driving our expectations for sequential growth through calendar 2022.
We are encouraged by the diversification and sustainability of our current demand profile and the company's operational execution. We are strategically adding capacity across our global manufacturing footprint to support our customers' growing process control requirements our near-term outlook and our long-term through-cycle growth thesis. Our September quarter guidance is as follows: total revenue is expected to be in the range of $2.6 billion, plus or minus $125 million. Foundry logic is forecasted to be approximately 64%, and memory is expected to be around 36% of semi PC systems revenue. In memory, DRAM is expected to be about 40% of the segment mix and NAND, 60%. We forecast non-GAAP gross margin to be in the range of 62% to 64%. Finally, GAAP diluted EPS is expected to be in a range of $5.28 to $6.38 and non-GAAP diluted EPS in the range of $5.70 to $6.80.
EPS guidance is based on a fully diluted share count of approximately 143 million shares. In conclusion, despite the macro and supply chain headwinds, see the secular trends driving semiconductor growth and investments in WFE is both durable and compelling over the long run. Broad-based customer demand and simultaneous investments supporting growing semiconductor content across technology nodes remains important trends in our industry. These are long-term secular growth drivers for the industry as technology investment and the resumption of scaling reflects the value that semiconductors in our industry have on lowering our cost for our customers and enabling a broader application universe for semiconductor-based technology across multiple end markets.
When it comes to KLA, considering our track record of execution and the power of our portfolio, we have confidence in our ability to continue to deliver sustainable outperformance throughout changing economic periods. As we look at the leading indicators for our business, including our backlog and sales funnel visibility, we continue to invest in expanding our business infrastructure and the required capabilities to support our outlook and maintain our product development investments to enable industry growth and support our customers' multiyear investment plans. This provides an element of stability that shores up our confidence in the demand outlook for the future.
These factors, combined with the KLA operating model that guides our execution position us to continue outperforming our industry as we execute our strategic objectives. These objectives fuel our growth, reliable operational excellence differentiation across an increasingly diverse product and service offering. They are also the foundation of our sustained technology leadership, wide competitive mode, industry-leading financial performance. long-standing track record of robust free cash flow generation and consistent and growing capital returns to shareholders. That concludes our prepared remarks.
I'll turn the call back over to Kevin to begin the Q&A. Kevin?
