KLA Corporation Reports Fiscal 2026 First Quarter Results

Total revenues were $3.21 billion, above the midpoint of the guidance range of $3.15 billion +/- $150 million; GAAP diluted EPS was $8.47 and non-GAAP diluted EPS was $8.81, both above the midpoints of the respective guidance ranges; Cash flow from operating activities for the quarter and last twelve months were $1.16 billion and $4.25 billion, respectively, and free cash flow was $1.07 billion and $3.88 billion, respectively; and Capital returns for the quarter and last twelve months were $799.1 million and $3.09 billion, respectively. , /PRNewswire/ -- KLA Corporation (NASDAQ: KLAC) today announced financial and operating results for its first quarter of fiscal year 2026, which ended on Sept. 30, 2025, and reported GAAP net income of $1.12 billion and GAAP net income per diluted share of $8.47 on revenues of $3.21 billion. "KLA produced a strong all-around September quarter performance above the guidance midpoints. These results reflect double-digit year-over-year revenue and EPS growth, and KLA is on pace for solid relative revenue growth compared to our industry in calendar 2025," said Rick Wallace, president and CEO of KLA Corporation. "The AI infrastructure buildout represents a profound change in high performance computing that will positively affect a wide range of industries over the coming years. KLA is in a unique position to benefit from this buildout with an industry-leading portfolio of solutions directly addressing the biggest challenges for AI compute in the leading-edge foundry/logic, memory, and advanced packaging markets." GAAP Results Q1 FY 2026 Q4 FY 2025 Q1 FY 2025 Total Revenues $3,210 million $3,175 million $2,842 million Net Income $1,121 million $1,203 million $946 million Net Income per Diluted Share $8.47 $9.06 $7.01 Non-GAAP Results Q1 FY 2026 Q4 FY 2025 Q1 FY 2025 Net Income $1,167 million $1,244 million $988 million Net Income per Diluted Share $8.81 $9.38 $7.33 A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in this release. KLA will discuss the results for its fiscal year 2026 first quarter, along with its outlook, on a conference call today beginning at 2:00 p.m. P.T. A webcast of the call will be available at: www.kla.com. Second Quarter Fiscal 2026 Guidance The following details our guidance for the second quarter of fiscal 2026 ending in Dec.: Total revenues are expected to be in a range of $3.225 billion +/- $150 million GAAP gross margin is expected to be in a range of 60.8% +/- 1.0% Non-GAAP gross margin is expected to be in a range of 62.0% +/- 1.0% GAAP diluted EPS is expected to be in a range of $8.46 +/- $0.78 Non-GAAP diluted EPS is expected to be in a range of $8.70 +/- $0.78 For additional details and assumptions underlying our guidance metrics, please see the company's published Letter to Shareholders, Earnings Slide Presentation and Earnings Infographic on the KLA investor relations website (ir.kla.com). Such Letter to Shareholders, Earnings Slide Presentation and Earnings Infographic are not incorporated by reference into this earnings release. About KLA: KLA Corporation ("KLA") develops industry-leading equipment and services that enable innovation throughout the electronics industry. We provide advanced process control and process-enabling solutions for manufacturing wafers and reticles, integrated circuits, packaging and printed circuit boards. In close collaboration with leading customers across the globe, our expert teams of physicists, engineers, data scientists and problem-solvers design solutions that move the world forward. Investors and others should note that KLA announces material financial information including SEC filings, press releases, public earnings calls and conference webcasts using an investor relations website (ir.kla.com). Additional information may be found at: www.kla.com. Note Regarding Forward-Looking Statements: Statements in this press release other than historical facts, such as statements pertaining to the amount and timing of dividends, the amount and timing of share repurchases, total revenues, GAAP and non-GAAP gross margin and GAAP and non-GAAP diluted EPS for the quarter ending Dec. 31, 2025, are forward-looking statements and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current information and expectations and involve a number of risks and uncertainties. Actual results may differ materially from those projected in such statements due to various factors, including, but not limited to: our vulnerability to a weakening in the condition of the financial markets and the global economy; risks related to our international operations; evolving Bureau of Industry and Security of the U.S. Department of Commerce rules and regulations and their impact on our ability to sell products to and provide services to certain customers in China; tariffs and other trade restrictions; costly intellectual property disputes that could result in our inability to sell or use the challenged technology; risks related to the legal, regulatory and tax environments in which we conduct our business; differing stakeholder expectations, requirements and attention to environment, social and governance ("ESG") matters and the resulting costs, risks and impact on our business; unexpected delays, difficulties and expenses in executing against our environmental, climate, or other ESG targets, goals and commitments; our ability to attract, retain and motivate key personnel; our vulnerability to disruptions and delays at our third-party service providers; cybersecurity threats, cyber incidents affecting our and our business partners' systems and networks; our inability to access critical information in a timely manner due to system failures; risks related to acquisitions, integrations, strategic alliances or collaborative arrangements; climate change, earthquake, flood or other natural catastrophic events, public health crises or terrorism and the adverse impact on our business operations; the war between Ukraine and Russia, escalation of hostilities in the Middle East, and the significant military activity in those regions; lack of insurance for losses and interruptions caused by terrorists and acts of war, and our self-insurance of certain risks including earthquake risk; risks related to fluctuations in foreign currency exchange rates; risks related to fluctuations in interest rates and the market values of our portfolio investments; risks related to tax and regulatory compliance audits; any change in taxation rules or practices and our effective tax rate; compliance costs with federal securities laws, rules, regulations, NASDAQ requirements, and evolving accounting standards and practices; ongoing changes in the technology industry, and the semiconductor industry in particular, including future growth rates, pricing trends in end-markets, or changes in customer capital spending patterns; our vulnerability to a highly concentrated customer base; the cyclicality of the industries in which we operate; our ability to timely develop new technologies and products that successfully address changes in the industry; risks related to artificial intelligence; our ability to maintain our technology advantage and protect proprietary rights; our ability to compete in the industry; availability and cost of the materials and parts used in the production of our products; our ability to operate our business in accordance with our business plan; risks related to our debt and leveraged capital structure; we may not be able to declare cash dividends at all or in any particular amount; liability to our customers under indemnification provisions if our products fail to operate properly or contain defects or our customers are sued by third parties due to our products; our government funding for research and development is subject to audit, and potential termination or penalties; we may incur significant restructuring charges or other asset impairment charges or inventory write offs; we are subject to risks related to receivables factoring arrangements and compliance risk of certain settlement agreements with the government; and risks related to the Court of Chancery of the State of Delaware being the sole and exclusive forum for certain actions and proceedings. For other factors that may cause actual results to differ materially from those projected and anticipated in forward-looking statements in this press release, please refer to KLA's Annual Report on Form 10-K for the year ended June 30, 2025, and other subsequent filings with the Securities and Exchange Commission (including, but not limited to, the risk factors described therein). KLA assumes no obligation to, and does not currently intend to, update these forward-looking statements. KLA Corporation Condensed Consolidated Unaudited Balance Sheets (In thousands) Sept. 30, 2025 June 30, 2025 ASSETS Current assets: Cash and cash equivalents $ 1,946,211 $ 2,078,908 Marketable securities 2,737,380 2,415,715 Accounts receivable, net 2,277,755 2,263,915 Inventories 3,297,368 3,212,149 Other current assets 642,446 728,102 Total current assets 10,901,160 10,698,789 Land, property and equipment, net 1,301,829 1,252,775 Goodwill, net 1,791,022 1,792,193 Deferred income taxes 1,131,211 1,105,770 Purchased intangible assets, net 397,366 444,785 Other non-current assets 795,386 773,614 Total assets $ 16,317,974 $ 16,067,926 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 429,836 $ 458,509 Deferred system revenue 818,807 816,834 Deferred service revenue 604,752 548,011 Other current liabilities 2,196,575 2,262,441 Total current liabilities 4,049,970 4,085,795 Long-term debt 5,885,193 5,884,257 Deferred tax liabilities 464,519 446,945 Deferred service revenue 287,133 348,844 Other non-current liabilities 646,088 609,632 Total liabilities 11,332,903 11,375,473 Stockholders' equity: Common stock and capital in excess of par value 2,489,121 2,511,922 Retained earnings 2,495,279 2,179,330 Accumulated other comprehensive income 671 1,201 Total stockholders' equity 4,985,071 4,692,453 Total liabilities and stockholders' equity $ 16,317,974 $ 16,067,926 KLA Corporation Condensed Consolidated Unaudited Statements of Operations Three Months Ended Sept. 30, (In thousands, except per share amounts) 2025 2024 Revenues: Product $ 2,465,006 $ 2,197,389 Service 744,690 644,152 Total revenues 3,209,696 2,841,541 Costs and expenses: Costs of revenues 1,243,070 1,147,431 Research and development 360,461 323,145 Selling, general and administrative 268,988 251,042 Interest expense 71,075 82,171 Other expense (income), net (43,374) (40,935) Income before income taxes 1,309,476 1,078,687 Provision for income taxes 188,436 132,836 Net income $ 1,121,040 $ 945,851 Net income per share Basic $ 8.51 $ 7.05 Diluted $ 8.47 $ 7.01 Weighted-average number of shares: Basic 131,757 134,134 Diluted 132,381 134,858 KLA Corporation Condensed Consolidated Unaudited Statements of Cash Flows Three Months Ended Sept. 30, (In thousands) 2025 2024 Cash flows from operating activities: Net income $ 1,121,040 $ 945,851 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 97,016 95,823 Unrealized foreign exchange loss and other 12,078 7,718 Stock-based compensation expense 70,182 61,700 Deferred income taxes (10,615) (81,682) Changes in assets and liabilities: Accounts receivable (12,575) (91,660) Inventories (95,738) (59,326) Other assets 50,921 152,641 Accounts payable (23,680) (12,463) Deferred system revenue 1,974 (108,648) Deferred service revenue (4,970) 35,863 Other liabilities (44,042) 49,421 Net cash provided by operating activities 1,161,591 995,238 Cash flows from investing activities: Capital expenditures (95,894) (60,393) Proceeds from capital-related government assistance 1,541 — Purchases of available-for-sale and equity securities (949,871) (837,935) Proceeds from maturity and sale of available-for-sale securities 632,795 727,247 Purchases of trading securities (156,864) (17,581) Proceeds from sale of trading securities 158,305 17,623 Net cash used in investing activities (409,988) (171,039) Cash flows from financing activities: Payment of debt issuance costs (1,602) — Common stock repurchases (545,067) (567,383) Payment of dividends to stockholders (254,008) (198,079) Tax withholding payments related to vested and released restricted stock units (81,122) (72,246) Net cash used in financing activities (881,799) (837,708) Effect of exchange rate changes on cash and cash equivalents (2,501) 13,582 Net increase (decrease) in cash and cash equivalents (132,697) 73 Cash and cash equivalents at beginning of period 2,078,908 1,977,129 Cash and cash equivalents at end of period $ 1,946,211 $ 1,977,202 Supplemental cash flow disclosures: Income taxes paid, net $ 119,049 $ 96,395 Interest paid, net of capitalized interest $ 131,494 $ 131,126 Non-cash activities: Dividends payable - financing activities $ 2,263 $ 2,009 Unsettled common stock repurchase - financing activities $ 20,207 $ 5,499 Accrued purchase of land, property and equipment - investing activities $ 32,758 $ 13,849 KLA Corporation Segment Information (Unaudited) The following is a summary of results for each of our three reportable segments and reconciliations to total revenues for the indicated periods: Three Months Ended Sept. 30, (In thousands) 2025 2024 Revenues: Semiconductor Process Control $ 2,899,392 $ 2,575,151 Specialty Semiconductor Process 119,755 128,334 PCB and Component Inspection 189,488 137,983 Total revenues for reportable segments 3,208,635 2,841,468 Effects of changes in foreign currency exchange rates 1,061 73 Total revenues $ 3,209,696 $ 2,841,541 KLA Corporation Condensed Consolidated Unaudited Supplemental Information Reconciliation of GAAP Net Income to Non-GAAP Net Income Three Months Ended (In thousands, except per share amounts) Sept. 30, 2025 June 30, 2025 Sept. 30, 2024 GAAP net income $ 1,121,040 $ 1,202,849 $ 945,851 Adjustments to reconcile GAAP net income to non-GAAP net income: Acquisition-related charges a 49,026 50,677 56,694 Restructuring, severance and other charges b — 2,133 2,862 Income tax effect of non-GAAP adjustments c (18,348) (18,559) (19,486) Discrete tax items d 15,087 7,322 2,233 Non-GAAP net income $ 1,166,805 $ 1,244,422 $ 988,154 GAAP net income per diluted share $ 8.47 $ 9.06 $ 7.01 Non-GAAP net income per diluted share $ 8.81 $ 9.38 $ 7.33 Shares used in diluted net income per share calculation 132,381 132,734 134,858 Pre-tax Impact of GAAP to Non-GAAP Adjustments Included in Condensed Consolidated Unaudited Statements of Operations (In thousands) Acquisition - Related Charges Restructuring, Severance and Other Charges Total Pre-tax GAAP to Non-GAAP Adjustments Three Months Ended Sept. 30, 2025 Costs of revenues $ 38,053 $ — $ 38,053 Selling, general and administrative 10,973 — 10,973 Total in three months ended Sept. 30, 2025 $ 49,026 $ — $ 49,026 Three Months Ended June 30, 2025 Costs of revenues $ 39,024 $ 1,233 $ 40,257 Research and development — (3) (3) Selling, general and administrative 11,653 903 12,556 Total in three months ended June 30, 2025 $ 50,677 $ 2,133 $ 52,810 Three Months Ended Sept. 30, 2024 Costs of revenues $ 44,090 $ 901 $ 44,991 Research and development — 1,087 1,087 Selling, general and administrative 12,604 874 13,478 Total in three months ended Sept. 30, 2024 $ 56,694 $ 2,862 $ 59,556 Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow Three Months Ended Sept. 30, Twelve Months Ended Sept. 30, (In thousands) 2025 2024 2025 2024 Net cash provided by operating activities $ 1,161,591 $ 995,238 $ 4,248,256 $ 3,420,073 Capital expenditures (95,894) (60,393) (370,760) (269,732) Free cash flow $ 1,065,697 $ 934,845 $ 3,877,496 $ 3,150,341 Capital Returns Calculation Three Months Ended Sept. 30, Twelve Months Ended Sept. 30, (In thousands) 2025 2024 2025 2024 Payments of dividends to stockholders $ 254,008 $ 198,079 $ 960,523 $ 789,613 Common stock repurchases 545,067 567,383 2,127,630 1,847,717 Capital returns $ 799,075 $ 765,462 $ 3,088,153 $ 2,637,330 Second Quarter Fiscal 2026 Guidance Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS Three Months Ending Dec. 31, 2025 (In millions, except per share amounts) Low High GAAP net income per diluted share $7.68 $9.24 Acquisition-related charges a 0.38 0.38 Income tax effect of non-GAAP adjustments c (0.14) (0.14) Non-GAAP net income per diluted share $7.92 $9.48 Shares used in net income per diluted share calculation 131.9 131.9 Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin Three Months Ending Dec. 31, 2025 Low High GAAP gross margin 59.8 % 61.8 % Acquisition-related charges a 1.2 % 1.2 % Non-GAAP gross margin 61.0 % 63.0 % The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for, KLA's financial results presented in accordance with United States GAAP. To supplement our Condensed Consolidated Financial Statements presented in accordance with GAAP, we provide certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain gains, costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user's overall understanding of our operating performance and our prospects in the future. Specifically, we believe that the non-GAAP information, including non-GAAP net income, non-GAAP net income per diluted share, non-GAAP gross margin and free cash flow, provides useful measures to both management and investors regarding financial and business trends relating to our financial performance by excluding certain costs and expenses that we believe are not indicative of our core operating results to help investors compare our operating performances with our results in prior periods as well as with the performance of other companies. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics are inherently subject to significant discretion (for example, determining which costs and expenses to exclude when calculating such a metric). As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP. The following are descriptions of the adjustments made to reconcile GAAP net income to non-GAAP net income: a. Acquisition-related charges primarily include amortization of intangible assets. Although we exclude the effect of amortization of all acquired intangible assets from these non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase price accounting arising from acquisitions, and such amortization of intangible assets related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Investors should note that the use of these intangible assets contributed to our revenues earned during the periods presented and are expected to contribute to our future period revenues as well. b. Restructuring, severance and other charges primarily include costs associated with employee severance. c. Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above. d. Discrete tax items in the three months ended Sept. 30, 2025 include the recognition of a deferred tax liability for withholding taxes on future remittance of previously taxed income as a result of new tax legislation. Discrete tax items in the three months ended June 30, 2025 include the recognition of a net deferred tax liability on foreign currency gains/losses resulting from new tax legislation and a tax benefit from an internal restructuring. Discrete tax items in all periods presented include a tax impact relating to the amortization of tax benefits from internal restructuring or similar tax benefits recorded in other periods. SOURCE KLA Corporation WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

KLA Corporation Reports Fiscal 2026 First Quarter Results

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