We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
KLA Q2 Earnings Surpass Estimates, Revenues Increase Y/Y, Shares Fall
Read MoreHide Full Article
Key Takeaways
KLAC posted Q2 non-GAAP EPS of $8.85, beating estimates and rising 7.9% year over year.
KLA's Semiconductor Process Control revenue grew 9% Y/Y to $3B, making up more than 91% of total sales.
KLA guided Q3 FY26 revenues of $3.35B plus/minus $150M with non-GAAP EPS of $9.08 plus/minus 78 cents.
KLA Corporation (KLAC - Free Report) reported second-quarter fiscal 2026 non-GAAP earnings of $8.85 per share, beating the Zacks Consensus Estimate by 0.36%. The figure increased 7.9% year over year.
Revenues increased 7.2% year over year to $3.3 billion, surpassing the Zacks Consensus Estimate by 1.02%.
In the pre-market trading, KLAC shares lost 7.7%.
KLAC’s Q2 Segmental Details
In terms of reportable segments, Semiconductor Process Control revenues (91.1% of total revenues) increased 9% year over year and 4% sequentially to $3 billion.
Foundry & Logic accounted for about 60%, while Memory accounted for about 40% of Semiconductor Process Control revenues.
Specialty Semiconductor Process revenues (4.3% of total revenues) were $140 million, down 12.4% year over year but up 17% sequentially.
PCB and Component Inspection revenues (4.6% of total revenues) decreased 6% year over year to $152 million and declined 20% on a sequential basis.
KLAC Top-Line Details
Product revenues (which accounted for 76.2% of total revenues) rose 4.2% year over year to $2.51 billion. Service revenues (23.8% of total revenues) increased 18% year over year and 6% sequentially to $786 million.
In terms of major products, Wafer Inspection and Patterning Systems (including metrology and reticle inspection) accounted for 48% and 21%, respectively, of KLA’s total revenues in the fiscal second quarter.
Wafer Inspection revenues increased 1% year over year and 2% sequentially to $1.57 billion. Patterning revenues moved up 31% year over year and 4% sequentially to $696 million.
In terms of the regional breakdown of revenues, Taiwan and China led revenue contributions with 26% and 30%, respectively. Korea accounted for 14%, Japan 7%, and North America 12%. Europe contributed 5%, whereas the remaining 6% came from the rest of Asia.
KLA’s Operating Details
In the second quarter of fiscal 2026, the non-GAAP gross margin was 62.6%, 60 basis points above the midpoint of the guidance range.
Research and development (R&D) expenses increased 10.9% year over year to $383.9 million. As a percentage of revenues, R&D expenses decreased 40 basis points (bps) on a year-over-year basis to 11.6%.
Selling, general and administrative (SG&A) expenses increased 4.8% year over year to $279.9 million. As a percentage of revenues, SG&A expenses decreased 20 bps year over year to 8.5%.
The fiscal second-quarter non-GAAP operating expenses were $653 million.
The fiscal second-quarter non-GAAP operating margin was 42.8%.
KLAC Balance Sheet & Cash Flow
As of Dec. 31, 2025, cash, cash equivalents, and marketable securities totaled $5.20 billion compared with $4.68 billion as of Sept. 30, 2025.
Long-term debt at the end of the fiscal second quarter was $5.88 billion, unchanged from the figure reported in the previous quarter.
Cash flow from operating activities was $1.36 billion compared with $1.16 billion reported in the previous quarter. The free cash flow was $1.26 billion in the fiscal second quarter.
In the fiscal second quarter, KLAC repurchased $548 million worth of shares and paid $250 million in dividends.
KLAC Provides Positive 3Q26 Guidance
For third-quarter fiscal 2026, revenues are expected to be $3.35 billion, plus/minus $150 million.
KLA expects non-GAAP earnings of $9.08 per share, plus/minus 78 cents.
The company expects a non-GAAP gross margin of 61.75%, plus/minus 1%. Operating expense is expected to be roughly $645 million in the fiscal third quarter.
KLA’s Zacks Rank & Other Stocks to Consider
Currently, KLA sports a Zacks Rank #1 (Strong Buy).
Shares of Arista Networks have gained 21.2% in the trailing six-month period. Arista Networks is set to report fourth-quarter 2025 results on Feb. 12
Shares of Advanced Energy have gained 86.8% in the trailing six-month period. Advanced Energy is slated to report third-quarter 2025 results on Feb. 10.
Amkor Technology shares have surged 108.9% in the trailing six-month period. Amkor Technology is set to report fourth-quarter 2025 results on Feb. 9.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
KLA Q2 Earnings Surpass Estimates, Revenues Increase Y/Y, Shares Fall
Key Takeaways
KLA Corporation (KLAC - Free Report) reported second-quarter fiscal 2026 non-GAAP earnings of $8.85 per share, beating the Zacks Consensus Estimate by 0.36%. The figure increased 7.9% year over year.
Revenues increased 7.2% year over year to $3.3 billion, surpassing the Zacks Consensus Estimate by 1.02%.
In the pre-market trading, KLAC shares lost 7.7%.
KLAC’s Q2 Segmental Details
In terms of reportable segments, Semiconductor Process Control revenues (91.1% of total revenues) increased 9% year over year and 4% sequentially to $3 billion.
Foundry & Logic accounted for about 60%, while Memory accounted for about 40% of Semiconductor Process Control revenues.
KLA Corporation Price, Consensus and EPS Surprise
KLA Corporation price-consensus-eps-surprise-chart | KLA Corporation Quote
Specialty Semiconductor Process revenues (4.3% of total revenues) were $140 million, down 12.4% year over year but up 17% sequentially.
PCB and Component Inspection revenues (4.6% of total revenues) decreased 6% year over year to $152 million and declined 20% on a sequential basis.
KLAC Top-Line Details
Product revenues (which accounted for 76.2% of total revenues) rose 4.2% year over year to $2.51 billion. Service revenues (23.8% of total revenues) increased 18% year over year and 6% sequentially to $786 million.
In terms of major products, Wafer Inspection and Patterning Systems (including metrology and reticle inspection) accounted for 48% and 21%, respectively, of KLA’s total revenues in the fiscal second quarter.
Wafer Inspection revenues increased 1% year over year and 2% sequentially to $1.57 billion. Patterning revenues moved up 31% year over year and 4% sequentially to $696 million.
In terms of the regional breakdown of revenues, Taiwan and China led revenue contributions with 26% and 30%, respectively. Korea accounted for 14%, Japan 7%, and North America 12%. Europe contributed 5%, whereas the remaining 6% came from the rest of Asia.
KLA’s Operating Details
In the second quarter of fiscal 2026, the non-GAAP gross margin was 62.6%, 60 basis points above the midpoint of the guidance range.
Research and development (R&D) expenses increased 10.9% year over year to $383.9 million. As a percentage of revenues, R&D expenses decreased 40 basis points (bps) on a year-over-year basis to 11.6%.
Selling, general and administrative (SG&A) expenses increased 4.8% year over year to $279.9 million. As a percentage of revenues, SG&A expenses decreased 20 bps year over year to 8.5%.
The fiscal second-quarter non-GAAP operating expenses were $653 million.
The fiscal second-quarter non-GAAP operating margin was 42.8%.
KLAC Balance Sheet & Cash Flow
As of Dec. 31, 2025, cash, cash equivalents, and marketable securities totaled $5.20 billion compared with $4.68 billion as of Sept. 30, 2025.
Long-term debt at the end of the fiscal second quarter was $5.88 billion, unchanged from the figure reported in the previous quarter.
Cash flow from operating activities was $1.36 billion compared with $1.16 billion reported in the previous quarter. The free cash flow was $1.26 billion in the fiscal second quarter.
In the fiscal second quarter, KLAC repurchased $548 million worth of shares and paid $250 million in dividends.
KLAC Provides Positive 3Q26 Guidance
For third-quarter fiscal 2026, revenues are expected to be $3.35 billion, plus/minus $150 million.
KLA expects non-GAAP earnings of $9.08 per share, plus/minus 78 cents.
The company expects a non-GAAP gross margin of 61.75%, plus/minus 1%. Operating expense is expected to be roughly $645 million in the fiscal third quarter.
KLA’s Zacks Rank & Other Stocks to Consider
Currently, KLA sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the broader Zacks Computer and Technology sector are Arista Networks (ANET - Free Report) , Advanced Energy (AEIS - Free Report) , and Amkor Technology (AMKR - Free Report) . While Amkor Technology sports a Zacks Rank #1, Arista Networks and Advanced Energy carry a Zacks Rank 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Arista Networks have gained 21.2% in the trailing six-month period. Arista Networks is set to report fourth-quarter 2025 results on Feb. 12
Shares of Advanced Energy have gained 86.8% in the trailing six-month period. Advanced Energy is slated to report third-quarter 2025 results on Feb. 10.
Amkor Technology shares have surged 108.9% in the trailing six-month period. Amkor Technology is set to report fourth-quarter 2025 results on Feb. 9.