It has been about a month since the last earnings report for KLA (KLAC Quick QuoteKLAC - Free Report) . Shares have added about 10.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is KLA due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

KLA Q3 Earnings Surpass Estimates, Revenues Increase Y/Y

KLA Corporation reported fiscal third-quarter 2026 non-GAAP earnings of $9.40 per share, up 11.8% year over year, beating the Zacks Consensus Estimate by 2.60%. 

Revenue rose 11.5% year over year to $3.42 billion and topped the consensus mark by about 0.91%. A key industry datapoint supporting the quarter’s tone was KLA’s process control market leadership.

KLAC Segment Mix Shows Broad-Based Demand

Semiconductor Process Control remained the clear engine of results. Segment revenue totaled $3.08 billion (90.3% of total revenues), up 12.6% year over year and 3% sequentially, underscoring solid demand across inspection, metrology and related services.

Within Semiconductor Process Control, the company described end-market mix as roughly 62% foundry/logic and 38% memory on a systems basis.

Specialty Semiconductor Process revenues (4.8% of total revenues) were $164 million, up 5% year over year and 17% sequentially.

PCB and Component Inspection revenues (4.9% of total revenues) decreased 1% year over year to $167 million but increased 10% on a sequential basis.

KLAC Top-Line Details

Product revenues (which accounted for 77.3% of total revenues) rose 10.3% year over year to $2.64 billion. Service revenues (22.7% of total revenues) increased 15.8% year over year to $775 million.

In terms of major products, Wafer Inspection and Patterning Systems (including metrology and reticle inspection) accounted for 51% and 18%, respectively, of KLA’s total revenues in the fiscal third quarter. 

Wafer Inspection revenues increased 16% year over year and 11% sequentially to $1.74 billion. Patterning revenues moved down 3% year over year and 12% sequentially to $615 million. 

In terms of the regional breakdown of revenues, Taiwan and China led revenue contributions with 26% and 24%, respectively. Korea accounted for 20%, Japan 5% and North America 12%. Europe contributed 7%, whereas the remaining 6% came from the Rest of Asia.

KLAC Margin Profile Holds Firm Despite Spend

In the third quarter of fiscal 2026, the non-GAAP gross margin was 62.2%, 45 basis points above the midpoint of the guidance range.

Research and development (R&D) expenses increased 15% year over year to $388.8 million. As a percentage of revenues, R&D expenses decreased 30 basis points (bps) on a year-over-year basis to 11.4%.

Selling, general, and administrative (SG&A) expenses increased 17% year over year to $291.1 million. As a percentage of revenues, SG&A expenses increased 40 bps year over year to 8.5%.

The fiscal third-quarter non-GAAP operating expenses were $670 million.

The fiscal third-quarter non-GAAP operating margin was 42.6%.

KLAC Balance Sheet & Cash Flow

As of March 31, 2026, cash, cash equivalents, and marketable securities totaled $4.95 billion compared with $5.20 billion as of Dec. 31, 2025.

Long-term debt at the end of the fiscal third quarter was $5.88 billion, unchanged from the figure reported in the previous quarter.

Cash flow from operations was $707.5 million for the quarter, and free cash flow was $622.3 million, providing ample room for capital deployment.

KLA returned $874.8 million to shareholders in the fiscal third quarter, including $626 million in share repurchases and $249 million in dividends.

KLAC Provides Positive 4Q26 Guidance

For the fourth quarter of fiscal 2026, KLA expects revenues of $3.575 billion plus or minus $200 million. The company’s non-GAAP earnings outlook is $9.87 plus or minus $1.00, with non-GAAP gross margin projected at 61.75% plus or minus 1%.

The outlook also included model assumptions that point to steady investment levels, with non-GAAP operating expenses expected to be around $665 million. KLA expects foundry/logic to represent approximately 82% of Semiconductor Process Control systems revenue to semiconductor customers in the June quarter, with memory at about 18%, reflecting a mix shift that could influence both revenue composition and near-term margin dynamics.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month.

VGM Scores

At this time, KLA has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a score of F on the value side, putting it in the lowest quintile for value investors.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise KLA has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.

Performance of an Industry Player

KLA belongs to the Zacks Electronics - Miscellaneous Products industry. Another stock from the same industry, Teradyne (TER Quick QuoteTER - Free Report) , has gained 11.4% over the past month. More than a month has passed since the company reported results for the quarter ended March 2026.

Teradyne reported revenues of $1.28 billion in the last reported quarter, representing a year-over-year change of +87%. EPS of $2.56 for the same period compares with $0.75 a year ago.

For the current quarter, Teradyne is expected to post earnings of $1.99 per share, indicating a change of +249.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.2% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Teradyne. Also, the stock has a VGM Score of D.