01—Abstract
Summary
Summary of the 10-Q filed January 30, 2026. Cited figures are marked; the original filing is the authoritative source.
KLA Corporation (KLAC) reported strong financial performance for the quarter and six months ended December 31, 2025.
Total revenues increased by 7% year-over-year to $3.3 billiona for the quarter, driven by robust growth in service revenue (up 18%) and a 4% increase in product revenue. This growth was particularly fueled by strong investments from memory customers in DRAM and high-bandwidth memory, alongside significant adoption of their advanced packaging products. The company also saw a notable uptick in its Semiconductor Process Control segment.
The company maintained healthy profitability, with gross margin improving to 61.4% from 60.3% in the prior year's comparable quarter. Net income also saw a substantial increase, reaching $1.15 billionb for the quarter, up from $824.5 million in the prior year.
This improvement was partly due to the absence of the significant goodwill and intangible asset impairment charges recorded in the prior year's quarter. KLA continues to return capital to shareholders through share repurchases and dividend payments, signaling financial strength and a commitment to shareholder value.
02—Key points
Key Highlights
- Total revenues grew 7% to $3.3 billion for the three months ended December 31, 2025, driven by strong service revenue growth (18%) and product revenue growth (4%).
- Gross margin improved to 61.4% from 60.3% year-over-year, indicating improved operational efficiency and favorable product mix.
- Net income surged to $1.15 billion from $824.5 million in the prior year's comparable quarter, benefiting from revenue growth and the absence of prior year impairment charges.
- The Semiconductor Process Control segment showed significant revenue growth (9% year-over-year), highlighting its strategic importance and demand drivers like AI and advanced packaging.
- KLA continued to actively return capital to shareholders, repurchasing $537.6 million of common stock and paying $249.7 million in dividends during the quarter.
- Cash and cash equivalents, along with marketable securities, increased to $5.21 billion, providing substantial financial flexibility.
- The company reiterated its commitment to investing in R&D, with R&D expenses increasing by 11% year-over-year to support technological innovation and maintain a competitive edge.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed January 30, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $3.30B$3.08B | +7.2% |
| Cost of Revenue | $1.27B$1.22B | +4.1% |
| Gross Profit | $2.03B$1.86B | +9.2% |
| R&D Expenses | $383.87M$346.16M | +10.9% |
| SG&A Expenses | $279.92M$267.08M | +4.8% |
| Net Income | $1.15B$824.53M | +39.0% |
| EPS (Basic) | $0.87$0.62 | +41.3% |
| EPS (Diluted) | $0.87$0.62 | +40.9% |
| Shares Outstanding (Basic) | 1.31B1.33B | −1.5% |
| Shares Outstanding (Diluted) | 1.32B1.34B | −1.4% |
05—Questions
Frequently Asked Questions
What were the key drivers of KLA's revenue growth in the recent quarter?
KLA's revenue growth was primarily driven by an 18% increase in service revenues, attributed to a growing installed base of tools and recurring service contracts. Product revenue also saw a 4% increase, fueled by strong investments from memory customers, particularly in DRAM and high-bandwidth memory, as well as robust adoption of their advanced packaging products.
How did KLA's profitability fare in the reported period?
Profitability improved significantly. Gross margin increased to 61.4% compared to 60.3% in the prior year's quarter. Net income rose substantially to $1.15 billion from $824.5 million in the prior year, partly due to the absence of significant goodwill and intangible asset impairment charges that impacted the prior year's results.
What is KLA's financial position regarding cash and investments?
KLA's financial position remains strong. As of December 31, 2025, the company held $5.21 billion in cash, cash equivalents, and marketable securities, an increase from $4.49 billion at the end of the prior fiscal year. This robust liquidity supports ongoing operations, investments, and shareholder returns.
How is KLA returning value to its shareholders?
KLA actively returns value to shareholders through share repurchases and dividends. In the quarter ended December 31, 2025, the company repurchased $537.6 million of common stock and paid $249.7 million in dividends, continuing its strategy of returning excess cash.
06—Continue