KLA (KLAC) Q2 2026 earnings summary

Executive summary

• Achieved record 2025 revenue of $12.745 billion, up 17% year-over-year, with strong growth in process control, memory, and advanced packaging, driven by AI demand and robust profitability metrics.

• December quarter revenue was $3.3 billion, with non-GAAP EPS of $8.85, GAAP EPS of $8.68, and net income of $1.15 billion.

• Maintained industry-leading gross margin of 62.8% and operating margin of 43.6% for 2025.

• Free cash flow increased 30% to $4.4 billion for 2025; $3 billion returned to shareholders via dividends and buybacks.

• Positioned as a key enabler in the AI ecosystem, benefiting from infrastructure buildout across foundry/logic, memory, advanced packaging, and services.

Financial highlights

• December quarter revenue grew 17% year-over-year, driven by leading-edge foundry logic, HBM, and DRAM investments.

• Gross margin for the quarter was 61.4%–62.6%, above guidance midpoint; operating margin improved year-over-year.

• Non-GAAP net income for the year was $4.56 billion; GAAP net income was $4.56 billion.

• Free cash flow for the quarter reached a record $1.26 billion; cash and equivalents at quarter-end were $5.21 billion.

• Capital returns were $797.4 million for the quarter and $3.01 billion for the last twelve months.

Outlook and guidance

• 2026 WFE market expected to grow high single- to low double-digits, reaching low $120 billion; advanced packaging to $12 billion.

• March quarter revenue guidance: $3.35 billion ± $150 million; non-GAAP gross margin 61.75% ± 1 ppt; non-GAAP EPS $9.08 ± $0.78.

• 2026 gross margin expected at ~62% ± 50 bps, with operating expenses rising sequentially by ~$15 million per quarter.

• 2026 planning tax rate set at 14.5%.

• Second half 2026 revenue expected to accelerate, with high single- to low double-digit growth half-over-half.