first quarter of fiscal year 2027
Filed Oct 28, 2026KLA Corporation Reports Fiscal 2027 First Quarter Results
Total revenues, GAAP diluted EPS and non-GAAP diluted EPS were above the midpoints of their respective guidance ranges. Revenue, net income, operating cash flow, free cash flow and capital returns were all higher than the respective September 30, 2025 figures reported in the filing.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenues, three months ended September 30, 2026GAAP | $4.14B | – | – |
| Product revenues, three months ended September 30, 2026GAAP | $3.29B | – | – |
| Service revenues, three months ended September 30, 2026GAAP | $850.5M | – | – |
| Costs of revenues, three months ended September 30, 2026GAAP | $1.58B | – | – |
| Research and development, three months ended September 30, 2026GAAP | $395.1M | – | – |
| Selling, general and administrative, three months ended September 30, 2026GAAP | $301.5M | – | – |
| Interest expense, three months ended September 30, 2026GAAP | $67.93M | – | – |
| Other expense (income), net, three months ended September 30, 2026GAAP | −$30.34M | – | – |
| Income before income taxes, three months ended September 30, 2026GAAP | $1.82B | – | – |
| Provision for income taxes, three months ended September 30, 2026GAAP | $275.5M | – | – |
| Net income, three months ended September 30, 2026GAAP | $1.55B | – | – |
| Net income per diluted share, three months ended September 30, 2026GAAP | $ 1.18 | – | – |
| Net income per basic share, three months ended September 30, 2026GAAP | $ 1.19 | – | – |
| Non-GAAP net income, three months ended September 30, 2026non-GAAP | $1.60B | – | – |
| Non-GAAP net income per diluted share, three months ended September 30, 2026non-GAAP | $ 1.22 | – | – |
| Net cash provided by operating activities, three months ended September 30, 2026GAAP | $1.53B | – | – |
| Capital expenditures, three months ended September 30, 2026GAAP | −$194.8M | – | – |
| Free cash flow, three months ended September 30, 2026non-GAAP | $1.34B | – | – |
| Net cash provided by operating activities, twelve months ended September 30, 2026GAAP | $4.51B | – | – |
| Free cash flow, twelve months ended September 30, 2026non-GAAP | $4.04B | – | – |
| Cash and cash equivalents, September 30, 2026GAAP | $1.53B | – | – |
| Marketable securities, September 30, 2026GAAP | $3.21B | – | – |
| Inventories, September 30, 2026GAAP | $4.09B | – | – |
| Long-term debt, September 30, 2026GAAP | $5.72B | – | – |
| Total assets, September 30, 2026GAAP | $18.40B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Semiconductor Process ControlThe company cited increases in leading-edge designs across foundry and logic, device size and value, memory complexity and performance requirements, and the importance of advanced packaging. | $3.75B | – | – |
| Specialty Semiconductor ProcessThe company cited technology transitions and rigorous performance requirements of high-performance computing. | $139.5M | – | – |
| PCB and Component InspectionThe company said its PCB and component inspection businesses are benefiting from technology transitions and rigorous performance requirements of high-performance computing. | $242.2M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Second quarter of fiscal 2027 ending in December outlook
- Revenue$4.7 billion +/- $200 million
- Gross marginGAAP gross margin is expected to be in a range of 61.8% +/- 1.0%; Non-GAAP gross margin is expected to be in a range of 62.5% +/- 1.0%
- NoteGAAP diluted EPS is expected to be in a range of $1.41 +/- $0.11
- NoteNon-GAAP diluted EPS is expected to be in a range of $1.44 +/- $0.11
- NoteGAAP net income per diluted share: $1.30 low to $1.52 high
- NoteNon-GAAP net income per diluted share: $1.33 low to $1.55 high
- NoteShares used in net income per diluted share calculation: 1,306
Capital returns
- Payments of dividends to stockholders for the three months ended September 30, 2026: $ 305,145
- Common stock repurchases for the three months ended September 30, 2026: $ 935,776
- Capital returns for the three months ended September 30, 2026: $ 1,240,921
- Payments of dividends to stockholders for the twelve months ended September 30, 2026: $ 1,108,969
- Common stock repurchases for the twelve months ended September 30, 2026: $ 2,680,478
- Capital returns for the twelve months ended September 30, 2026: $ 3,789,447
What drove it
- The company said process control is critical to the AI ecosystem buildout.
- KLA cited leading-edge foundry and logic designs, device size and value, memory complexity and performance requirements, and advanced packaging as ongoing inflections.
- The company said its process, PCB, and component inspection businesses are benefiting from technology transitions and high-performance computing performance requirements.
- The company stated that the September quarter beat the midpoint of guidance across all key metrics.
Concerns
- Inventories were $ 4,090,426 at September 30, 2026, compared with $ 3,648,538 at June 30, 2026.
- The filing identifies risks from Bureau of Industry and Security rules and regulations affecting sales and services to certain customers in China.
- The filing identifies tariffs, retaliatory trade measures and other trade restrictions as risks.
- The filing identifies a highly concentrated customer base and cyclicality of the industries in which KLA operates as risks.
- The filing identifies risks associated with debt and KLA's leveraged capital structure.
What to watch
- Delivery against second-quarter fiscal 2027 total-revenue guidance of $4.7 billion +/- $200 million.
- Delivery against second-quarter fiscal 2027 GAAP gross-margin guidance of 61.8% +/- 1.0% and non-GAAP gross-margin guidance of 62.5% +/- 1.0%.
- Delivery against second-quarter fiscal 2027 GAAP diluted-EPS guidance of $1.41 +/- $0.11 and non-GAAP diluted-EPS guidance of $1.44 +/- $0.11.
- Inventory levels, which were $ 4,090,426 at September 30, 2026.
- Demand associated with the AI ecosystem buildout, leading-edge designs, memory, advanced packaging and high-performance computing.
Balance sheet and cash flow
- Accounts receivable, net at September 30, 2026: $ 3,072,087
- Inventories at September 30, 2026: $ 4,090,426
- Cash and cash equivalents at September 30, 2026: $ 1,531,950
- Marketable securities at September 30, 2026: $ 3,209,241
- Long-term debt at September 30, 2026: $ 5,723,289
- Net decrease in cash and cash equivalents for the three months ended September 30, 2026: $ (117,892)
- Net cash used in financing activities for the three months ended September 30, 2026: $ (1,479,603)
Analysis
KLA reported total revenues of $ 4,136,015 for the three months ended September 30, 2026, compared with $ 3,657,556 in the June 30, 2026 quarter and $ 3,209,696 in the September 30, 2025 quarter. The company stated that total revenues of $4.14 billion were above the midpoint of its guidance range of $4.0 billion +/- $200 million. Product revenues were $ 3,285,469 and service revenues were $ 850,546, with both line items higher than their respective June 30, 2026 and September 30, 2025 values.
All three reported segments posted revenue figures above their respective September 30, 2025 and June 30, 2026 levels except Specialty Semiconductor Process, which was $ 139,487 versus $ 159,704 in the June 30, 2026 quarter. Semiconductor Process Control generated $ 3,754,254, while PCB and Component Inspection generated $ 242,151. Management attributed the growth profile to AI ecosystem demand, leading-edge foundry and logic designs, memory complexity, advanced packaging, technology transitions and high-performance computing requirements.
GAAP net income was $ 1,548,588 and GAAP diluted EPS was $ 1.18, compared with $ 1,363,059 and $ 1.04 in the June 30, 2026 quarter and $ 1,121,040 and $ 0.85 in the September 30, 2025 quarter. Non-GAAP net income was $ 1,603,004 and non-GAAP diluted EPS was $ 1.22. The non-GAAP reconciliation includes $ 43,040 of acquisition-related charges, $ (14,560) of income tax effect of non-GAAP adjustments, $ 20,151 of Pillar Two undertaxed profits rule taxes and $ 5,785 of discrete tax items. The filing does not report actual-period GAAP or non-GAAP gross margin.
Cash generation strengthened in the reported quarter. Net cash provided by operating activities was $ 1,530,939 and free cash flow was $ 1,336,183, compared with $ 906,430 and $ 817,142 in the June 30, 2026 quarter. KLA returned $ 1,240,921 through $ 305,145 of dividends and $ 935,776 of common-stock repurchases. Cash and cash equivalents were $ 1,531,950, marketable securities were $ 3,209,241 and long-term debt was $ 5,723,289 at September 30, 2026. Inventories were $ 4,090,426, compared with $ 3,648,538 at June 30, 2026.
For the second quarter of fiscal 2027, KLA guided total revenues to $4.7 billion +/- $200 million, GAAP gross margin to 61.8% +/- 1.0%, non-GAAP gross margin to 62.5% +/- 1.0%, GAAP diluted EPS to $1.41 +/- $0.11 and non-GAAP diluted EPS to $1.44 +/- $0.11. The guidance implies management expects the business conditions it described, including AI-related process-control demand and high-performance-computing technology transitions, to continue into the December quarter. No previous outlook was provided for a reported-versus-prior-guidance comparison.
Management, verbatim
KLA’s September quarter beat the midpoint of guidance across all key metrics, demonstrating the accelerated growth we expected for the second half of calendar 2026.
Rick Wallace, president and CEO of KLA Corporation
Process control, and KLA in particular, continues to be critical to the AI ecosystem buildout and benefits from numerous ongoing inflections, including increases in leading-edge designs across foundry and logic, device size and value, memory complexity and performance requirements, and the importance of advanced packaging.
Rick Wallace, president and CEO of KLA Corporation
Not in the filing
stated, not guessed- Actual GAAP gross margin for the three months ended September 30, 2026
- Actual non-GAAP gross margin for the three months ended September 30, 2026
- GAAP operating income for the three months ended September 30, 2026
- Non-GAAP operating income for the three months ended September 30, 2026
- Reported percentage changes for total revenue, product revenue, service revenue, segment revenues, net income, EPS, operating cash flow and free cash flow
- Second-quarter fiscal 2027 operating-expense guidance
- Second-quarter fiscal 2027 tax-rate guidance
- Previous-release outlook needed to compare reported results with prior guidance
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.