Investor Relations: Media Relations:
Investor Relations: Media Relations: Kevin Kessel, CFA Mike Dulin Vice President, Investor Relations Corporate Communications ir@kla.com media@kla.com
• Total revenues were $4.14 billion, above the midpoint of the guidance range of $4.0 billion +/- $200 million;
• GAAP diluted EPS was $1.18 and non-GAAP diluted EPS was $1.22, both above the midpoints of the respective guidance ranges;
• Cash flow from operating activities for the quarter and last twelve months were $1.53 billion and $4.51 billion, respectively, and free cash flow was $1.34 billion and $4.04 billion, respectively; and
• Capital returns for the quarter and last twelve months were $1.24 billion and $3.79 billion, respectively.
MILPITAS, Calif., October 28, 2026 - KLA Corporation (NASDAQ: KLAC) today announced financial and operating results for its first quarter of fiscal year 2027, which ended on September 30, 2026, and reported GAAP net income of $1.55 billion and GAAP net income per diluted share of $1.18 on revenues of $4.14 billion.
“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,” said 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. In addition, KLA’s process, PCB, and component inspection businesses are benefiting from the technology transitions and the rigorous performance requirements of high-performance computing, which further augments the company’s growth profile. KLA’s market-leading product portfolio and its associated services offerings remain well positioned to address these compelling opportunities as we approach the end of calendar 2026 and look forward to calendar 2027.”
GAAP Results Q1 FY 2027 Q4 FY 2026 Q1 FY 2026 Total Revenues $4,136 million $3,658 million $3,210 million Net Income $1,549 million $1,363 million $1,121 million Net Income per Diluted $1.18 $1.04 $0.85 Share(1) Non-GAAP Results Q1 FY 2027 Q4 FY 2026 Q1 FY 2026 Net Income $1,603 million $1,386 million $1,167 million Net Income per Diluted $1.22 $1.05 $0.88 Share(1)
(1) All per share amounts referenced herein have been retroactively adjusted to reflect the ten-for-one stock split effective June 11, 2026.
A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in this release. KLA will discuss the results for its fiscal year 2027 first quarter, along with its outlook, on a conference call today beginning at 2:00 p.m. Pacific Time. A webcast of the call will be available at: ir.kla.com .
The following details our guidance for the second quarter of fiscal 2027 ending in December:
• Non-GAAP diluted EPS is expected to be in a range of $1.44 +/- $0.11 1 For additional details and assumptions underlying our guidance metrics, please see the company’s published Letter to Shareholders, Earnings Slide Presentation and Earnings Infographic on the KLA investor relations website (ir.kla.com) . Such Letter to Shareholders, Earnings Slide Presentation and Earnings Infographic are not incorporated by reference into this earnings release.
KLA Corporation (“KLA”) develops industry-leading equipment and services that enable innovation throughout the electronics industry. We provide advanced process control and process-enabling solutions for manufacturing wafers and reticles, integrated circuits, packaging and printed circuit boards. In close collaboration with leading customers across the globe, our expert teams of physicists, engineers, data scientists and problem-solvers design solutions that move the world forward. Investors and others should note that KLA announces material financial information including SEC filings, press releases, public earnings calls and conference webcasts using an investor relations website ( ir.kla.com ). Additional information may be found at: www.kla.com .
Statements in this press release other than historical facts, such as statements pertaining to the amount and timing of dividends, the amount and timing of share repurchases, total revenues, GAAP and non-GAAP gross margin and GAAP and non- GAAP diluted EPS for the quarter ending December 31, 2026, are forward-looking statements and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current information and expectations and involve a number of risks and uncertainties. Actual results may differ materially from those projected in such statements due to various factors, including, but not limited to: our vulnerability to a weakening in the condition of the financial markets and the global economy; risks related to our international operations; evolving Bureau of Industry and Security of the U.S. Department of Commerce rules and regulations and their impact on our ability to sell products to and provide services to certain customers in China; tariffs, retaliatory trade measures and other trade restrictions, as well as uncertainty regarding tariff authority, implementation and refund process; costly intellectual property disputes that could result in our inability to sell or use the challenged technology; risks related to the legal, regulatory and tax environments in which we conduct our business; differing stakeholder expectations, requirements and attention to environment, social and governance (“ESG”) matters and the resulting costs, risks and impact on our business; unexpected delays, difficulties and expenses in executing against our environmental, climate, or other ESG targets, goals and commitments, or meeting stakeholder expectations; our ability to attract, retain and motivate key personnel; our vulnerability to disruptions and delays at our third-party service providers; cybersecurity threats, cyber incidents affecting our and our business partners’ systems and networks; our reliance on critical information, including our enterprise resource planning system for daily operations; risks related to acquisitions, integrations, strategic alliances or collaborative arrangements; climate change, natural disasters, public health crises, terrorism, acts of war and other catastrophic events and the adverse impact on our business operations; the war between Ukraine and Russia, the armed conflict in Iran and elsewhere in the Middle East, and the significant military activity in those regions; lack of insurance for losses and interruptions caused by terrorists and acts of war, and our self-insurance of certain risks including earthquake risk; risks related to fluctuations in foreign currency exchange rates; risks related to fluctuations in interest rates and the market values of our portfolio investments; risks associated with our interest rate hedging activities; risks related to tax and regulatory compliance audits; any change in taxation rules or practices and our effective tax rate; compliance costs with federal securities laws, rules, regulations, NASDAQ requirements, and evolving accounting standards and practices; ongoing changes in the technology industry, including artificial intelligence (“AI”) related developments and changes in semiconductor manufacturing processes, customer investment patterns and end- market demand; our vulnerability to a highly concentrated customer base; the cyclicality of the industries in which we operate; our ability to timely develop new technologies and products that successfully address changes in the industry; risks related to the development, adoption, governance and use of AI by us, our competitors and third parties; our ability to maintain our technology advantage and protect proprietary rights; our ability to compete in the industry; the availability and cost of components, materials or subassemblies used in the production of our products, including due to limited-source suppliers, the availability of rare earth elements or DRAM chip shortages; our ability to operate our business in accordance with our business plan; risks related to our debt and leveraged capital structure; we may not be able to declare cash dividends at all or in any particular amount; liability to our customers under indemnification provisions if our products fail to operate properly or contain defects or our customers are sued by third parties due to our products; risks associated with our receipt of government funding; we may incur significant restructuring charges or other asset impairment charges or inventory write offs; we are subject to risks related to receivables factoring, banking arrangements and compliance risk of certain settlement agreements with the government; and risks related to the Court of Chancery of the State of Delaware being the sole and exclusive forum for certain actions and proceedings. For other factors that may cause actual results to differ materially from those projected and anticipated in forward-looking statements in this press release, please refer to KLA’s Annual Report on Form 10-K for the year ended June 30, 2026, and other subsequent filings with the Securities and Exchange Commission (including, but not limited to, the risk factors described therein). KLA assumes no obligation to, and does not currently intend to, update these forward-looking statements. 2
(1) All per share amounts referenced herein have been retroactively adjusted to reflect the ten-for-one stock split effective June 11, 2026. 4
The following is a summary of results for each of our three reportable segments and reconciliations to total revenues for the indicated periods:
(1) All per share amounts referenced herein have been retroactively adjusted to reflect the ten-for-one stock split effective June 11, 2026. 6 Pre-tax Impact of GAAP to Non-GAAP Adjustments Included in Condensed Consolidated Unaudited Statements of Operations
(In thousands) Three Months Total Pre-tax Ended September Acquisition-Rel- GAAP to Non-GAAP 30, 2026 ated Charges Adjustments ────────────────────────────────────────────────────────────────────────────── Costs of revenues $ 34,929 $ 34,929 Selling, general and 8,111 8,111 administrative Total in three months ended $ 43,040 $ 43,040 September 30, 2026 Three Months Ended June 30, 2026 Costs of revenues $ 36,200 $ 36,200 Selling, general and 8,470 8,470 administrative Other expense -11,601 -11,601 (income), net Total in three months ended June $ 33,069 $ 33,069 30, 2026 Three Months Ended September 30, 2025 Costs of revenues $ 38,053 $ 38,053 Selling, general and 10,973 10,973 administrative Total in three months ended $ 49,026 $ 49,026 September 30, 2025
Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow
Three Months Ending December 31, 2026 ────────────────────────────────────────────────────────────────────────────── (In millions, except per share Low High amounts) GAAP net income per diluted $1.30 $1.52 share Acquisition-related charges a 0.03 0.03 Income tax effect of non-GAAP b -0.01 -0.01 adjustments Pillar Two undertaxed profits c 0.01 0.01 rule taxes Non-GAAP net income per $1.33 $1.55 diluted share Shares used in net income per diluted 1,306 1,306 share calculation
The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for, KLA’s financial results presented in accordance with United States GAAP.
To supplement our Condensed Consolidated Financial Statements presented in accordance with GAAP, we provide certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain gains, costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user’s overall understanding of our operating performance and our prospects in the future. Specifically, we believe that the non-GAAP information, including non-GAAP net income, non-GAAP net income per diluted share, non-GAAP gross margin and free cash flow, provides useful measures to both management and investors regarding financial and business trends relating to our financial performance by excluding certain costs and expenses that we believe are not indicative of our core operating results to help investors compare our operating performances with our results in prior periods as well as with the performance of other companies. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non- GAAP financial metrics are inherently subject to significant discretion (for example, determining which costs and expenses to exclude when calculating such a metric). As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP. The following are descriptions of the adjustments made to reconcile GAAP net income to non-GAAP net income:
a. Acquisition-related charges primarily include amortization of intangible assets. Acquisition-related charges during the three months ended June 30, 2026 also include a discrete release of $11.6 million of interest on unrecognized tax positions recorded as part of purchase price accounting arising from acquisitions. Although we exclude the effect of amortization of all acquired intangible assets from these non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase price accounting arising from acquisitions, and such amortization of intangible assets related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Investors should note that the use of these intangible assets contributed to our revenues earned during the periods presented and are expected to contribute to our future period revenues as well.
b. Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above.
c. Pillar Two undertaxed profits rule taxes represents the impact of Undertaxed Profits Rule taxes arising from Pillar Two legislation. We expect these taxes to be temporary and reverse upon adoption of the Side-by-Side Safe Harbor provisions, which would exempt U.S.-parented groups from the Undertaxed Profits Rule.
d. Discrete tax items in the three months ended September 30, 2025 include the recognition of a deferred tax liability for withholding taxes on future remittance of previously taxed income as a result of new tax legislation. Discrete tax items in all periods presented include a tax impact relating to the amortization of tax benefits from internal restructuring or similar tax benefits recorded in other periods. 8
Full text with the tables
Exhibit 99.1
FOR IMMEDIATE RELEASE
Investor Relations: Media Relations:
Kevin Kessel, CFA Mike Dulin
Vice President, Investor Relations Corporate Communications
ir@kla.com media@kla.com
KLA Corporation Reports Fiscal 2027 First Quarter Results
• Total revenues were $4.14 billion, above the midpoint of the guidance range of
$4.0 billion +/- $200 million;
• GAAP diluted EPS was $1.18 and non-GAAP diluted EPS was $1.22, both above the
midpoints of the respective guidance ranges;
• Cash flow from operating activities for the quarter and last twelve months
were $1.53 billion and $4.51 billion, respectively, and free cash flow was $1.34
billion and $4.04 billion, respectively; and
• Capital returns for the quarter and last twelve months were $1.24 billion and
$3.79 billion, respectively.
MILPITAS, Calif., October 28, 2026 - KLA Corporation (NASDAQ: KLAC) today
announced financial and operating results for its first quarter of fiscal year
2027, which ended on September 30, 2026, and reported GAAP net income of $1.55
billion and GAAP net income per diluted share of $1.18 on revenues of $4.14
billion.
“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,” said 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. In addition, KLA’s process, PCB, and component inspection businesses
are benefiting from the technology transitions and the rigorous performance
requirements of high-performance computing, which further augments the company’s
growth profile. KLA’s market-leading product portfolio and its associated
services offerings remain well positioned to address these compelling
opportunities as we approach the end of calendar 2026 and look forward to
calendar 2027.”
GAAP Results
Q1 FY 2027 Q4 FY 2026 Q1 FY 2026
Total Revenues $4,136 million $3,658 million $3,210 million
Net Income $1,549 million $1,363 million $1,121 million
Net Income per Diluted $1.18 $1.04 $0.85
Share(1)
Non-GAAP Results
Q1 FY 2027 Q4 FY 2026 Q1 FY 2026
Net Income $1,603 million $1,386 million $1,167 million
Net Income per Diluted $1.22 $1.05 $0.88
Share(1)
__________________
(1) All per share amounts referenced herein have been retroactively adjusted to
reflect the ten-for-one stock split effective June 11, 2026.
A reconciliation between GAAP operating results and non-GAAP operating results
is provided following the financial statements included in this release. KLA
will discuss the results for its fiscal year 2027 first quarter, along with its
outlook, on a conference call today beginning at 2:00 p.m. Pacific Time. A
webcast of the call will be available at: ir.kla.com .
Second Quarter Fiscal 2027 Guidance
The following details our guidance for the second quarter of fiscal 2027 ending
in December:
• Total revenues are expected to be in a range of $4.7 billion +/- $200 million
• GAAP 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%
• GAAP diluted EPS is expected to be in a range of $1.41 +/- $0.11
• Non-GAAP diluted EPS is expected to be in a range of $1.44 +/- $0.11
1
For additional details and assumptions underlying our guidance metrics, please
see the company’s published Letter to Shareholders, Earnings Slide Presentation
and Earnings Infographic on the KLA investor relations website (ir.kla.com) .
Such Letter to Shareholders, Earnings Slide Presentation and Earnings
Infographic are not incorporated by reference into this earnings release.
About KLA:
KLA Corporation (“KLA”) develops industry-leading equipment and services that
enable innovation throughout the electronics industry. We provide advanced
process control and process-enabling solutions for manufacturing wafers and
reticles, integrated circuits, packaging and printed circuit boards. In close
collaboration with leading customers across the globe, our expert teams of
physicists, engineers, data scientists and problem-solvers design solutions that
move the world forward. Investors and others should note that KLA announces
material financial information including SEC filings, press releases, public
earnings calls and conference webcasts using an investor relations website (
ir.kla.com ). Additional information may be found at: www.kla.com .
Note Regarding Forward-Looking Statements:
Statements in this press release other than historical facts, such as statements
pertaining to the amount and timing of dividends, the amount and timing of share
repurchases, total revenues, GAAP and non-GAAP gross margin and GAAP and non-
GAAP diluted EPS for the quarter ending December 31, 2026, are forward-looking
statements and are subject to the Safe Harbor provisions created by the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
based on current information and expectations and involve a number of risks and
uncertainties. Actual results may differ materially from those projected in such
statements due to various factors, including, but not limited to: our
vulnerability to a weakening in the condition of the financial markets and the
global economy; risks related to our international operations; evolving Bureau
of Industry and Security of the U.S. Department of Commerce rules and
regulations and their impact on our ability to sell products to and provide
services to certain customers in China; tariffs, retaliatory trade measures and
other trade restrictions, as well as uncertainty regarding tariff authority,
implementation and refund process; costly intellectual property disputes that
could result in our inability to sell or use the challenged technology; risks
related to the legal, regulatory and tax environments in which we conduct our
business; differing stakeholder expectations, requirements and attention to
environment, social and governance (“ESG”) matters and the resulting costs,
risks and impact on our business; unexpected delays, difficulties and expenses
in executing against our environmental, climate, or other ESG targets, goals and
commitments, or meeting stakeholder expectations; our ability to attract, retain
and motivate key personnel; our vulnerability to disruptions and delays at our
third-party service providers; cybersecurity threats, cyber incidents affecting
our and our business partners’ systems and networks; our reliance on critical
information, including our enterprise resource planning system for daily
operations; risks related to acquisitions, integrations, strategic alliances or
collaborative arrangements; climate change, natural disasters, public health
crises, terrorism, acts of war and other catastrophic events and the adverse
impact on our business operations; the war between Ukraine and Russia, the armed
conflict in Iran and elsewhere in the Middle East, and the significant military
activity in those regions; lack of insurance for losses and interruptions caused
by terrorists and acts of war, and our self-insurance of certain risks including
earthquake risk; risks related to fluctuations in foreign currency exchange
rates; risks related to fluctuations in interest rates and the market values of
our portfolio investments; risks associated with our interest rate hedging
activities; risks related to tax and regulatory compliance audits; any change in
taxation rules or practices and our effective tax rate; compliance costs with
federal securities laws, rules, regulations, NASDAQ requirements, and evolving
accounting standards and practices; ongoing changes in the technology industry,
including artificial intelligence (“AI”) related developments and changes in
semiconductor manufacturing processes, customer investment patterns and end-
market demand; our vulnerability to a highly concentrated customer base; the
cyclicality of the industries in which we operate; our ability to timely develop
new technologies and products that successfully address changes in the industry;
risks related to the development, adoption, governance and use of AI by us, our
competitors and third parties; our ability to maintain our technology advantage
and protect proprietary rights; our ability to compete in the industry; the
availability and cost of components, materials or subassemblies used in the
production of our products, including due to limited-source suppliers, the
availability of rare earth elements or DRAM chip shortages; our ability to
operate our business in accordance with our business plan; risks related to our
debt and leveraged capital structure; we may not be able to declare cash
dividends at all or in any particular amount; liability to our customers under
indemnification provisions if our products fail to operate properly or contain
defects or our customers are sued by third parties due to our products; risks
associated with our receipt of government funding; we may incur significant
restructuring charges or other asset impairment charges or inventory write offs;
we are subject to risks related to receivables factoring, banking arrangements
and compliance risk of certain settlement agreements with the government; and
risks related to the Court of Chancery of the State of Delaware being the sole
and exclusive forum for certain actions and proceedings. For other factors that
may cause actual results to differ materially from those projected and
anticipated in forward-looking statements in this press release, please refer to
KLA’s Annual Report on Form 10-K for the year ended June 30, 2026, and other
subsequent filings with the Securities and Exchange Commission (including, but
not limited to, the risk factors described therein). KLA assumes no obligation
to, and does not currently intend to, update these forward-looking statements.
2
KLA Corporation
Condensed
Consolidated
Unaudited Balance
Sheets (In thousands) September 30, 2026 June 30, 2026
──────────────────────────────────────────────────────────────────────────────
ASSETS
Current assets:
Cash and cash $ 1,531,950 $ 1,649,842
equivalents
Marketable 3,209,241 3,252,566
securities
Accounts 3,072,087 2,889,208
receivable, net
Inventories 4,090,426 3,648,538
Other current 669,711 941,636
assets
Total current 12,573,415 12,381,790
assets
Land, property
and equipment, 1,541,331 1,380,550
net
Goodwill, net 1,789,683 1,788,758
Deferred income 1,054,617 1,037,224
taxes
Purchased
intangible 212,598 255,835
assets, net
Other non-current 1,233,091 1,107,378
assets
Total assets $ 18,404,735 $ 17,951,535
LIABILITIES AND
STOCKHOLDERS’
EQUITY
Current
liabilities:
Accounts payable $ 740,743 $ 623,668
Deferred system 843,008 932,901
revenue
Deferred service 634,232 604,127
revenue
Other current 2,337,103 2,144,231
liabilities
Total current 4,555,086 4,304,927
liabilities
Long-term debt 5,723,289 5,887,415
Deferred tax 452,541 473,648
liabilities
Deferred service 230,562 238,111
revenue
Other non-current 919,850 697,614
liabilities
Total liabilities 11,881,328 11,601,715
Stockholders’
equity:
Common stock and
capital in excess 2,585,416 2,700,409
of
par value
Retained earnings 3,997,397 3,683,864
Accumulated other
comprehensive -59,406 -34,453
loss
Total
stockholders’ 6,523,407 6,349,820
equity
Total liabilities
and stockholders’ $ 18,404,735 $ 17,951,535
equity
3
KLA
Corpor…
Conden…
Consol…
Unaudi…
Statem…
of
Operat…
(In
thousa…
except Three
per Months
share Ended
amount… September June 30, September
Revenu… 30, 2026 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Product $ 3,285,4… $ 2,837,1… $ 2,465,0…
Service 850,546 820,405 744,690
Total 4,136,0… 3,657,5… 3,209,6…
revenu…
Costs
and
expens…
Costs
of 1,577,7… 1,413,1… 1,243,0…
revenu…
Resear…
and 395,096 399,023 360,461
develo…
Sellin…
general 301,458 291,477 268,988
and
admini…
Intere… 67,927 73,274 71,075
expense
Other
expense -30,339 -68,711 -43,374
(incom…
net
Income
before 1,824,0… 1,549,3… 1,309,4…
income
taxes
Provis…
for 275,494 186,326 188,436
income
taxes
Net $ 1,548,5… $ 1,363,0… $ 1,121,0…
income
Net
income
per
share(…
Basic $ 1.19 $ 1.04 $ 0.85
Diluted $ 1.18 $ 1.04 $ 0.85
Weight…
number
of
shares…
Basic 1,305,3… 1,306,5… 1,317,5…
Diluted 1,311,0… 1,314,9… 1,323,8…
__________________
(1) All per share amounts referenced herein have been retroactively adjusted to
reflect the ten-for-one stock split effective June 11, 2026.
4
KLA
Corpor…
Conden…
Consol…
Unaudi…
Statem…
of Cash
Flows
(In
thousa…
Cash Three
flows Months
from Ended
operat… September June 30, September
activi… 30, 2026 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Net $ 1,548,5… $ 1,363,0… $ 1,121,0…
income
Adjust…
to
reconc…
net
income
to
net
cash
provid…
by
operat…
activi…
Deprec…
and 97,424 98,606 97,016
amorti…
Unreal…
foreign
exchan…
(gain) -6,872 6,343 12,078
loss
and
other
Stock-…
compen… 84,073 82,104 70,182
expense
Deferr…
income -27,093 105,049 -10,615
taxes
Changes
in
assets
and
liabil…
Accoun… -179,196 -586,459 -12,575
receiv…
Invent… -433,839 -212,304 -95,738
Other 176,890 -423,291 50,921
assets
Accoun… 116,666 107,788 -23,680
payable
Deferr…
system -89,893 312,062 1,974
revenue
Deferr…
service 22,556 14,172 -4,970
revenue
Other 221,635 39,301 -44,042
liabil…
Net
cash
provid… 1,530,9… 906,430 1,161,5…
by
operat…
activi…
Cash
flows
from
invest…
activi…
Capital -194,756 -89,288 -95,894
expend…
Procee…
from
capita… 435 — 1,541
govern…
assist…
Purcha…
of
availa… -701,246 -860,407 -949,871
and
equity
securi…
Procee…
from
maturi…
and 716,202 780,717 632,795
sale of
availa…
securi…
Purcha…
of -36,801 -35,233 -156,864
trading
securi…
Procee…
from
sale of 38,228 31,094 158,305
trading
securi…
Net
cash
used in -177,938 -173,117 -409,988
invest…
activi…
Cash
flows
from
financ…
activi…
Payment
of debt — — -1,602
issuan…
costs
Common
stock -935,776 -570,997 -545,067
repurc…
Payment
of
divide… -305,145 -305,334 -254,008
to
stockh…
Issuan…
of — 113,030 —
common
stock
Tax
withho…
paymen…
related
to
vested -238,682 -113,775 -81,122
and
releas…
restri…
stock
units
Net
cash
used in -1,479,… -877,076 -881,799
financ…
activi…
Effect
of
exchan…
rate
changes 8,710 6,595 -2,501
on cash
and
cash
equiva…
Net
decrea…
in cash -117,892 -137,168 -132,697
and
cash
equiva…
Cash
and
cash
equiva… 1,649,8… 1,787,0… 2,078,9…
at
beginn…
of
period
Cash
and
cash
equiva… $ 1,531,9… $ 1,649,8… $ 1,946,2…
at end
of
period
Supple…
cash
flow
disclo…
Income
taxes $ 61,284 $ 198,963 $ 119,049
paid,
net
Intere…
paid,
net of $ 131,275 $ 11,919 $ 131,494
capita…
intere…
5
KLA Corporation
Segment Information (Unaudited)
The following is a summary of results for each of our three reportable segments
and reconciliations to total revenues for the indicated periods:
Three
(In Months September June 30, September
thousands) Ended 30, 2026 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Revenue…
Semicon…
Process $ 3,754,254 $ 3,256,781 $ 2,899,392
Control
Special…
Semicon… 139,487 159,704 119,755
Process
PCB and
Compone… 242,151 241,110 189,488
Inspect…
Total
revenues
for 4,135,892 3,657,595 3,208,635
reporta…
segments
Effects
of
changes
in 123 -39 1,061
foreign
currency
exchange
rates
Total $ 4,136,015 $ 3,657,556 $ 3,209,696
revenues
KLA Corporation
Condensed Consolidated Unaudited Supplemental Information
Reconciliation of GAAP Net Income to Non-GAAP Net Income
(In
thousa…
except
per Three Septem… June Septe…
share Months 30, 30, 30,
amount… Ended 2026 2026 2025
──────────────────────────────────────────────────────────────────────────────
GAAP
net $ 1,548,… $ 1,363,… $ 1,121…
income
Adjus…
to
recon…
GAAP
net
income
to
non-G…
net
incom…
Acquis… a 43,040 33,069 49,026
charges
Income
tax
effect b -14,560 -17,159 -18,3…
of
non-GA…
adjust…
Pillar
Two
undert… c 20,151 — —
profits
rule
taxes
Discre…
tax d 5,785 6,780 15,087
items
Non-G…
net $ 1,603,… $ 1,385,… $ 1,166…
income
GAAP
net
income $ 1.18 $ 1.04 $ 0.85
per
dilut…
share…
Non-G…
net
income $ 1.22 $ 1.05 $ 0.88
per
dilut…
share…
Shares
used
in
dilut…
net 1,311,… 1,314,… 1,323…
income
per
share
calcu…
__________________
(1) All per share amounts referenced herein have been retroactively adjusted to
reflect the ten-for-one stock split effective June 11, 2026.
6
Pre-tax Impact of GAAP to Non-GAAP Adjustments Included in Condensed
Consolidated Unaudited Statements of Operations
(In thousands)
Three Months Total Pre-tax
Ended September Acquisition-Rel- GAAP to Non-GAAP
30, 2026 ated Charges Adjustments
──────────────────────────────────────────────────────────────────────────────
Costs of revenues $ 34,929 $ 34,929
Selling, general
and 8,111 8,111
administrative
Total in three
months ended $ 43,040 $ 43,040
September
30, 2026
Three Months
Ended June 30,
2026
Costs of revenues $ 36,200 $ 36,200
Selling, general
and 8,470 8,470
administrative
Other expense -11,601 -11,601
(income), net
Total in three
months ended June $ 33,069 $ 33,069
30,
2026
Three Months
Ended September
30, 2025
Costs of revenues $ 38,053 $ 38,053
Selling, general
and 10,973 10,973
administrative
Total in three
months ended $ 49,026 $ 49,026
September
30, 2025
Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash
Flow
Three Sept… June Sept… Twel… Sep… Sept…
(In Mont… 30, 30, 30, Mont… 30, 30,
thou… Ended 2026 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net
cash
pro… $ 1,53… $ 906,… $ 1,16… $ 4,5… $ 4,24…
by
ope…
act…
Cap… -194… -89,… -95,… -47… -370…
exp…
Free
cash $ 1,33… $ 817,… $ 1,06… $ 4,0… $ 3,87…
flow
Capital Returns Calculation
Three Sept… June Sept… Twel… Sep… Sept…
(In Mont… 30, 30, 30, Mont… 30, 30,
thou… Ended 2026 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Pay…
of
div… $ 305,… $ 305,… $ 254,… $ 1,1… $ 960,…
to
sto…
Com…
sto… 935,… 570,… 545,… 2,6… 2,12…
rep…
Cap… $ 1,24… $ 876,… $ 799,… $ 3,7… $ 3,08…
ret…
Second Quarter Fiscal 2027 Guidance
Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS
Three Months Ending December
31, 2026
──────────────────────────────────────────────────────────────────────────────
(In millions, except per share Low High
amounts)
GAAP net income per diluted $1.30 $1.52
share
Acquisition-related charges a 0.03 0.03
Income tax effect of non-GAAP b -0.01 -0.01
adjustments
Pillar Two undertaxed profits c 0.01 0.01
rule taxes
Non-GAAP net income per $1.33 $1.55
diluted share
Shares used in net income per
diluted 1,306 1,306
share calculation
7
Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin
Three Months Ending December
31, 2026
───────────────────────────────────────────────────────────────────────────
Low High
GAAP gross margin 60.8% 62.8%
Acquisition-related charges a 0.7% 0.7%
Non-GAAP gross margin 61.5% 63.5%
The non-GAAP and supplemental information provided in this press release is a
supplement to, and not a substitute for, KLA’s financial results presented in
accordance with United States GAAP.
To supplement our Condensed Consolidated Financial Statements presented in
accordance with GAAP, we provide certain non-GAAP financial information, which
is adjusted from results based on GAAP to exclude certain gains, costs and
expenses, as well as other supplemental information. The non-GAAP and
supplemental information is provided to enhance the user’s overall understanding
of our operating performance and our prospects in the future. Specifically, we
believe that the non-GAAP information, including non-GAAP net income, non-GAAP
net income per diluted share, non-GAAP gross margin and free cash flow, provides
useful measures to both management and investors regarding financial and
business trends relating to our financial performance by excluding certain costs
and expenses that we believe are not indicative of our core operating results to
help investors compare our operating performances with our results in prior
periods as well as with the performance of other companies. The non-GAAP
information is among the budgeting and planning tools that management uses for
future forecasting. However, because there are no standardized or generally
accepted definitions for most non-GAAP financial metrics, definitions of non-
GAAP financial metrics are inherently subject to significant discretion (for
example, determining which costs and expenses to exclude when calculating such a
metric). As a result, non-GAAP financial metrics may be defined very differently
from company to company, or even from period to period within the same company,
which can potentially limit the usefulness of such information to an investor.
The presentation of non-GAAP and supplemental information is not meant to be
considered in isolation or as a substitute for results prepared and presented in
accordance with United States GAAP. The following are descriptions of the
adjustments made to reconcile GAAP net income to non-GAAP net income:
a. Acquisition-related charges primarily include amortization of intangible
assets. Acquisition-related charges during the three months ended June 30, 2026
also include a discrete release of $11.6 million of interest on unrecognized tax
positions recorded as part of purchase price accounting arising from
acquisitions. Although we exclude the effect of amortization of all acquired
intangible assets from these non-GAAP financial measures, management believes
that it is important for investors to understand that such intangible assets
were recorded as part of purchase price accounting arising from acquisitions,
and such amortization of intangible assets related to past acquisitions will
recur in future periods until such intangible assets have been fully amortized.
Investors should note that the use of these intangible assets contributed to our
revenues earned during the periods presented and are expected to contribute to
our future period revenues as well.
b. Income tax effect of non-GAAP adjustments includes the income tax effects of
the excluded items noted above.
c. Pillar Two undertaxed profits rule taxes represents the impact of Undertaxed
Profits Rule taxes arising from Pillar Two legislation. We expect these taxes to
be temporary and reverse upon adoption of the Side-by-Side Safe Harbor
provisions, which would exempt U.S.-parented groups from the Undertaxed Profits
Rule.
d. Discrete tax items in the three months ended September 30, 2025 include the
recognition of a deferred tax liability for withholding taxes on future
remittance of previously taxed income as a result of new tax legislation.
Discrete tax items in all periods presented include a tax impact relating to the
amortization of tax benefits from internal restructuring or similar tax benefits
recorded in other periods.
8