KLAC
TechnologyKLA Corporation
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XBRL · SEC EDGAR2009–2025(17yr)| Metric | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $1.5B | $1.8B | $3.2B | $3.2B | $2.8B | $2.9B | $2.8B | $3.0B | $3.5B | $4.0B | $4.6B | $5.8B | $6.9B | $9.2B | $10.5B | $9.8B | $12.2B | +23.9% |
| Gross Profit | $655.4M | $1.0B | $1.9B | $1.8B | $1.6B | $1.7B | $1.6B | $1.8B | $2.2B | $2.6B | $2.7B | $3.4B | $4.1B | $5.6B | $6.3B | $5.9B | $7.4B | +25.8% |
| Gross Margin | 43.1% | 55.2% | 60.3% | 58.1% | 56.5% | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% | 59.1% | 57.8% | 59.9% | 61.0% | 59.8% | 60.0% | 60.9% | +0.9pp |
| Operating Income | -$577.9M | $314.2M | $1.2B | $1.0B | $729.7M | $772.1M | — | — | — | — | — | — | — | — | — | — | — | — |
| Operating Margin | -38.0% | 17.3% | 36.5% | 32.0% | 25.7% | 26.4% | — | — | — | — | — | — | — | — | — | — | — | — |
| Net Income | -$523.4M | $212.3M | $794.5M | $756.0M | $543.1M | $582.8M | $366.2M | $704.4M | $926.1M | $802.3M | $1.2B | $1.2B | $2.1B | $3.3B | $3.4B | $2.8B | $4.1B | +47.1% |
| Net Margin | -34.4% | 11.7% | 25.0% | 23.8% | 19.1% | 19.9% | 13.0% | 23.6% | 26.6% | 19.9% | 25.7% | 21.0% | 30.0% | 36.1% | 32.3% | 28.1% | 33.4% | +5.3pp |
| Free Cash Flow | $173.5M | $417.6M | $772.0M | $884.0M | $838.6M | $711.4M | $560.1M | $728.0M | $1.0B | $1.2B | $1.0B | $1.6B | $2.0B | $3.0B | $3.3B | $3.0B | $3.7B | +23.6% |
| FCF Margin | 11.4% | 22.9% | 24.3% | 27.9% | 29.5% | 24.3% | 19.9% | 24.4% | 29.9% | 28.8% | 22.4% | 28.0% | 28.2% | 32.6% | 31.7% | 30.9% | 30.8% | -0.1pp |
| EPS (Diluted) | $-3.07 | $1.23 | $4.66 | $4.44 | $3.21 | $3.47 | $2.24 | $4.49 | $5.88 | $5.10 | $7.49 | $7.70 | $13.37 | $21.92 | $24.15 | $20.28 | $30.37 | +49.8% |
1. THE BIG PICTURE
KLA Corporation is the efficiency engine of the global semiconductor industry, boasting the highest operating and net margins among its primary peers. Its business model relies on being an essential enabler of the AI ecosystem, where its process control systems are required to manage the extreme manufacturing complexity of advanced foundry and memory chips.
2. WHERE THE RISKS HIT HARDEST
KLA Corporation’s stated competitive advantage in technology leadership is directly threatened by U.S. export controls because its most advanced R&DR&DResearch & Development — spending on creating new products or technologies-heavy products, such as the 39xx and 29xx series, are the primary targets of BIS trade restrictions (10-K Item 1). These regulations already impact the bottom line; while the broader business grew, the Specialty Semiconductor Process segment saw a 12% revenue decline specifically due to lower sales volume in China (10-Q). Furthermore, the strategy of building "deep relationships" with leading manufacturers creates a structural vulnerability: because KLA Corporation configures equipment to specific customer requirements, the loss or delay of an order from a single concentrated customer can result in significant non-recoverable costs (10-K Item 1A).
3. WHAT THE NUMBERS SAY TOGETHER
While trailing twelve-month (TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter) revenue growth is a robust 23.9%, the most recent quarter showed a deceleration to 7% (8-K, XBRL). This divergence is explained by a shifting business mix: higher investment from memory and advanced packaging customers is currently offsetting the double-digit declines in the China-heavy specialty semiconductor and display-related businesses (10-Q). Despite these headwinds, KLA Corporation maintains a 41.3% operating margin—the highest in its peer group—suggesting that its pricing power in the AI-driven foundry and logic sectors remains intact (XBRL). Short interest is low at 2.5% of the float, indicating that the market has not yet turned bearish on KLA Corporation’s ability to service its $5.95 billion in debt (Supplemental Signals).
4. IS IT WORTH IT AT THIS PRICE?
At 31.2x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, KLA Corporation trades at a 17% premium to the peer median of 26.7x (XBRL). The market is currently pricing in approximately 9.3% long-term growth (CAPM analysis). This expectation is supported by KLA Corporation’s 33.0% net margin, which leads its peer group and justifies a quality premium over competitors like Applied Materials (24.9%) or Lam Research (28.8%). However, the valuation is sensitive to growth fluctuations; if long-term growth slows to 8.0%, the justified multiple would fall to 22.4x (CAPM analysis). The current price is essentially a bet that AI infrastructure demand will grow fast enough to permanently replace the 33% of revenue currently exposed to Chinese regulatory risk.
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if the Specialty Semiconductor segment's decline (currently -12%) accelerates or if KLA Corporation fails to meet debt covenants on its $1.50 billion Revolving Credit Facility due to rising interest costs (Risks, 10-Q).
- Constructive if GAAPGAAPGenerally Accepted Accounting Principles — the standard U.S. accounting rules all public companies must follow gross margins exceed the guided 60.62% for the upcoming quarter, signaling that high-margin advanced packaging and DRAM sales are successfully expanding the margin profile despite geopolitical headwinds (8-K).
6. BOTTOM LINE
Structural Advantage: KLA Corporation’s dominance is rooted in proprietary yield-management software and a massive installed base that generates high-margin, recurring service revenue.
Bottom Line: KLA Corporation is a premier cash-flow machine, but its premium valuation leaves little room for error if trade restrictions further erode its Chinese revenue base.
1. Top 5 Material Risks
- Export Controls and Trade Restrictions: Regulations issued by the U.S. Department of Commerce, including the 2022, 2023, 2024, and 2025 BIS Rules, restrict KLA Corporation’s ability to sell and support equipment for advanced semiconductor manufacturing in China. Failure to obtain required licenses could disrupt the supply chain, impair product development, and force the return of substantial customer deposits.
- Customer Concentration: A substantial portion of sales is derived from a limited number of manufacturers. The loss, delay, or cancellation of orders from these key customers—who possess significant negotiating leverage—can lead to non-recoverable costs because KLA Corporation’s products are configured to specific customer requirements.
- Leveraged Capital Structure: As of June 30, 2025, KLA Corporation held $5.95 billion in aggregate principal amount of Senior Notes. KLA Corporation’s ability to service this debt and comply with covenants in its $1.50 billion Revolving Credit Facility is subject to operational performance and interest rate fluctuations.
- Macroeconomic and Cyclical Industry Sensitivity: Demand for KLA Corporation’s products is tied to global electronic device consumption. Economic uncertainty, rising interest rates, and tightening credit markets can cause customers to reduce capital spending, directly impacting product and service revenues.
- Technological Obsolescence and Innovation: Success depends on the ability to predict industry standards and develop new products in a timely manner. Failure to keep pace with technological changes, such as the emergence of disruptive manufacturing processes or the introduction of integrated products by competitors, could result in loss of market share and inventory obsolescence.
2. Company-Specific Risks
- Geopolitical Exposure in Israel: KLA Corporation maintains significant operations in Israel, a region subject to persistent armed conflict. Security challenges and the potential for employees to be called to active military duty could disrupt operations and increase costs.
- Self-Insured Earthquake Risk: KLA Corporation does not hold earthquake insurance for its manufacturing and research facilities, a significant portion of which are centralized in Milpitas, California. A major seismic event could cause major financial loss and disrupt global supply chains.
- Dependency on Third-Party Outsourcing: KLA Corporation outsources critical functions including logistics, information systems management, and spare parts handling. Diminished control over these providers increases the risk of operational delays and cybersecurity vulnerabilities.
- Volume Purchase Agreement Accruals: KLA Corporation enters into volume purchase agreements that require significant estimation of future credits and incentives. Inaccurate estimates of these accruals can adversely affect reported revenue and gross margins in near-term periods.
3. Regulatory/Legal Risks
- Tax Compliance and Effective Tax Rate: KLA Corporation is subject to tax audits in multiple jurisdictions. Changes in tax laws, such as the One Big Beautiful Bill Act (OBBBA) and the OECD’s Pillar Two global minimum tax framework, may materially increase KLA Corporation’s effective tax rate beginning in the quarter ending September 30, 2026.
- Environmental Regulations: Compliance with evolving laws regarding per- and polyfluoroalkyl substances (PFAS) and greenhouse gas emissions may require KLA Corporation to alter manufacturing processes or incur significant costs to source compliant materials.
- Intellectual Property Disputes: KLA Corporation faces risks from third-party claims regarding patent, copyright, or trademark infringement. Legal proceedings are expensive and could result in injunctions preventing the sale of specific products.
- Settlement Compliance: KLA Corporation is subject to ongoing compliance requirements related to past settlements with the government. Violations of these terms could trigger additional penalties, fines, or the loss of government funding for R&DR&DResearch & Development — spending on creating new products or technologies.
4. Financial Impact Map
Export Controls (China) → Revenue → 33% of annual revenue in fiscal year 2025 was derived from customers in China.
Leveraged Capital Structure → Interest Expense/Cash Flows → $5.95 billion in outstanding Senior Notes as of June 30, 2025, requires ongoing interest and principal payments.
Customer Concentration → Accounts Receivable/Revenue → Liquidity issues at major customers could lead to credit losses or reduced order volumes.
Volume Purchase Agreements → Gross Margin → Accruals for future credits and incentives reduce the revenue recognized on initial product sales.
Restructuring and Impairment → Operating Results → Potential for material charges related to workforce reductions, inventory write-offs, or goodwill and intangible asset impairments.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-Q | Jan 2026 | Dec 2025 |
| 8-K | Jan 2026 | — |
| 14A | Sep 2025 | — |
| 10-K | Aug 2025 | Jun 2025 |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
KLA Announces $7B Share Buyback Program and 21% Dividend Increase to $2.30/Share
- ▸Authorized new $7B share buyback program
- ▸Increased quarterly dividend 21% to $2.30 per share
- ▸Reiterated financial guidance for March quarter
- ▸AI-driven demand for inspection and metrology tools supporting cash flow
- ▸Potential US export restrictions to China pose significant regulatory risk
KLA Corporation authorizes $7 billion share repurchase program, total capacity reaches $11 billion
- ▸Authorized new $7 billion share repurchase program
- ▸Total buyback capacity increased to nearly $11 billion
- ▸Repurchase capacity represents 5.8% of total market capitalization
- ▸Shares rose 4.1% following the announcement
- ▸Stock up 19.5% year-to-date
KLA Announces $7 Billion Share Buyback and 21% Dividend Increase to $2.30
- ▸Authorized new $7 billion share buyback program
- ▸Increased quarterly dividend 21% to $2.30 per share
- ▸Reiterated March-quarter revenue guidance of $3.35 billion +/- $150 million
- ▸Reiterated March-quarter adjusted EPS guidance of $9.08 +/- $0.78
- ▸Shares up over 20% year-to-date on strong AI infrastructure demand
KLA Corporation reaffirms Q3 revenue guidance of $3.35B, sets 2030 revenue target of $26B
- ▸Reaffirmed fiscal Q3 2026 revenue guidance of approximately $3.35 billion
- ▸Non-GAAP gross margin guidance for fiscal Q3 maintained at approximately 61.75%
- ▸Projected 2030 revenue target of $26 billion with EPS of $84
- ▸Forecasts 2026 wafer equipment market to reach $135B–$140B, up 11% YoY
- ▸Service growth expected to accelerate to 13%–15% annually through 2030
KLA Q4 Revenue $3.30B +7.2% YoY, Beats Analyst Estimates by 1.3%
- ▸KLA Q4 revenue $3.30B, +7.2% YoY, beat estimates by 1.3%
- ▸KLA next quarter revenue guidance topped analyst expectations
- ▸Teradyne Q4 revenue $1.08B, +43.9% YoY, beat estimates by 11%
- ▸Semiconductor manufacturing sector Q4 revenues beat consensus estimates by 3%
- ▸Semiconductor manufacturing stocks up 8.5% on average post-earnings
KLAC Q3 Revenue Guidance $3.35B Misses Estimates Amid Supply Constraints and Tariff Headwinds
- ▸Q3 fiscal 2026 revenue guidance $3.35B (+/- $150M) vs $3.38B consensus
- ▸Calendar 2025 advanced packaging systems revenue ~$950M, +70% YoY
- ▸Calendar 2026 revenue growth projected in mid-to-high-teens range
- ▸WFE market forecast raised to mid-$130B range for 2026
- ▸100 bps negative tariff impact and supply constraints cited as near-term headwinds
KLA Q3 Revenue Forecast $3.35B Amid DRAM Cost Pressures and Supply Constraints
- ▸Q3 fiscal 2026 revenue guidance $3.35B (+/- $150M)
- ▸Core WFE market expected to grow high-single to low-double digits in 2026
- ▸Advanced packaging market forecast to reach $12B in 2026
- ▸DRAM chip cost inflation and supply constraints impacting gross margins
- ▸Hyperscaler AI infrastructure spending projected at $700B combined for 2026
KLA Corporation expands share repurchase authorization to $20B, raises quarterly dividend to $2.30
- ▸Expanded share repurchase authorization to $20.00 billion
- ▸Increased quarterly dividend 21% to $2.30 per share
- ▸17th consecutive annual dividend increase
- ▸Projected 2028 revenue $14.8 billion and earnings $5.3 billion
- ▸Management cites strong free cash flow and balance sheet flexibility
KLA Price Target Raised to $1,900 by Oppenheimer, Cut to $1,700 by Jefferies
- ▸Oppenheimer raised price target to $1,900 from $1,800, maintains Outperform rating
- ▸Jefferies lowered price target to $1,700 from $1,850, maintains Buy rating
- ▸Investor Day targets suggest potential $26B revenue and $84 EPS by 2030
- ▸Analysts cite improved near-term outlook and high capital intensity expectations
- ▸Company identified as high-quality growth franchise in semiconductor capital equipment
KLA Q3 Revenue Guidance $3.35B Misses Estimates Amid DRAM Cost Pressures
- ▸Q3 fiscal 2026 revenue guidance $3.35B +/- $150M, below $3.38B consensus
- ▸WFE market projected to grow from $110B in 2025 to mid-$130B range in 2026
- ▸Calendar 2025 systems revenue $950M, +70% YoY
- ▸Gross margins pressured by rising DRAM costs and 100 bps tariff impact
- ▸Advanced packaging market segment currently valued at $11B