Core Viewpoint - KLA Corp. reported strong second-quarter earnings, exceeding analyst expectations in both earnings per share and revenue, indicating robust company performance and growth potential in the semiconductor industry [2][3]. Financial Performance - KLA reported quarterly earnings of $8.85 per share, surpassing the analyst consensus estimate of $8.80 [2]. - The company achieved quarterly revenue of $3.3 billion, exceeding the analyst consensus estimate of $3.25 billion [2]. Company Outlook - KLA's CEO, Rick Wallace, highlighted that the company delivered a record quarter and anticipates continued strong performance for calendar year 2025 in terms of revenue, non-GAAP operating income, and free cash flow generation [2][3]. - For the third quarter, KLA expects adjusted EPS in the range of $8.30 to $9.86, compared to the analyst estimate of $8.93, and revenue between $3.2 billion and $3.5 billion, against the analyst estimate of $3.28 billion [3]. Stock Performance - Following the earnings report, KLA stock fell by 8.73% to $1,537.63 in extended trading [4].

+17% Revenue Growth Revenue $12.74B Q2 Fiscal 2026 Earnings Quarter Ended December 31, 2025 • Reported January 29, 2026 KLA Non-Confidential | Unrestricted 1 KLA Non-Confidential | Unrestricted 2 Calendar 2025 – Financial Highlights From a Record Year Forward Looking Statements Statements in this presentation other than historical facts, such as statements pertaining to: (i) future industry demand for semiconductors, WFE, and advanced packaging; (ii) our market position for the future and future growth in d ...

Financial Performance - KLA Corporation reported GAAP net income of $1.15 billion and revenues of $3.30 billion for Q2 FY 2026, marking a year-over-year revenue increase of 7.1%[2] - Non-GAAP net income for Q2 FY 2026 was $1.17 billion, with non-GAAP net income per diluted share at $8.85, compared to $8.20 in Q2 FY 2025, reflecting a 7.9% increase[3] - Total revenues for the first half of FY 2026 reached $6.51 billion, up from $5.92 billion in the same period last year, indicating a growth of 10.0%[10] - KLA Corporation reported a net income of $1,145,682 thousand for the three months ended December 31, 2025, a 39% increase from $824,527 thousand in the same period of 2024[11] - Total revenues for reportable segments reached $3,297,400 thousand, up 7% from $3,077,230 thousand year-over-year[12] - The Semiconductor Process Control segment generated revenues of $3,004,648 thousand, representing a 9% increase compared to $2,755,743 thousand in the prior year[12] Cash Flow and Shareholder Returns - KLA's cash flow from operating activities for the last twelve months was $4.77 billion, with free cash flow at $4.38 billion, demonstrating strong cash generation capabilities[4] - The company returned $797.4 million to shareholders in Q2 FY 2026, contributing to a total of $3.01 billion over the last twelve months[4] - Free cash flow for the three months ended December 31, 2025, was $1,262,031 thousand, a significant increase from $757,192 thousand in the same period of 2024[15] - KLA Corporation's cash and cash equivalents at the end of the period were $2,452,124 thousand, up from $1,838,278 thousand at the end of December 2024[11] - The company paid $249,654 thousand in dividends to stockholders during the three months ended December 31, 2025, an increase from $226,776 thousand in the prior year[16] - The company repurchased $547,750 thousand of common stock during the three months ended December 31, 2025, compared to $650,121 thousand in the same period of 2024[16] Future Projections - The company expects total revenues for Q3 FY 2026 to be in the range of $3.35 billion +/- $150 million, with GAAP diluted EPS projected between $8.85 and $9.63[5] - KLA Corporation expects GAAP net income per diluted share for the three months ending March 31, 2026, to be between $8.07 and $9.63[17] - The non-GAAP gross margin for the three months ending March 31, 2026, is projected to be between 60.75% and 62.75%[18] - KLA's gross margin for Q2 FY 2026 was 61.5%, with expectations for Q3 FY 2026 gross margin to be around 60.62% +/- 1.00%[4] Asset and Liability Management - KLA's total current assets increased to $11.26 billion as of December 31, 2025, compared to $10.70 billion as of June 30, 2025[9] - KLA's total liabilities decreased slightly to $11.25 billion from $11.38 billion since June 30, 2025, indicating improved financial stability[9] Non-GAAP Financial Information - The company provides non-GAAP financial information to enhance understanding of operating performance and future prospects[19] - Non-GAAP net income and free cash flow are key metrics used for budgeting and planning[19] - Acquisition-related charges include amortization of intangible assets and write-offs from abandoned R&D projects[19] - Restructuring and severance costs are included in non-GAAP adjustments, primarily related to employee severance[19] - Impairment of goodwill and intangible assets was recognized due to the deterioration of long-term forecasts for the PCB business[19] - Excluding impairment charges helps in comparing operating performance with prior periods and other companies[19] - Income tax effects of non-GAAP adjustments are included in the overall financial metrics[19] - Discrete tax items recognized include adjustments for deferred tax liabilities and benefits due to new tax legislation[19] - The company emphasizes that non-GAAP metrics may vary significantly between companies and periods[19] - Non-GAAP information is not a substitute for GAAP results and should be considered in conjunction with them[19] Strategic Positioning - The company emphasized its role as a key enabler of the AI ecosystem, benefiting from the AI infrastructure buildout across various sectors[3]

MILPITAS, Calif., Jan. 29, 2026 /PRNewswire/ -- KLA Corporation (NASDAQ: KLAC) today announced financial and operating results for its second quarter of fiscal year 2026, which ended on Dec. 31, 2025, and reported GAAP net income of $1.15 billion and GAAP net income per diluted share of $8.68 on revenues of $3.30 billion. "KLA delivered a record quarter and calendar 2025 for revenue, non-GAAP operating income, and free cash flow generation. This performance was fueled by our differentiated product portfolio ...

Group 1 - The article provides earnings reminders and analysis on KLA, indicating a focus on market updates and stock recommendations [1] Group 2 - The content emphasizes the importance of timely information delivery regarding earnings and stock performance [1]

Group 1 - KLA Corporation (NASDAQ:KLAC) manufactures and sells equipment used in the chip manufacturing process [2] - The stock has increased by 119% over the past year and by 21% year-to-date [2] - Morgan Stanley upgraded KLA's rating to Overweight from Equalweight and raised the price target to $1,697 from $1,214 [2] - Bernstein initiated coverage on KLA with a price target of $1,700 and an Overweight rating, highlighting potential for double-digit revenue growth [2] - Bernstein noted KLA's lower exposure to China replacement risks as a positive factor [2] Group 2 - Jim Cramer highlighted KLA as having a shortage that cannot be met, indicating strong demand for semiconductor capital equipment [3] - Despite the potential of KLA, there is a belief that some AI stocks may offer higher returns with limited downside risk [3]

Core Viewpoint - The semiconductor capital equipment sector presents a safer investment opportunity compared to data storage stocks, which have seen significant price increases recently. Group 1: Data Storage Stocks - Major players in the data storage sector, including Micron, Western Digital, Seagate, and SanDisk, have reported substantial gains, with SanDisk more than doubling in value since the beginning of the year [1][2]. - Despite a severe shortage of memory products due to data center expansions, the volatility of commodity chip makers makes them risky investments [2][3]. - Potential disruptions from competitors or changes in investment strategies by hyperscalers could negatively impact these stocks [3]. Group 2: Semiconductor Capital Equipment - The semiconductor capital equipment companies, such as ASML, Applied Materials, KLA, and Lam Research, have also seen significant gains, ranging from 29% to 39% since January [5][6]. - These companies are expected to benefit from increased orders as manufacturers ramp up production to address chip shortages [5][6]. - Taiwan Semiconductor Manufacturing Company (TSMC) plans to invest between $52 billion and $56 billion in capital expenditures for 2023, a 27% to 37% increase from the previous year, indicating strong demand for semiconductor production [7][8]. Group 3: Future Outlook - TSMC does not anticipate a balance between supply and demand until 2028 or 2029, suggesting sustained high capital expenditures, which is favorable for capital equipment makers [8]. - The demand for AI semiconductors is driving investments in advanced manufacturing equipment, benefiting companies like ASML [9]. - Micron is also investing heavily in new production facilities, which will create consistent orders for capital equipment suppliers [11][12]. Group 4: Market Reactions and Predictions - Intel's recent poor guidance, despite solid quarterly results, highlights the challenges in meeting chip demand, which could lead to increased business for capital equipment makers [13][14]. - Upcoming earnings reports from major semiconductor capital equipment companies are highly anticipated, with expectations for strong performance, although the high stock prices may lead to volatility [15][16]. - Analysts suggest that if stocks like Lam Research experience a pullback, it could present a buying opportunity for long-term investors [18][19].

Core Viewpoint - Investors are cautioned against chasing the rally in data storage stocks, with a recommendation to focus on companies that alleviate the memory supply crunch [1] Group 1: Data Storage Companies - Micron, Western Digital, Seagate, and Sandisk have seen their shares more than triple last year due to surging AI-related demand and limited supply, granting them immense pricing power [2] - Despite the significant gains, even minor disruptions could severely impact these stocks [2] Group 2: Semiconductor Capital Equipment Makers - Companies like ASML, Applied Materials, KLA Corp, and Lam Research are suggested as a safer investment option, as they benefit from increased demand for manufacturing equipment during chip shortages [3][4] - Micron is investing billions in building new chip factories, indicating a broader trend of increased spending on semiconductor tools across the industry [3][4] Group 3: Performance and Recommendations - ASML's shares increased by 54%, Applied Materials by 58%, KLA by 93%, and Lam Research by 137% last year [5] - Investors are advised to consider buying shares of ASML, Lam Research, or KLA if their prices dip following quarterly earnings reports, while Applied Materials will report next month [5][6] - The expectation is for solid earnings from these companies, but the high valuation may warrant a pullback before buying [6]

Key Takeaways KLAC expects fiscal Q2 revenues of $3.225B $150M and EPS of $8.70 78c, both higher year over year.Demand for AI chips, advanced packaging, and process control is fueling KLAC's top-line growth. Gross margin may be pressured by product mix and tariffs, despite KLAC's solid cash flow and strong demand. KLA (KLAC) is set to report its second-quarter fiscal 2026 results on Jan. 29.For the to-be-reported quarter, KLAC expects revenues of $3.225 billion, plus/minus $150 million. The Zacks Consensus ...

Core Insights - KLA Corporation (KLAC) is experiencing growth driven by increasing demand for AI infrastructure, particularly in process control and wafer fab equipment (WFE) markets, including high-bandwidth memory (HBM) and advanced packaging [1] Group 1: Advanced Packaging and WFE Growth - KLA's advanced packaging portfolio is projected to generate over $925 million in revenue for calendar year 2025, reflecting a 70% year-over-year increase [2] - The advanced packaging market, currently valued at $11 billion, is growing faster than the core WFE market, presenting a significant growth opportunity for KLA [3] - KLA anticipates mid- to high single-digit growth in WFE for calendar year 2025, driven by investments in leading-edge foundry/logic and memory to meet AI and premium mobile demand [4] Group 2: Competitive Landscape - KLA faces strong competition from Teradyne and Applied Materials, both of which are expanding their presence in the AI infrastructure market [6] - Teradyne expects AI-related demand to be a key growth driver, with projected revenues between $920 million and $1 billion for the fourth quarter of 2025 [7] - Applied Materials is leading innovations in AI-driven semiconductor technologies, which are expected to enhance the WFE market and drive long-term revenue growth [8] Group 3: Stock Performance and Valuation - KLA's stock has increased by 67.1% over the past six months, outperforming the Zacks Computer & Technology sector and the Zacks Electronics - Miscellaneous Products [9] - The stock is currently trading at a forward 12-month Price/Sales ratio of 14.38X, significantly higher than the industry average of 6.98X, indicating a premium valuation [12] - The Zacks Consensus Estimate for fiscal 2026 earnings is $35.69 per share, suggesting a year-over-year growth of 7.24% [15]