KLA(KLAC) - 2026 Q2 - Quarterly Results

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]