KLA Corporation Q1 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

KLA Corporation September Quarter 2025 Earnings Summary

Revenue: $3.21 billion (exceeded guidance midpoint of $3.15 billion)

Non-GAAP Diluted EPS: $8.81 (above guidance midpoint)

GAAP Diluted EPS: $8.47

Key Financial Highlights vs. Prior Periods

  • Services Revenue: $745 million, +6% sequentially and +16% year-over-year (strong consistency and resiliency noted)
  • Gross Margin: 62.5% (50 basis points above guidance midpoint, driven by product mix and manufacturing efficiencies)
  • Non-GAAP Operating Margin: 43.2%
  • Operating Expenses: $618 million (R&D $360M, SG&A $258M)
  • Cash Flow from Operations: $1.16 billion; Free Cash Flow: $1.07 billion (record quarterly FCF)
  • Trailing 12-Month Free Cash Flow: $3.9 billion (31% FCF margin)

Advanced Packaging & Market Position

  • Advanced packaging systems revenue expected to exceed $925 million in calendar 2025, +70% year-over-year
  • Advanced packaging now an ~$11 billion market (growing faster than core WFE)
  • KLA expects to outperform mid- to high single-digit WFE growth in 2025 due to process control intensity gains and market share expansion
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Operator: Good afternoon. My name is Stephanie, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the KLA Corporation September Quarter 2025 Post-Earnings Conference Call. [Operator Instructions] Thank you. I will now turn the call over to Kevin Kessel, Vice President of Investor Relations and Market Analytics for KLA. Please go ahead. Kevin Kessel: Welcome to the September 2025 quarterly earnings call. I'm joined by our CEO, Rick Wallace, and our CFO, Bren Higgins. We will discuss today's results as well as our December quarter outlook, which was released after the market close and is available on our website along with the supplemental materials. We are presenting today's discussion and metrics on a non-GAAP financial basis unless otherwise specified. All full year references made refer to calendar years. The earnings materials contain a detailed reconciliation of GAAP to non-GAAP results. KLA's IR website also contains future events, presentations, corporate governance information and links to our SEC filings. Our comments today are subject to risks and uncertainties reflected in the disclosure of risk factors in our SEC filings. Any forward-looking statements, including those we make on the call today, are also subject to those risks, and KLA cannot guarantee those forward-looking statements will come true. Our actual results may differ significantly from those projected in our forward-looking statements. We will begin the call with
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