KLA Corporation Q2 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

KLA Corporation December Quarter 2025 Earnings Summary

Full Year 2025 (Calendar) Performance vs. 2024

  • Revenue: $12.745 billion (+17% YoY), record high; process control systems outpaced industry growth by several points.
  • Non-GAAP diluted EPS: +29% YoY, showing strong operating leverage.
  • Gross margin: 62%; operating margin: 43.6% (industry-leading).
  • Free cash flow: $4.4 billion (+30% YoY).
  • Capital returned to shareholders: $3 billion (dividends + buybacks).
  • Process control systems revenue: +19% YoY; service revenue: +15% YoY (16th consecutive year of growth, >12% CAGR).
  • Advanced packaging systems revenue: $950 million (+70%+ YoY).

December Quarter 2025 Highlights vs. Prior Periods

  • Revenue: $3.3 billion (+17% YoY); above guidance midpoint of $3.225 billion.
  • Non-GAAP diluted EPS: $8.85; GAAP diluted EPS: $8.68 (both above midpoints).
  • Gross margin: 62.6% (+60 bps vs. guidance midpoint, driven by service strength and efficiencies).
  • Operating margin: 42.8%; operating expenses: $653 million ($384M R&D, $269M SG&A).
  • Free cash flow: $1.26 billion (quarterly record); cash from operations: $1.37 billion.
  • Service revenue: $786 million (+18% YoY, +6% QoQ).
  • Capital return: $797 million ($548M share repurchases, $250M dividends); trailing twelve months: $3 billion.
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Stephanie: Thank you for your Your meeting will begin shortly. If you need assistance at any time, please press 0, and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly. Team will be happy to help you. You for your continued patience. Your meeting will begin shortly. Member of our team will be happy to help you. Good afternoon. My name is Stephanie, and I'll be your conference operator today. At this time, I would like to welcome everyone to the KLA Corporation December Quarter 2025 Earnings Conference Call and Webcast. All participant lines have been placed in a listen-only mode to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I will now turn the call over to Kevin Kessel, Vice President of Investor Relations and Market Analytics. Please go ahead. Kevin Kessel: Welcome to the December 2025 quarterly earnings call. I'm joined by our CEO, Richard Wallace, and our CFO, Bren Higgins. We will discuss today's results as well as our March and calendar 2026 outlook, which we released after the market close and is available on our website along with supplemental materials. We are presenting today's discussion and metrics on a non-GAAP financial basis unless otherwise specified. All full-year references we make refer to calendar years. The earnings materials contain a detailed reconciliation of GAAP to non-GAAP results. KLA's IR website also contain
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