KLA Corporation Reports Fiscal 2026 Second Quarter Results

Rhea-AI Summary

KLA (NASDAQ: KLAC) reported fiscal 2026 Q2 results for the quarter ended Dec 31, 2025: revenues $3.30B, GAAP net income $1.15B, GAAP diluted EPS $8.68 and non-GAAP diluted EPS $8.85. Cash flow from operations was $1.37B for the quarter and free cash flow $1.26B.

The company returned $797.4M in capital during the quarter and provided Q3 FY2026 guidance for revenue, gross margins, and EPS ranges.

Positive

• Revenue increased to $3.30B in Q2 FY2026
• GAAP diluted EPS of $8.68, above guidance midpoint
• Free cash flow of $1.26B for the quarter
• Capital returns of $797.4M in the quarter

Negative

• Guidance implies variability: revenue range ±$150M for Q3 FY2026
• GAAP gross margin guidance centered at 60.62% with ±1.00% band

News Market Reaction – KLAC

-15.24% 1.8x vol

132 alerts

-15.24% News Effect

-12.1% Trough in 23 hr 34 min

-$39.80B Valuation Impact

$221.36B Market Cap

1.8x Rel. Volume

On the day this news was published, KLAC declined 15.24%, reflecting a significant negative market reaction. Argus tracked a trough of -12.1% from its starting point during tracking. Our momentum scanner triggered 132 alerts that day, indicating very high trading interest and price volatility. This price movement removed approximately $39.80B from the company's valuation, bringing the market cap to $221.36B at that time. Trading volume was above average at 1.8x the daily average, suggesting increased trading activity.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Total revenues: $3.30 billion GAAP diluted EPS: $8.68 Non-GAAP diluted EPS: $8.85 +5 more

8 metrics

Total revenues $3.30 billion Q2 FY2026, above guidance midpoint of $3.225B

GAAP diluted EPS $8.68 Q2 FY2026, above guidance midpoint

Non-GAAP diluted EPS $8.85 Q2 FY2026, above guidance midpoint

Operating cash flow $1.37 billion Q2 FY2026 cash flow from operating activities

Free cash flow $1.26 billion Q2 FY2026 free cash flow

Capital returns $797.4 million Q2 FY2026 capital returned to shareholders

Revenue guidance $3.35 billion +/- $150 million Q3 FY2026 total revenue guidance

Non-GAAP EPS guidance $9.08 +/- $0.78 Q3 FY2026 non-GAAP diluted EPS guidance

Market Reality Check

Price: $1511.52 Vol: Volume 1,076,164 vs 20-da...

normal vol

$1511.52 Last Close

Volume Volume 1,076,164 vs 20-day average 1,098,192 suggests no unusual trading activity ahead of the release. normal

Technical Price $1,627.20 is above 200-day MA at $1,013.08 and about 1.38% below the 52-week high of $1,650.00, reflecting a strong pre-news uptrend.

Peers on Argus

KLAC gained 0.67% while key peers were mostly lower: AMAT -1.51%, LRCX -0.70%, E...

KLAC gained 0.67% while key peers were mostly lower: AMAT -1.51%, LRCX -0.70%, ENTG -0.46%, ASML -4.69%, with only TER +2.84%. This points to a stock-specific reaction to earnings rather than a broad sector move.

Historical Context

5 past events · Latest: Jan 15 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 15	Innovation awards	Positive	+7.7%	Recognition for multiple sustainability- and safety-focused coating innovations.
Nov 06	Dividend declaration	Positive	-1.1%	Quarterly cash dividend of $1.90 per share announced.
Oct 29	Quarterly earnings	Positive	+2.4%	Q1 FY2026 revenue and EPS both above guidance midpoints with strong cash flow.
Aug 07	Dividend declaration	Positive	+0.3%	Announced regular quarterly dividend of $1.90 per share.
Jul 31	Earnings & outlook	Positive	+0.9%	Strong Q4/FY2025 results with record free cash flow and Q1 FY2026 guidance.

Pattern Detected

KLAC’s earnings and dividend announcements have generally seen slightly positive or modestly negative single-day reactions, with most events aligning with the news tone.

Recent Company History

Over the past six months, KLAC has reported multiple strong financial updates. Q4 FY2025 results on Jul 31, 2025 showed solid revenue and record free cash flow. Q1 FY2026 results on Oct 29, 2025 again exceeded guidance midpoints and provided Q2 guidance that aligns with today’s reported outcomes. Regular dividends of $1.90 per share were declared in Aug 2025 and Nov 2025. Today’s Q2 FY2026 record revenue and EPS extend this pattern of consistent execution and shareholder returns.

Market Pulse Summary

The stock dropped -15.2% in the session following this news. A negative reaction despite record Q2 F...

Analysis

The stock dropped -15.2% in the session following this news. A negative reaction despite record Q2 FY2026 results, including revenue of $3.30 billion and non-GAAP EPS of $8.85, would fit a pattern where strong fundamentals occasionally met profit-taking. Past earnings for KLAC produced mostly modest gains, so a sharp decline would raise questions about valuation or expectations rather than the reported quarter, given solid free cash flow of $1.26 billion and ongoing capital returns.

Key Terms

gaap, non-gaap, free cash flow, diluted eps, +1 more

5 terms

gaap financial

"GAAP diluted EPS was $8.68 and non-GAAP diluted EPS was $8.85"

GAAP, or Generally Accepted Accounting Principles, are a set of standardized rules and guidelines that companies follow when preparing their financial statements. They ensure consistency, transparency, and comparability across different companies, making it easier for investors to understand and compare financial information accurately. This helps investors make informed decisions based on trustworthy and uniform financial reports.

non-gaap financial

"GAAP diluted EPS was $8.68 and non-GAAP diluted EPS was $8.85"

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

free cash flow financial

"free cash flow was $1.26 billion and $4.38 billion, respectively"

Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.

diluted eps financial

"GAAP diluted EPS was $8.68 and non-GAAP diluted EPS was $8.85"

Diluted earnings per share (EPS) shows how much profit a company makes for each share of stock, assuming all possible shares from stock options or convertible securities are used. It provides a more conservative estimate than basic EPS, accounting for potential share increases that could dilute ownership. Investors use diluted EPS to get a clearer picture of a company's true profitability on a per-share basis.

gross margin financial

"GAAP gross margin is expected to be in a range of 60.62% +/- 1.00%"

Gross margin is the difference between how much money a company makes from selling its products and how much it costs to produce them, expressed as a percentage of sales. It shows how efficiently a company is turning sales into profit before other expenses like marketing or salaries. Higher gross margin means the company keeps more money from each sale, which is a good sign of financial health.

AI-generated analysis. Not financial advice.

• Total revenues were $3.30 billion, above the midpoint of the guidance range of $3.225 billion +/- $150 million;
• GAAP diluted EPS was $8.68 and non-GAAP diluted EPS was $8.85, both above the midpoints of the respective guidance ranges;
• Cash flow from operating activities for the quarter and last twelve months were $1.37 billion and $4.77 billion, respectively, and free cash flow was $1.26 billion and $4.38 billion, respectively; and
• Capital returns for the quarter and last twelve months were $797.4 million and $3.01 billion, respectively.

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 and solid company execution in an environment where the relevance of process control at the leading edge for foundry/logic and memory is increasing. As the market leader in process control, KLA is well positioned to take advantage of this long-term trend," said Rick Wallace, president and CEO of KLA Corporation. "As we look forward to calendar year 2026, KLA is a key enabler of the AI ecosystem and continues to uniquely benefit from the AI infrastructure buildout across all major growth vectors, including foundry/logic, memory, advanced packaging, and services."

GAAP Results
	Q2 FY 2026	Q1 FY 2026	Q2 FY 2025
Total Revenues	$3,297 million	$3,210 million	$3,077 million
Net Income	$1,146 million	$1,121 million	$825 million
Net Income per Diluted Share	$8.68	$8.47	$6.16
Non-GAAP Results
	Q2 FY 2026	Q1 FY 2026	Q2 FY 2025
Net Income	$1,168 million	$1,167 million	$1,098 million
Net Income per Diluted Share	$8.85	$8.81	$8.20

A reconciliation between GAAP operating results and non-GAAP operating results is provided following the financial statements included in this release. KLA will discuss the results for its fiscal year 2026 second quarter, along with its outlook, on a conference call today beginning at 2:00 p.m. P.T. A webcast of the call will be available at: www.kla.com. 

Third Quarter Fiscal 2026 Guidance

The following details our guidance for the third quarter of fiscal 2026 ending in March:

• Total revenues are expected to be in a range of $3.35 billion +/- $150 million
• GAAP gross margin is expected to be in a range of 60.62% +/- 1.00%
• Non-GAAP gross margin is expected to be in a range of 61.75% +/- 1.00%
• GAAP diluted EPS is expected to be in a range of $8.85 +/- $0.78
• Non-GAAP diluted EPS is expected to be in a range of $9.08 +/- $0.78

For additional details and assumptions underlying our guidance metrics, please see the company's published Letter to Shareholders, Earnings Slide Presentation and Earnings Infographic on the KLA investor relations website (ir.kla.com). Such Letter to Shareholders, Earnings Slide Presentation and Earnings Infographic are not incorporated by reference into this earnings release.

About KLA:

KLA Corporation ("KLA") develops industry-leading equipment and services that enable innovation throughout the electronics industry. We provide advanced process control and process-enabling solutions for manufacturing wafers and reticles, integrated circuits, packaging and printed circuit boards. In close collaboration with leading customers across the globe, our expert teams of physicists, engineers, data scientists and problem-solvers design solutions that move the world forward. Investors and others should note that KLA announces material financial information including SEC filings, press releases, public earnings calls and conference webcasts using an investor relations website (ir.kla.com). Additional information may be found at: www.kla.com. 

Note Regarding Forward-Looking Statements:

Statements in this press release other than historical facts, such as statements pertaining to the amount and timing of dividends, the amount and timing of share repurchases, total revenues, GAAP and non-GAAP gross margin and GAAP and non-GAAP diluted EPS for the quarter ending March 31, 2026, are forward-looking statements and are subject to the Safe Harbor provisions created by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current information and expectations and involve a number of risks and uncertainties. Actual results may differ materially from those projected in such statements due to various factors, including, but not limited to: our vulnerability to a weakening in the condition of the financial markets and the global economy; risks related to our international operations; evolving Bureau of Industry and Security of the U.S. Department of Commerce rules and regulations and their impact on our ability to sell products to and provide services to certain customers in China; tariffs and other trade restrictions; costly intellectual property disputes that could result in our inability to sell or use the challenged technology; risks related to the legal, regulatory and tax environments in which we conduct our business; differing stakeholder expectations, requirements and attention to environment, social and governance ("ESG") matters and the resulting costs, risks and impact on our business; unexpected delays, difficulties and expenses in executing against our environmental, climate, or other ESG targets, goals and commitments; our ability to attract, retain and motivate key personnel; our vulnerability to disruptions and delays at our third-party service providers; cybersecurity threats, cyber incidents affecting our and our business partners' systems and networks; our inability to access critical information in a timely manner due to system failures; risks related to acquisitions, integrations, strategic alliances or collaborative arrangements; climate change, earthquake, flood or other natural catastrophic events, public health crises or terrorism and the adverse impact on our business operations; the war between Ukraine and Russia, escalation of hostilities in the Middle East, and the significant military activity in those regions; lack of insurance for losses and interruptions caused by terrorists and acts of war, and our self-insurance of certain risks including earthquake risk; risks related to fluctuations in foreign currency exchange rates; risks related to fluctuations in interest rates and the market values of our portfolio investments; risks related to tax and regulatory compliance audits; any change in taxation rules or practices and our effective tax rate; compliance costs with federal securities laws, rules, regulations, NASDAQ requirements, and evolving accounting standards and practices; ongoing changes in the technology industry, and the semiconductor industry in particular, including future growth rates, pricing trends in end-markets, or changes in customer capital spending patterns; our vulnerability to a highly concentrated customer base; the cyclicality of the industries in which we operate; our ability to timely develop new technologies and products that successfully address changes in the industry; risks related to artificial intelligence; our ability to maintain our technology advantage and protect proprietary rights; our ability to compete in the industry; availability and cost of the materials and parts used in the production of our products; our ability to operate our business in accordance with our business plan; risks related to our debt and leveraged capital structure; we may not be able to declare cash dividends at all or in any particular amount; liability to our customers under indemnification provisions if our products fail to operate properly or contain defects or our customers are sued by third parties due to our products; our government funding for research and development is subject to audit, and potential termination or penalties; we may incur significant restructuring charges or other asset impairment charges or inventory write offs; we are subject to risks related to receivables factoring arrangements and compliance risk of certain settlement agreements with the government; and risks related to the Court of Chancery of the State of Delaware being the sole and exclusive forum for certain actions and proceedings. For other factors that may cause actual results to differ materially from those projected and anticipated in forward-looking statements in this press release, please refer to KLA's Annual Report on Form 10-K for the year ended June 30, 2025, and other subsequent filings with the Securities and Exchange Commission (including, but not limited to, the risk factors described therein). KLA assumes no obligation to, and does not currently intend to, update these forward-looking statements.

KLA Corporation
Condensed Consolidated Unaudited Balance Sheets
(In thousands)	Dec. 31, 2025		June 30, 2025
ASSETS
Current assets:
Cash and cash equivalents	$             2,452,124		$             2,078,908
Marketable securities	2,755,340		2,415,715
Accounts receivable, net	2,073,581		2,263,915
Inventories	3,282,605		3,212,149
Other current assets	700,155		728,102
Total current assets	11,263,805		10,698,789
Land, property and equipment, net	1,344,768		1,252,775
Goodwill, net	1,790,597		1,792,193
Deferred income taxes	1,144,113		1,105,770
Purchased intangible assets, net	348,018		444,785
Other non-current assets	828,927		773,614
Total assets	$           16,720,228		$           16,067,926
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$                425,189		$                458,509
Deferred system revenue	858,088		816,834
Deferred service revenue	599,254		548,011
Other current liabilities	2,099,941		2,262,441
Total current liabilities	3,982,472		4,085,795
Long-term debt	5,886,128		5,884,257
Deferred tax liabilities	452,678		446,945
Deferred service revenue	270,549		348,844
Other non-current liabilities	662,670		609,632
Total liabilities	11,254,497		11,375,473
Stockholders' equity:
Common stock and capital in excess of par value	2,604,177		2,511,922
Retained earnings	2,860,594		2,179,330
Accumulated other comprehensive income	960		1,201
Total stockholders' equity	5,465,731		4,692,453
Total liabilities and stockholders' equity	$           16,720,228		$           16,067,926

 

KLA Corporation
Condensed Consolidated Unaudited Statements of Operations
	Three Months Ended Dec. 31,				Six Months Ended Dec.31,
(In thousands, except per share amounts)	2025		2024		2025		2024
Revenues:
Product	$     2,511,093		$     2,409,462		$     4,976,099		$     4,606,851
Service	786,053		667,389		1,530,743		1,311,541
Total revenues	3,297,146		3,076,851		6,506,842		5,918,392
Costs and expenses:
Costs of revenues	1,271,210		1,221,461		2,514,280		2,368,892
Research and development	383,871		346,157		744,332		669,302
Selling, general and administrative	279,919		267,081		548,907		518,123
Impairment of goodwill and purchased intangible assets	—		239,100		—		239,100
Interest expense	69,668		74,981		140,743		157,152
Other expense (income), net	(37,825)		(44,458)		(81,199)		(85,393)
Income before income taxes	1,330,303		972,529		2,639,779		2,051,216
Provision for income taxes	184,621		148,002		373,057		280,838
Net income	$     1,145,682		$         824,527		$     2,266,722		$     1,770,378
Net income per share
Basic	$               8.73		$               6.18		$             17.24		$             13.24
Diluted	$               8.68		$               6.16		$             17.15		$             13.17
Weighted-average number of shares:
Basic	131,278		133,327		131,517		133,730
Diluted	132,009		133,926		132,205		134,415

 

KLA Corporation
Condensed Consolidated Unaudited Statements of Cash Flows
	Three Months Ended Dec. 31,
(In thousands)	2025		2024
Cash flows from operating activities:
Net income	$     1,145,682		$         824,527
Adjustments to reconcile net income to net cash provided by operating activities:
Impairment of goodwill and purchased intangible assets	—		239,100
Depreciation and amortization	99,268		103,922
Unrealized foreign exchange loss and other	2,304		11,346
Stock-based compensation expense	73,947		61,841
Deferred income taxes	(31,728)		(68,976)
Net gain on sale of assets	—		(161)
Changes in assets and liabilities:
Accounts receivable	191,158		(394,604)
Inventories	1,214		64,958
Other assets	(65,267)		(90,845)
Accounts payable	(5,027)		67,080
Deferred system revenue	39,285		195,357
Deferred service revenue	(22,082)		22,927
Other liabilities	(61,147)		(186,957)
Net cash provided by operating activities	1,367,607		849,515
Cash flows from investing activities:
Proceeds from sale of assets	—		161
Capital expenditures	(105,576)		(92,323)
Proceeds from capital-related government assistance	15,241		—
Purchases of available-for-sale and equity securities	(861,613)		(489,033)
Proceeds from maturity and sale of available-for-sale securities	840,909		1,193,757
Purchases of trading securities	(23,944)		(17,276)
Proceeds from sale of trading securities	22,301		18,420
Net cash provided by (used in) investing activities	(112,682)		613,706
Cash flows from financing activities:
Repayment of debt	—		(750,000)
Common stock repurchases	(547,750)		(650,121)
Payment of dividends to stockholders	(249,654)		(226,776)
Issuance of common stock	55,542		47,538
Tax withholding payments related to vested and released restricted stock units	(5,717)		(3,608)
Net cash used in financing activities	(747,579)		(1,582,967)
Effect of exchange rate changes on cash and cash equivalents	(1,433)		(19,178)
Net increase (decrease) in cash and cash equivalents	505,913		(138,924)
Cash and cash equivalents at beginning of period	1,946,211		1,977,202
Cash and cash equivalents at end of period	$     2,452,124		$     1,838,278
Supplemental cash flow disclosures:
Income taxes paid, net	$         283,901		$         361,833
Interest paid, net of capitalized interest	$             7,700		$           25,059
Non-cash activities:
Dividends payable - financing activities	$             2,174		$             2,104
Unsettled common stock repurchase - financing activities	$             5,500		$             5,500
Accrued purchase of land, property and equipment - investing activities	$           26,040		$           11,354

 

KLA Corporation Segment Information (Unaudited)   The following is a summary of results for each of our three reportable segments and reconciliations to total revenues for the indicated periods:
	Three Months Ended Dec. 31,				Six Months Ended Dec. 31,
(In thousands)	2025		2024		2025		2024
Revenues:
Semiconductor Process Control	$     3,004,648		$     2,755,743		$     5,904,040		$     5,330,894
Specialty Semiconductor Process	140,577		160,407		260,332		288,741
PCB and Component Inspection	152,175		161,080		341,663		299,063
Total revenues for reportable segments	3,297,400		3,077,230		6,506,035		5,918,698
Effects of changes in foreign currency exchange rates	(254)		(379)		807		(306)
Total revenues	$     3,297,146		$     3,076,851		$     6,506,842		$     5,918,392

 

KLA Corporation Condensed Consolidated Unaudited Supplemental Information   Reconciliation of GAAP Net Income to Non-GAAP Net Income
			Three Months Ended						Six Months Ended
(In thousands, except per share amounts)			Dec. 31, 2025		Sept. 30, 2025		Dec. 31, 2024		Dec. 31, 2025		Dec. 31, 2024
GAAP net income			$   1,145,682		$   1,121,040		$      824,527		$   2,266,722		$  1,770,378
Adjustments to reconcile GAAP net income to non-GAAP net income:
	Acquisition-related charges	a	49,002		49,026		58,656		98,028		115,350
	Restructuring, severance and other charges	b	—		—		2,133		—		4,995
	Impairment of goodwill and purchased intangible assets	c	—		—		239,100		—		239,100
	Income tax effect of non-GAAP adjustments	d	(18,103)		(18,348)		(23,160)		(36,451)		(42,646)
	Discrete tax items	e	(8,399)		15,087		(2,812)		6,688		(579)
Non-GAAP net income			$   1,168,182		$   1,166,805		$   1,098,444		$   2,334,987		$   2,086,598
GAAP net income per diluted share			$            8.68		$            8.47		$            6.16		$          17.15		$          13.17
Non-GAAP net income per diluted share			$            8.85		$            8.81		$            8.20		$          17.66		$          15.52
Shares used in diluted net income per share calculation			132,009		132,381		133,926		132,205		134,415

 

Pre-tax Impact of GAAP to Non-GAAP Adjustments Included in Condensed Consolidated Unaudited Statements of Operations
(In thousands)	Acquisition - Related Charges		Restructuring, Severance and Other Charges		Goodwill and Purchased Intangible Asset Impairment		Total Pre-tax GAAP to Non-GAAP Adjustments
Three Months Ended Dec. 31, 2025
Costs of revenues	$        38,052		$                —		$                —		$                38,052
Selling, general and administrative	10,950		—		—		10,950
Total in three months ended Dec. 31, 2025	$        49,002		$                —		$                —		$                49,002
Three Months Ended Sept. 30, 2025
Costs of revenues	$        38,053		$                —		$                —		$                38,053
Selling, general and administrative	10,973		—		—		10,973
Total in three months ended Sept. 30, 2025	$        49,026		$                —		$                —		$                49,026
Three Months Ended Dec. 31, 2024
Costs of revenues	$        43,348		$              429		$                —		$                43,777
Research and development	2,994		1,166		—		4,160
Selling, general and administrative	12,314		538		—		12,852
Impairment of goodwill and purchased intangible assets	—		—		239,100		239,100
Total in three months ended Dec. 31, 2024	$        58,656		$          2,133		$      239,100		$              299,889

 

Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Free Cash Flow
	Three Months Ended Dec. 31,				Twelve Months Ended Dec. 31,
(In thousands)	2025		2024		2025		2024
Net cash provided by operating activities	$      1,367,607		$          849,515		$      4,766,348		$      3,647,346
Capital expenditures	(105,576)		(92,323)		(384,013)		(285,254)
Free cash flow	$      1,262,031		$          757,192		$      4,382,335		$      3,362,092

 

Capital Returns Calculation
	Three Months Ended Dec. 31,				Twelve Months Ended Dec. 31,
(In thousands)	2025		2024		2025		2024
Payments of dividends to stockholders	$          249,654		$          226,776		$          983,401		$          819,530
Common stock repurchases	547,750		650,121		2,025,259		2,060,021
Capital returns	$          797,404		$          876,897		$      3,008,660		$      2,879,551

 

Third Quarter Fiscal 2026 Guidance   Reconciliation of GAAP Diluted EPS to Non-GAAP Diluted EPS
		Three Months Ending March 31, 2026
(In millions, except per share amounts)		Low		High
GAAP net income per diluted share		$8.07		$9.63
Acquisition-related charges	a	0.36		0.36
Income tax effect of non-GAAP adjustments	d	(0.13)		(0.13)
Non-GAAP net income per diluted share		$8.30		$9.86
Shares used in net income per diluted share calculation		131.7		131.7

 

Reconciliation of GAAP Gross Margin to Non-GAAP Gross Margin
		Three Months Ending March 31, 2026
		Low		High
GAAP gross margin		59.62 %		61.62 %
Acquisition-related charges	a	1.13 %		1.13 %
Non-GAAP gross margin		60.75 %		62.75 %

The non-GAAP and supplemental information provided in this press release is a supplement to, and not a substitute for, KLA's financial results presented in accordance with United States GAAP.

To supplement our Condensed Consolidated Financial Statements presented in accordance with GAAP, we provide certain non-GAAP financial information, which is adjusted from results based on GAAP to exclude certain gains, costs and expenses, as well as other supplemental information. The non-GAAP and supplemental information is provided to enhance the user's overall understanding of our operating performance and our prospects in the future. Specifically, we believe that the non-GAAP information, including non-GAAP net income, non-GAAP net income per diluted share, non-GAAP gross margin and free cash flow, provides useful measures to both management and investors regarding financial and business trends relating to our financial performance by excluding certain costs and expenses that we believe are not indicative of our core operating results to help investors compare our operating performances with our results in prior periods as well as with the performance of other companies. The non-GAAP information is among the budgeting and planning tools that management uses for future forecasting. However, because there are no standardized or generally accepted definitions for most non-GAAP financial metrics, definitions of non-GAAP financial metrics are inherently subject to significant discretion (for example, determining which costs and expenses to exclude when calculating such a metric). As a result, non-GAAP financial metrics may be defined very differently from company to company, or even from period to period within the same company, which can potentially limit the usefulness of such information to an investor. The presentation of non-GAAP and supplemental information is not meant to be considered in isolation or as a substitute for results prepared and presented in accordance with United States GAAP. The following are descriptions of the adjustments made to reconcile GAAP net income to non-GAAP net income:

a.	Acquisition-related charges primarily include amortization of intangible assets and write-offs due to abandonment of in-process research and development projects. Although we exclude the effect of amortization of all acquired intangible assets from these non-GAAP financial measures, management believes that it is important for investors to understand that such intangible assets were recorded as part of purchase price accounting arising from acquisitions, and such amortization of intangible assets related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. Investors should note that the use of these intangible assets contributed to our revenues earned during the periods presented and are expected to contribute to our future period revenues as well.
b.	Restructuring, severance and other charges primarily include costs associated with employee severance.
c.	Impairment of goodwill and purchased intangible assets in the three and six months ended Dec. 31, 2024 included non-cash expense recognized as a result of the company's testing for goodwill impairment and long-lived assets impairment, which resulted from the continued deterioration of the long-term forecast for our PCB business. Management believes that it is appropriate to exclude these impairment charges as they are not indicative of ongoing operating results and therefore limit comparability. Management also believes excluding this item helps investors compare our operating performance with our results in prior periods as well as with the performance of other companies.
d.	Income tax effect of non-GAAP adjustments includes the income tax effects of the excluded items noted above.
e.	Discrete tax items in the three and six months ended Dec. 31, 2025 and in the three months ended Sept. 30, 2025 include the recognition or adjustment of a deferred tax liability for withholding taxes on future remittance of previously taxed income as a result of new tax legislation. Discrete tax items in the three months ended Dec. 31, 2025 also include an adjustment of certain deferred tax benefits for a change in tax rate due to change in tax incentives. Discrete tax items in the three and six months ended Dec. 31, 2024 include the recognition of a net deferred tax asset on foreign currency gains/losses resulting from new tax legislation. Discrete tax items in all periods presented include a tax impact relating to the amortization of tax benefits from internal restructuring or similar tax benefits recorded in other periods.

 

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SOURCE KLA Corporation

FAQ

What were KLA (KLAC) fiscal Q2 2026 revenue and EPS results on Jan 29, 2026?

KLA reported $3.30 billion in revenue and GAAP diluted EPS of $8.68 for Q2 FY2026. According to the company, non-GAAP diluted EPS was $8.85, and GAAP net income was $1.15 billion for the quarter.

How much free cash flow did KLAC generate in Q2 FY2026 and trailing twelve months?

Free cash flow for the quarter was $1.26 billion, and for the last twelve months was $4.38 billion. According to the company, operating cash flow was $1.37 billion for the quarter and $4.77 billion LTM.

What capital returns did KLA (KLAC) report for Q2 FY2026 and the last twelve months?

KLA returned $797.4 million in capital during Q2 FY2026 and $3.01 billion over the last twelve months. According to the company, these amounts reflect share repurchases and dividends for the stated periods.

What guidance did KLA (KLAC) provide for Q3 FY2026 revenue and EPS on Jan 29, 2026?

KLA guided Q3 FY2026 revenue to $3.35B ± $150M with GAAP diluted EPS of $8.85 ± $0.78. According to the company, non-GAAP diluted EPS guidance is $9.08 ± $0.78 for the quarter.

How did KLA (KLAC) describe market drivers and positioning for 2026 in the earnings release?

KLA said it is positioned to benefit from the AI infrastructure buildout across foundry, memory, packaging, and services. According to the company, demand for leading‑edge process control underpins near‑term growth and strategic relevance in 2026.