KLA (KLAC) Q4 2026 earnings summary

Executive summary

• Revenue reached $3.66 billion in Q4 FY26, up 15% year-over-year and 7% sequentially, surpassing guidance midpoint, driven by AI infrastructure and advanced packaging demand.

• Non-GAAP diluted EPS was $1.05–$1.50 and GAAP diluted EPS was $1.04, both at the upper end of guidance, retroactively adjusted for a 10-for-1 stock split.

• Profitability, cash generation, and customer engagement were strong, supporting accelerating growth into the second half of 2026 and 2027.

• Service revenue rose 17% year-over-year to $820 million, reflecting high tool utilization and contract-based stability.

• Fiscal year 2026 revenue totaled $13.58 billion, with GAAP net income of $4.83 billion.

Financial highlights

• Gross margin was 62.4% non-GAAP and 61.6% GAAP, at the upper end of guidance, aided by favorable services mix and manufacturing scale.

• Operating margin reached 43.7% non-GAAP; incremental operating margin was 59%.

• Non-GAAP net income was $1.39 billion; GAAP net income was $1.36 billion.

• Cash flow from operations was $906 million for the quarter and $4.14 billion for the year; free cash flow was $817 million for the quarter and $3.77 billion for the year.

• Returned $876 million to shareholders in the quarter and $3.35 billion for the year via dividends and share repurchases.

Outlook and guidance

• Q1 FY27 revenue guidance: $4.0 billion ± $200 million; gross margin forecasted at 62.5% ± 1 percentage point non-GAAP and 61.6% ± 1.0% GAAP.

• Non-GAAP diluted EPS guidance: $1.16 ± $0.10; GAAP diluted EPS: $1.14 ± $0.10.

• Operating expenses expected to be ~$690 million in September quarter, with sequential growth of $15–20 million in coming quarters.

• Wafer equipment market outlook for 2026 raised to low $150 billion range, up from prior $140 billion+; 2027 market expected to reach ~$190 billion.

• Management expects business momentum to accelerate in the second half of 2026 and continue through 2027, driven by AI infrastructure expansion and advanced packaging demand.