KLA Corporation Earnings Call Transcripts
Fiscal Year 2026
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Record revenue and profitability exceeded guidance, driven by AI and advanced packaging demand. Outlook for 2026 and 2027 is robust, with accelerating growth, strong cash generation, and continued market share gains in process control.
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Industry investment and wafer equipment demand are set for robust growth through 2027, with advanced packaging, High-Performance Compute, and memory intensity as key drivers. Market share gains, margin expansion, and a highly predictable service business underpin a strong long-term outlook.
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Wafer equipment and process control markets are experiencing strong momentum, with spending for 2026 projected above $140 billion and advanced packaging growth accelerating. Market share gains, robust R&D, and expanding service revenues position the company for outperformance and higher margins through 2030.
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Revenue grew 11% year-over-year to $3.415 billion, with strong gains in advanced packaging and service. Guidance calls for high teen revenue growth in 2026, driven by AI, advanced packaging, and memory demand, despite margin headwinds from DRAM costs.
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AI-driven complexity is accelerating growth in process control, with revenue expected to reach $26B by 2030 and service revenue set to double. Rising process control intensity in both logic and memory, advanced packaging, and robust capital allocation underpin sustained outperformance.
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Record 2025 results with 17% revenue growth, strong margins, and $3B capital return. 2026 outlook calls for continued outperformance, driven by AI, advanced packaging, and process control, despite supply and cost headwinds.
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Strong quarterly results with revenue and EPS above guidance, driven by AI and advanced packaging demand. Advanced packaging revenue is set to rise 70% year-over-year, and service revenue grew 16%. 2026 outlook includes a $300–$350 million China export control impact.
Fiscal Year 2025
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Modest growth is expected in the first half of next year, with acceleration in the second half, driven by high-performance compute, advanced packaging, and strong DRAM demand. Advanced packaging is now a significant growth area, and service revenue continues to expand at 12–14% annually.
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Strong quarterly results and raised guidance reflect momentum in advanced packaging and process control, driven by AI, HBM, and leading-edge logic investments. Service and non-process control businesses show resilience, while financial discipline supports dividend growth and shareholder returns.
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Strong growth in high performance compute, advanced packaging, and service contracts is driving robust financial performance and market share gains. Process control intensity is rising across logic, memory, and packaging, with sustainable tailwinds expected. China exposure is normalizing, and capital allocation remains focused on R&D, dividends, and buybacks.
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June quarter revenue grew 24% year-over-year to $3.175B, with record free cash flow and strong advanced packaging and services growth. Guidance for September quarter remains stable, with gross margin impacted by tariffs but long-term outlook supported by AI and HBM demand.
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Stable demand and strong growth are driven by leading-edge investments, high bandwidth memory, and advanced packaging. China exposure is moderating, while service and process control intensity support consistent revenue and margin expansion. Gross margins are guided to mid-60% for 2025.
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Strong growth in advanced packaging and process control is driving outperformance, with significant share gains in e-beam inspection and robust adoption of AI-enabled inspection systems. The outlook for 2025 and 2026 remains positive, supported by leading-edge investments and effective risk management.
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March quarter revenue and EPS exceeded guidance, driven by strong demand in AI, HBM, and advanced packaging. Gross margin was 63%, with robust free cash flow and capital returns. Despite trade and tariff uncertainties, 2025 guidance remains strong, with KLA expecting to outperform WFE growth.
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Strong 2024 results and record revenue set the stage for mid-single digit industry growth in 2025, led by advanced logic, foundry, and memory. E-beam and optical inspection synergies, advanced packaging, and process control intensity are key growth drivers, while China’s share normalizes and margin targets remain robust.
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2025 growth is driven by leading-edge logic, foundry, and memory investments, with advanced packaging and high bandwidth memory as key accelerants. Regulatory headwinds in China are offset by strong demand at advanced nodes, while service and technology innovation continue to support long-term growth.
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Revenue grew 12% to $10.85B in 2024, with record margins and strong free cash flow. March quarter guidance points to $3B revenue and 62% gross margin, with China headwinds offset by growth in AI, advanced packaging, and process control intensity.
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September quarter revenue and EPS exceeded guidance, driven by strong demand in leading-edge logic, memory, and advanced packaging. Service revenue marked its 49th consecutive quarter of year-over-year growth, and 2025 is expected to see continued growth led by Foundry/Logic and DRAM, offset by lower China demand.
Fiscal Year 2024
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Export controls are expected to reduce China business by over 20% in 2025, but growth in advanced packaging, high bandwidth memory, and leading edge nodes is projected to offset these headwinds. Long-term revenue growth targets remain at 9%-11%, with expanding software and service contributions.
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New U.S. export controls are expected to reduce 2025 China revenue by about $500 million, with the China business declining to the high 20s percentile of revenue. Growth is driven by leading-edge investments, advanced packaging, and a robust, contract-based services business that continues to outperform expectations.
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Advanced packaging and leading-edge investments are driving significant growth, with process control intensity rising due to new architectures and technology inflections. Financial targets for 2026 remain on track, supported by strong market share gains and a robust service business.
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Leadership transition and organizational changes are aligning with advanced packaging growth. Leading-edge investments and a robust service business drive performance, while packaging revenue is set to exceed $500 million. Dividend growth and a strong technology roadmap support long-term outlook.
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Revenue, gross margin, and EPS exceeded guidance, with strong AI-driven demand and advanced packaging growth. Outlook remains positive, with sequential growth expected through 2024 and into 2025, led by foundry logic and memory recovery. Advanced packaging revenue estimate for 2024 raised to over $500 million.
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Advanced packaging and heterogeneous integration are driving rapid growth in the semiconductor sector, fueled by AI and high-bandwidth memory demand. Inspection, metrology, and data analytics are increasingly critical, with packaging revenue expected to nearly double in 2024.
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Management targets 9%-11% annual growth, driven by rising capital intensity, robust service revenue, and advanced packaging expansion. Sequential growth is expected through 2024, with strong demand anticipated for 2025, especially in leading-edge and AI-driven markets.