KLA (NASDAQ:KLAC) Posts Earnings Results, Beats Estimates By $0.05 EPS

KLA (NASDAQ:KLAC) released its quarterly earnings results on Tuesday. The semiconductor company reported $1.05 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $1.00 by $0.05, FiscalAI reports. The firm had revenue of $3.66 billion for the quarter, compared to analysts’ expectations of $3.61 billion. KLA had a net margin of 35.57% and a return on equity of 91.38%. The firm’s revenue for the quarter was up 15.2% compared to the same quarter last year. During the same quarter last year, the company earned $0.94 EPS. KLA updated its Q1 2027 guidance to 1.060-1.260 EPS.

Here are the key takeaways from KLA’s conference call:

• Record June-quarter results: Revenue reached $3.66 billion, up 7% sequentially and 15% year over year, while earnings and profitability came in above the midpoint of guidance.
• AI-driven demand is strengthening: KLA cited accelerating hyperscale data-center investment, leading-edge logic and memory growth, HBM adoption, and advanced packaging as drivers of rising process-control intensity. The company expects second-half 2026 revenue to grow approximately 20% over the first half and significant growth to continue in 2027.
• Outlook was raised: KLA now expects the 2026 wafer-equipment market, including advanced packaging, to reach the low-$150 billion range, up from its prior $140 billion-plus estimate. Advanced-packaging process-control revenue is forecast at approximately $1.1 billion, up more than 70% year over year.
• September-quarter guidance signals continued momentum: Revenue is expected at $4.0 billion, plus or minus $200 million, with gross margin guided to 62.5% and non-GAAP diluted EPS to $1.16, plus or minus $0.10. Backlog is expected to reach roughly $12.5 billion, supporting visibility into late 2027.
• Cost pressures remain: Higher memory prices and tariff-related costs are weighing on gross margins, with management estimating the memory headwind at more than 100 basis points and expecting it to continue through 2027, although new-product pricing and operating leverage should provide offsets.

KLA Trading Up 6.8%

Shares of KLAC traded up $11.58 during midday trading on Thursday, reaching $181.77. The company had a trading volume of 7,064,989 shares, compared to its average volume of 11,593,514. KLA has a 1-year low of $83.22 and a 1-year high of $307.37. The stock has a market cap of $237.44 billion, a PE ratio of 49.71, a price-to-earnings-growth ratio of 1.81 and a beta of 1.41. The firm has a 50 day simple moving average of $223.99 and a 200-day simple moving average of $181.22. The company has a quick ratio of 2.11, a current ratio of 3.03 and a debt-to-equity ratio of 1.01.

KLA Cuts Dividend

The business also recently announced a quarterly dividend, which was paid on Tuesday, June 2nd. Shareholders of record on Monday, May 18th were issued a $0.23 dividend. This represents a $0.92 annualized dividend and a yield of 0.5%. The ex-dividend date was Monday, May 18th. KLA’s dividend payout ratio is presently 26.06%.

Key Headlines Impacting KLA

Here are the key news stories impacting KLA this week:

• Positive Sentiment: Results exceeded expectations: KLA reported fiscal Q4 adjusted earnings of $1.05 per share versus the $1.00 consensus, while revenue rose 15.2% year over year to approximately $3.66 billion. Strong demand from AI infrastructure, foundry and logic customers, and process-control applications supported the performance. KLA fiscal 2026 fourth-quarter results
• Positive Sentiment: AI investment remains a major growth catalyst: Management expects continued spending on AI infrastructure to drive semiconductor manufacturing demand and expand opportunities in inspection and process control. Fiscal Q1 2027 revenue guidance of $3.8 billion to $4.2 billion was broadly above Wall Street expectations, while the EPS range of $1.06 to $1.26 included an upside scenario. KLA forecasts upbeat quarter on AI investment
• Positive Sentiment: Analyst support remains favorable: JPMorgan raised its price target to $238 and assigned an Overweight rating; Needham reiterated Buy with a $270 target, Cantor Fitzgerald maintained Overweight with a $325 target, and Citi reiterated Buy with a $290 target. Analysts cited the earnings beat and an improved outlook for wafer-fabrication equipment demand. KLA analyst outlook
• Neutral Sentiment: Semiconductor cycle backdrop is mixed: Wolfe Research analyst Chris Caso argued that a broad oversupply cycle is unlikely before 2028 because the industry lacks sufficient physical infrastructure, a view that supports longer-term chip-equipment demand. However, broader technology shares remain sensitive to interest rates, geopolitical tensions, and concerns about elevated valuations.
• Negative Sentiment: High expectations drove the initial decline: Investors viewed the guidance increase as less impressive than KLA’s premium valuation required, with analysts flagging potential growth constraints, competition, margin pressure, and uncertainty around customer capital spending. The stock’s rebound follows that selloff rather than a new earnings release. KLA earnings reaction
• Negative Sentiment: Insider selling is a secondary caution: KLA’s CEO, CFO, and chief accounting officer collectively sold shares during the past six months, with no reported open-market purchases. These transactions may add to investor caution but are not necessarily company-specific signals.

Insider Transactions at KLA

In other news, CEO Richard P. Wallace sold 45,120 shares of the business’s stock in a transaction dated Thursday, June 11th. The shares were sold at an average price of $221.34, for a total transaction of $9,986,725.44. Following the transaction, the chief executive officer owned 713,830 shares of the company’s stock, valued at approximately $157,996,990.71. The trade was a 5.95% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. Also, CFO Bren D. Higgins sold 27,701 shares of the firm’s stock in a transaction dated Thursday, July 2nd. The stock was sold at an average price of $265.69, for a total transaction of $7,359,878.69. Following the sale, the chief financial officer owned 263,472 shares of the company’s stock, valued at approximately $70,001,875.68. The trade was a 9.51% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold a total of 132,333 shares of company stock worth $29,547,170 in the last quarter. Company insiders own 91.48% of the company’s stock.

Institutional Trading of KLA

A number of hedge funds and other institutional investors have recently made changes to their positions in KLAC. Triumph Capital Management acquired a new position in KLA in the third quarter valued at approximately $40,000. WFA of San Diego LLC purchased a new stake in KLA in the second quarter valued at $90,000. Martingale Asset Management L P purchased a new stake in KLA in the fourth quarter valued at $208,000. Guardian Wealth Management Inc. acquired a new position in shares of KLA in the 4th quarter valued at $209,000. Finally, Abound Financial LLC acquired a new position in shares of KLA in the 4th quarter valued at $241,000. Institutional investors and hedge funds own 86.65% of the company’s stock.

Analyst Ratings Changes

KLAC has been the topic of several research analyst reports. Cantor Fitzgerald reiterated an “overweight” rating and issued a $325.00 price objective on shares of KLA in a report on Wednesday. BNP Paribas Exane boosted their price target on KLA from $155.00 to $170.00 and gave the stock a “neutral” rating in a research report on Thursday, April 30th. UBS Group set a $240.00 price objective on KLA and gave the company a “neutral” rating in a research note on Monday, July 20th. Needham & Company LLC reaffirmed a “buy” rating and set a $270.00 target price on shares of KLA in a research note on Wednesday. Finally, Weiss Ratings lowered shares of KLA from a “buy (b)” rating to a “buy (b-)” rating in a report on Monday, May 4th. Twenty investment analysts have rated the stock with a Buy rating and ten have assigned a Hold rating to the stock. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and an average target price of $219.10.

KLA Company Profile

KLA is a provider of process control and yield management solutions for the semiconductor and related microelectronics industries. The company designs and manufactures equipment, software and services used by chipmakers to analyze and control manufacturing processes, detect defects, measure critical dimensions and improve yield across wafer fabrication, photomask and packaging operations. KLA’s offerings are aimed at enabling production of advanced logic, memory, and specialty devices at progressively smaller technology nodes and more complex package structures.

Its product portfolio includes optical and e-beam inspection systems, metrology tools for critical dimension and film measurement, mask and reticle inspection platforms, as well as enterprise software and data analytics that aggregate process data and drive automated process control.