KLA (NASDAQ:KLAC) Announces Quarterly Earnings Results, Beats Estimates By $0.04 EPS

KLA (NASDAQ:KLAC) announced its earnings results on Wednesday. The semiconductor company reported $1.22 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.18 by $0.04, FiscalAI reports. The business had revenue of $4.14 billion during the quarter, compared to analyst estimates of $4.04 billion. KLA had a net margin of 36.25% and a return on equity of 91.73%. KLA’s revenue for the quarter was up 28.9% on a year-over-year basis. During the same period in the previous year, the business posted $8.47 earnings per share.

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

• Record September-quarter revenue of $4.14 billion rose 13% sequentially and 29% year over year, while operating margin reached a company-record 46.1% and free cash flow was $1.34 billion.
• KLA guided to approximately $4.7 billion of December-quarter revenue and expects the wafer equipment market to reach roughly $150 billion in 2026 and exceed $200 billion in 2027, supported by AI infrastructure, leading-edge logic, DRAM/HBM, and advanced packaging.
• Backlog and sales-funnel visibility are strengthening, with management expecting sequential growth through 2027 and believing KLA can outgrow the overall wafer equipment market as process-control intensity rises at newer nodes and in advanced packaging.
• Persistent memory-cost inflation is pressuring gross margins, which are guided to 62.5% in December; management expects improvement only gradually as new pricing takes effect and systems are redesigned to use memory more efficiently.
• KLA is increasing capital expenditures, hiring, factory capacity, and supplier investments to support the multiyear cycle, while noting that customer clean-room construction, power availability, and other infrastructure constraints could limit industry growth.

KLA Stock Down 3.3%

NASDAQ KLAC traded down $5.49 during trading on Friday, hitting $161.94. The company’s stock had a trading volume of 3,344,315 shares, compared to its average volume of 11,119,387. The company has a market cap of $211.33 billion, a PE ratio of 40.50, a P/E/G ratio of 1.41 and a beta of 1.45. The company has a debt-to-equity ratio of 0.93, a current ratio of 2.88 and a quick ratio of 2.03. The business’s 50 day simple moving average is $179.18 and its 200-day simple moving average is $181.70. KLA has a fifty-two week low of $107.20 and a fifty-two week high of $307.37.

KLA Increases Dividend

The company also recently declared a quarterly dividend, which was paid on Tuesday, September 1st. Shareholders of record on Monday, August 17th were issued a $0.23 dividend. This is an increase from KLA’s previous quarterly dividend of $0.23. This represents a $0.92 annualized dividend and a yield of 0.6%. The ex-dividend date of this dividend was Monday, August 17th. KLA’s dividend payout ratio is presently 25.07%.

Analyst Upgrades and Downgrades

A number of equities analysts recently issued reports on the stock. Susquehanna dropped their price target on shares of KLA from $215.00 to $190.00 and set a “neutral” rating on the stock in a research note on Thursday. BMO Capital Markets set a $133.00 target price on shares of KLA in a research report on Thursday. UBS Group restated a “neutral” rating and issued a $180.00 price objective (down from $190.00) on shares of KLA in a research note on Thursday. The Goldman Sachs Group reiterated a “neutral” rating and set a $230.00 target price on shares of KLA in a research report on Tuesday, July 28th. Finally, Argus reissued a “buy” rating and set a $225.00 price target on shares of KLA in a report on Friday. Nineteen investment analysts have rated the stock with a Buy rating and ten have given a Hold rating to the company. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average price target of $220.35.

Insider Buying and Selling

In other KLA news, EVP MaryBeth Wilkinson sold 13,802 shares of the firm’s stock in a transaction that occurred on Wednesday, August 5th. The stock was sold at an average price of $195.50, for a total value of $2,698,291.00. Following the sale, the executive vice president directly owned 22,110 shares of the company’s stock, valued at approximately $4,322,505. This trade represents a 38.43% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CEO Richard Wallace sold 72,019 shares of KLA stock in a transaction on Tuesday, September 15th. The stock was sold at an average price of $171.88, for a total transaction of $12,378,625.72. Following the sale, the chief executive officer directly owned 706,925 shares in the company, valued at approximately $121,506,269. This trade represents a 9.25% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 243,339 shares of company stock valued at $46,903,454 in the last three months. 79.39% of the stock is currently owned by insiders.

Key Stories Impacting KLA

Here are the key news stories impacting KLA this week:

• Positive Sentiment: Quarterly results exceeded expectations. KLA reported fiscal 2027 first-quarter revenue of $4.14 billion, above the $4.04 billion consensus estimate. Non-GAAP EPS was $1.22 versus expectations of $1.18, while revenue increased 28.9% year over year. The company also generated $1.34 billion in free cash flow and returned $1.24 billion to shareholders. KLA Corporation Reports Fiscal 2027 First Quarter Results
• Positive Sentiment: Next-quarter guidance topped consensus. KLA forecast fiscal second-quarter revenue of $4.5 billion to $4.9 billion, implying a midpoint of $4.7 billion versus the $4.5 billion analyst consensus. Adjusted EPS guidance of $1.33 to $1.55 also brackets a consensus estimate of $1.36. KLA Expects Second-Quarter Revenue Range
• Positive Sentiment: AI-related demand remains the primary catalyst. Analysts cited rising wafer-inspection demand, margin expansion and the need for leading-edge fabs supporting AI chips. KLA expects the wafer-fabrication equipment market to exceed $200 billion in 2027, supporting a favorable multiyear outlook. KLA Forecasts Wafer Equipment Market Growth
• Neutral Sentiment: Analyst sentiment is mixed. JPMorgan raised its target to $240 and maintained an overweight rating, while Citigroup maintained a buy rating despite trimming its target to $275. These targets still imply substantial upside, but the differing revisions suggest expectations remain unsettled.
• Negative Sentiment: Several firms lowered price targets. Wells Fargo, Needham, Evercore ISI, Susquehanna, Cantor Fitzgerald and UBS reduced their targets following the results. UBS retained a hold rating, citing structural share-related headwinds, while Susquehanna also moved to neutral. These cuts may limit enthusiasm despite the strong operating outlook.

KLA Company Profile

KLA Corporation (NASDAQ: KLAC) develops process control, inspection and yield management solutions for the semiconductor and other advanced manufacturing industries. Its technologies help manufacturers identify defects, measure critical dimensions and monitor production processes to improve quality, reliability and manufacturing efficiency.

The company’s product portfolio includes wafer and reticle inspection systems, metrology and measurement tools, defect review and classification systems, and software for analyzing manufacturing data.