Investment Thesis
KLA demonstrates exceptional operational excellence with industry-leading profitability (40.6% operating margin, 34.8% net margin) and robust growth (+23.9% revenue YoY). The company converts revenue efficiently into free cash flow (35.8% FCF margin, $2.3B absolute) while maintaining a healthy balance sheet with strong liquidity (2.83x current ratio) and manageable leverage (1.08x debt/equity, 11.6x interest coverage).
KLAC Strengths
- Exceptional operating margins (40.6%) and net margins (34.8%) indicating strong pricing power and operational efficiency in optical instrumentation
- High-quality growth with $2.3B free cash flow generation (35.8% FCF margin) demonstrating cash conversion strength
- Outstanding returns on equity (41.5%) and assets (13.6%) showing efficient capital deployment
- Strong liquidity position with 2.83x current ratio and $2.5B cash providing strategic flexibility
- Robust revenue growth of 23.9% YoY demonstrating sustained demand in semiconductor/optical instruments sector
KLAC Risks
- Elevated debt burden ($5.9B long-term debt, 1.08x debt/equity) limits financial flexibility despite strong cash generation
- High exposure to semiconductor industry cyclicality which could pressure revenue and profitability in downturns
- Net income flat growth (+0.0% YoY) despite strong revenue growth suggests operating leverage headwinds or one-time charges masking underlying performance
Key Metrics to Watch
- Revenue growth sustainability and operating margin trajectory as semiconductor cycle potentially moderates
- Free cash flow conversion consistency and dividend/debt repayment strategy
- Debt reduction progress to improve leverage ratio and financial flexibility
KLAC Financial Metrics
KLAC Profitability Ratios
KLAC Balance Sheet & Liquidity
KLAC 5-Year Financial Trend
5-Year Trend Summary: KLA CORP's revenue has grown significantly by 76% over the 5-year period, indicating strong business expansion. The most recent EPS of $24.15 reflects profitable operations.
KLAC Growth Metrics (YoY)
KLAC Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q2 2026 | $3.1B | $824.5M | $6.16 |
| Q1 2026 | $2.8B | $945.9M | $7.01 |
| Q3 2025 | $2.4B | $582.5M | $4.43 |
| Q2 2025 | $2.5B | $582.5M | $4.28 |
| Q1 2025 | $2.4B | $741.4M | $5.41 |
| Q3 2024 | $2.4B | $582.5M | $4.43 |
| Q2 2024 | $2.5B | $582.5M | $4.28 |
| Q1 2024 | $2.4B | $741.4M | $5.41 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
KLAC Capital Allocation
KLAC SEC Filings
Access official SEC EDGAR filings for KLA CORP (CIK: 0000319201)