KLA Extends Sequential Revenue Growth After Guidance Beat

The Tip Desk · October 28, 2026 · 3 min read

The semiconductor equipment maker guided second-quarter fiscal 2027 revenue to $4.7 billion plus or minus $200 million after a $4.14 billion September quarter.

KLA Corporation (KLAC) reported first-quarter fiscal 2027 revenue of $4.14 billion, above the $4.0 billion midpoint of its $4.0 billion plus or minus $200 million guidance range, and said sequential growth accelerated from the prior quarter.

The semiconductor process-control equipment maker posted GAAP net income of $1.55 billion, or $1.18 a share, and non-GAAP diluted earnings of $1.22 a share, both above the midpoints of the respective ranges it had issued.

Sequential revenue growth picked up to about 13% from about 7% in the June quarter, when sales were $3.66 billion. A year earlier, in the September 2025 quarter, revenue was $3.21 billion.

President and Chief Executive Rick Wallace said the September quarter “beat the midpoint of guidance across all key metrics, demonstrating the accelerated growth we expected for the second half of calendar 2026.” He said process control “continues to be critical to the AI ecosystem buildout” and that the company is benefiting from increases in leading-edge designs across foundry and logic, device size and value, memory complexity, and advanced packaging, as well as from technology transitions in process, PCB, and component inspection tied to high-performance computing.

Product revenue was $3.29 billion. Service revenue was $851 million.

Semiconductor Process Control, the largest reportable segment, generated $3.75 billion. Specialty Semiconductor Process revenue was $139 million, down from $160 million in the June quarter. PCB and Component Inspection revenue was $242 million.

Cash flow from operating activities was $1.53 billion in the quarter and $4.51 billion for the last twelve months ended September 30, 2026. Free cash flow was $1.34 billion and $4.04 billion, respectively. Capital returns were $1.24 billion in the quarter, including $936 million of common stock repurchases and $305 million of dividends, and $3.79 billion for the last twelve months.

Cash and cash equivalents were $1.53 billion at September 30, 2026. Inventories were $4.09 billion. Long-term debt was $5.72 billion.

The GAAP-to-non-GAAP reconciliation included $20.2 million of Pillar Two undertaxed profits rule taxes. The company said it expects those taxes to be temporary and to reverse upon adoption of Side-by-Side Safe Harbor provisions that would exempt U.S.-parented groups from the Undertaxed Profits Rule. Acquisition-related charges, primarily amortization of intangible assets, were $43.0 million.

For the second quarter of fiscal 2027, ending in December, KLA expects total revenues of $4.7 billion plus or minus $200 million, GAAP gross margin of 61.8% plus or minus 1.0%, non-GAAP gross margin of 62.5% plus or minus 1.0%, GAAP diluted EPS of $1.41 plus or minus $0.11, and non-GAAP diluted EPS of $1.44 plus or minus $0.11.

Wallace said the company’s product portfolio and services “remain well positioned” as it approaches the end of calendar 2026 and looks toward calendar 2027.