Q2 2026 KLA Corp Earnings Call Transcript
Key Points
- KLA Corp (KLAC) achieved a record revenue of $12.745 billion in 2025, marking a 17% growth year-over-year.
- The company reported a 29% increase in earnings per share, showcasing strong leverage in its business model.
- KLA Corp (KLAC) maintained industry-leading gross margins and operating margins of 62.8% and 43.6%, respectively.
- Free cash flow grew by 30% to $4.4 billion, with $3 billion returned to shareholders through dividends and share buybacks.
- The company experienced significant growth in advanced packaging, with a 70% year-over-year increase in revenue for this segment.
- Supply constraints are limiting growth potential in the first half of 2026, affecting customer lead times and product availability.
- The rapidly escalating cost of DRAM chips is expected to negatively impact gross margins by 75 to 100 basis points in 2026.
- KLA Corp (KLAC) faces challenges in meeting the rising demand for AI infrastructure due to facility readiness issues among customers.
- The company anticipates a modest growth in China WFE, with potential constraints due to geopolitical factors and regulatory restrictions.
- There is uncertainty in the advanced packaging market growth, with expectations adjusted to mid- to high-teens percentage growth for 2026.
Good afternoon. My name is Stephanie, and I'll be your conference operator today. At this time, I would like to welcome everyone to the KLA Corporation December quarter 2025 earnings conference call and webcast. (Operator Instructions)
Thank you. I will now turn the call over to Kevin Kessel, Vice President of Investor Relations and Market Analytics. Please go ahead.
Welcome to December 2025 quarterly earnings call. I'm joined by our CEO, Rick Wallace; and our CFO, Bren Higgins. We will discuss today's results as well as our March quarter and calendar 2026 outlook, which we released after the market closed and is available on our website along with supplemental materials.
We are presenting today's discussion and metrics on a non-GAAP financial basis unless otherwise specified. All full-year references we make were for the calendar years. The earnings materials contain detailed reconciliation of GAAP and non-GAAP results. KLA's IR website also contains future investor events,
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