KLA Corporation

Q2 (June quarter) results beat guidance & show accelerating demand - Revenue $3.66B: above guidance midpoint ($3.575B), +7% sequential and +15% YoY. - Profitability strong: Non-GAAP diluted EPS $1.05 (upper end guidance), GAAP EPS $1.04; Gross margin 62.4% (upper end guidance), Operating margin 43.7%; services mix and operational leverage offset memory headwinds and tariff headwinds. - This is framed as evidence that KLA is winning in AI infrastructure, leading-edge logic/foundry, and rising process control intensity (including HBM adoption and advanced packaging).

Capital return remains substantial (share repurchases + dividends), backed by cash generation - Cash flow: CFO $906M, Free cash flow (FCF) $817M. - Shareholder returns: $876M returned in the quarter ($571M buybacks + $305M dividends). - Over last 12 months: total capital returns $3.3B; FCF margin 28%. - Balance sheet: $4.9B cash/marketable securities vs $5.9B debt, maintaining an “investment-grade” style maturity profile (per commentary).

Outlook: Q3 guidance and H2 acceleration—revenue growth expected to pick up meaningfully - September quarter guidance: revenue $4.0B ± $200M, gross margin ~62.5% ± 1pp, operating expenses ~$690M. - EPS guidance (non-GAAP): $1.16 ± $0.10; (GAAP $1.14 ± $0.10). - Management expects H2 calendar 2026 growth to be ~20% over H1, positioning for sequential growth into calendar 2027. - A key driver is the expectation that earlier-cycle shipment/supply constraints in the first half normalize as supply chain lead times ease.