KLAC · 10-K · 2026A

KLA CORP

Filed 2026-08-06 · Industrials · View original filing on EDGAR

Ranked Events

• Capital Return ProgramImportance 69 · Surprise 50
  KLA repurchased $2.29 billion of common stock in fiscal 2026, up from $2.15 billion in fiscal 2025, and had $9.74 billion of repurchase authority remaining at June 30, 2026.,The Board increased authorized repurchase capacity by $7.00 billion in the third quarter of fiscal 2026, in addition to $3.94 billion remaining under the prior authorization at December 31, 2025.,Cash dividends and dividend equivalents paid increased to $1.06 billion from $904.6 million, reflecting quarterly dividend increases from $0.170 to $0.190 per share and then to $0.230 per share.,The $0.230 per-share quarterly dividend represented KLA’s 17th consecutive annual dividend increase, and the Board declared another $0.230 per-share quarterly dividend on August 6, 2026.
• Liquidity and Debt PositionImportance 64 · Surprise 42
  Cash, cash equivalents and marketable securities totaled $4.90 billion at June 30, 2026, up from $4.49 billion at June 30, 2025, including $735.1 million held by foreign subsidiaries and branch offices.,Net cash provided by operating activities increased to $4.14 billion from $4.08 billion, while net cash used in financing activities was $3.39 billion after $2.29 billion of repurchases and $1.06 billion of dividends.,KLA had $5.95 billion of senior unsecured notes outstanding with maturities from fiscal 2029 through fiscal 2063, and interest payments associated with the debt were estimated at $5.20 billion.,The new Revolving Credit Facility permits borrowings of up to $1.50 billion through July 3, 2030, had no borrowings at June 30, 2026, and KLA reported a 0.53-to-1.00 net leverage ratio versus a 3.25-to-1.00 covenant maximum.
• Geographic Revenue ShiftImportance 64 · Surprise 56
  China revenue was essentially flat at $4.05 billion in fiscal 2026 and declined to 29.8% of total revenue from 33.3% in fiscal 2025, as legacy-node investment offset export-control restrictions on advanced technology transactions.,Taiwan revenue increased 13.7% to $3.64 billion, supported by leading-edge foundry/logic, memory and advanced-packaging investment tied to AI and HPC applications.,Korea revenue increased 26.2% to $1.83 billion, driven by memory investments supporting high-bandwidth memory and advanced DRAM roadmaps.,North America revenue increased 29.0% to $1.76 billion, while Japan revenue declined to $915.1 million from $1.13 billion; China, Taiwan, Korea and North America together represented 83.1% of fiscal 2026 revenue.
• Supply Chain ConstraintsImportance 63 · Surprise 42
  KLA increased purchase commitments partly to secure supplies of key components, creating potential effects on cost timing and working-capital requirements. The company cited tariffs and government regulations as…
• Purchase Commitments and ObligationsImportance 63 · Surprise 42
  KLA’s estimated significant purchase commitments totaled $5.97 billion at June 30, 2026, with a majority due within the next 12 months.,The commitments primarily covered inventory, materials, services, supplies and asset purchases, reflecting increased procurement to secure key components.,Aggregate principal debt obligations were $5.95 billion, while associated interest payments were estimated at $5.20 billion through the debt maturities.,Additional obligations included $417.3 million for the non-qualified executive deferred compensation plan, $301.5 million of operating lease obligations and $275.3 million related to uncertain tax positions.
• Operating Expense TrendsImportance 60 · Surprise 40
  R&D expense increased $171.8 million, or approximately 13%, to $1.53 billion in fiscal 2026, driven by $124.8 million of higher employee-related costs from increased headcount and compensation and $36.0 million of additional engineering project material costs.,SG&A expense increased $101.8 million, or approximately 10%, to $1.13 billion, primarily due to $35.9 million of higher employee-related expenses, $23.9 million of higher facility costs and $22.7 million of higher credit-loss provisions.,Combined R&D and SG&A expense increased approximately $273.6 million to $2.66 billion, reflecting continued investment in product development and higher operating infrastructure costs.
• Geographic Market CommentaryImportance 59 · Surprise 48
  China revenue was broadly flat as domestic semiconductor companies’ legacy-node investments were offset by export-control restrictions affecting certain advanced-technology transactions. Taiwan revenue increased 13.7%…
• End-Market Demand TrendsImportance 59 · Surprise 48
  Semiconductor Process Control revenue increased 12% to $12.24 billion, driven by foundry/logic and memory customers investing in leading-edge technologies for AI and HPC. PCB and Component Inspection revenue increased…
• Income Tax Rate ChangesImportance 58 · Surprise 56
  The effective tax rate increased to 13.8% in fiscal 2026 from 12.5% in fiscal 2025, raising tax expense to $775.2 million from $582.8 million.,The rate increase primarily reflected a lower proportion of earnings generated in jurisdictions with tax rates below U.S. statutory rates and a lower proportion of U.S. earnings eligible for the FDDEI deduction.,The increase was partially offset by lower NCTI and the absence of the prior-year $230.4 million nondeductible goodwill impairment charge, which had increased fiscal 2025 pretax income without a corresponding tax deduction.,Tax valuation allowances increased to $356.6 million at June 30, 2026 from $310.6 million, primarily for California credit carry-forwards.
• Revenue Performance and MixImportance 54 · Surprise 40
  Fiscal 2026 total revenue increased 12% to $13.58 billion from $12.16 billion in fiscal 2025, driven by higher product sales to leading-edge foundry/logic, memory and advanced-packaging customers.,Product revenue increased $980.7 million, or approximately 10%, to $10.45 billion, while service revenue increased $442.6 million, or 16%, to $3.13 billion and represented approximately 23% of total revenue.,Semiconductor Process Control revenue increased 12% to $12.24 billion, PCB and Component Inspection revenue increased 21% to $750.4 million, and Specialty Semiconductor Process revenue decreased 1% to $584.1 million.,Revenue from wafer inspection increased to $6.63 billion, patterning increased to $2.71 billion, and services increased to $3.13 billion, while other revenue declined 25% to $153.1 million.
• Headcount / RestructuringImportance 53 · Surprise 82
  Restructuring charges decreased to $1.2 million in fiscal 2026 from $7.7 million in fiscal 2025, an approximately 84% reduction.,Fiscal 2026 charges primarily consisted of severance and related costs associated with restructuring the former PCB and Display operating segment and write-downs of abandoned right-of-use and fixed assets.,The prior-year restructuring activity was associated with the former PCB and Display operating segment, including facility and asset abandonment costs.
• Guidance / OutlookImportance 43 · Surprise 32
  KLA said customer engagement and demand signals continued to strengthen at the end of fiscal 2026. Management expects continued revenue growth in fiscal 2027, following higher fiscal 2026 revenue and net income driven…
• Trade Policy and TariffsImportance 40 · Surprise 42
  KLA stated that government regulations and tariffs have affected its fiscal 2026 results and may continue to affect operations. The company is assessing the aggregate potential impact of U.S. and foreign government…
• AI Infrastructure DemandImportance 37 · Surprise 42
  KLA reported that HPC and data centers, supported by increasing AI adoption, are driving semiconductor industry expansion and are expected to influence customer investment through fiscal 2027. Management identified AI…
• Product Launch and TransitionImportance 34 · Surprise 42
  KLA provides inspection, metrology, data analytics, deposition, etching, testing, measurement and direct-imaging products across semiconductor and adjacent electronics markets. Its portfolio supports IC, wafer and…
• Market Demand TrendsImportance 29 · Surprise 24
  KLA reported continued semiconductor industry expansion and diversification, with HPC and data centers supported by increasing AI adoption driving industry investment into fiscal 2027. Leading-edge demand is increasing…
• OECD Global Minimum TaxImportance 20 · Surprise 24
  KLA continues to monitor the adoption of Pillar Two global minimum-tax rules across its tax jurisdictions. The company stated that Pillar Two legislation was effective for KLA beginning in fiscal 2025 in some…
• Gross Margin DriversImportance 20 · Surprise 24
  Gross margin increased 0.4 percentage points to 61.3% in fiscal 2026 from 60.9% in fiscal 2025, despite higher installation, warranty and tariff costs.,Revenue volume contributed 0.5 percentage points to the margin increase through greater leverage of existing infrastructure, while product and service mix reduced margin by 0.2 percentage points.,Manufacturing labor, overhead and efficiencies added 0.2 percentage points, reflecting cost management and productivity gains as manufacturing activity scaled.,Other service and manufacturing costs reduced margin by 0.1 percentage points because of higher installation, warranty and tariff costs, partially offset by lower inventory-related charges.

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