KLA forecasts $4B September-quarter revenue as it lifts 2026 wafer equipment view to low $150B range
View original at seekingalpha.comKLA forecasts $4B September-quarter revenue as it lifts 2026 wafer equipment view to low $150B range Earnings Call Insights: KLA Corporation (KLAC) Q4 2026 MANAGEMENT VIEW * CEO Richard Wallace said, “For the June quarter, KLA results were strong with revenue, profitability and earnings per share all above the midpoint…
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Revenue reached a record $3.66 billion.
60% confidenceThe world needs more advanced logic, and the broadening of demand has been happening as hoped.
60% confidenceKLA does not talk about specific customer engagements, declining to discuss SpaceX.
60% confidenceCompetitors have been able to ship into fabs in China that KLA hasn't been able to ship into.
60% confidenceSince the March Investor Day, demand signals across AI infrastructure have strengthened materially, visibility continues to improve, and the wafer equipment market outlook continues to expand.
60% confidenceKLA is not very good at forecasting.
60% confidenceMemory pricing headwinds to gross margin were around 100 basis points, and probably a bit more than that.
60% confidenceLong lead time optical components can take 12 to 24 months to put new capacity in place.
60% confidenceJune quarter results were strong with revenue, profitability and earnings per share all above the midpoint of guidance.
60% confidenceIt's pretty hard to go back to customers after taking orders and start to change prices on those orders.
60% confidenceOperating expenses were $682 million, consisting of $399 million in R&D and $283 million in SG&A; operating margin was 43.7%, with incremental operating margin in the quarter at 59%.
60% confidenceKLA ended the quarter with $4.9 billion in total cash, cash equivalents and marketable securities and $5.9 billion of debt.
60% confidenceSeptember-quarter gross margin is guided to 62.5%, plus or minus 1 percentage point; operating expenses to approximately $690 million; and EPS to $1.16 non-GAAP and $1.14 GAAP, each plus or minus $0.10.
60% confidenceSeptember-quarter revenue is guided to $4 billion, plus or minus $200 million.
60% confidenceSemiconductor Process Control systems customer mix is expected to be approximately 73% foundry/logic and 27% memory, with memory split approximately 90% DRAM and 10% NAND.
60% confidenceEffective June 11, 2026, KLA completed a 10-for-1 stock split.
60% confidenceSecond half of calendar 2026 growth for KLA over the first half is anticipated to be approximately 20%.
60% confidenceGross margin of 62.4% was driven by a more favorable services mix than modeled and manufacturing scale, offsetting the challenging memory pricing environment and tariff headwinds.
60% confidenceMomentum is expected to accelerate through the second half of calendar 2026 and significant growth is expected to continue in calendar 2027.
60% confidenceMix is the biggest factor in KLA's gross margin quarter-to-quarter.
60% confidenceServices has a long-term target of 13% to 15% growth, with 80% of revenue contract-based, and performance is expected toward the higher end of the range.
60% confidenceInput prices have gone up and KLA has had discussions about how it will help capture some of that value.
60% confidenceCash flow from operations was $906 million and free cash flow was $817 million; KLA returned $876 million to shareholders, including $571 million in share repurchases and $305 million in dividends.
60% confidenceSome products have lead times closer to 18 to 24 months, and memory pricing impact likely continues through 2027.
60% confidenceProcess control is a very high mix, low volume market where KLA's algorithms and 1,600-1,700 worldwide applications engineers give it an advantage; KLA performs well whenever fair competition is allowed.
60% confidenceAdvanced packaging process control systems revenue is now expected to grow to approximately $1.1 billion in calendar 2026, up more than 70% year-over-year.
60% confidenceIt is confusing why KLA can't raise prices to at least offset memory prices.
60% confidenceThere are very few concerns about 2027 because the build-out clearly continues.
60% confidenceKLA is raising its expectation for the wafer equipment market, including advanced packaging, to approximately the low $150 billion range in calendar 2026, up from the prior expectation of $140 billion plus, with significant growth planned for calendar 2027.
60% confidenceRevenue of $3.66 billion was above the midpoint of guidance of $3.575 billion.
60% confidence