Start here if you're new
what it is
KLA sells the machines that help chip factories find tiny defects before those defects become very expensive mistakes.
how it gets paid
Last year Kla made $12.2B in revenue. Semiconductor Process Control was the main engine at $8.78B, or 72% of sales.
why it's growing
Revenue grew 23.9% last year. Annual revenue reached $12.2B, up 23.9% vs. prior year, and quarterly EPS almost doubled from the prior year.
what just happened
KLA posted $6.5B in quarterly revenue and $17.15 EPS, but the latest reported quarter still came in slightly below consensus on EPS.
At a glance
A balance sheet — strong enough to weather a downturn
80/100 earnings predictability — you can trust these numbers
36.8x trailing p/e — you're paying up for this one
0.6% dividend yield — cash in your pocket every quarter
42.5% return on capital — every dollar works hard here
xvary composite: 75/100 — average
What they do
KLA sells the machines that help chip factories find tiny defects before those defects become very expensive mistakes.
KLA sits where chip factories hate surprises. Its tools handle process control (checking wafers for defects) and yield management (making more usable chips per wafer), which is plain English for catching billion-dollar mistakes early. China was 33% of fiscal 2025 revenue and Taiwan Semiconductor was 19%, which tells you the biggest fabs keep paying KLA because ripping out inspection tools mid-process is how your production line learns new swear words.
How they make money
$12.2B
annual revenue · their business grew +23.9% last year
Semiconductor Process Control
$8.78B
+25.0%
Specialty Semiconductor Process
$1.71B
+18.0%
Services
$1.10B
+11.0%
PCB and Component Inspection
$0.61B
+6.0%
The products that matter
finds defects on wafers
Defect Inspection Systems
62.8% gross margin
These tools sit near the center of the thesis because a 62.8% gross margin tells you customers are paying for precision, not shopping on price.
core
measures process accuracy
Metrology & Measurement Tools
43.6% operating margin
Process control has to happen at every step. The current 43.6% operating margin says that requirement still throws off serious profit.
profit engine
connects deployed tools to analytics
Yield Management Software
10,000+ deployed tools
This page is thin on software revenue, so we will keep it honest. What we do know is that analytics tied to 10,000+ deployed tools makes the installed base harder to dislodge.
installed base
Key numbers
44.0%
operating margin
Operating margin means the share of sales left after running the business. At 44.0%, KLA keeps $0.44 from every $1 before interest and taxes, which is elite for hardware.
33%
China revenue
One-third of sales came from China in fiscal 2025. That is demand strength and policy risk in the same number.
36.8x
trailing P/E
Price-to-earnings means what investors pay for each dollar of past profit. At 36.8x, you are paying up for a company already expected to do very well.
42.5%
return on capital
Return on capital means how well management turns invested money into operating profit. At 42.5%, KLA looks more like a software business wearing a hardware badge.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 3 — safer than 50% of stocks
- price stability 35 / 100
- long-term debt $5.9B (4% of capital)
- net profit margin 35.6% — keeps 36 cents of every dollar in revenue
- return on equity 70% — $0.70 profit for every $1 investors have put in
A with balance sheet grade and net profit margin standing out. your money faces less risk here than at most public companies.
Total return vs. market
You invested $10,000 in KLAC 3 years ago → it's now worth $31,840.
The index would have given you $13,920.
source: institutional data · total return
What just happened
missed estimates
KLA posted $6.5B in quarterly revenue and $17.15 EPS, but the latest reported quarter still came in slightly below consensus on EPS.
Annual revenue reached $12.2B, up 23.9% vs. prior year, and quarterly EPS almost doubled from the prior year. The quiet part is that expectations had already moved so high that a -0.8% EPS miss was enough to matter.
$6.5B
revenue
$17.15
eps
62.8%
gross margin
the number that mattered
The number that mattered was the -0.8% EPS surprise versus consensus, because richly valued stocks get punished for being merely great.
-
kla corp.’s earnings should still rise at a decent clip in fiscal 2026 (ends june 30th).artificial intelligence and the shift to new technological advances in semiconductor production drove enormous earnings growth in fiscal 2025.
-
these factors are still in place, but may be less of a force this fiscal year.we are raising our earnings forecast for fiscal 2026 by $0.75 per share to reflect the ongoing momentum witnesssed in the first quarter.
-
september-period results continued the pattern of surpassing revenue and earnings targets.
-
granted, the size of the so-called beats were smaller than that of the last two quarters.
-
still, revenues rose 13% to $3.21 billion, and diluted earnings came in at $8.81 per share.these figures were at the higher end of management’s $3.0 billion to $3.3 billion revenue interval, and non-gaap earnings-per-share range of $7.76 to $9.30.
source: company earnings report, 2026
Get this snapshot in your inbox
This page, delivered free — plus weekly updates when the numbers change. plain english, no spam.
weekly updates
earnings alerts
plain english
no spam
What could go wrong
KLA's risk profile is specific, not generic: 85% of the shown revenue mix comes from Wafer Fab Equipment, and the page already flags 15–20% of revenue as exposed to China policy changes. When the stock trades at 36.8x trailing earnings, those two facts matter more than the marketing slide.
med
Wafer fab spending slows harder than the stock expects
Chipmakers cutting tool budgets would hit the 85% Wafer Fab Equipment mix first. That's the cyclical part of the story the market tends to forgive when margins look this good.
If that happens, 43.6% operating margin is the number to watch. A premium multiple gets less patient fast when the profit structure starts bending.
med
China restrictions tighten beyond the 15–20% exposure already flagged here
This is not abstract geopolitical chatter. The page already tells you China policy touches a meaningful slice of revenue, so rule changes hit real numbers.
If restrictions expand enough to bite deeper into that 15–20% band, the market has to reprice not just sales, but confidence in the durability of the mix.
med
Customer concentration makes order swings matter quickly
Top five customers account for 19% of revenue. In a concentrated industry, one large fab pausing orders can show up fast.
That is the catch with elite numbers. You get paid for precision, but you are still exposed to a small group of very large buyers.
The key insight: KLA looks structurally better than a plain equipment name, but your downside still starts with fab budgets, China rules, and a concentrated customer list.
source: institutional data · regulatory filings · risk analysis
Pay attention to
calendar
Investor Day presentation
March 4, 2026 — management is expected to outline FY2027 guidance and say more about how the $7B buyback gets deployed.
metric
Operating margin holding above 40%
The current number is 43.6%. If that slips under 40%, the premium-multiple story starts losing its best argument.
risk
China policy updates
This matters because the page already flags 15–20% of revenue as exposed to export-policy changes.
trend
Wafer Fab Equipment demand
With $10.4B of the shown $12.2B revenue mix coming from this segment, the broader fab spending trend is still the number that matters most.
Analyst rankings
earnings predictability
80 / 100
Management usually lands close to its own guide. In human-speak, analysts trust the numbers more than they trust the cycle.
valuation posture
36.8x
This is a premium multiple for a cyclical industry. You're paying for quality and scarcity, not for a bargain.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 808 buyers vs. 700 sellers in 3q2025. total institutional holdings: 0.1B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$868
$2042
$1225
current price
$1018
target midpoint · 17% from current · 3-5yr high: $2042
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
see plans from $5/moThe deep dive