KLA 2025 Q4 Earnings Strong Performance as Net Income Increases 43.8%

KLA (KLAC), ranked 122nd by market capitalization, reported its fiscal 2025 Q4 earnings on July 31st, 2025. The company beat expectations with revenue reaching $3.175 billion, exceeding the guidance range. KLA's GAAP EPS was $9.06, and non-GAAP EPS was $9.38, both at the upper end of the guidance. For Q1 FY2026, KLA projects revenues of $3.15 billion, plus or minus $150 million, with non-GAAP EPS guidance of $8.53, plus or minus $0.77, indicating an in-line forecast. The company's performance reflects its robust role in AI infrastructure development and semiconductor innovation.

Revenue
KLA's total revenue increased by 23.6% to $3.17 billion in Q4 2025, compared to $2.57 billion in Q4 2024. The Semiconductor Process Control segment was the major contributor, generating $2.88 billion. Specialty Semiconductor Process added $141.87 million, while PCB and Component Inspection brought in $154.11 million. Corporate allocations and foreign currency exchange effects contributed $1.12 million.

Earnings/Net Income
KLA's earnings per share (EPS) rose significantly by 46.5% to $9.11 in 2025 Q4 from $6.22 in 2024 Q4, signifying continued earnings growth. Net income reached $1.20 billion in Q4 2025, marking a 43.8% increase from $836.45 million in the previous year's quarter. The substantial EPS increase reflects strong profitability growth.

Price Action
The stock price of KLA has edged up 1.69% during the latest trading day, has edged down 2.78% during the most recent full trading week, and has edged down 1.87% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing KLA stock when it surpasses revenue expectations and holding for 30 days has proven effective, yielding a remarkable 322.62% return, far outstripping the benchmark return of 86.76%. This strategy demonstrated an excess return of 235.86%, showcasing its ability to leverage positive earnings surprises. Notably, the strategy maintained a maximum drawdown of 0.00%, emphasizing robust risk management during the backtest period. Additionally, with a Sharpe ratio of 0.83, the strategy underscores balanced risk-adjusted returns, highlighting its potential in capitalizing on KLA's favorable earnings outcomes.

CEO Commentary
Richard P. Wallace, CEO of KLA, highlighted the company's robust performance for the June 2025 quarter, with revenue reaching $3.175 billion and record free cash flow exceeding $1 billion. He emphasized that KLA's leadership in process control uniquely positions the company to support the AI infrastructure build-out, driven by increased demand for advanced packaging and high bandwidth memory. Wallace noted that sustained investment in leading-edge foundry and logic underpins KLA's growth, while the importance of process control continues to rise due to semiconductor scaling and complexity. He expressed confidence in customer demand and the company’s ability to capitalize on market opportunities.

Guidance
KLA expects total revenue for the September quarter to be approximately $3.15 billion, plus or minus $150 million. For the full calendar year 2025, the company anticipates gross margins to remain around 62.5%. Non-GAAP diluted EPS for the September quarter is expected to be approximately $8.53, plus or minus $0.77, with an operating expense forecast of about $615 million. KLA maintains a stable near-term revenue outlook, supported by ongoing investments in leading-edge logic and advanced packaging, anticipating continued growth into 2026.

Additional News
Recently, KLA has made significant strategic moves, including announcing a $5 billion increase in share repurchase authorization, reflecting confidence in its financial stability and commitment to shareholder returns. Furthermore, KLA has declared a regular quarterly cash dividend of $1.90 per share, demonstrating its dedication to returning value to shareholders. Additionally, the company has expanded its operations with the opening of a $138 million R&D and manufacturing facility in Newport, Wales, designed to bolster semiconductor process technologies development, particularly in advanced packaging and AI-driven demand. These developments highlight KLA's strategic focus on enhancing shareholder value and operational capacity.