KLA Corporation Q3 2026 Earnings Recap

Shares of KLA fell 3.2% after earnings as investors reacted to higher-than-expected operating expenses, which pressured margins despite revenue and EPS coming in above the midpoint of guidance.

Key Takeaways

• Revenue was $3.415 billion, up 4% sequentially and 11% year-over-year, topping the guidance midpoint.
• Non-GAAP diluted EPS reached $9.40, also above guidance, with GAAP EPS at $9.12.
• Gross margin was 62.2%, exceeding guidance midpoint by 45 basis points; however, operating expenses came in higher than expected due to materials timing and reserve adjustments.
• Operating margin was 42.6%, and free cash flow for the quarter was $622 million, with $875 million in capital returned to shareholders.
• Despite achieving leadership in process control for advanced wafer-level packaging and raising long-term growth targets, cautious investor reaction reflected concerns over margin compression and expense control.