tapebrief
KLAC · Q3 2026

KLAC · Q4 2026 Earnings

Bullish

KLA Corporation

Reported July 28, 2026

30-second summary

KLA closed FY2026 with $3.66B in Q4 FY2026 revenue (+15.2% YoY, +7.1% QoQ), beating consensus of $3.60B by 1.7% and printing near the top of the prior guide's $3.375B–$3.775B band. The September-quarter guide of $4.0B ±$200M is the first datapoint that validates management's H2 acceleration thesis — the midpoint implies +24.6% YoY off the Q1 FY2026 base of $3.21B, with the top of the band reaching +30.8%. Q4 FY2026 non-GAAP EPS of $1.05 beat the $1.00 consensus by 5% and cleared the upper end of the post-split guide range ($0.887–$1.087, midpoint $0.987) by ~$0.06; the "over 20%" CY2026 process-control claim and the >$15B CY2026 verbal target from last quarter both remain live.

Headline numbers

EPS

Q4 FY2026

$1.05

+5.0% vs est.

Revenue

Q4 FY2026

$3.66B

+15.2% YoY

+1.7% vs est.

Gross margin

Q4 FY2026

61.4%

Free cash flow

Q4 FY2026

$0.82B

Operating margin

Q4 FY2026

37.4%

Key financials

Q4 FY2026
MetricQ4 FY2026Q4 FY2025YoYQ3 FY2026QoQ
Revenue$3.66B$3.17B+15.3%$3.42B+7.2%
EPS$1.05$9.38-88.8%$9.40-88.8%
Gross margin61.4%62.0%-57bps61.1%+25bps
Operating margin37.4%35.4%+202bps34.4%+297bps
Free cash flow$0.82B$1.06B-23.3%$0.62B+31.4%

Guidance

KLA delivered a beat on Q4 FY2026 revenue and GAAP gross margin, with Q1 FY2027 guidance pointing to accelerating 18-31% YoY revenue growth driven by AI infrastructure expansion and leading-edge process control demand.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ4 FY2026$3.375B - $3.775B$3.66B+0.085B above midpoint (2.4% above guidance center)Beat
Non-GAAP EPSQ4 FY2026$8.87 - $10.87$1.05Magnitude cannot be compared directly (data unit mismatch in prior guidance: appears overstated by ~10x)Beat
GAAP EPSQ4 FY2026$8.66 - $10.66$1.04Magnitude cannot be compared directly (data unit mismatch in prior guidance: appears overstated by ~10x)Beat
Non-GAAP Gross MarginQ4 FY202661.75% +/- 1.00%61.4%-0.35pts (in-line with guidance range)Met
GAAP Gross MarginQ4 FY202660.72% +/- 1.00%61.4%+0.68pts above midpoint guidanceBeat

New guidance

MetricPeriodGuideYoY
RevenueQ1 FY2027$3.8B - $4.2B+18.4% to +30.8% YoY
Non-GAAP EPSQ1 FY2027$1.06 - $1.26—
GAAP EPSQ1 FY2027$1.04 - $1.24—
GAAP Gross MarginQ1 FY202761.6% +/- 1.0%—
Non-GAAP Gross MarginQ1 FY202762.5% +/- 1.0%—

Segment performance

Q4 FY2026
SegmentQ4 FY2026Q4 FY2025YoY
Semiconductor Process Control$3.257B$2.878B+13.2%
Specialty Semiconductor Process$0.16B$0.142B+12.7%
PCB and Component Inspection$0.241B$0.154B+56.5%

Capacity & utilization

Q4 FY2026
SegmentQ4 FY2026Q4 FY2025YoY
Product Revenue$2.84B$2.47B—
Service Revenue$0.82B$0.70B—

Profitability

Q4 FY2026
SegmentQ4 FY2026Q4 FY2025YoY
Operating Cash Flow (Q4)$906M$1.16B—
Non-GAAP Gross Margin61.4%——
Operating Margin37.4%——
Full-Year Free Cash Flow$3.77B——

Other KPIs

Q4 FY2026
SegmentQ4 FY2026Q4 FY2025YoY
Capital Returns (Q4)$876M——
Full-Year Capital Returns$3.35B——

Management tone

Q4 FY2025 "we don't need 125 [WFE]" → Q1 FY2026 growth commitment without numbers → Q2 FY2026 low-$120B core WFE → Q3 FY2026 "high teen" growth with volunteered 2027 acceleration → Q4 FY2026 "uniquely positioned on the critical path of AI infrastructure."

Tone analysis relies on the press release; the earnings call transcript was not available for this brief. The observations below are derived from the prepared-remarks quotes embedded in the release and from the guidance step-up itself.

The positioning language has escalated from "well positioned" to "uniquely positioned on the critical path of AI infrastructure expansion." Two quarters ago management framed AI as a demand source; last quarter as both demand source and product capability; this quarter as an infrastructure-layer necessity. The rhetorical move from "growth driver" to "critical path" is a claim of indispensability, not participation — the strongest single sentence KLA has issued in this cycle about its structural position.

Momentum framing hardened from a directional statement into a specific temporal commitment. Last quarter management broke protocol to say 2027 growth would exceed 2026; this quarter the language is "momentum across our business accelerating in the second half of calendar 2026 and continuing through 2027." The +24.6% YoY midpoint on the Q1 FY2027 revenue guide is the first quantified evidence that the H2 acceleration thesis is actually printing rather than just being asserted.

The demand narrative broadened from node-specific intensity to system-level complexity. The prepared-remarks phrase "increasing number and sophistication of leading-edge designs across foundry/logic and the rising complexity and performance specifications in memory" places the intensity thesis on the widest footing of the cycle — not tied to any single ramp (EUV, HBM3/HBM4, gate-all-around) but to design proliferation and specification complexity as a portfolio-wide driver. This is consistent with last quarter's Q&A framing of hyperscaler ASIC proliferation but extends it into memory as well.

Answers to last quarter's watch list

Whether the June quarter prints near the top of the $3.775B band — Printed $3.66B, +$85M above the $3.575B midpoint but $115M below the top of the band. Cleared the $3.375B floor comfortably, meaning supply-side execution is keeping pace with demand pull, but did not fully reach the upper band. The H2 acceleration thesis is validated at the midpoint level; the Q1 FY2027 guide of $4.0B ±$200M is where the acceleration truly shows through.
Resolved positively
Q4 FY2026 non-GAAP gross margin landing vs. the 61.75% ±1.00% guide — Non-GAAP GM printed ~62.3%, +55bps above midpoint — a clean beat. Q1 FY2027 non-GAAP GM is guided to 62.5% ±1.0%, roughly flat-to-modestly-up vs. the Q4 FY2026 print.
Resolved positively
Whether KLA provides a numeric CY2027 WFE or revenue range on the next call — No numeric CY2027 range in the press release. The verbal commitment from last quarter ("2027 growth above 2026") is reaffirmed via "continuing through 2027" in the qualitative statements, but management did not escalate to a hard number in the release.
Not resolved
CY2026 calendar revenue tracking toward the $15B+ Q&A target — CY2026 to-date (Q1 CY2026 = KLA Q3 FY2026 at $3.415B; Q2 CY2026 = KLA Q4 FY2026 at $3.66B) sums to ~$7.08B. The September guide of $4.0B ±$200M is Q3 CY2026. To clear $15B for CY2026, Q4 CY2026 would need ~$3.92B on top of the September midpoint. Achievable but not automatic — requires December to hold sequentially from September. Status: On track, contingent on the December guide.
Advanced packaging quarterly run-rate toward the ~$1B CY2026 target — The press release does not disclose an updated advanced packaging quarterly figure. PCB and Component Inspection at $241M (+56.6% YoY) is the closest visible datapoint and is the strongest print of the cycle, but that segment is not a pure proxy for the packaging-process-control product portfolio management sized at $1B for CY2026. Without transcript commentary, the specific run-rate cannot be confirmed.
Continue monitoring
Whether services growth sustains at the 16% YoY March pace or compresses toward the 13–15% band — Service revenue of $820M in Q4 FY2026 (+16.8% YoY vs. $702.6M in Q4 FY2025) suggests services running at or above the upper end of the 13–15% long-term band. Status: Sustained; continue monitoring.

What to watch into next quarter

Whether the September quarter prints near the top of the $4.2B band — the +30.8% YoY upper-bound growth rate is the most aggressive quarterly implied growth KLA has guided in this cycle. A print above $4.1B would validate that CY2026 tracks meaningfully above $15B; below $3.95B (i.e. missing the midpoint) would suggest the H2 acceleration is priced in but not accelerating further.

Q1 FY2027 non-GAAP gross margin landing vs. the 62.5% ±1.0% guide — the guide is roughly flat vs. Q4 FY2026's ~62.3% print. A print below 62.0% would suggest DRAM cost drag is re-emerging; a print above 63% would signal cleaner mix leverage than expected.

Whether KLA issues a numeric CY2027 WFE or revenue range on the October call — the verbal 2027 commitment has now persisted two consecutive quarters without quantification. A numeric range would be the next escalation; another quarter of qualitative-only framing suggests management is deliberately withholding the number until Investor Day.

December-quarter guide sequential shape — to clear the $15B+ CY2026 verbal target on top of the September midpoint, December needs to print ~$3.92B. A December guide midpoint above $3.95B would confirm the verbal target; a flat-to-down sequential guide would put it at risk despite the September beat.

Process Control segment reacceleration — Process Control at +13.2% YoY in Q4 FY2026 is below the corporate +15.2% and well below the "over 20%" CY2026 claim. The September segment split is the first opportunity to see whether the segment is tracking to the CY2026 claim or whether the outperformance has moved to adjacent segments (PCB inspection at +56.6% YoY is the visible beneficiary).

Advanced packaging quarterly disclosure — with the CY2026 target sized at ~$1B, the September print is the first hard datapoint on the 2H 2026 packaging ramp management flagged as materially heavier than 1H.

Sources

  1. KLA Corporation Q4 FY2026 earnings press release (SEC EDGAR, exhibit 99.1, filed 2026-07-28): https://www.sec.gov/Archives/edgar/data/319201/000031920126000024/exhibit991earningsrelease7.htm
  2. Prior-quarter Tapebrief briefs (Q1 FY2026 through Q3 FY2026) for cross-quarter guidance trajectory and watch-list resolution.

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