Executive Summary
KLA Corporation delivered a solid QQ4 2025 quarter, underscoring the company’s ability to monetize a high-margin, capital-intensive segment within the semiconductor equipment ecosystem. Revenue of $3.174 billion represented a 23.7% year-over-year increase and 3.6% sequential growth, driven by sustained demand for metrology, inspection, and yield-management solutions across leading-edge nodes. Gross margin of 63.24% and operating margin of 44.24% contributed to a diluted earnings per share (EPS) of $9.06 and net income of $1.202 billion, marking another record of profitability for a business with a large scale of cash generation.
Cash flow generation remained a standout attribute. Operating cash flow totaled $1.165 billion for the quarter, with free cash flow of $1.064 billion and a per-share free cash flow of $8.06. The balance sheet remains robust, with substantial liquidity (cash and short-term investments of approximately $4.495 billion) and a market-appropriate leverage profile given long-term debt of about $6.043 billion and net debt around $4.009 billion. The company’s liquidity metrics—current ratio of 2.62 and quick ratio of 1.83—support resilience through the semiconductor cycle. While valuation remains elevated (P/E around 24.6x and other high multiples), KLA’s cash-generative strength and margin resilience provide a foundation for continued premium positioning in a disciplined capex environment for foundries and IDMs.
Management did not publish explicit forward guidance in the provided materials, limiting explicit near-term targets. Nevertheless, the results imply continued pricing power and demand for yield-management technologies as semiconductor nodes advance and process complexity increases. Investors should monitor the cadence of WFE (wafer fab equipment) spending, supply-chain dynamics, and potential mix shifts toward more advanced metrology and inspection offerings as drivers of ongoing profitability.
Key Performance Indicators
Key Insights
Revenue: $3,174,741,000; YoY +23.71%; QoQ +3.65%. Gross Profit: $2,007,712,000; Gross Margin 63.24% (YoY +26.10%; QoQ +6.38%). Operating Income: $1,404,570,000; Operating Margin 44.24% (YoY +33.45%; QoQ +8.01%). Net Income: $1,202,849,000; Net Margin 37.89% (YoY +43.80%; QoQ +10.51%). Diluted EPS: $9.06; Basic EPS: $9.11; YoY EPS growth +46.46%; QoQ +10.96%....
Financial Highlights
Revenue: $3,174,741,000; YoY +23.71%; QoQ +3.65%. Gross Profit: $2,007,712,000; Gross Margin 63.24% (YoY +26.10%; QoQ +6.38%). Operating Income: $1,404,570,000; Operating Margin 44.24% (YoY +33.45%; QoQ +8.01%). Net Income: $1,202,849,000; Net Margin 37.89% (YoY +43.80%; QoQ +10.51%). Diluted EPS: $9.06; Basic EPS: $9.11; YoY EPS growth +46.46%; QoQ +10.96%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
3.17B |
23.71% |
3.65% |
| Gross Profit |
2.01B |
26.10% |
6.38% |
| Operating Income |
1.40B |
33.45% |
8.01% |
| Net Income |
1.20B |
43.80% |
10.51% |
| EPS |
9.11 |
46.46% |
10.96% |
Key Financial Ratios
operatingProfitMargin
44.2%
operatingCashFlowPerShare
$8.82
freeCashFlowPerShare
$8.06
dividendPayoutRatio
21.1%
Management Commentary
No earnings-call transcript data were provided in the materials. As a result, management-specific quotes or thematic commentary from the QQ4 2025 call could not be incorporated. Highlights herein focus on disclosed financial performance and balance sheet strength.
Forward Guidance
Explicit forward guidance for QQ1 2026 and beyond was not included in the provided data. Qualitative assessment suggests a favorable long-term trajectory driven by sustained WFE demand, node transitions to EUV/advanced lithography, and the need for sophisticated yield-management software and metrology tools. Key factors to monitor: (1) wafer fab capex cycles and utilization of leading-edge nodes; (2) transition timing for new metrology/inspection portfolios; (3) end-market mix shifts (foundries vs. IDMs vs. PCB/Display inspection); (4) any changes in supply chain or component costs that could affect margins. If WFE demand remains robust and technology nodes advance, management could sustain high-margin growth aided by strong free cash flow; if the cycle cools, expect emphasis on price competition and cost discipline to protect profitability.