November 2, 2026·33 min read
KLA Corporation (KLAC), Financial Analysis
Insights derived from analysing SEC filings. Independent analysis, not a publication of the SEC.
Revenues Q1 FY27
$4.14bn
+28.9% year on year (Q1 FY26 $3.21bn)
Costs and operating expenses Q1 FY27
$2.27bn
+21.5% year on year (Q1 FY26 $1.87bn)
Operating margin Q1 FY27
45.0%
+3.4 pts year on year (Q1 FY26 41.7%)
Key findings
- Q1 FY27 revenue $4.14bn, +28.9% year on year and +13.1% on Q4 FY26; operating income $1.86bn, 45.0% margin against 41.7% a year earlier; diluted EPS $1.18 against $0.85.
- Inspection leads the growth: wafer inspection $2.11bn (+37.3%), patterning $863m (+29.2%), service $851m (+14.2%); Semiconductor Process Control segment profit margin 47.8% against 45.1%.
- Every region except Japan grew: North America +107.5%, Korea +66.1%, Taiwan +28.9%, China +12.5% to $1.43bn; Japan (45.9%). Lam Research grew Korea 110.5% in its Sep 2026 quarter.
- China is 34.5% of Q1 FY27 revenue against 29.8% for FY2026 and 42.8% for FY2024; the FY2026 Form 10-K adds the BIS Affiliates Rule, suspended until Nov 2026, and China bound shipments held by US Customs.
- Supply build ahead of guidance of $4.7bn for Q2 FY27 (+42.5%): purchase commitments $8.87bn against $5.97bn at 30 Jun 2026; inventory +$442m to $4.09bn; capex $195m against $96m; the 10-K expects higher DRAM chip costs to reduce FY2027 gross margin.
- Shares $160.24 on 2 Nov 2026, 46.9% below the 30 Jun 2026 record close of $301.71; 40.1x TTM EPS of $4.00. Scenario values for FY2029: base $179, best $292, worst $76.
Figures are read from the Forms 10-K for FY2023 to FY2026, the Forms 10-Q for Q1 FY26 to Q3 FY26 and Q1 FY27, the Forms 8-K with all their exhibits, incl. the quarterly earnings releases (Ex 99.1) with the CEO and CFO commentary they contain, the dividend and stock split releases (Ex 99.1), the charter amendment and restated charter (Ex 3.1, 3.2) and the amended bylaws (Ex 3.1), the proxy statement of 2026, the Form 8-K Item 5.07 vote results of Nov 2025, Schedules 13G and Forms 4 on the record for central index key 319201, together with the Forms 10-Q, 10-K and 6-K of Lam Research, Applied Materials, ASML and Teradyne. KLA's fiscal year ends 30 June; Q1 FY27 is the quarter ended 30 Sep 2026. Per share figures and share counts are adjusted for the ten for one stock split effective 11 Jun 2026 unless marked pre split. Accession numbers appear in the Sources appendix. Market prices are the last trade of 2 Nov 2026.
1 Revenue & Business Model
- Storyline: process control demand tied to AI chips lifts growth from 11.7% in FY2026 to 28.9% in Q1 FY27, while China stays a third of revenue under export controls and the company builds inventory to meet orders. Chapters 2 to 4 cover the three revenue drivers: process control products and services, end markets by region, and China.
- Three segments: Semiconductor Process Control (wafer inspection, patterning and related service) earned $12.24bn in FY2026, 90.2% of revenue, with segment profit of $5.48bn (44.8%); Specialty Semiconductor Process (SPTS etch and deposition) $584m with $65m profit; PCB and Component Inspection (Orbotech) $750m with $108m profit, after losses incl. impairments of $289.5m in FY2024 and $239.1m in FY2025.
- Revenue FY2022 $9.21bn to FY2026 $13.58bn, a 10.2% CAGR; TTM Q1 FY27 $14.51bn. Service revenue $3.13bn in FY2026, 23.0% of the total, +16.5%.
- Regions FY2026 (customer ship to location): China $4.05bn (29.8%), Taiwan $3.64bn (26.8%), Korea $1.83bn (13.5%), North America $1.76bn (12.9%), Japan $915m (6.7%), Europe and Israel $727m (5.4%), Rest of Asia $654m (4.8%).
- Customers and backlog: TSMC was the only customer above 10% of revenue in FY2024 to FY2026 (19% in FY2026); in Q1 FY27 the largest customer took 21% and the second largest 13%. Backlog $12.57bn at 30 Jun 2026 against $7.86bn a year earlier; about 17,000 employees.
Table 1.1 Segment revenue and segment profit, FY2022 to FY2026 ($bn)
| Segment | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 |
|---|---|---|---|---|---|
| Semiconductor Process Control revenue ($bn) | 7.92 | 9.32 | 8.73 | 10.95 | 12.24 |
| Specialty Semiconductor Process revenue ($bn) | 0.46 | 0.54 | 0.53 | 0.59 | 0.58 |
| PCB and Component Inspection revenue ($bn) | 0.83 | 0.63 | 0.55 | 0.62 | 0.75 |
| Semiconductor Process Control segment profit ($bn) | n/a | n/a | 3.77 | 5.00 | 5.48 |
| Specialty Semiconductor Process segment profit ($bn) | n/a | n/a | 0.09 | 0.10 | 0.06 |
| PCB and Component Inspection segment profit ($bn) | n/a | n/a | (0.47) | (0.28) | 0.11 |
Segment profit as filed under the new segment reporting standard (ASU 2023 07, revenue less cost of revenue, R&D, SG&A and other segment items) is available from FY2024; the FY2024 Form 10-K used a narrower measure, so earlier years are not shown. PCB and Component Inspection includes impairments of $289.5m (FY2024) and $239.1m (FY2025).
Table 1.2 Segment revenue and segment profit margin, last five quarters
| Segment | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 |
|---|---|---|---|---|---|
| Semiconductor Process Control revenue ($m) | 2,899.4 | 3,004.6 | 3,083.9 | 3,256.8 | 3,754.3 |
| Semiconductor Process Control segment profit margin (%) | 45.1 | 44.5 | 44.2 | 45.3 | 47.8 |
| Specialty Semiconductor Process revenue ($m) | 119.8 | 140.6 | 164.0 | 159.7 | 139.5 |
| Specialty Semiconductor Process segment profit margin (%) | 5.0 | 7.6 | 14.3 | 15.3 | 6.8 |
| PCB and Component Inspection revenue ($m) | 189.5 | 152.2 | 167.6 | 241.1 | 242.2 |
| PCB and Component Inspection segment profit margin (%) | 14.0 | (1.6) | 12.7 | 26.0 | 29.5 |
Q4 FY26 equals FY2026 less 9M FY26. Segment totals differ from revenue by corporate items of under $4m a year.
2 Process Control: Inspection and Patterning Up 29%
- Semiconductor Process Control revenue $3.75bn in Q1 FY27, +29.5%, 90.8% of revenue; segment profit $1.80bn, 47.8% margin against 45.1% a year earlier.
- Wafer inspection $2.11bn, +37.3%, 51.0% of revenue; patterning $863m, +29.2%; service $851m, +14.2%; product revenue overall +33.3%.
- FY2026: wafer inspection $6.63bn (+7.0%), patterning $2.71bn (+23.2%), service $3.13bn (+16.5%); wafer inspection rose 43.1% in FY2025.
- Guidance: Q2 FY27 revenue $4.7bn plus or minus $200m, +42.5% on Q2 FY26 at the midpoint (8-K Ex 99.1, 28 Oct 2026).
How the equipment industry is changing
- Process control intensity: KLA says EUV adoption in logic and DRAM, incl. high bandwidth memory, and 2 nanometer nodes raise process control needs (10-Q, 29 Oct 2026); its CEO cited third party reports of process control share gains (8-K Ex 99.1, 29 Apr 2026).
- Peers grow faster in the latest quarter: Lam Research revenue +54.4% (Sep 2026 quarter) with a 40.0% operating margin; ASML net sales +55.0% (Q3 2026) with 2026 guidance of EUR 44bn to 45bn and planned 2027 and 2028 supply below demand (6-K, 14 Oct 2026); Applied Materials +24.8% (Jul 2026 quarter).
- Margins: KLA TTM gross margin 61.5% against ASML 54.3%, Lam 51.1% and Applied Materials 49.4%; TTM operating margin 42.6% against Lam 36.9% and Applied Materials 29.6%.
Table 2.1 Wafer fab equipment makers compared, latest reported quarter
| Company | Period | Revenue | Growth (%) | Gross margin (%) | Operating margin (%) | Main products |
|---|---|---|---|---|---|---|
| KLA | Sep 2026 quarter | $4.14bn | 28.9 | 61.9 | 45.0 | Process control, SSP, PCI |
| Lam Research | Sep 2026 quarter | $8.22bn | 54.4 | 52.3 | 40.0 | Etch and deposition |
| Applied Materials | Jul 2026 quarter | $9.12bn | 24.8 | 49.4 (TTM) | 29.6 (TTM) | Deposition, etch, process control unit |
| ASML | Q3 2026 | EUR 11.66bn | 55.0 | 54.3 (TTM) | n/a | Lithography |
Lam Research from its Form 10-Q for the quarter to 27 Sep 2026; Applied Materials from its Form 10-Q for the quarter to 26 Jul 2026 (Oct 2026 quarter not yet reported); ASML from its Form 6-K of 14 Oct 2026. Onto Innovation and Nova, named process control competitors, are not included because their latest results were not retrieved.
Table 2.2 Revenue by product line, last five quarters ($m)
| Product line | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 | Change year on year (%) |
|---|---|---|---|---|---|---|
| Wafer Inspection ($m) | 1,537.2 | 1,572.8 | 1,739.7 | 1,781.1 | 2,111.2 | +37.3 |
| Patterning ($m) | 667.4 | 696.2 | 615.1 | 728.1 | 862.5 | +29.2 |
| Specialty Semiconductor Process ($m) | 100.2 | 121.6 | 144.2 | 136.5 | 113.6 | +13.4 |
| PCB and Component Inspection ($m) | 117.3 | 80.3 | 95.1 | 167.5 | 167.5 | +42.8 |
| Other ($m) | 42.8 | 40.2 | 46.2 | 23.9 | 30.7 | (28.3) |
| Service ($m) | 744.7 | 786.1 | 774.8 | 820.4 | 850.5 | +14.2 |
| Total revenue ($m) | 3,209.7 | 3,297.1 | 3,415.1 | 3,657.6 | 4,136.0 | +28.9 |
Product lines exclude service revenue, which is shown separately.
3 End Markets: Memory, Foundry and Packaging by Region
- Korea $497m in Q1 FY27, +66.1%, which the 10-Q attributes to memory customers investing in high bandwidth memory and advanced DRAM; FY2026 Korea $1.83bn, +26.2%.
- Taiwan $1.02bn, +28.9%, 24.7% of revenue; FY2026 $3.64bn, +13.7%. TSMC was 19% of FY2026 revenue.
- North America $618m, +107.5%, 14.9% of revenue; Rest of Asia $218m, +106.8%; Japan $160m, (45.9%).
- PCB and Component Inspection $242m, +27.8%, segment profit margin 29.5%; the 10-Q links demand to package complexity for AI and high performance computing. Specialty Semiconductor Process $140m, +16.4%, margin 6.8%.
How end markets are changing
- Memory spending rises at both companies: Lam Research systems revenue was 46% memory and 46% foundry in its Sep 2026 quarter against 34% and 60% a year earlier (Lam 10-Q); KLA Korea revenue +66.1% against Lam Korea +110.5%.
- Advanced packaging: KLA says package complexity for AI and high performance computing drives growth in its advanced packaging business (10-Q, 29 Oct 2026); PCB and Component Inspection revenue +27.8%.
- Concentration: TSMC is the only customer above 10% of KLA revenue in each of FY2024 to FY2026; Taiwan is KLA's second largest region at 26.8% of FY2026 revenue.
Table 3.1 Revenue by region, KLA against Lam Research, quarter to Sep 2026
| Region | KLA ($m) | KLA share (%) | KLA growth (%) | Lam ($m) | Lam share (%) | Lam growth (%) |
|---|---|---|---|---|---|---|
| China | 1,425.7 | 34.5 | +12.5 | 2,885.6 | 35.1 | +26.4 |
| Taiwan | 1,022.7 | 24.7 | +28.9 | 1,482.1 | 18.0 | +44.3 |
| Korea | 497.2 | 12.0 | +66.1 | 1,634.1 | 19.9 | +110.5 |
| North America (Lam: United States) | 618.0 | 14.9 | +107.5 | 663.1 | 8.1 | +117.6 |
| Japan | 159.8 | 3.9 | (45.9) | 721.5 | 8.8 | +36.3 |
KLA quarter ended 30 Sep 2026, Lam Research quarter ended 27 Sep 2026; growth year on year; each company's own region definitions.
4 China: 34.5% of Q1 FY27 Revenue Under Export Controls
- China revenue $1.43bn in Q1 FY27, +12.5% year on year and +49.0% on Q4 FY26, led by foundry and logic at mature nodes (10-Q); 34.5% of revenue against 26.2% in Q4 FY26.
- Annual: $4.20bn in FY2024 (42.8%), $4.04bn in FY2025 (33.3%), $4.05bn in FY2026 (29.8%); the 10-K says legacy node investment by domestic companies offset export control limits on advanced transactions.
- Lam Research China: $2.89bn in its Sep 2026 quarter, 35.1% of revenue, +26.4% year on year (Lam 10-Q).
How export rules are changing
- Affiliates Rule: in Sep 2025 BIS extended controls to entities 50% owned by listed parties, then suspended the rule in Nov 2025 for one year, until Nov 2026 (KLA 10-K FY2026).
- Shipments and tariffs: some KLA products bound for China were held by US Customs and Border Protection; the Feb 2026 Supreme Court ruling that IEEPA tariffs were not authorized leaves refunds and tariff authority uncertain (10-K FY2026).
- Risk factor text: the export control factor now names sanctions and states China revenue of 30% in FY2026 against 33% and 43% in the two prior years.
Table 4.1 China revenue and share, KLA and Lam Research, last five quarters
| Line | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 |
|---|---|---|---|---|---|
| KLA China revenue ($m) | 1,267.2 | 994.9 | 829.6 | 956.7 | 1,425.7 |
| KLA China share (%) | 39.5 | 30.2 | 24.3 | 26.2 | 34.5 |
| Lam Research China revenue ($m) | 2,282.6 | 1,858.5 | 1,996.9 | 1,721.8 | 2,885.6 |
| Lam Research China share (%) | 42.9 | 34.8 | 34.2 | 25.6 | 35.1 |
Both companies label fiscal quarters the same way (Q1 ends in September). Lam Research figures from its Forms 10-Q and 10-K.
5 Financial Analysis & Ratios
- Operating margin 45.0% in Q1 FY27, against 41.7% in FY2026 and 34.1% in FY2024, which included $289.5m of impairments; TTM 42.6%.
- Net income TTM $5.26bn, 36.3% of revenue; FY2026 $4.83bn, +18.9%. The effective tax rate rose to 15.1% in Q1 FY27 from 12.0% in Q4 FY26 on the Pillar Two UTPR tax.
- Free cash flow TTM $4.04bn, 27.8% of revenue; Q3 FY26 operating cash flow of $708m was lower than net income of $1.20bn as working capital grew.
- Balance sheet at 30 Sep 2026: cash and marketable securities $4.74bn against senior notes of $5.72bn book value ($5.95bn principal), net debt $982m; equity $6.52bn after buybacks.
- Capital returns TTM $3.79bn, 93.9% of free cash flow: buybacks $2.68bn and dividends $1.11bn; $8.81bn of authorization left at 30 Sep 2026; quarterly dividend $0.23 since the 21% raise in March 2026.
Table 5.1 Income statement, cash flow and balance sheet summary ($bn unless stated)
| Line item | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 | TTM Q1 FY27 |
|---|---|---|---|---|---|---|
| Revenue | 9.2 | 10.5 | 9.8 | 12.2 | 13.6 | 14.5 |
| Gross profit | 5.6 | 6.3 | 5.9 | 7.4 | 8.3 | 8.9 |
| Research and development | 1.1 | 1.3 | 1.3 | 1.4 | 1.5 | 1.6 |
| Selling, general and administrative | 0.9 | 1.0 | 1.0 | 1.0 | 1.1 | 1.2 |
| Operating income | 3.7 | 4.0 | 3.3 | 4.8 | 5.7 | 6.2 |
| Net income | 3.3 | 3.4 | 2.8 | 4.1 | 4.8 | 5.3 |
| Diluted EPS ($) | 2.19 | 2.42 | 2.03 | 3.04 | 3.66 | 4.00 |
| Operating cash flow | 3.3 | 3.7 | 3.3 | 4.1 | 4.1 | 4.5 |
| Capital expenditure | (0.3) | (0.3) | (0.3) | (0.3) | (0.4) | (0.5) |
| Free cash flow | 3.0 | 3.3 | 3.0 | 3.7 | 3.8 | 4.0 |
| Stock based compensation | 0.1 | 0.2 | 0.2 | 0.3 | 0.3 | 0.3 |
| Cash and investments | 2.7 | 3.2 | 4.5 | 4.5 | 4.9 | 4.7 |
| Total debt | 6.7 | 5.9 | 6.6 | 5.9 | 5.9 | 5.7 |
| Total equity | 1.4 | 2.9 | 3.4 | 4.7 | 6.3 | 6.5 |
KLA presents no operating income line; operating income here is revenue less cost of revenues, R&D, SG&A and impairments. Capital expenditure is purchases of property and equipment; free cash flow is operating cash flow less capital expenditure (company definition). Total debt is the book value of senior notes. TTM equals Q2 FY26 to Q1 FY27. FY2022 and FY2023 EPS are pre split figures divided by ten.
Table 5.2 What changed, Q1 FY27 against Q1 FY26
| Metric | Q1 FY26 | Q1 FY27 | Change |
|---|---|---|---|
| Revenue ($bn) | 3.21 | 4.14 | 28.9% |
| Gross profit ($bn) | 1.97 | 2.56 | 30.1% |
| Operating income ($bn) | 1.34 | 1.86 | 39.2% |
| Net income ($bn) | 1.12 | 1.55 | 38.1% |
| Diluted EPS ($) | 0.85 | 1.18 | 38.8% |
| Operating cash flow ($bn) | 1.16 | 1.53 | 31.8% |
| Free cash flow ($bn) | 1.07 | 1.34 | 25.4% |
| Operating margin (%) | 41.7 | 45.0 | 3.4 pts |
| Net margin (%) | 34.9 | 37.4 | 2.5 pts |
Table 5.3 Ratio analysis
| Ratio | FY2022 | FY2023 | FY2024 | FY2025 | FY2026 | TTM Q1 FY27 |
|---|---|---|---|---|---|---|
| Growth and margins | ||||||
| Revenue growth (%) | n/a | 13.9 | (6.5) | 23.9 | 11.7 | n/a |
| Gross margin (%) | 61.0 | 59.8 | 60.0 | 60.9 | 61.3 | 61.5 |
| Operating margin (%) | 39.7 | 38.1 | 34.1 | 39.3 | 41.7 | 42.6 |
| Net margin (%) | 36.1 | 32.3 | 28.1 | 33.4 | 35.6 | 36.3 |
| FCF margin (%) | 32.6 | 31.7 | 30.9 | 30.8 | 27.7 | 27.8 |
| Cost and investment intensity | ||||||
| R&D (%) revenue | 12.0 | 12.4 | 13.0 | 11.2 | 11.3 | 10.8 |
| SBC (%) revenue | 1.4 | 1.6 | 2.2 | 2.2 | 2.3 | 2.2 |
| Capex (%) revenue | 3.3 | 3.3 | 2.8 | 2.8 | 2.8 | 3.3 |
| Effective tax rate (%) | 4.8 | 10.6 | 13.4 | 12.5 | 13.8 | 14.1 |
| Returns | ||||||
| ROE (%) | 237.0 | 156.8 | 87.8 | 100.8 | 87.5 | 80.6 |
| ROA (%) | 26.4 | 25.4 | 18.7 | 25.8 | 28.4 | 28.6 |
| ROIC (%) | 65.0 | 64.1 | 52.7 | 68.7 | 66.5 | 70.8 |
| Asset turnover (x) | 0.73 | 0.75 | 0.64 | 0.76 | 0.76 | 0.79 |
| Liquidity and leverage | ||||||
| Current ratio (x) | 2.50 | 2.24 | 2.15 | 2.62 | 2.88 | 2.76 |
| Debt to equity (x) | 4.75 | 2.02 | 1.97 | 1.25 | 0.93 | 0.88 |
| Net cash ($bn) | (4.0) | (2.6) | (2.1) | (1.4) | (1.0) | (1.0) |
| Efficiency and cash quality | ||||||
| Days sales outstanding | 72 | 61 | 68 | 68 | 78 | 77 |
| Inventory days | 218 | 249 | 282 | 247 | 253 | 267 |
| FCF to net income (x) | 0.90 | 0.98 | 1.10 | 0.92 | 0.78 | 0.77 |
| Shareholder returns (%) FCF | 153 | 61 | 83 | 82 | 89 | 94 |
ROE and ROA use average balances for FY2023 to FY2026 and period end balances for FY2022 and TTM; the peer table uses average equity for TTM ROE (91.4%). FY2022 ROE reflects low equity after buybacks.
Table 5.4 Valuation snapshot at $160.24 per share, 2 Nov 2026
| Measure | Value |
|---|---|
| Market cap ($bn) | 208.8 |
| Enterprise value ($bn) | 209.8 |
| P/E (TTM) (x) | 40.1 |
| EV/Sales (TTM) (x) | 14.5 |
| EV/EBITDA (TTM) (x) | 31.9 |
| FCF yield (%) | 1.9 |
| Price/Book (x) | 32.0 |
Cost structure and profitability
- Cost of revenues 38.1% of Q1 FY27 revenue against 38.7% a year earlier; cost of revenues rose 26.9% against revenue growth of 28.9%.
- R&D $395m, +9.6%, 9.6% of revenue against 11.2%; SG&A $302m, +12.1%, 7.3% against 8.4%. R&D and SG&A together fell from 19.6% to 16.8% of revenue, 2.8 points of the 3.4 point operating margin gain.
- Depreciation and amortization $97m, 2.4% of revenue; stock based compensation $84m, 2.0%.
- Capex $195m in Q1 FY27, 4.7% of revenue, against $96m a year earlier; FY2026 capex $376m.
- Capital returns of $1.24bn in Q1 FY27 against free cash flow of $1.34bn: buybacks $936m, the highest in the last nine quarters, and dividends $305m.
Table 5.5 Costs as % of revenue, last five quarters
| Line | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 | Q1 FY27 |
|---|---|---|---|---|---|
| Cost of revenues (% of revenue) | 38.7 | 38.6 | 38.9 | 38.6 | 38.1 |
| Research and development (% of revenue) | 11.2 | 11.6 | 11.4 | 10.9 | 9.6 |
| Selling, general and administrative (% of revenue) | 8.4 | 8.5 | 8.5 | 8.0 | 7.3 |
| Depreciation and amortization (incl. in lines above) (% of revenue) | 3.0 | 3.0 | 2.9 | 2.7 | 2.4 |
| Stock based compensation (incl. in lines above) (% of revenue) | 2.2 | 2.2 | 2.5 | 2.2 | 2.0 |
| Operating income (% of revenue) | 41.7 | 41.3 | 41.2 | 42.5 | 45.0 |
| Capex (% of revenue) | 3.0 | 3.2 | 2.5 | 2.4 | 4.7 |
| Effective tax rate (%) | 14.4 | 13.9 | 15.2 | 12.0 | 15.1 |
6 MD&A & Management Commentary
Q1 FY27 results release and Form 10-Q
- Q1 FY27 (8-K of 28 Oct 2026, 10-Q of 29 Oct 2026): revenue $4.14bn against the $4.0bn guidance midpoint; product $3.29bn (+33.3%), service $851m (+14.2%); GAAP EPS $1.18, non GAAP $1.22.
- Gross margin 61.9% against 61.4% in Q4 FY26 (10-Q): volume +0.6 pts, mix +0.5 pts, manufacturing +0.3 pts, other service and manufacturing costs incl. tariffs (0.9 pts). Non GAAP gross margin 62.7%.
- Operating expenses: R&D $395m, 9.6% of revenue against 11.2% a year earlier; SG&A $302m, 7.3%. Tax rate 15.1% incl. $20.2m UTPR Pillar Two tax; $94.5m is expected for FY2027 and may reverse if the Side by Side Safe Harbor is enacted.
- Working capital: inventory $4.09bn (+$442m in the quarter), purchase commitments $8.87bn; operating cash flow $1.53bn and free cash flow $1.34bn; capital returns $1.24bn.
- Earlier 2026 quarters against guidance midpoints: Q2 FY26 $3.30bn against $3.225bn, Q3 FY26 $3.42bn against $3.35bn, Q4 FY26 $3.66bn against $3.575bn.
- Reporting change: from Q1 FY27 the MD&A compares results with the prior quarter as the primary basis.
Table 6.1 Company guidance issued in 2026, as filed in the Forms 8-K and 10-Q
| Item | Outlook | Source |
|---|---|---|
| Q3 FY26 revenue | $3.35bn plus or minus $150m; GAAP EPS $8.85 plus or minus $0.78 pre split ($0.89 plus or minus $0.08 post split); actual $3.42bn | 8-K Ex 99.1, 29 Jan 2026 |
| Q4 FY26 revenue | $3.575bn plus or minus $200m; actual $3.66bn | 8-K Ex 99.1, 29 Apr 2026 |
| Q1 FY27 revenue and gross margin | $4.0bn plus or minus $200m; GAAP gross margin 61.6% plus or minus 1.0 pts; actual $4.14bn and 61.9% | 8-K Ex 99.1, 28 Jul 2026 |
| Q2 FY27 revenue | $4.7bn plus or minus $200m, +42.5% on Q2 FY26 | 8-K Ex 99.1, 28 Oct 2026 |
| Q2 FY27 gross margin | GAAP 61.8% and non GAAP 62.5%, each plus or minus 1.0 pts | 8-K Ex 99.1, 28 Oct 2026 |
| Q2 FY27 EPS | GAAP $1.41 and non GAAP $1.44, each plus or minus $0.11; 1.31bn diluted shares | 8-K Ex 99.1, 28 Oct 2026 |
| FY2027 UTPR tax | $94.5m expected; $20.2m accrued in Q1 FY27 | 10-Q Q1 FY27 |
| FY2027 gross margin | higher DRAM chip costs expected to reduce gross margin | 10-K FY2026, Item 1A |
| Dividend | raised 21% to $2.30 pre split ($0.23 post split) per quarter from the May 2026 declaration | 8-K, 11 Mar 2026 |
Management and CFO commentary
- CEO Rick Wallace, 8-K Ex 99.1 of 28 Oct 2026: the September quarter beat guidance midpoints on all key metrics; process control and PCB and component inspection units benefit from high performance computing requirements.
- CEO, 8-K Ex 99.1 of 28 Jul 2026: momentum expected to accelerate in the second half of calendar 2026 and continue through 2027; advanced packaging named as a growth area tied to AI infrastructure.
- CFO Bren Higgins, 8-K Ex 99.1 of 7 May 2026: stock split intended to improve the accessibility and liquidity of the shares; quarterly dividend raised 21% to $2.30 pre split ($0.23 post split).
- CEO, 8-K Ex 99.1 of 29 Apr 2026: 17th consecutive annual dividend increase and an added $7bn buyback; third party reports show process control share gains.
- CEO, 8-K Ex 99.1 of 29 Jan 2026: record calendar 2025 revenue, non GAAP operating income and free cash flow.
Table 6.2 Management statements in their own words
| Speaker | Date and source | Statement |
|---|---|---|
| Rick Wallace, President and CEO | 28 Oct 2026, 8-K Ex 99.1 | “continues to be critical to the AI ecosystem buildout” |
| Rick Wallace, President and CEO | 28 Jul 2026, 8-K Ex 99.1 | “KLA remains uniquely positioned on the critical path of AI infrastructure expansion” |
| Bren Higgins, CFO | 7 May 2026, 8-K Ex 99.1 | “This stock split is intended to improve the accessibility and liquidity of KLA shares” |
Table 6.3 Key disclosures in the Forms 10-Q and 10-K
| Item | Disclosure |
|---|---|
| 10-Q Q1 FY27, regions | China $1.43bn, +49% on the prior quarter, from foundry and logic at mature nodes; Korea +66% year on year from high bandwidth memory and DRAM investment; North America +107%; Japan (46%). |
| 10-Q Q1 FY27, customers | Largest customer 21% and second largest 13% of revenue, against 15%, 11% and 10% for the top three in Q1 FY26. |
| 10-Q Q1 FY27, liquidity | Cash and marketable securities $4.74bn, of which $786m held abroad; working capital $8.02bn; net leverage 0.49x against a 3.25x covenant; buyback authorization $8.81bn. |
| 10-K FY2026, backlog | Backlog $12.57bn at 30 Jun 2026 against $7.86bn a year earlier, attributed to AI infrastructure demand. |
| 10-K FY2026, commitments | Senior notes $5.95bn with $5.20bn of future interest; purchase commitments $5.97bn at 30 Jun 2026, $8.87bn at 30 Sep 2026. |
| 10-K FY2026, tax | Singapore tax holidays cut tax by $120.9m in FY2026 ($198.6m FY2025), renewed to Dec 2032; under US federal examination for FY2018. |
| 10-K FY2026, competition | Named competitors: Applied Materials, ASML, Hitachi High Tech, Lasertec and Onto Innovation; over 9,100 active patents. |
| 10-K FY2026, total return | $100 invested in Jun 2021 grew to $978.58 by Jun 2026, against $449.45 for the PHLX Semiconductor index and $187.57 for the S&P 500. |
7 Peer Valuation & Sector Summary
- Sector: wafer fab equipment. KLA TTM revenue $14.51bn against Lam Research $26.13bn, Applied Materials $30.84bn (TTM to Jul 2026) and ASML $44.2bn (converted from EUR).
- Growth: KLAC +15.8% TTM (Q1 FY27 +28.9%) against LRCX +33.4% TTM, ASML +55.2% (Q3 2026), Teradyne +95.3% (H1 2026) and Applied Materials +11.4% (9M FY26).
- Margins: KLAC TTM operating margin 42.6% against LRCX 36.9%, Teradyne 30.2% and Applied Materials 29.6%; gross margin 61.5% against Teradyne 59.2%, ASML 54.3%, LRCX 51.1% and Applied Materials 49.4%.
- Valuation: KLAC 40.1x P/E and 14.5x EV/Sales against ASML 40.2x and 13.7x, LRCX 35.6x and 11.3x, Applied Materials 33.8x and 10.0x, Teradyne 42.2x and 10.7x.
- Leverage: KLAC net debt $0.98bn; LRCX net cash $3.70bn, Applied Materials $2.69bn, Teradyne $0.35bn.
Table 7.1 Peer comparison, latest reported trailing twelve months
| Company | Revenue TTM ($bn) | Revenue growth (%) | Gross margin (%) | Operating margin (%) | Net margin (%) | FCF margin (%) | ROE (%) | Net cash ($bn) | Market value ($bn) | EV/Sales (x) | P/E TTM (x) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| KLAC | 14.5 | 15.8 | 61.5 | 42.6 | 36.3 | 27.8 | 91.4 | (1.0) | 209 | 14.5 | 40.1 |
| LRCX | 26.1 | 33.4 | 51.1 | 36.9 | 32.3 | 25.0 | 70.1 | 3.7 | 299 | 11.3 | 35.6 |
| AMAT | 30.8 | 11.4 | 49.4 | 29.6 | 30.1 | 18.2 | 41.1 | 2.7 | 311 | 10.0 | 33.8 |
| ASML | 44.2 | 55.2 | 54.3 | n/a | 34.1 | n/a | n/a | n/a | 606 | 13.7 | 40.2 |
| TER | 4.5 | 95.3 | 59.2 | 30.2 | 25.8 | 17.9 | 36.9 | 0.4 | 48 | 10.7 | 42.2 |
KLAC and LRCX TTM to Sep 2026; KLAC growth is TTM against the prior TTM (Q1 FY27 alone +28.9%); LRCX growth TTM. AMAT TTM to Jul 2026, growth 9M FY26. ASML from Form 6-K releases in EUR at 1.12 $ per EUR, growth Q3 2026. Teradyne TTM to Jun 2026, growth H1 2026, market value at Oct 2026. KLAC, LRCX, AMAT and ASML market values at 2 Nov 2026. Onto Innovation and Nova not included; their latest financials were not retrieved.
8 Material Events & Contracts
- Ten Forms 8-K in twelve months: four earnings releases, two standalone dividend notices, the Investor Day and capital return 8-K of Mar 2026, the stock split announcement (with a dividend), the charter amendment, and the Nov 2025 annual meeting results (with a dividend).
- Ten for one split: approved 7 May 2026, effective 11 Jun 2026, split adjusted trading from 12 Jun 2026; authorized shares raised from 500m to 5bn.
Table 8.1 Forms 8-K filed in the last twelve months
| Date | Items | Event |
|---|---|---|
| 28 Oct 2026 | 2.02, 9.01 | Q1 FY27 results (Ex 99.1): revenue $4.14bn, GAAP EPS $1.18, non GAAP $1.22, operating cash flow $1.53bn, free cash flow $1.34bn; Q2 FY27 guidance revenue $4.7bn plus or minus $200m, GAAP EPS $1.41 plus or minus $0.11. |
| 6 Aug 2026 | 8.01, 9.01 | Quarterly dividend $0.23 per share, payable 1 Sep 2026 (record 17 Aug 2026). |
| 28 Jul 2026 | 2.02, 9.01 | Q4 FY26 results (Ex 99.1): revenue $3.66bn, GAAP EPS $1.04, non GAAP $1.05; FY2026 revenue $13.58bn, GAAP EPS $3.66, non GAAP $3.76; Q1 FY27 guidance $4.0bn plus or minus $200m. |
| 11 Jun 2026 | 5.03, 9.01 | Charter amendment (Ex 3.1) effective 11 Jun 2026 effects the ten for one split and raises authorized shares from 500m to 5bn; restated charter (Ex 3.2). |
| 7 May 2026 | 8.01, 9.01 | Board approved the ten for one forward split (record 4 Jun, split adjusted trading from 12 Jun 2026); dividend $2.30 pre split ($0.23 post split) payable 2 Jun 2026. |
| 29 Apr 2026 | 2.02, 9.01 | Q3 FY26 results (Ex 99.1): revenue $3.42bn, GAAP EPS $9.12 pre split ($0.91 post split), non GAAP $9.40 pre split ($0.94); Q4 FY26 guidance $3.575bn plus or minus $200m. |
| 11 Mar 2026 | 7.01, 8.01 | Investor Day on 12 Mar 2026 (presentation referenced, Item 7.01); quarterly dividend level raised 21% to $2.30 pre split from $1.90 ($0.23 from $0.19 post split); new $7bn repurchase program added to $3.94bn left under the April 2025 program. |
| 5 Feb 2026 | 8.01, 9.01 | Quarterly dividend $1.90 pre split ($0.19 post split), payable 3 Mar 2026. |
| 29 Jan 2026 | 2.02, 9.01 | Q2 FY26 results (Ex 99.1): revenue $3.30bn, GAAP EPS $8.68 pre split ($0.87 post split), non GAAP $8.85 pre split ($0.89); Q3 FY26 guidance $3.35bn plus or minus $150m. |
| 5 Nov 2025 | 5.03, 5.07, 8.01, 9.01 | Annual meeting: ten directors elected, PwC ratified, say on pay approved; bylaw amendments (Ex 3.1) adopted 6 Nov 2025; quarterly dividend $1.90 pre split ($0.19 post split) (Ex 99.1). |
Table 8.2 Material contracts and financing arrangements
| Contract | Terms |
|---|---|
| Senior notes | $5.95bn principal in eight series from 4.10% due 2029 ($800m) to 5.25% due 2062 ($800m); book value $5.72bn at 30 Sep 2026; no maturity before Mar 2029; ratings A2, A minus and A. |
| Interest rate swaps | $2.0bn of fixed rate notes swapped to floating SOFR rates; a 100 basis point rise adds $20.0m of annual interest (10-K Item 7A). |
| Revolving credit facility | $1.5bn, undrawn, matures Jul 2030; net leverage 0.49x against a 3.25x covenant at 30 Sep 2026. |
| Share repurchase programs | $5bn (Apr 2025) and $7bn (Mar 2026); $8.81bn left at 30 Sep 2026; $936m repurchased in Q1 FY27. |
| Purchase commitments | $8.87bn at 30 Sep 2026 against $5.97bn at 30 Jun 2026, partly to secure DRAM chips and components. |
9 Ownership, Voting Power & Annual Meeting
- One class of common stock with one vote per share; no controlling holder. BlackRock reported 8.8% (Schedule 13G as of 31 Dec 2023) and Vanguard 7.5% (as of 31 Mar 2026); directors and executive officers held 1.0m shares, under 1%.
- 2025 annual meeting (5 Nov 2025): all ten directors elected, Robert Calderoni with the lowest support at 91.5% of votes cast; PwC ratified with 93.7%; say on pay 92.4%. The 2026 meeting is set for 4 Nov 2026 with nine nominees.
- Insiders, Nov 2025 to Oct 2026: no open market purchases; open market sales about $112.3m, mostly under prearranged trading plans; shares withheld for tax on vesting about $143.8m. CEO Richard Wallace sold about $60.9m in five sales, incl. 87,568 shares at $198.95 on 11 Aug 2026.
- CEO pay FY2026: total compensation $29.95m against a median employee at $99,696 (proxy statement).
2025 annual meeting and board changes
- Meeting of 5 Nov 2025: results filed under Item 5.07; no transcript of management remarks was filed.
- Board: Emiko Higashi and Gary Moore left the board; Michael McMullen became chair of the Compensation and Talent Committee.
- Bylaws: amended on 6 Nov 2025 with tighter disclosure rules for shareholder nominations and proposals (Ex 3.1).
- 2026 meeting (4 Nov 2026): election of nine directors, ratification of PwC for FY2027 and an advisory vote on pay (proxy of 22 Sep 2026); results not yet filed.
Table 9.1 Annual meeting vote results, 5 Nov 2025 (m votes, pre split)
| Proposal | For (m votes) | Against (m votes) | Abstain (m votes) | For as % of votes cast | Result |
|---|---|---|---|---|---|
| Elect Robert Calderoni | 100.6 | 9.4 | 0.1 | 91.5 | Elected |
| Elect Jason Conley | 109.7 | 0.2 | 0.1 | 99.8 | Elected |
| Elect Tracy Embree | 109.9 | 0.1 | 0.1 | 100.0 | Elected |
| Elect Jeneanne Hanley | 109.7 | 0.2 | 0.1 | 99.8 | Elected |
| Elect Kevin Kennedy | 103.2 | 6.7 | 0.1 | 93.9 | Elected |
| Elect Michael McMullen | 105.3 | 4.6 | 0.1 | 95.8 | Elected |
| Elect Victor Peng | 109.6 | 0.3 | 0.1 | 99.7 | Elected |
| Elect Jamie Samath | 109.6 | 0.3 | 0.1 | 99.7 | Elected |
| Elect Susan Taylor | 109.9 | 0.1 | 0.1 | 100.0 | Elected |
| Elect Richard Wallace | 109.8 | 0.1 | 0.1 | 99.9 | Elected |
| Ratify PwC as auditor for FY2026 | 110.5 | 7.4 | 0.1 | 93.7 | Ratified |
| Advisory vote on executive compensation | 100.6 | 8.3 | 1.1 | 92.4 | Approved |
Votes in millions as filed in the Form 8-K of 7 Nov 2025. The 2025 meeting predates the ten for one stock split of 11 Jun 2026, so these counts are pre split (131.7m shares entitled to vote, 89.64% present); post split equivalents are ten times larger. Broker non votes 8.0m on each item except the auditor ratification.
Table 9.2 Holders above 5% and insiders, proxy statement of 22 Sep 2026
| Holder | Shares (m) | % of shares | As of |
|---|---|---|---|
| BlackRock, Inc. | 115.0 | 8.8 | 31 Dec 2023 (Schedule 13G) |
| Vanguard Capital Management | 98.2 | 7.5 | 31 Mar 2026 (Schedule 13G) |
| Directors and executive officers (15 persons) | 1.0 | 0.1 | 9 Sep 2026 |
Share counts as stated in the proxy on a post split basis; 1.30bn shares outstanding at 9 Sep 2026. One class of common stock, one vote per share.
10 Risk Factors
- Scope as filed: the comparison covers the full Risk Factors Summary lists of the FY2026 and FY2025 Forms 10-K (35 against 33 items) and the body text of the first factors (economy, international operations, export controls, tariffs, intellectual property); body changes beyond those may be missed, and word counts are not available.
Table 10.1 Risk factors with filed figures
| Risk | Disclosure and change |
|---|---|
| Export controls and China | China 29.8% of FY2026 revenue (33.3% FY2025, 42.8% FY2024) and 34.5% in Q1 FY27; the BIS Affiliates Rule of Sep 2025 covering 50% owned affiliates of listed parties was suspended in Nov 2025 for one year; some China bound shipments were held by US Customs and Border Protection. |
| Customer concentration | TSMC 19% of FY2026 revenue; largest customer 21% and second largest 13% of Q1 FY27 revenue. |
| Components and DRAM chips | Some suppliers discontinued DRAM chips used in KLA products; purchase commitments rose to $8.87bn; higher chip costs are expected to reduce FY2027 gross margin; China rare earth export controls cited. |
| Tariffs | Section 232 semiconductor investigation opened Apr 2025; the Feb 2026 Supreme Court ruling on IEEPA tariffs leaves refunds and future tariff authority uncertain; other costs incl. tariffs cut Q1 FY27 gross margin by 0.9 pts. |
| Tax | Singapore tax holidays worth $120.9m in FY2026, renewed to Dec 2032; UTPR Pillar Two tax of $94.5m expected for FY2027; OBBBA changes to GILTI and FDII. |
| Debt and interest rates | New factor on swaps converting $2.0bn of fixed rate notes to floating rates; debt may divert resources from dividends and buybacks. |
| AI and intellectual property | FY2026 10-K widens AI risk to customers and third parties; the Q1 FY27 10-Q adds misappropriation attempts by state actors, incl. through AI or machine learning. |
| Industry cyclicality | Demand factor now cites industry cyclicality, customer capital spending and AI related investment trends; backlog $12.57bn at 30 Jun 2026. |
How risk factors changed
- Comparison: 10-K FY2026 (year to 30 Jun 2026) filed 6 Aug 2026 acc 0000319201-26-000027 against 10-K FY2025 (year to 30 Jun 2025) filed 8 Aug 2025 acc 0000319201-25-000024.
- China share of revenue fell from 43% in FY2024 to 33% in FY2025 and 30% in FY2026, as disclosed in the export control factor
- Trade risk text now covers three new events: the September 2025 BIS Affiliates Rule, its one year suspension in November 2025 and the February 2026 Supreme Court IEEPA ruling
- AI language widened in the FY2026 10-K and again in the Q1 FY2027 10-Q, which adds AI assisted IP misappropriation
- Supply chain wording now names rare earth elements and DRAM chip shortages
- Summary list grew from 33 to 35 items with no items removed
Table 10.2 Size of the risk factor section
| Measure | 10-K FY2025 | 10-K FY2026 |
|---|---|---|
| Risk factors (count) | 33 | 35 |
Table 10.3 Risk factors added, removed and materially reworded
| Change | Risk factor | What changed |
|---|---|---|
| Added | Interest rate hedging and floating rates | New factor after KLA entered interest rate swaps in 2026 converting part of its fixed rate 2022 Senior Notes payments to floating rate. |
| Added | Legal, regulatory and tax environments (summary list) | Added to the risk summary list; a body factor on legal, regulatory and tax environments already existed in FY2025. |
| Reworded | Export controls, especially China | Heading now names export controls and sanctions; text adds the September 2025 BIS Affiliates Rule (suspended in November 2025 until November 2026), China revenue of 30% in FY2026 against 33% and 43%, and China bound shipments held by US Customs and Border Protection. |
| Reworded | Tariffs and refund uncertainty | Adds retaliatory measures and the February 2026 Supreme Court ruling that IEEPA tariffs were not authorized, creating uncertainty on refunds and future tariff authority. |
| Reworded | Group renamed | Group formerly titled Commercial, Operational, Financial and Regulatory Risks is now Macroeconomic, International Trade, Operational and Regulatory Risks. |
| Reworded | System failures and ERP | Adds ERP system implementation risk to system failure and information access risk. |
| Reworded | Cybersecurity | Adds operational disruption to the listed cyber incident effects. |
| Reworded | Catastrophic events | Adds climate related events alongside natural disasters, health crises, terrorism and war. |
| Reworded | Market exposures | Adds the market price of KLA common stock to foreign exchange, interest rate and portfolio exposures. |
| Reworded | Key personnel | Wording changed from attract, onboard and retain to attract, retain and motivate. |
| Reworded | Group renamed; demand drivers | Industry Risks renamed Industry and Technology Risks; demand factor now cites industry cyclicality, customer capital spending and AI related investment trends. |
| Reworded | AI | Widened from AI use by KLA and competitors to development, adoption, governance and use of AI by KLA, competitors, customers and third parties. |
| Reworded | Competition | Changed from competing with competitors' new products to competing successfully worldwide. |
| Reworded | Components and materials | Adds limited source suppliers, rare earth elements and DRAM chip shortages. |
| Reworded | Debt and capital returns | Leverage factor now says debt may divert resources from dividends and stock repurchases. |
| Reworded | Government funding | Broadened from R&D funding audits to termination, modification, repayment obligations and other restrictions on government funding. |
Showing 14 of 15 materially reworded factors.
Table 10.4 Risk factor updates in quarterly reports since the annual filing
| Filing | Change disclosed |
|---|---|
| 10-Q Q1 FY2027 (Sep 2026 quarter) filed 29 Oct 2026 | No material changes except an updated proprietary rights factor, which now cites attempts by internal or external parties, including state actors, to misappropriate KLA technology, including through AI or machine learning. |
11 Stock Price, Scenarios & Sensitivity
- KLAC traded at $160.24 on 2 Nov 2026, 47.9% below the 52 week intraday high of $307.37 (30 Jun 2026) and 49.9% above the low of $106.91 (Nov 2025). Prices are split adjusted.
- Price path in 2026: month end close $301.71 in June, $182.82 in July (down 39.4%), $145.61 on 23 Oct; $158.77 on 28 Oct before the release after the close, $167.43 on 29 Oct and $157.91 on 30 Oct.
- Valuation: 40.1x TTM GAAP EPS of $4.00 (39.1x on non GAAP EPS of $4.10); market value $208.8bn on 1.30bn shares; EV/Sales 14.5x TTM.
- Scenario model: revenue grows from FY2026 $13.58bn for three years to FY2029; operating margin as stated; other expense $55m a year as in FY2026; 15% tax rate; price equals FY2029 EPS times exit P/E.
Critical factors and core assumptions
Table 11.1 Critical factors behind the best case
| Factor | Current value | Best case requires | Evidence in filings and calls |
|---|---|---|---|
| Revenue growth after Q2 FY27 | Q1 FY27 +28.9%; Q2 FY27 guidance $4.7bn, +42.5% | 25% revenue CAGR from FY2026 to FY2029 | 8-K Ex 99.1, 28 Oct 2026 |
| Backlog conversion and supply | backlog $12.57bn (Jun 2026); purchase commitments $8.87bn | commitments convert into shipments on schedule | 10-K FY2026; 10-Q Q1 FY27 |
| China revenue | 34.5% of Q1 FY27 revenue; 29.8% of FY2026 | no further export restrictions after the Affiliates Rule suspension ends | 10-K FY2026 Item 1A |
| Gross margin | 61.9% GAAP, 62.7% non GAAP (Q1 FY27) | DRAM chip cost increases reverse after FY2027 | 10-K FY2026 Item 1A; 10-Q MD&A |
| Customer concentration | largest customer 21%, second 13% (Q1 FY27) | spending by the two largest customers continues | 10-Q Q1 FY27 |
| Services | $851m in Q1 FY27, +14.2%; 23.0% of FY2026 revenue | service growth near the FY2026 rate of 16.5% | 10-K FY2026; 10-Q Q1 FY27 |
- Revenue base FY2026 $13.58bn; operating income $5.66bn (41.7% margin); TTM Q1 FY27 revenue $14.51bn.
- Best case: 25% revenue CAGR, 47% operating margin, 35x P/E, share count (3%).
- Base case: 17% revenue CAGR, 44% margin, 28x P/E, share count (3%) from buybacks.
- Worst case: 5% revenue CAGR, 37% margin, 20x P/E, share count (1%).
- Tax rate 15% (Q1 FY27: 15.1%); other expense $55m a year; share count base 1.30bn (10-Q cover, 26 Oct 2026).
Scenarios, three years forward
Table 11.2 Scenario analysis, FY2026 to FY2029
| Measure | Worst case | Base case | Best case |
|---|---|---|---|
| Revenue CAGR, 3 years (%) | 5.0 | 17.0 | 25.0 |
| Revenue, FY2029 ($bn) | 15.7 | 21.7 | 26.5 |
| Operating margin, FY2029 (%) | 37.0 | 44.0 | 47.0 |
| Net income, FY2029 ($bn) | 4.9 | 8.1 | 10.5 |
| EPS, FY2029 ($) | 3.80 | 6.40 | 8.35 |
| Exit P/E (x) | 20.0 | 28.0 | 35.0 |
| Implied price ($) | 76 | 179 | 292 |
| Change against $160.24 (%) | (53) | 12 | 82 |
| Implied annual return (%) | (22.0) | 3.8 | 22.2 |
Implied annual return excludes dividends ($0.23 per share quarterly).
Sensitivity analysis
Table 11.3 Sensitivity of implied price to revenue CAGR and operating margin at 28x P/E
| Revenue CAGR \ Operating margin | 37% | 40% | 44% | 46% | 47% |
|---|---|---|---|---|---|
| 5% | $108 | $117 | $129 | $135 | $138 |
| 10% | $125 | $135 | $149 | $156 | $159 |
| 17% | $151 | $163 | $179 | $187 | $191 |
| 21% | $167 | $180 | $198 | $207 | $212 |
| 25% | $184 | $199 | $219 | $229 | $234 |
Cells show implied share price in year 3. Current price $160.24. Blue cells sit above it, red cells below.
Table 11.4 Sensitivity of implied price to exit P/E and operating margin at 17% revenue CAGR
| Exit P/E \ Operating margin | 37% | 40% | 44% | 46% | 47% |
|---|---|---|---|---|---|
| 20x | $108 | $116 | $128 | $134 | $137 |
| 24x | $129 | $140 | $154 | $161 | $164 |
| 28x | $151 | $163 | $179 | $187 | $191 |
| 32x | $172 | $186 | $205 | $214 | $219 |
| 35x | $188 | $203 | $224 | $234 | $239 |
Cells show implied share price in year 3. Current price $160.24. Blue cells sit above it, red cells below.
Disclaimer
This analysis is for information only and is not financial advice. It is derived from public SEC filings retrieved via sec-api.io and is not a publication of the U.S. Securities and Exchange Commission. Scenario values are model outputs under stated assumptions and are not forecasts. Data as of 2 November 2026.
Sources
All company figures are read from SEC filings retrieved through the sec-api.io MCP server. Management statements come from the earnings releases and other exhibits to the Forms 8-K; earnings call statements are used only where a filing or company release repeats them.
Table A.1 Filings used, with accession numbers
| Form | Period | Filed | Accession number |
|---|---|---|---|
| 10-Q | Q1 FY27 | 29 Oct 2026 | 0000319201-26-000034 |
| 8-K | Q1 FY27 results | 28 Oct 2026 | 0000319201-26-000032 |
| DEF 14A | 2026 annual meeting | 22 Sep 2026 | 0001193125-26-397898 |
| 10-K | FY2026 | 6 Aug 2026 | 0000319201-26-000027 |
| 8-K | Q4 FY26 results | 28 Jul 2026 | 0000319201-26-000024 |
| 10-Q | Q3 FY26 | 29 Apr 2026 | 0000319201-26-000016 |
| 8-K | Q3 FY26 results | 29 Apr 2026 | 0000319201-26-000014 |
| 10-Q | Q2 FY26 | 30 Jan 2026 | 0000319201-26-000008 |
| 8-K | Q2 FY26 results | 29 Jan 2026 | 0000319201-26-000006 |
| 10-Q | Q1 FY26 | 31 Oct 2025 | 0000319201-25-000034 |
| 10-K | FY2025 | 8 Aug 2025 | 0000319201-25-000024 |
| 8-K | Q4 FY25 results | 31 Jul 2025 | 0000319201-25-000020 |
| 10-K | FY2024 | 5 Aug 2024 | 0000319201-24-000021 |
| 10-K | FY2023 | 4 Aug 2023 | 0000319201-23-000031 |
| 8-K | 2025 annual meeting | 7 Nov 2025 | 0001193125-25-272448 |
| 8-K | Investor Day, buyback, dividend | 12 Mar 2026 | 0001193125-26-102999 |
| 8-K | Stock split | 7 May 2026 | 0001193125-26-212093 |
Table A.2 Peer filings used
| Company | Form | Filed | Accession number |
|---|---|---|---|
| Lam Research | 10-Q | 22 Oct 2026 | 0000707549-26-000054 |
| Lam Research | 10-K | 7 Aug 2026 | 0000707549-26-000037 |
| Applied Materials | 10-Q | 20 Aug 2026 | 0001628280-26-058235 |
| Applied Materials | 10-K | 12 Dec 2025 | 0001628280-25-056742 |
| ASML Holding | 6-K | 14 Oct 2026 | 0001628280-26-065813 |
| Teradyne | 10-Q | 31 Jul 2026 | 0001193125-26-327715 |
| Teradyne | 10-K | 19 Feb 2026 | 0001193125-26-059002 |
Table B.1 Exhibits to Forms 8-K filed in the last twelve months
| Filed | Exhibit | Document | Content |
|---|---|---|---|
| 7 Nov 2025 | 8-K Items 5.03/5.07/8.01 and EX-3.1 | Bylaw amendments, 2025 annual meeting votes, dividend | Board adopted amended bylaws on 6 Nov 2025 tightening disclosure rules for shareholder nominations and proposals (EX-3.1); Annual meeting 5 Nov 2025: 89.64% of 131.7m pre split shares present; all ten directors elected, Robert Calderoni lowest at 100.6m for and 9.4m against (pre split votes) |
| 7 Nov 2025 | EX-99.1 | Quarterly dividend $1.90 pre split | Dividend of $1.90 per share pre split ($0.19 post split) payable 2 Dec 2025 to holders of record 17 Nov 2025 |
| 29 Jan 2026 | EX-99.1 | Q2 FY2026 results (Dec 2025 quarter) | Revenue $3.297bn against $3.077bn a year earlier (+7.1%), above the $3.225bn guidance midpoint; GAAP net income $1.146bn, diluted EPS $8.68 pre split ($0.87 post split); non GAAP EPS $8.85 pre split ($0.89 post split) |
| 5 Feb 2026 | EX-99.1 | Quarterly dividend $1.90 pre split | Dividend of $1.90 per share pre split ($0.19 post split) payable 3 Mar 2026 to holders of record 17 Feb 2026 |
| 12 Mar 2026 | 8-K Item 8.01 | Dividend raised 21% to $2.30 pre split; new $7bn buyback | Quarterly dividend level raised to $2.30 from $1.90 pre split ($0.23 from $0.19 post split, +21%) from the May 2026 declaration; New $7bn share repurchase authorization on top of the April 2025 $5bn program, which had $3.94bn left at 31 Dec 2025 |
| 29 Apr 2026 | EX-99.1 | Q3 FY2026 results (Mar 2026 quarter) | Revenue $3.415bn against $3.063bn a year earlier (+11.5%); GAAP net income $1.201bn, diluted EPS $9.12 pre split ($0.91 post split); non GAAP EPS $9.40 pre split ($0.94) |
| 7 May 2026 | EX-99.1 | Ten for one stock split and $2.30 pre split dividend | Ten for one forward split for holders of record 4 Jun 2026; split adjusted trading from 12 Jun 2026; Dividend of $2.30 per share pre split ($0.23 post split) payable 2 Jun 2026; August 2026 dividend expected at $0.23 post split |
| 12 Jun 2026 | EX-3.1 / EX-3.2 | Charter amendment for stock split | Charter amendment effective 11:59 p.m. ET on 11 Jun 2026 effects the split and raises authorized shares from 500m to 5bn (EX-3.1); Restated Certificate of Incorporation filed as EX-3.2 |
| 28 Jul 2026 | EX-99.1 | Q4 and FY2026 results (Jun 2026 quarter) | Q4 FY2026 revenue $3.658bn against $3.175bn a year earlier (+15.2%); GAAP EPS $1.04 post split; FY2026 revenue $13.58bn, GAAP net income $4.83bn, diluted EPS $3.66 |
| 6 Aug 2026 | EX-99.1 | Quarterly dividend $0.23 post split | Dividend of $0.23 per share payable 1 Sep 2026 to holders of record 17 Aug 2026 (equal to $2.30 pre split) |
| 28 Oct 2026 | EX-99.1 | Q1 FY2027 results (Sep 2026 quarter) | Revenue $4.136bn against $3.210bn a year earlier (+28.9%) and $3.658bn the prior quarter; GAAP net income $1.549bn, diluted EPS $1.18; non GAAP EPS $1.22 |
