KLA’s Form 10-Q, filed on October 29, confirms the strongest quarter in the company’s history. Revenue for the three months ended September 30, 2026 was 4,136 million dollars, up from 3,210 million dollars a year earlier, split between product revenue of 3,285 million dollars and service revenue of 851 million dollars, the latter up 14 percent on a growing installed base. Net income was 1,549 million dollars, or 1.18 dollars per diluted share, against 1,121 million dollars and 0.85 dollars a year earlier. Non-GAAP diluted earnings were 1.22 dollars per share.
The quality of the quarter is in the margins and the cash. Operating margin passed 46 percent for the first time, gross margin was 62.7 percent on the company’s non-GAAP presentation, operating cash flow was 1.53 billion dollars and free cash flow 1.34 billion dollars, of which 1.24 billion dollars was returned to shareholders in the quarter.
Guidance is the forward signal. KLA expects December quarter revenue of about 4.7 billion dollars, plus or minus 200 million dollars, roughly 14 percent above the September quarter at the midpoint, and management said advanced packaging process control revenue remains on track for about 1.1 billion dollars in calendar 2026, growth of more than 70 percent, nearly twice the growth rate of the advanced packaging market itself.
Process control is the least discretionary layer of fab spending: chips cannot ship at yield without inspection, and each new node and packaging step raises the number of inspection points. A record quarter and a step up guide from KLA, in the same week Intel quantified a supply shock and Samsung reported record memory profit, says equipment demand tied to AI capacity is still accelerating rather than plateauing.