Semiconductor manufacturing equipment maker KLA Corporation (NASDAQ: KLAC) reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 15.2% year on year to $3.66 billion. Guidance for next quarter’s revenue was better than expected at $4 billion at the midpoint, 1.2% above analysts’ estimates. Its non-GAAP profit of $1.05 per share was 5.1% above analysts’ consensus estimates.
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KLA Corporation (KLAC) Q2 CY2026 Highlights:
- Revenue: $3.66 billion vs analyst estimates of $3.61 billion (15.2% year-on-year growth, 1.3% beat)
- Adjusted EPS: $1.05 vs analyst estimates of $1.00 (5.1% beat)
- Revenue Guidance for Q3 CY2026 is $4 billion at the midpoint, above analyst estimates of $3.95 billion
- Adjusted EPS guidance for Q3 CY2026 is $1.16 at the midpoint, above analyst estimates of $1.13
- Operating Margin: 42.5%, in line with the same quarter last year
- Free Cash Flow Margin: 22.3%, down from 33.5% in the same quarter last year
- Inventory Days Outstanding: 235, in line with the previous quarter
- Market Capitalization: $265.6 billion
"KLA's June quarter results reinforce that the trends driving our growth are strengthening, and we see momentum across our business accelerating in the second half of calendar 2026 and continuing through 2027," said Rick Wallace, president and CEO of KLA Corporation.
Company Overview
Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, KLA Corporation’s sales grew at an impressive 14.4% compounded annual growth rate over the last five years. Its growth surpassed the average semiconductor company and shows its offerings resonate with customers, a great starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions (which can sometimes offer opportune times to buy).
Long-term growth is the most important, but short-term results matter for semiconductors because the rapid pace of technological innovation (Moore’s Law) could make yesterday’s hit product obsolete today. KLA Corporation’s annualized revenue growth of 17.6% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, KLA Corporation reported year-on-year revenue growth of 15.2%, and its $3.66 billion of revenue exceeded Wall Street’s estimates by 1.3%. Beyond the beat, this marks 9 straight quarters of growth, showing that the current upcycle has had a good run - a typical upcycle usually lasts 8-10 quarters. Company management is currently guiding for a 24.6% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 28% over the next 12 months, an improvement versus the last two years. This projection is above average for the sector and suggests its newer products and services will fuel better top-line performance.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’s capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, KLA Corporation’s DIO came in at 235, which is one day below its five-year average. At the moment, these numbers show no indication of an unusual inventory buildup.
Key Takeaways from KLA Corporation’s Q2 Results
We enjoyed seeing KLA Corporation beat analysts’ operating income expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. Investors were likely hoping for more amid skittishness around the entire sector, and shares traded down 10.1% to $175.98 immediately following the results.
So do we think KLA Corporation is an attractive buy at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
