KLA reported second-quarter non-GAAP earnings of $8.85 per share and GAAP earnings of $8.68 per share, both above the midpoints of its guidance ranges. Revenue totaled $3.30 billion, up 7% year-over-year and slightly above the midpoint of the guidance range of $3.225 billion ± $150 million. Cash flow from operating activities reached $1.37 billion for the quarter and $4.77 billion over the trailing twelve months, while free cash flow was $1.26 billion for the quarter and $4.38 billion for the last year. Capital returns included $797.4 million in dividends and share repurchases for the quarter and $3.01 billion for the last twelve months.

For the third quarter, management projects revenue of $3.35 billion ± $150 million, GAAP diluted EPS of $8.85 ± $0.78 and non-GAAP diluted EPS of $9.08 ± $0.78. Gross margin on a non-GAAP basis is expected to be approximately 61.75% ± 1.00%. Despite the beat and raised outlook, shares tumbled around 11.5% in trading as investors weighed the projections against high prior-year comparisons and the bar set by a 140% gain over the past twelve months.

Goldman Sachs maintained a Neutral rating, with an increased price target from $1,280 to $1,450, noting KLA’s leading process-control portfolio and long-term share gains in foundry, logic, memory and advanced packaging. The analyst highlighted that near-term industry spending is tilted toward memory (DRAM) rather than process control, and described the stock as carrying a relatively full valuation at current levels. Expectations for China revenue contributing a mid-to-high 20% share in calendar 2026 and moderate revenue growth early next year were also underscored as key factors for the stock’s performance.