Earnings Call Intelligence Subscribe
Home › Call Sheets › KLAC › Q1'26
Call sheet · Q1'26

KLA (KLAC)

Q1'26 earnings call · held 2025-10-29 · compared with the Q4'25 call · management-credibility review
10/12
Disclosure score
1 medium, 5 low flags
Financial quality
Bottom line
The sleeper story is advanced packaging becoming a legitimate growth driver outside traditional WFE, hitting 6% intensity vs 1% just years ago with KLA gaining share in an $11B addressable market. While everyone focuses on China export headwinds ($300-350M impact), the real constraint is customers securing process control capacity ahead of 2026 broadening. Rick Wallace: 'customers are pretty strong in terms of wanting to make sure they're securing slots...worried that they may not be able to achieve their objectives if they don't line us up.' My view changes if advanced packaging growth stalls below 20% or if 2026 first half guidance comes in below flat when they report December results.

The 30-second version

  • Advanced packaging quietly becoming KLA's new WFE story
  • China export controls bite harder than expected
  • DRAM process control intensity hits inflection point

What changed this quarter

MetricQ4'25Q1'26Change
Revenue$3.175B Q4 (+24% YoY)$3.21B Q1 (+26% YoY)+$35M sequential beat vs guidance
Non-GAAP EPS$9.38 Q4$8.81 Q1-$0.57 sequential, still beat guidance
Gross Margin63.2% Q462.5% Q1-70bps but 50bps above guidance
Operating Cash Flow$1.16B Q4$1.16B Q1Flat at record levels
Free Cash Flow$1.065B Q4$1.066B Q1New record, 31% margin
Services Revenue$703M Q4 (+14% YoY)$745M Q1 (+16% YoY)+$42M sequential acceleration
Advanced Packaging Revenue$850M 2025E$925M 2025E+$75M raise, 70% YoY growth
China Revenue Mix39% Sept quarterHigh-20s Dec guidanceSharp 10+ point sequential decline
Foundry/Logic Mix75% Q459% Q1E-16 points, offset by memory strength
Memory Mix25% Q441% Q1E+16 points, DRAM at 78%

Accountability tracked

8 new promises made4 narrative shifts flagged6 prior promises scored
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
Read the full KLAC Q1'26 report Subscribe
About Research ↗Call SheetsCredibility IndexMissed PromisesScreens13F BooksData & InstitutionalPrivacyTermsSubscribe
This is a free preview. The full write-up and promise ledger are published to subscribers on Substack.
Scores, kept-promise rates, and flags on this site reflect the author's opinion, applying a stated methodology to statements management made on public earnings calls. Informational and educational purposes only - not investment advice, a recommendation, or an offer to buy or sell any security. Sources believed reliable but not guaranteed; the author may hold positions in the securities discussed.

Follow what management promises next

Get free previews of our earnings-call research: the key changes, management scores, and questions worth investigating. Subscribe for full call sheets and deeper analysis.

Subscriptions are managed by Substack. If the form does not load, subscribe directly. Or follow the RSS feed.