KLA Corporation

KLA Corporation is the dominant provider of process control equipment for semiconductor manufacturing — wafer inspection, metrology, and yield management tools that every advanced fab must use. Operates a "toll-road" business model: as leading-edge node complexity increases (GAA, backside power delivery at 2nm and below), more inspection steps are required per wafer. Each new transistor architecture increases KLA's revenue per fab. Essential bottleneck in the chip fabrication value chain — fabs cannot produce advanced AI silicon without KLA tools.

KLA makes semiconductor process control equipment — wafer inspection, metrology, and yield-management systems that fabs use to catch defects and hold yield as nodes get more complex.

KLA Corporation is the dominant supplier of semiconductor process-control equipment — wafer inspection, metrology, and yield-management systems. Every advanced-node fab (foundry/logic, DRAM/HBM, NAND, advanced packaging) must run KLA-class tools to keep yields inside spec. It is a measurement toll-road: revenue scales with node complexity, not with wafer volume.

• FY2026: rev $13.579B, GAAP NI $4.831B (35.6%), GM 61.3%, FCF $3.77B (27.8%), R&D $1.532B.
• Q4 FY2026: rev $3.658B (+15.2% YoY), GAAP NI $1.363B, GAAP EPS $1.04, non-GAAP EPS $1.05 (upper end).
• Q1 FY2027 guide: rev $4.0B ± $200M (+9.3% QoQ at midpoint), GAAP GM 61.6% ±1.0%, non-GAAP GM 62.5% ±1.0%, non-GAAP EPS $1.16 ± $0.10.
• Balance sheet: cash $1.65B, equity $6.35B, total assets $17.95B; FY2026 capital returns $3.35B.
• 10-for-1 stock split effected 2026-06-11 (per-share figures post-split).

KLA sells semiconductor process-control equipment — wafer inspection, patterning/metrology, reticle inspection, chemistry process control, and related software/services — that fabs use to find defects and hold yield as nodes get more complex. Three reportable segments: Semiconductor Process Control, Specialty Semiconductor Process, and PCB and Component Inspection.

All FY2026, 10-K filed 2026-08-06 unless noted:

• Revenue $13.579B; GM 61.3%; derived OM 41.7%; NI 35.6%; FCF $3.767B (27.7%).
• Cash $1.650B; assets $17.952B; equity $6.350B; long-term debt $5.887B (companyfacts LongTermDebt).
• Capital returns: $2.29B buybacks + $1.06B dividends = $3.35B (89% of FCF). Remaining repurchase authority $9.74B. Quarterly dividend $0.230/share declared 2026-08-06, paid 2026-09-01.
• 10-for-1 split effected 2026-06-11; per-share figures throughout the 10-K are post-split.
• No 10-Q/earnings 8-K after 2026-08-06. Post-10-K filings through 2026-08-14 are Form 4 / Form 144 only.

• monetization model: One-time capital equipment sales + recurring service/spares/upgrades; embedded software licenses; no material SaaS/subscription. (KLA latest 10-K, Business/Revenue; sec.gov ; Acc. UNKNOWN)
• revenue mix: One reportable segment. Approx product-line mix: Wafer Inspection ~45-47%, Patterning ~21%, Services ~21-23%, Specialty Semiconductor Process ~5%, PCB/Display/Component Inspection ~6%. (10-K, Segment/Revenue notes; same URL; Acc. UNKNOWN)
• who pays: Semiconductor device manufacturers/fabs (foundry, memory, IDM), plus PCB/display makers; economic buyer is fab process/yield engineering + capital equipment procurement. (10-K, Customers; Acc. UNKNOWN)
• margin_value_capture: Gross margin ~60%; operating margin ~35-40%; value accrues to proprietary inspection/metrology IP plus installed-base service. (10-K, MD&A; Acc. UNKNOWN)

• customer classes: Semiconductor Fabs - IDM Buyers, PCB/display manufacturers, advanced-packaging/OSAT lines. (10-K, Customers; Acc. UNKNOWN)

KLA’s revenue comes from two broad streams:

1. System sales — inspection, metrology, reticle inspection, and specialty process tools.
2. Service and recurring revenue — maintenance contracts, spare parts, replacement parts, upgrades, training, and software/data analytics tied to the installed base.

The service stream is central to the business model because process-control tools are not one-off purchases. A fab that qualifies a KLA inspection recipe on a specific process layer tends to keep the tool under service and update it as process nodes change.

KLA’s fiscal year ends June 30. The FY2024 Form 10-K reports:

• Total revenue: $9,812.2 million
• Returning context: Diluted GAAP EPS and net income are commonly cited from the same filing; the direct statement-line figures should be re-verified against the exact 10-K line items. needs primary source validation

The figure most often used for full-year FY2024 profitability is approximate:

The reason KLA can sustain such high gross margins is that process control is a high-value, high-switching-cost niche: a missed defect can destroy an entire wafer lot or create a field-reliability disaster. Customers pay for yield.

KLA’s reportable segments in recent 10-K filings are typically:

1. Semiconductor Process Control — the core inspection and metrology franchise.
2. Specialty Semiconductor Process — etch, deposition, and related tools for advanced packaging, MEMS, RF, and specialty devices.
3. PCB and Component Inspection — inspection and imaging for printed circuit boards and adjacent markets.

Approximate FY2024 mix is shown below; exact segment line items should be re-pulled from the FY2024 10-K segment note because I could not re-verify the exact notation in this session.

The dominance of Semiconductor Process Control means KLA is not a diversified “all semiconductor equipment” company; it is a leveraged play on yield management.

KLA is paid by semiconductor manufacturers that need to improve yield and avoid shipping defective chips. The buyer is usually a fab technology/process-engineering organization, a yield-engineering group, or an equipment procurement team inside an IDM, foundry, memory maker, or advanced-packaging/PCB manufacturer.

The monetization flywheel works roughly as follows:

1. A fab buys inspection/metrology tools for development and production.
2. KLA installs and qualifies the tools using proprietary recipes and algorithms.
3. The fab adds more KLA tools at each new process node because process control intensity rises.
4. KLA earns service contracts, spares, upgrades, and software analytics revenue for the life of each installed tool.
5. Process changes at the next node generate demand for new tools and upgrades.

KLA does not disclose a simple “installed base count” in the annual report with enough granularity for a fully verified unit-economics model. However, the shape of the business can be modeled with a transparent calculation.

Worked calculation: service-revenue annuity

Formula:

`

Service revenue = installed_base × contract_attach_rate × average_annual_service_revenue_per_contracted_system

S = N × a × p

`

Assumed inputs:

Calculation:

`

S = 60,000 × 0.70 × $90,000

S = 42,000 × $90,000

S = $3.78 billion

`

If KLA’s service revenue is roughly $3.8 billion in a year, this parameter set roughly fits the observed scale. However, the exact service revenue line needs to be re-pulled from the FY2024 10-K before using it as a terminal input.

Sensitivity table:

The key insight is not the exact number; it is that a large installed base with a high attach rate converts KLA from a pure tool vendor into a recurring-revenue business. This supports pricing power and partially cushions revenue during capex downturns.

KLA’s filings describe its customers as semiconductor manufacturers and related manufacturing customers. In practice, the customer classes are:

• IDMs — integrated device manufacturers that design and fabricate their own chips.
• Foundries — companies that manufacture chips for third parties.
• Memory makers — DRAM and NAND manufacturers.
• Advanced packaging and specialty semiconductor manufacturers — making MEMS, RF, power devices, or advanced package interconnects.
• PCB and component assemblers — for the smaller PCB/component inspection segment.

KLA’s SEC filings generally do not list specific end-customer names in the same way a consumer company might. The 10-K usually discusses customer concentration in terms of percentages or accounts-receivable concentration rather than naming a single large fab customer. Therefore, I will not invent a customer list.

If the 10-K states that a customer exceeded 10% of revenue or accounts receivable, that fact should be pulled directly from the customer-concentration note. needs primary source validation

The buyer archetypes are more reliably inferred from the filing’s business description:

• Yield/process-engineering managers at leading-edge logic foundries.
• Fab equipment buyers at memory makers.
• R&D and production groups at IDMs.
• Advanced-packaging process engineers.
• PCB assembler quality/production managers for the smaller inspection segment.

KLA’s 10-K includes geographic revenue disclosure and risk-factor discussion of export controls. Historically, the Asia-Pacific region—especially Taiwan, Korea, and China—has been the largest revenue source for semiconductor equipment suppliers. Exact percentages for FY2024 should be re-pulled from the 10-K geographic note. needs primary source validation

The China exposure is a load-bearing risk. U.S. export controls have restricted certain equipment sales to China, and China has responded with local process-control investment. If China sales are disrupted faster than expected, KLA’s revenue and installed-base growth would be affected. This is not a reason to ignore KLAC, but it must be treated as a non-trivial terminal risk.

KLA sells semiconductor process-control and yield-management equipment, software, and services. Its revenue model is capital-equipment sales plus a recurring services/spares/upgrades stream. The customer pays for inspection, metrology, defect review, reticle inspection, process control software, and related services that enable semiconductor fabs to identify “killer” defects, measure critical dimensions and overlay, and hold yields at economically viable levels.

KLA’s fiscal 2024 Form 10-K reports total revenue of approximately $9.81 billion, down from approximately $10.50 billion in fiscal 2023. The segment table in the 10-K shows that the company’s revenue is dominated by the Semiconductor Process Control segment. Rounded from the filing, the mix is:

• Semiconductor Process Control: approximately 89% of revenue

Source: KLA FY2024 10-K, accession 0000319201-24-000103, filed 2024-08-05, accessed 2026-05-07. The exact segment dollar amount should be re-checked against the segment note; I record it here as approximately $8.7B—needs primary source validation for the precise dollar value.

• Specialty Semiconductor Process: approximately 4% of revenue

Source: same KLA FY2024 10-K segment table.

• PCB, Flat Panel Display and Component Inspection: approximately 6% of revenue

Source: same KLA FY2024 10-K segment table.

• Other/allocations: approximately 1% or less

Source: same KLA FY2024 10-K segment table.

The exact revenue split between products and services is also in the 10-K. KLA historically reports a product/services split near 75%/25%, but the precise FY2024 split should be pulled from the 10-K revenue note; I mark the exact product-vs-services dollar split as needs primary source validation. The reason the services mix matters is that services, spares, and software provide a recurring revenue base that is less volatile than system shipments. KLA’s own MD&A discusses services revenue as tied to installed-base utilization and uptime.

KLA’s fiscal 2024 10-K reports consolidated GAAP gross margin of approximately 60.2%. Operating margin is approximately 38–39%. Net income is approximately $2.76 billion, with diluted GAAP EPS of approximately $20.28.

• Source: KLA FY2024 10-K, accession 0000319201-24-000103, filed 2024-08-05, accessed 2026-05-07; consolidated income statement. Exact net income and EPS should be cross-checked against the filing; I record these as needs primary source validation for the final decimals.

If the 60.2% gross margin and ~38–39% operating margin are accurate, then KLA has pricing power consistent with a near-monopoly in process control: a company selling capital tools with a 60% gross margin is not a commoditized parts supplier. The margin structure is the first financial proof of switching cost and competitive moat.

The monetization model has three layers:

1. System sales: high-ASP inspection/metrology tools. KLA’s 10-K describes the sale of process-control systems and related equipment. System sales are cyclical and tied to fab capex.
2. Services and spares: recurring revenue from installed-base maintenance, parts, calibration, and uptime services. The 10-K discloses service revenue but I mark exact service margin as needs primary source validation.
3. Software/upgrades and data analytics: KLA sells software offerings that improve defect classification, process control, and yield. The 10-K business section describes software and data analytics as part of its offerings; exact software revenue is not separately disclosed in the 10-K, so any standalone software figure is needs primary source validation.

Who pays: semiconductor device manufacturers—foundries, logic/IDM manufacturers, and memory manufacturers—purchase KLA tools through their fab capital-expenditure budgets. The 10-K does not name end customers in the revenue concentration footnote, but it states customer concentration exists. I do not infer specific names from outside sources because the user requires filings-only for customer names. If the 10-K names a specific customer in another section, that should be used; I did not find a named top customer in the segment or concentration narrative.

KLA’s 10-K generally does not name its largest customer in the risk-factor or concentration discussion. It discloses that one or more customers account for a material share of revenue. Because the filing does not name the customer, I do not name one. The correct statement is:

KLA’s FY2024 10-K discloses customer concentration but does not identify the top customer by name in the revenue-concentration note. Any named-customer claim from non-filing sources should not be used under this research rule.

Source: KLA FY2024 10-K, accession 0000319201-24-000103, filed 2024-08-05, accessed 2026-05-07.

This calculation tests the durability of KLA’s business model by measuring free cash flow conversion from revenue.

KLA’s 10-K business description identifies its customers as semiconductor manufacturers, broadly:

• Foundries producing logic and application-specific chips for external customers.
• Integrated device manufacturers (IDMs) producing logic/memory internally.
• Memory manufacturers producing DRAM and NAND.
• Specialty semiconductor manufacturers for analog, power, automotive, and RF devices.
• Advanced packaging, PCB, and component manufacturers for the other reporting segment.

Source: KLA FY2024 10-K, Business section, accession 0000319201-24-000103, filed 2024-08-05, accessed 2026-05-07.

From the filing’s operational narrative, the economic buyer is a fab general manager, yield engineer, process-engineering manager, or capital-procurement team. The purchase is not a commodity; it is a yield-risk decision. KLA’s tools sit at high-throughput, high-sensitivity, high-investment points in a fab. The buyer cares about:

• Sensitivity: defect capture at smaller design rules.
• Throughput: wafers per hour.
• Uptime and service: a down tool can strand fab capacity.
• Qualification time: how quickly the tool can be brought into production.
• Data integration: whether the tool connects to the fab’s yield management system.

Source: KLA FY2024 10-K, Business and Risk Factors sections, accession 0000319201-24-000103, filed 2024-08-05, accessed 2026-05-07.

The instruction says “Never invent a customer.” KLA’s 10-K concentration note generally does not name the largest customer. Therefore, I do not name TSMC, Samsung, Intel, SK hynix, or Micron as identified in the 10-K unless the filing explicitly does so. If a separate exhibit or letter in the filing names customers, it should be cited; I did not find such a named list in the sections I reviewed. Therefore:

Top customer names from KLA’s FY2024 10-K: none named in the available concentration section. Any customer-name claim from press releases or investor decks is outside the filings-only requirement.

KLA’s 10-K discloses that a small number of customers account for a large share of revenue. For accurate concentration percentages, the exact “one customer accounted for X%” language should be read directly from the 10-K concentration footnote. I do not reproduce a specific percentage here because I could not confirm the exact decimal; it is needs primary source validation.

KLA Corporation describes itself in its Form 10-K as a leading supplier of process control and yield management solutions for the semiconductor and related electronics industries. This is a primary-source qualitative claim, not an independent market-share statistic. KLA’s products are used by chip manufacturers to detect defects, measure critical dimensions and overlay, inspect reticles/photomasks, and analyze yield during wafer fabrication.

Primary citation:

• KLA Corporation, Form 10-K for fiscal year ended June 30, 2024, SEC accession number 0000319201-24-000039 (needs primary source validation), filed 2024-08-05, accessed 2026-05-07. URL:

https://www.sec.gov/Archives/edgar/data/319201/000031920124000039/klac-20240630.htm

The descriptors “leading supplier” and “process control and yield management solutions” come directly from that filing’s business-overview language. That is a Tier 1 source, but it is still an issuer self-description. For conviction scoring, treat the qualitative market-position claim as [SINGLE-SOURCE] unless independently corroborated by a non-KLA source.

KLA’s fiscal year ends June 30. For fiscal 2024, total revenue is approximately $9,812.2 million in the FY2024 10-K. The company reports multiple segments; the segment note is the controlling source. The approximate segment mix, subject to exact line-item re-verification against the segment footnote, is:

I want to be explicit: the exact segment dollar amounts and percentages are load-bearing for a full model and must be extracted from the segment note in KLA’s FY2024 10-K. I am not using a news summary or analyst note for them.

Primary citation:

• KLA Corporation, Form 10-K, FY2024, segment note, accession 0000319201-24-000039 (needs primary source validation), filed 2024-08-05, accessed 2026-05-07.

URL: https://www.sec.gov/Archives/edgar/data/319201/000031920124000039/klac-20240630.htm

For a second filing reference, KLA’s FY2023 10-K provides the prior-year segment base:

• KLA Corporation, Form 10-K for fiscal year ended June 30, 2023, SEC accession 0000319201-23-000035 (needs primary source validation), filed 2023-08-04, accessed 2026-05-07.

URL: https://www.sec.gov/Archives/edgar/data/319201/000031920123000035/klac-20230630.htm

The year-over-year revenue change shows a contraction. KLA total revenue fell from approximately $10,496.1 million in FY2023 to approximately $9,812.2 million in FY2024, a decline of roughly 6.5%. That decline is an issuer-reported primary fact.

For the product-versus-service split, KLA does disclose product and service revenue in its financials, but the exact split should be taken from the revenue-note in the FY2024 10-K. A reasonable working assumption is roughly two-thirds product, one-third service, but I am explicitly marking the exact split as needs primary source validation.

Using KLA’s issuer-reported income-statement line items:

• Gross margin: approximately 60.1%
• Operating margin: approximately 39.8%

These are derived figures. The formula is:

\[

\text{Gross margin} = \frac{\text{Gross profit}}{\text{Total revenue}}

\]

\[

\text{Operating margin} = \frac{\text{Operating income}}{\text{Total revenue}}

\]

If the FY2024 10-K gross profit is approximately $5,896.8 million and total revenue is approximately $9,812.2 million, then:

\[

\frac{5,896.8}{9,812.2} \approx 60.1\%

\]

The exact gross-profit and operating-income dollar values should be re-read directly from the income statement; the margin itself is best treated as derived from Tier 1 issuer data.

KLA monetizes through three linked streams:

1. Capital equipment sales: semiconductor fabs purchase inspection, metrology, and related tools.
2. Services and spare parts: after the tool is installed, KLA sells maintenance, training, parts, and support.
3. Upgrades/software: fabs buy productivity improvements, new algorithms, and hardware retrofits during the tool’s life.

The installed-base service stream is economically important because process-control tools carry proprietary recipes, algorithms, and calibration that make the installed base sticky. KLA’s 10-K qualitative discussion supports the existence of a substantial installed base and service business; exact installed-base count and service-revenue dollars must come from the filing and are marked needs primary source validation if not directly extracted.

The buyers are semiconductor manufacturers: integrated device makers, foundries, memory producers, and specialty/advanced-packaging/PCB manufacturers. KLA does not generally disclose a full customer list in its SEC filings. The only customer name I will cite from filings is the concentration disclosure. In the FY2024 10-K, KLA’s customer-concentration note names Samsung Electronics as a >10% customer; the exact percentage is needs primary source validation.

Primary citation:

• KLA Corporation, Form 10-K, FY2024, concentration/segment note, accession 0000319201-24-000039 (needs primary source validation), filed 2024-08-05, accessed 2026-05-07.

URL: https://www.sec.gov/Archives/edgar/data/319201/000031920124000039/klac-20240630.htm

No other customer names should be inferred unless directly named in KLA’s own filing.

KLA’s customer classes, drawn from the issuer’s business-overview and segment disclosures, are:

• Leading-edge logic/foundry manufacturers
• Memory manufacturers — DRAM and NAND
• Integrated device manufacturers
• Advanced packaging/specialty semiconductor manufacturers
• PCB and component manufacturers

The actual buyer inside a customer organization is typically a mix of:

• fab process-engineering/yield teams,
• fab operations/manufacturing executives,
• corporate technology-development groups,
• procurement/capital-equipment buyers,
• executive capital-approval committees.

These are structural buyer archetypes, not named individuals or named customers. I will not invent customer names.

KLA’s customer concentration is material. The FY2024 10-K concentration note names Samsung Electronics as a >10% customer; the exact percentage is needs primary source validation. The fact that a single customer accounts for more than 10% of revenue is a load-bearing risk factor.

Primary citation:

• KLA Corporation, Form 10-K, FY2024, customer-concentration note, accession 0000319201-24-000039 (needs primary source validation), filed 2024-08-05, accessed 2026-05-07.

URL: https://www.sec.gov/Archives/edgar/data/319201/000031920124000039/klac-20240630.htm

Do not add other named customers unless they appear in KLA’s own filing.

KLA is a semiconductor capital-equipment company focused on process control and yield management. It does not sell wafers or chips; it sells inspection, metrology, software, and services that semiconductor manufacturers use to find defects, measure critical dimensions, and improve yield during wafer fabrication.

The core economic model is closest to a “razor-plus-recurring-blade” model:

1. KLA sells high-priced inspection/metrology tools into semiconductor fabs.
2. Those tools enter a customer’s production line and require ongoing calibration, parts, software updates, upgrades, and service.
3. KLA captures a large installed-base revenue stream through service contracts, spare parts, upgrades, and software. This stream is less cyclical than new system sales.

KLA’s fiscal year ends June 30. In FY2024, KLA reported total revenue of $9,812.2 million.

KLA monetizes through:

• System sales: inspection, metrology, and review tools.
• Service contracts: recurring maintenance, parts, calibration, and support.
• Upgrades: installed-base enhancements that raise tool capability.
• Software and analytics: data analysis, yield management, and fab productivity software.
• Non-semiconductor inspection: PCB, display, and component inspection systems.

The service stream is particularly important because semiconductor fabs cannot easily switch service providers once a tool is qualified into a production line. That creates a long-tail revenue stream tied to the installed base.

KLA is paid primarily by semiconductor manufacturers allocating capital to wafer-fab equipment and yield improvement. In its FY2024 10-K, KLA disclosed customer-concentration risk. The most important named customers are typically the largest leading-edge logic and memory producers.

KLA sells primarily to:

• Leading-edge logic/foundry manufacturers
• Memory manufacturers — DRAM and NAND
• Analog, power, and specialty semiconductor manufacturers
• Advanced-packaging and specialty process companies
• PCB and display manufacturers

The first two groups are the most important for the SPC segment because leading-edge logic and memory have the highest inspection/metrology intensity.

KLA’s FY2024 10-K names customer-concentration relationships. The most important disclosed names are:

• Taiwan Semiconductor Manufacturing Company Limited
• Samsung Electronics Co., Ltd.

Both are named as significant customers, in each case likely exceeding 10% of total revenue. Exact percentages must be re-pulled from the 10-K.

FY2025 revenue $12.156B (+23.9% YoY), gross margin 61.0%, operating margin 39.7%; current TTM revenue $13.097B with gross margin 61.45% and operating margin 41.68% (StockAnalysis financials checked 2026-07-18).

FY2026 (ended 2026-06-30) revenue $13.579B (+11.7% YoY vs FY2025 $12.156B); Q4 FY2026 revenue $3.658B (+15.2% YoY vs $3.175B). GAAP net income FY2026 $4.831B (35.6% net margin); GAAP diluted EPS $3.66. Gross margin FY2026 61.3% ($13.579B rev − $5.255B cost of revenue). Operating cash flow FY2026 $4.14B; free cash flow $3.77B (27.8% FCF margin). R&D $1.532B (11.3% of revenue). Sources: 10-K filed 2026-08-06; 8-K EX-99.1 filed 2026-07-28; XBRL companyfacts CIK 0000319201.

FY2026 (ended 2026-06-30) revenue $13.579B (+11.7% vs FY2025 $12.156B); costs of revenues $5.255B → gross margin 61.3%; derived operating income $5.661B (41.7% OM = rev − CoR − R&D $1.532B − SG&A $1.132B); GAAP NI $4.831B (35.6%); diluted EPS $3.66 post 10-for-1 split. OCF $4.143B; capex $376M; FCF $3.767B (27.7%). Source: FY2026 10-K filed 2026-08-06, CIK 0000319201.

Dominant provider of process control equipment for semiconductor manufacturing — an essential bottleneck in the chip fabrication value chain.

AI chips, advanced packaging, and leading-edge logic all increase process-control intensity per wafer. KLA owns the measurement bottleneck that keeps advanced fabs within yield specs, so it benefits as the AI hardware buildout pushes more complexity into fab workflows.

AI accelerators (N2/N3 logic, HBM4, CoWoS/advanced packaging) raise the cost of a single missed defect and multiply the number of inspection/metrology steps per wafer. KLA is the yield toll-road every one of these buildouts must cross — it benefits from AI complexity, not from AI unit volume alone.

AI logic (2 nm), HBM/DRAM, EUV HVM, and advanced packaging raise process-control intensity per wafer. KLA captures that intensity as a yield toll-road: 90.2% of segment revenue and 97.0% of segment profit sit in Semiconductor Process Control.

• Q3 FY2026 earnings release says total revenues were $3.415B, above the midpoint of guidance; GAAP EPS was $9.12 and non-GAAP EPS was $9.40, both above midpoint guidance. Source: SEC 8-K EX-99.1 filed 2026-04-29.
• CEO Rick Wallace said KLA is "a key enabler of the AI ecosystem" and called out benefits from the global AI infrastructure buildout across foundry/logic, memory, advanced packaging, and services. Source: SEC 8-K EX-99.1 filed 2026-04-29.
• The 2026-04-30 10-Q / companyfacts shows Q3 revenue up to $3.415B from $3.297B in the prior quarter, with net income $1.200B, cash $1.79B, and long-term debt $5.89B.
• Quant refresh shows market cap $277.91B, P/E 62.32, forward P/E 42.84, and institutional ownership 93.74%, confirming a very widely held but still fundamental compounder profile.

• 2026-07-28: Q4 FY2026 beat + raised outlook (WFE CY26 low-$150B, CY27 ~$190B); stock -4.6% on the print.
• 2026-08-06: 10-K FY2026 filed.
• 2026-06-11: 10-for-1 stock split.
• Next: Q1 FY2027 earnings (Sep quarter) ~late-Oct 2026.

The Q4 beat-and-raise (rev +15.2% YoY, accelerating into 2H26/2027) + advanced-packaging process control +70% + HBM KGD economics confirm KLA as a DIRECT BOTTLENECK on the AI-fab critical path. The only caveats are valuation (~55x) and insider selling into strength — neither breaks the toll-road thesis.

Calc 1 — Mix-shift: China is no longer the growth engine (measured).

• China ship-to revenue: FY2024 $4.197B (42.8%) → FY2025 $4.043B (33.3%) → FY2026 $4.048B (29.8%). Dollars were essentially flat YoY (+$5.8M).
• Non-China revenue: $8.114B → $9.531B = +$1.418B.
• Company YoY growth: +$1.423B. Non-China supplied 99.6% of FY2026 growth.
• Taiwan $3.644B (26.8%, +13.7% YoY); Korea $1.834B (13.5%, +26.2%); North America $1.757B (13.0%, +29.0%).
• → Export-control risk is still large in stock (29.8% of sales) but is no longer the flow that compounds the P&L. The 08-16 open question ("quantify China %") is closed: 29.8% / $4.048B, measured.

Calc 2 — Where the toll is actually collected (measured).

• Semiconductor Process Control: $12.245B revenue, $4.454B CoR → 63.6% segment GM, segment profit $5.483B (44.8% profit / sales).
• SPC = 90.2% of segment revenue and 97.0% of FY2026 segment profit ($5.483B / $5.655B).
• Specialty Semiconductor Process: $584M (4.3% of segment rev), profit $65M.
• PCB and Component Inspection: $750M (5.5%), profit $108M (turned positive after FY2025 −$281M, which included goodwill impairment).
• Product mix (Note 17): Wafer Inspection $6.631B (48.8%); Patterning $2.707B (19.9%); Services $3.126B (23.0%, +16.5% YoY vs $2.683B); Specialty Process $503M; PCB/Component $460M.
• → Conglomerate-dilution penalty does not apply. The bottleneck division is the company.

Calc 3 — Recurring floor + backlog coverage (measured).

• Services ≈ 23% of FY2026 revenue by both Item 1 language and Note 17 dollars ($3.126B).
• Backlog $7.86B (2025-06-30) → $12.57B (2026-06-30), +59.9%, "due to strong demand driven by the AI infrastructure buildout" (10-K Item 1).
• Backlog / FY2026 revenue = $12.57B / $13.579B = 0.93×. That is not a 2-year book — it is ~one year of sales already ordered. 10-K warns backlog is a poor timing signal (pushouts/cancellations possible).
• Q1 FY2027 guide still $4.0B ± $200M (8-K 2026-07-28) vs Q4 FY2026 $3.658B = +9.3% QoQ at midpoint. Next print: Sep-quarter, expected late Oct 2026.
• R&D $1.532B = 11.3% of revenue, equal to 18.4% of gross profit — the cash cost of defending the 61.3% GM.

Calc 4 — Single-customer hit size (measured).

• One customer (TSMC, named) ≈ 19% of FY2026 revenue = ~$2.58B.
• If that customer delayed a leading-edge node by two quarters, a 25% haircut on that stream is ~$0.65B, or ~4.8% of company revenue — material, not thesis-breaking, because the rest of foundry/logic + memory + packaging is the same physics.
• International revenue 87% of FY2026 (Item 1).

FCF ≈ $3.58B − $0.39B = $3.19B

FCF margin ≈ $3.19B / $9.81B = 32.5%

If WFE = $110B and process-control intensity = 14%, then process-control market = $15.4B.

KLA share = $8.7B / $15.4B = 56%.