⚡What does KLA do, in 30 seconds?
KLA makes machines and software that find tiny flaws on silicon wafers while chips are being made 12 1. It sold $13.6bn ✓ in FY2026, the year to June 30, 2026 23. Wafer Inspection tools made up 49% ✓ of that.
📱What does KLA sell?
KLA mostly sells tools that check and measure chips as they are made, plus the service that keeps those tools running. Here is what each line is and who buys it.
Wafer Inspection
Tools that find, locate and study tiny defects on wafers while chips are being made 12. This is KLA's biggest line, bringing in $6.6bn ✓ in FY2026.
👥 Chipmakers that run wafer factories. TSMC is KLA's biggest customer 24.
Service
KLA's teams maintain the tools it has already sold, to keep them running 56. Service brought in $3.1bn ✓ in FY2026.
Patterning
One of KLA's two main lines of checking tools, with Wafer Inspection. It brought in $2.7bn ✓ in FY2026 2. KLA also makes tools that measure pattern sizes, film thickness and how well layers line up 1. Others check the masks, called reticles, that print chip patterns 1.
👥 Chipmakers that need to check that their chip patterns print correctly 1 1.
Specialty semiconductor process
Machines sold under the SPTS name that lay down and etch away thin layers 51. This line brought in $0.5bn ✓ in FY2026.
👥 Makers of tiny sensors, radio chips and power chips for cars and factories 51.
How the mix has shifted
Where the customers are
China is KLA's biggest region, at 30% ✓ of FY2026 sales. KLA counts a sale by where the tool is shipped, and China's share fell from 33.3% in FY2025 and 42.8% in FY2024 6. Taiwan added 27% ✓, South Korea 14% ✓ and North America 13% ✓. In all, about 87% of FY2026 sales came from outside the US 4.
💸How does KLA make money?
Follow the money from left to rightfrom top to bottom: what customers pay for, what it costs to make, and what is left as profit.
KLA sold $13.6bn ✓ of tools and services in FY2026. Making those tools and doing that service cost $5.3bn ✓. What is left is gross profit, the money kept after paying for what was sold. That came to $8.3bn ✓.
Next come the costs of running the company. Research and development took $1.5bn ✓, and sales, marketing and admin took $1.1bn ✓. Other operating costs took $0.2bn ✓. What remains is operating profit, the profit from the main business, which was $5.5bn ✓. After tax of $0.8bn ✓ and a little other income, net income was $4.8bn ✓. Put simply, out of every hundred dollars of sales, KLA kept about $36 ✓ as profit.
Out of every $100 customers paid in FY2026…
Interest, investment gains and other income added +$1 for every $100 of sales, so the slices above add up to a little more than $100.
⏱️ KLA by the clock
Spread the FY2026 totals evenly over its 365 days and you get this. Source: KLA CORP 10-K [7].
📈How is KLA doing?
KLA has grown fast over ten years, and it is still growing. From FY2016 to FY2026, sales grew 16.4% ✓ a year on average. Sales rose in 9 ✓ of those 10 ✓ years. The one dip was FY2024, when growth was -6.5% ✓. Sales then rose 23.9% ✓ in FY2025 and 11.7% ✓ in FY2026.
KLA also keeps more of each sale than before. Operating margin rose from 32.2% ✓ in FY2016 to 40.4% ✓ in FY2026. Free cash flow was $3.8bn ✓ in FY2026.
The latest figures point up. KLA's backlog, orders not yet filled, rose from $7.86 billion to $12.57 billion in the year to June 30, 2026 19. KLA put that down to demand from the AI buildout 19. In the quarter to September 30, 2026, sales were $4.14 billion 25. KLA expects about $4.7 billion in the quarter to December 2026 25. That is a forecast, not a result.
📝 The report card
KLA earns top marks for profit and cash, middle marks for growth and steadiness, and a weak mark for its balance sheet. Every company is graded on the same fixed scale, so an A means the same thing on every page. The strip shows where KLA (orange) and its 2 peers land; further right is better.
Growth
KLA's sales grew 9.0% ✓ a year over its last three fiscal years, which earns a C ✓ on the fixed scale. That count includes the FY2024 dip. Lam Research grew a bit faster at 10.1% ✓, a B ✓.
Why this measure? (higher is better)
Growing sales is the engine of a business. Mature giants rarely grow fast, so 5% a year already earns a C.
Profitability
Over the last three years combined, KLA kept 37.3% ✓ of sales as operating profit, an A ✓. That is the best of its peers. Lam Research came to 32.5% ✓, also an A ✓, and Applied Materials 29.0% ✓, a B ✓.
Why this measure? (higher is better)
Operating margin is the share of each sales dollar left after running the business. Software and platforms often clear 30%; hardware makers usually sit below 10%.
Cash generation
Over the last three years combined, KLA turned 29.7% ✓ of sales into free cash flow, an A ✓. Lam Research, at 25.7% ✓, also earns an A ✓. So does Applied Materials, at 25.3% ✓, which is an A ✓ too.
Why this measure? (higher is better)
Free cash flow is the cash left after paying for factories, data centres and equipment. It funds dividends, buybacks and new bets.
Balance sheet
KLA's cash and investments minus its borrowings came to -17.3% ✓ of a year's sales, a D ✓. It held $3.5bn ✓ of cash and investments against $5.9bn ✓ of debt. That debt is fixed-rate bonds due between fiscal 2029 and fiscal 2063 11. Lam Research holds more cash than debt, at 8.0% ✓, a B ✓.
Why this measure? (higher is better)
More cash than debt gives a company room to ride out bad years. Some debt is normal; a lot of it makes a company fragile.
Steadiness
KLA's yearly growth swings with a standard deviation of 10.6% ✓, which earns a C ✓. That is the steadiest of its peers. Growth hit 33.1% ✓ in FY2022, while Lam Research swings far more, at 21.2% ✓.
Why this measure? (lower is better)
Steady growers are easier to plan around. Big swings mean sales depend on product cycles, the economy or one-off events.
🧑🏫 How the grades work
- Same scale for everyone. Each measure has fixed cut-offs (shown under each strip). Clear the A line and you get an A, whatever your peers do.
- Three years together. Profitability and cash generation add up the last three fiscal years before dividing, so one unusual year counts for less than it would on its own (a year much bigger than the others still weighs most).
- Peers for context. The rank shows how KLA compares with the group. Companies within 0.1 percentage point share a rank.
- Same source. Every company's figures come from its own latest annual report (10-K), so fiscal years end in different months.
- Judgement, openly stated. The cut-offs are QuantVantage.ai's view of what good looks like for a large, established company. They are not a forecast or a recommendation.
11 years at a glance
Where the cash goes
KLA hands back most of the cash it makes. Over the 11 fiscal years from FY2016 to FY2026, it made $24.4bn ✓ of free cash flow. It spent $21.5bn ✓ of that on buybacks and dividends. In FY2026, payouts equalled 89% ✓ of free cash flow. That year it spent $2.29 billion on buybacks and $1.06 billion on dividends 22. In March 2026 it approved a new $7 billion buyback plan 21.
🧮Ratios 101: what are KLA's key financial ratios?
Ratios shrink KLA's numbers into easy comparisons with Applied Materials and Lam Research, its two US-listed peers. A ratio divides one number by another so companies of any size can be compared. Each card shows the formula with KLA's real FY2026 numbers, the peer median and the trend.
💰 Profitability: how much of each sale is kept?
Gross margin
What is left from each sale after paying to make the product or deliver the service.
👉 At 61.3% ✓, about the same as 61.0% ✓ in FY2016, KLA beats the 49.6% ✓ peer median.
📏 Rule of thumb: Above 40% usually signals pricing power or a big software or services mix.
Operating margin
What is left after also paying for research, marketing and running the company.
👉 KLA's 40.4% ✓ is well above the 32.3% ✓ peer median and its own 32.2% ✓ of FY2016.
📏 Rule of thumb: Above 20% is strong for a large company.
Net margin
The bottom line: profit after interest and taxes, per dollar of sales.
👉 KLA kept 35.6% ✓ of sales as final profit, up from 23.6% ✓ in FY2016 and above the 28.0% ✓ peer median.
📏 Rule of thumb: Above 15% is strong; one-off tax items can move it in a single year.
Return on equity (ROE)
Profit earned for each dollar that shareholders have left in the company.
👉 ROE of 76.1% ✓ beats the 46.3% ✓ peer median, partly because shareholders' equity is only $6.3bn ✓. It was even higher, at 102.2% ✓, in FY2016.
📏 Rule of thumb: Around 15% or more is good, but buybacks shrink equity and can make ROE look huge.
⚙️ Efficiency: how hard do the assets work?
Return on assets (ROA)
Profit earned from everything the company owns, however it was paid for.
👉 ROA of 26.9% ✓, up from 14.2% ✓ in FY2016, sits just above the 25.1% ✓ peer median.
📏 Rule of thumb: Above 10% is strong; banks and factories usually earn less.
Asset turnover
Dollars of sales squeezed out of each dollar of assets.
👉 KLA's sales were 0.8x ✓ the value of what it owns, up from 0.6x ✓ in FY2016 and close to the 0.9x ✓ peer median.
📏 Rule of thumb: Retailers often top 2x; asset-heavy businesses can sit below 0.5x.
Inventory days
How many days of products sit in warehouses before they are sold.
👉 KLA holds 253 ✓ days of stock, more than the 142 ✓ peer median and the 219 ✓ days of FY2016.
📏 Rule of thumb: Fewer days means less cash tied up and less risk of products going stale.
🛟 Safety: could it survive a bad year?
Current ratio
Can short-term assets (cash, money owed by customers, stock) pay the bills due within a year?
👉 KLA's 2.9x ✓ means short-term assets are almost three times its bills due within a year, above the 2.6x ✓ peer median.
📏 Rule of thumb: Above 1.0x is the classic comfort line, but cash-rich giants can run below it on purpose.
Debt to equity
How much the company has borrowed for each dollar shareholders have in it.
👉 Debt is 0.9x ✓ equity, well above the 0.3x ✓ peer median but far below 4.4x ✓ in FY2016.
📏 Rule of thumb: Below 1.0x is conservative. Like ROE, it can rise when buybacks shrink equity, even if debt has not changed.
Interest cover
How many times over operating profit could pay the year's interest bill.
👉 Operating profit covered interest costs 19.3x ✓, up from 7.8x ✓ in FY2016 but below the 41.5x ✓ peer median.
📏 Rule of thumb: Above 5x is comfortable; below 2x is a warning sign.
💵 Cash and owners: where does the money end up?
Cash conversion
Does reported profit turn into real cash? Free cash flow is operating cash minus capital spending.
👉 KLA turned profit into free cash at 0.8x ✓, a little above the 0.7x ✓ peer median and below 1.0x ✓ in FY2016.
📏 Rule of thumb: Near or above 1.0x means profits are backed by cash.
R&D intensity
How much of each sales dollar goes into inventing future products.
👉 KLA spent 11.3% ✓ of sales on R&D, in line with the 11.4% ✓ peer median. That is down from 16.1% ✓ in FY2016, because sales grew faster than R&D.
📏 Rule of thumb: Tech companies often spend 10% to 20%; more is not always better if it does not pay off.
Stock pay
Pay given to staff in shares instead of cash. It is a real cost to owners because it adds shares.
👉 Stock pay was 2.3% ✓ of sales, a little above the 2.0% ✓ peer median and up from 1.5% ✓ in FY2016.
📏 Rule of thumb: Under 5% of sales is modest for a tech company.
Shareholder payout
How much of the year's profit was handed back to owners.
👉 KLA returned 69.3% ✓ of FY2026 profit as buybacks and dividends, below the 80.1% ✓ peer median and 75.0% ✓ in FY2016.
📏 Rule of thumb: Above 100% means it returned more than it earned, using cash savings or debt.
Ratios use fiscal-year-end balance sheet values. Inputs are shown rounded, so dividing them can differ from the result in the last digit. A peer median leaves out peers that do not report the inputs, or where the ratio means nothing (for example, negative shareholders' equity). Rules of thumb are general guides from QuantVantage.ai, not hard limits. No share-price ratios (like price-to-earnings) are shown on this page.
🥊Who are KLA's competitors?
KLA's two US-listed peers on this page are Applied Materials and Lam Research, which also sell tools to chip factories 1314 5412. Applied also sells tools that inspect and measure wafers, within a much broader range 1314. Lam mostly sells tools that lay down, etch and clean layers, while KLA mostly sells tools that check them 5412.
| Company | Where they compete | Revenue | Growth/yr (3y) | Op. margin | FCF margin |
|---|---|---|---|---|---|
| KLA (KLAC, FY2026) | Tools that inspect and measure wafers, masks and chips, plus service 5412 | $13.6bn | 9.0% | 40.4% | 27.7% |
| Applied Materials (AMAT, FY2025) | Optical and eBeam inspection and measuring tools, inside a much broader equipment range 1314 | $28.4bn | 3.2% | 29.2% | 20.1% |
| Lam Research (LRCX, FY2026) | Deposition, etch and clean tools sold to the same chip factories, such as TSMC 5412 | $23.2bn | 10.1% | 35.3% | 21.1% |
KLA also names ASML, Hitachi High-Tech, Lasertec and Onto Innovation among its rivals 15. It says some rivals may have more resources than it does 15.
🧭KLA SWOT: strengths, weaknesses, opportunities and threats
💪 Strengths
- Over the last three years combined, KLA kept 37.3% ✓ of sales as operating profit, an A ✓ on our report card.
- Service made up about 23% of FY2026 sales and grew 16% that year 56.
- KLA owns over 9,100 active patents, with over 3,600 more pending 17.
- Its backlog of unfilled orders reached $12.57 billion at June 30, 2026 19.
🩹 Weaknesses
🚀 Opportunities
- KLA says AI chips are driving strong growth in its advanced packaging business 5.
- PCB and Component Inspection sales rose 21% in FY2026, helped by advanced packaging 6.
- KLA linked its higher backlog to the AI buildout 19.
- A new advanced chip factory costs well above $10 billion, KLA says 5. The most advanced chips go through measurement and inspection steps hundreds of times 5.
⚠️ Threats
- US export rules limit what KLA can sell to some Chinese chipmakers without a license 18.
- China's share of KLA's sales fell from 42.8% in FY2024 to 29.8% in FY2026 6.
- KLA's sales depend on how much chipmakers spend, and its business has long gone in cycles 5.
- KLA says some of its rivals may have more resources than it does 15.
🏰Does KLA have a moat?
Why 4?
Once a chipmaker picks a supplier's tool for a production step, it tends to stick with it for a long time, Lam Research says of its own tools 12. KLA's software pulls data from its tools to spot and sort defects as chips are made 1. Service sales grew 16% in FY2026 as more KLA tools were in use 56.
Why 1?
KLA's software links the data from its own tools inside each customer's factory 1. That helps each customer, but we found no sign that more customers make the tools better for each other.
A moat is what keeps rivals from taking a company's customers and profits. Scores are QuantVantage.ai's judgement (5 = strongest), set with the same rubric on every explainer (orange is KLA; grey dots are peers).
🔭What should you watch next?
KLA's yearly shareholder meeting
Shareholders vote on nine directors, the auditor and executive pay 20.
📚Learn the words
❓Frequently asked questions about KLA
What does KLA do?
KLA makes tools that find and measure tiny flaws on chips while they are being made 12 1. Chipmakers use them to catch mistakes early. KLA also services those tools and sells some chipmaking machines 56 51.
How does KLA make money?
KLA makes most of its money selling inspection tools to chipmakers. In FY2026, Wafer Inspection brought in $6.6bn ✓, Service $3.1bn ✓ and Patterning $2.7bn ✓. Smaller lines make up the rest.
Is KLA still growing?
Yes, KLA is still growing. Sales rose 11.7% ✓ in FY2026 to $13.6bn ✓. Over ten years, growth averaged 16.4% ✓ a year.
Who are KLA's biggest competitors?
Applied Materials also sells inspection and measuring tools, within a much broader range 1314. KLA also names ASML, Hitachi High-Tech, Lasertec and Onto Innovation 15. Lam Research sells to the same chip factories but mostly makes different tools 5412.
How much of KLA's sales come from China?
China was KLA's biggest region, at 30% ✓ of FY2026 sales. That share has fallen from 42.8% in FY2024 6. US export rules limit some sales there 18.
Who is KLA's CEO?
Rick Wallace has been KLA's CEO since January 2006 20. He first joined KLA Instruments in 1988 as an engineer 20.
Does KLA pay a dividend?
Yes, KLA pays a dividend every quarter. It paid $1.1bn ✓ in dividends in FY2026. In March 2026 it announced a 21% rise in the quarterly dividend, its 17th straight yearly rise 21.
Did KLA split its stock?
Yes, KLA did a ten-for-one stock split on June 11, 2026 22. Each old share became ten new ones.
🎮Play: higher or lower, then test yourself
Figures come from each company's latest annual report (10-K); fiscal years end in different months. Sources: [7] [9] [8].
🧠 Test yourself
5 quick questions. Score: 0 / 5
1. Which KLA product line brought in the most money in FY2026?
2. Which company was KLA's only customer above 10% of sales?
3. How often do the most advanced chips repeat steps like patterning and inspection?
4. Out of every $100 of sales in FY2026, about how much did KLA keep as profit?
5. Which region was KLA's biggest in FY2026?
🔎Sources and method
Every figure comes from a source listed here or is calculated from those sources (marked ✓). Company financials are taken from SEC filings (10-K and 10-Q) as tagged in XBRL. Peer grades rank the same measures across the company and its peers. This page contains no share-price data and no valuation.
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 1 Business: product and services tables by segment (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Note 17: revenue by major product category, category definitions, customer concentration (accessed 2026-10-29)
- KLA (KLAC) Form 10-K for fiscal year 2026, filed 2026-08-06 — revenue and cost of sales by product, segment and geography (accessed 2026-10-28)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 1 Business: customers, sales and service, international revenue share (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 1 Business: company, segments, history, industry, R&D, manufacturing, sustainability goals (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 7: revenue by segment, product category and region, with reasons for changes (accessed 2026-10-29)
- SEC EDGAR companyfacts: KLA (KLAC) — annual 10-K facts (accessed 2026-10-28)
- SEC EDGAR companyfacts: LAM RESEARCH CORP (LRCX) — annual 10-K facts (accessed 2026-10-28)
- SEC EDGAR companyfacts: APPLIED MATERIALS INC /DE (AMAT) — annual 10-K facts (accessed 2026-10-28)
- SEC EDGAR companyfacts: KLA (KLAC) — balance sheet at 2026-06-30 (accessed 2026-10-28)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 7 and Note 7: debt (Senior Notes) (accessed 2026-10-29)
- Lam Research Corporation Form 10-K for fiscal year ended June 28, 2026 (filed 2026-08-07) — Item 1 Business: what Lam sells, its main customers, competition and equipment qualification (accessed 2026-10-29)
- Applied Materials Form 10-K, fiscal year ended October 26, 2025 (cover and Item 1 Business overview) — Headquarters, incorporation year, fiscal year end, segments and what each segment sells (accessed 2026-10-29)
- KLA Corporation Form 10-K, fiscal year ended June 30, 2026 (Item 1 Business) — KLA segments; Semiconductor Process Control sells inspection and metrology products (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 1 Business: competition (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 1 Business: human capital and workforce (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 1 Business: patents and other proprietary rights (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 1A Risk Factors: export controls and China (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 1 Business: backlog (accessed 2026-10-29)
- KLA Corporation 2026 Proxy Statement (DEF 14A, filed 2026-09-22) — Annual meeting date and proposals; CEO background (accessed 2026-10-29)
- KLA press release: KLA Hosts Investor Day; Announces $7 Billion Share Repurchase Program and 21% Increase to Quarterly Dividend (2026-03-12) — Investor Day, repurchase authorization, dividend increase (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Item 5 and Item 7: stock listing, stock split, dividends and repurchases (accessed 2026-10-29)
- KLA Corporation Form 10-K for fiscal year ended June 30, 2026 (filed 2026-08-06) — Cover, Item 2 Properties and signatures: fiscal year, headquarters, officers (accessed 2026-10-29)
- SEC EDGAR companyfacts: KLA (KLAC) — quarterly 10-Q/10-K facts (accessed 2026-10-28)
- KLA Corporation Form 8-K, Exhibit 99.1: fiscal 2027 first quarter results (2026-10-28) — Q1 FY2027 results and Q2 FY2027 guidance (accessed 2026-10-29)