KLA Corporation delivered a solid QQ4 2025 quarter, underscoring the company’s ability to monetize a high-margin, capital-intensive segment within the semiconductor equipment ecosystem. Revenue of $3.174 billion represented a 23.7% year-over-year increase and 3.6% sequential growth, driven by sustained demand for metrology, inspection, and yield-management solutions across leading-edge nodes. Gross margin of 63.24% and operating margin of 44.24% contributed to a diluted earnings per share (EPS) of $9.06 and net income of $1.202 billion, marking another record of profitability for a business with a large scale of cash generation.
Cash flow generation remained a standout attribute. Operating cash flow totaled $1.165 billion for the quarter, with free cash flow of $1.064 billion and a per-share free cash flow of $8.06. The balance sheet remains robust, with substantial liquidity (cash and short-term investments of approximately $4.495 billion) and a market-appropriate leverage profile given long-term debt of about $6.043 billion and net debt around $4.009 billion. The company’s liquidity metrics—current ratio of 2.62 and quick ratio of 1.83—support resilience through the semiconductor cycle. While valuation remains elevated (P/E around 24.6x and other high multiples), KLA’s cash-generative strength and margin resilience provide a foundation for continued premium positioning in a disciplined capex environment for foundries and IDMs.
Management did not publish explicit forward guidance in the provided materials, limiting explicit near-term targets. Nevertheless, the results imply continued pricing power and demand for yield-management technologies as semiconductor nodes advance and process complexity increases. Investors should monitor the cadence of WFE (wafer fab equipment) spending, supply-chain dynamics, and potential mix shifts toward more advanced metrology and inspection offerings as drivers of ongoing profitability.