KLA Corporation (KLAC) Income Statement

The sequential acceleration in revenue growth, from 7.2% in 2026Q2 to 15.2% in 2026Q4, indicates that the AI-driven complexity tailwind is strengthening. This is supported by management's raised forward guidance to approximately $4.0B, implying continued momentum into the second half of calendar 2026. The growth appears organic, driven by advanced node transitions and increasing inspection intensity, rather than acquisitions.

Despite a slight dip from the 62.0% peak in 2025Q4, gross margin stability suggests that product mix and pricing power remain intact. The company's ability to maintain margins above 60% while scaling revenue indicates that its proprietary defect inspection algorithms command a premium. However, investors should monitor whether increased competition or a shift to less complex nodes could compress this structural advantage.

Over the past ten quarters, operating income grew from $848M to $1.6B, a 90% increase, while revenue grew only 54%, indicating that fixed costs are being spread over a larger base. R&D and SG&A expenses grew at a slower pace than revenue, reflecting disciplined cost management. This leverage is a key driver of the company's superior profitability relative to peers, with operating margin exceeding AMAT's 29.2% and LRCX's 35.3%.

The consistent increase in R&D, from 13.4% of revenue in 2024Q3 to 10.8% in 2026Q4, shows that KLAC is prioritizing innovation to maintain its technological lead. While R&D intensity has declined slightly as revenue scales, absolute spending remains high, which is critical for defending its moat against competitors like Onto Innovation. SG&A costs have also risen but at a slower pace, indicating efficient overhead management.