KLA Corporation: 17% Revenue Growth Cannot Shield Margins From Supply Chain Pressure!

KLA Corporation reported strong financial performance for the full year 2025 and the December quarter, marked by revenue growth, robust profitability, and sustained free cash flow generation. For the full year, revenue increased 17% to a record $12.745 billion, with process control systems revenue expanding 19% and services growing 15%. Earnings per share rose 29% year-over-year, supported by industry-leading gross and operating margins of 62.8% and 43.6%, respectively. Free cash flow improved by 30% to $4.4 billion, enabling capital returns totaling $3 billion through dividends and share repurchases. In the December quarter, the company achieved $3.3 billion in revenue and non-GAAP diluted EPS of $8.85, both above guidance midpoints. Growth was fueled by investments in leading-edge foundry logic, high-bandwidth memory, DRAM, and advanced packaging, the latter seeing over 70% year-over-year systems revenue growth to approximately $950 million in 2025.