KLA rides packaging boom
AI-driven demand boosts advanced packaging outlook to $1B, but rising costs and tariffs weigh on profitability.
KLA Corporation reported better-than-expected Q1 2026 results, driven by strong demand in advanced packaging and process control.
Revenue rose 11.5% year over year to $3.42 billion, while adjusted EPS reached $9.40, both beating analyst estimates.
The company raised its 2026 advanced packaging process control outlook to $1 billion, up from $635 million, citing increased adoption in AI and high-performance computing applications.
CEO Richard Wallace highlighted growing traction in wafer-level packaging, where KLA has secured a leading market position.
However, margins came under pressure, with the operating margin falling to 41.2%. CFO Bren Higgins pointed to higher R&D spending, elevated DRAM costs, and tariffs as ongoing headwinds expected to persist through 2026.
KLA guided Q2 revenue slightly above expectations and maintained that strong demand, particularly in advanced packaging, will continue to support growth despite industry capacity constraints.
