KLA Corporation (KLAC) earnings preview: what to watch in Q1 2027

When KLA reports

KLA will publish results for its fiscal first quarter of 2027 (the three months ending September 2026) on Wednesday, October 28, 2026, after the US market closes, with a webcast at 2 p.m. Pacific. The date comes from KLA's own announcement of October 1, 2026. KLA's fiscal year ends in June, so this is the first quarter of its new year.

KLA makes the inspection and measurement tools chipmakers use to catch defects during manufacturing ("process control"). Its results are a read on how much the largest chipmakers are spending on new production lines.

What the last full year showed

Our analysis of KLA's fiscal 2026 10-K found:

• Revenue rose 11.7% to $13.58B, driven by leading-edge spending for AI chips. Taiwan grew 13.7%, Korea 26.2% (memory makers building high-bandwidth memory) and North America 29.0%.
• China, the largest region, was flat at $4.05B, as export controls offset Chinese buying of tools for older chip designs. Its share of revenue fell to 29.8% from 33.3%.
• Diluted EPS rose 20.4% to $3.66, but the reported 2.4-point operating margin gain was mostly the absence of a $239.1M impairment in fiscal 2025. Like for like, the margin improved about 0.4 points.
• Gross margin was 61.3%, and the 10-K warned that higher prices for the DRAM chips KLA puts in its own tools "will continue to have an adverse impact on our gross margin in fiscal 2027."
• Deferred revenue rose only 3.6% and receivables rose 28%, both out of step with 11.7% revenue growth.

The 10-K's only forward statement was unquantified: management expected "continued revenue growth" in fiscal 2027.

What KLA guided for this quarter

The 10-K gave no figures, but KLA's July 28, 2026 earnings release did. For the September quarter it guided to:

The midpoint implies revenue about 9% higher than in the June quarter, one quarter to the next. (Non-GAAP EPS, the company's adjusted figure, mainly leaves out amortization of intangible assets from past acquisitions.)

Three things to watch

1. Whether revenue lands in the top half of the $3.8–4.2B range. A result near $4.2B would back the CEO's July statement that momentum is "accelerating in the second half of calendar 2026." A result near $3.8B would still be growth from $3.66B, but it would fit our fiscal 2026 read: growth tied to a few very large customers (TSMC alone was about 19% of revenue) whose spending moves in steps.

2. Gross margin against the DRAM cost warning. KLA guided gross margin to 61.6%, above fiscal 2026's 61.3%, even though its own 10-K named DRAM component prices and tariffs as headwinds. If the quarter comes in at the low end (60.6%), the cost pressure is outrunning the benefit of higher volume. In fiscal 2026, volume added 0.5 points to gross margin and other service and manufacturing costs took away 0.1 point.

3. China's share and the working-capital lines. China was 29.8% of revenue in fiscal 2026, after 42.8% two years earlier. A further drop means the growth keeps coming from Taiwan, Korea and the US, not from a China recovery. Also check whether receivables, up 28% last year, keep growing faster than sales, and whether deferred revenue ($1.78B at June 30) starts rising faster than revenue. That would be the first sign of orders building ahead of shipments.

We'll publish our full analysis of the quarter after KLA files. Until then, the fiscal 2026 report has the full baseline.