KLA Corp. (KLAC): First Take: Modest beat on the quarter and guidance

We expect the stock to trade modestly higher following a quarter and guidance that were modestly above the Street. We believe investor positioning is slightly negatively biased following Lam's print, despite more bullish WFE spending forecasts from GS and investors. We expect the following topics to be in focus on the earnings call: (1) management's view on process control intensity in CY26/27; (2) KLA's momentum in advanced packaging; (3) gross margin trends. KLA reported revenue of $4.14 bn, just below GS at $4.22 bn but above the Street (Visible Alpha) at $4.04 bn, while gross margin of 62.4% was just below GS at 62.5% and the Street at 62.6%. Non-GAAP EPS of $1.22 was below GS at $1.25 but above the Street at $1.18. Systems revenue of $3.29 bn was below GS at $3.38 bn but above the Street at $3.23 bn, and Service revenue of $850 mn was above GS at $844 mn and in line with the Street at $853 mn. KLA guided 4Q just above the Street on revenue and EPS, with revenue guided to $4.70 bn