KLA reports revenue growth and expands services business

KLA reported strong fiscal Q3 2026 results, with total revenue rising to $3.415 billion from $3.063 billion the previous year, exceeding the midpoint of company guidance. GAAP net income reached $1.20 billion, and diluted earnings per share increased to $9.12 from $8.16.

The company’s services business saw a 16% year-over-year increase, reaching $774.8 million and accounting for approximately 23% of total sales. This growth is driven by a growing installed base and recurring, subscription-like contracts. Management noted that artificial intelligence infrastructure spending is creating opportunities across memory, advanced packaging, and process control.

Regarding shareholder returns, KLA increased its quarterly dividend to $2.30 per share, marking 17 consecutive years of dividend growth, and authorized an additional $7 billion in share repurchases. While the stock has experienced recent volatility and a 30-day pullback, some valuation analyses suggest the company may be undervalued based on projected cash flows and the expansion of the advanced packaging market.