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KLA (KLAC) is trading modestly lower today after reporting its Q1 (Sep) results last night. The semicap equipment maker delivered another solid quarter, beating expectations on both the top and bottom line. EPS topped consensus by double digits, though the beat was narrower than in recent quarters. Revenue increased 13% yr/yr to $3.21 bln. The company's Q2 EPS and revenue guidance was in line with expectations at $7.92-9.48 and $3.075-3.375 bln, respectively.

• The company continues to benefit from the growing importance of process control and AI infrastructure investment, driving stronger customer engagement and higher process-control intensity.
• Foundry/logic and memory both contributed to growth, supported by leading-edge investment and strong HBM-related DRAM demand, which management said remains particularly robust with strength expected into CY26 as customers expand AI capacity.
• Advanced packaging is emerging as a bright spot, with CY25 revenue expected to exceed $925 mln, up about 70% yr/yr, supported by heterogeneous chip integration and a served market growing faster than core WFE, according to management.
• China is expected to normalize, consistent with peers, after running hot this quarter (39%). The company expects export controls to reduce revenue by about $300-350 mln through CY26, though sees an offset by leading edge and DRAM going up.
• Looking ahead, management reiterated CY26 as a growth year, not necessarily higher in magnitude but with rising confidence as customer visibility and slot activity improve.

Briefing.com Analyst Insight

This report echoes what we've seen from others in the semi-cap space, with upside results fueled by AI tailwinds tied to infrastructure investments and rising process-control intensity. Geopolitical concerns remain, with China revenue taking a hit, similar to what peers Lam Research (LRCX) and Applied Materials (AMAT) have disclosed, though these pressures appear largely manageable. The stock is down slightly today after a strong move yesterday, suggesting a mild "sell-the-news" reaction, as fundamentals and the broader growth story remain intact.