KLAC Set to Report Q4 Earnings: How Should You Play the Stock?

KLA Corporation KLAC is set to report its fourth-quarter fiscal 2025 results on July 31.

For the fourth quarter of fiscal 2025, KLAC expects revenues of $3.075 billion, plus/minus $150 million. The Zacks Consensus Estimate for revenues is pegged at $3.08 billion, indicating an increase of 19.75% from the year-ago quarter’s reported figure.

KLA expects non-GAAP earnings of $8.53 per share, plus/minus 78 cents. The consensus mark for earnings is pegged at $8.53 per share, unchanged over the past 30 days, indicating year-over-year growth of 29.24%.

KLAC’s earnings have surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 5.81%.

KLA Corporation Price and EPS Surprise

KLA Corporation price-eps-surprise | KLA Corporation Quote

Let us see how things have shaped up for the upcoming announcement.

Key Factors to Note Ahead of KLAC’s Q4 Results

KLA's advanced packaging business demonstrates robust growth prospects entering the fourth quarter, driven by increasing complexity in chip integration and expanding AI infrastructure requirements. The segment's revenue trajectory from more than $500 million in calendar 2024 to an anticipated $850 million in 2025 underscores its emergence as a significant performance driver.

Strong spending on the development of leading-edge logic nodes, high-bandwidth memory technologies and advanced packaging solutions continues to support KLAC's position in the wafer fabrication equipment sector. The escalating semiconductor complexity from these technological advances positions the company favorably for sustained fourth-quarter momentum.

Artificial intelligence (AI) continues serving as a key catalyst for KLA as compute efficiency advancements fuel demand for advanced semiconductors and sophisticated process control solutions. This momentum, combined with sustained investments in leading-edge logic and high-bandwidth memory, is expected to have contributed meaningfully to fourth-quarter performance.

The Services division posted $669 million in third-quarter revenues, up 13.3% year over year. Nevertheless, mounting export restrictions and impending tariff implications pose potential constraints on this historically reliable growth engine.

Tariff implementations are projected to compress gross margins by roughly 100 basis points in the to-be-reported quarter, with service operations bearing particular impact. Ongoing export licensing uncertainties add another layer of revenue risk for the upcoming quarter. Pillar 2 global tax reforms have elevated KLA's effective tax rate to approximately 14%, negatively impacting profitability.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.

KLA currently has an Earnings ESP of 0.00% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Arista Networks ANET currently has an Earnings ESP of +0.19% and sports a Zacks Rank #1. Arista Networks shares are up 3.4% year to date. Arista Networks is set to report its second-quarter 2025 results on Aug. 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ametek AME presently has an Earnings ESP of +4.32% and a Zacks Rank #3. Ametek shares are down 0.1% year to date. Ametek is set to report its second-quarter 2025 results on July 31.

Apple AAPL currently has an Earnings ESP of +3.52% and a Zacks Rank #3. Apple shares are down 14.6% year to date. Apple is set to report its third-quarter 2025 results on July 31.

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This article originally published on Zacks Investment Research (zacks.com).

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