KLA’s PCB and Component Inspection segment grew 21% in the twelve months ended June 30, powered by customers spending on advanced packaging and by a larger installed base of tools. That is the clean version of the year: semiconductor customers kept buying the machinery behind AI and high-performance computing.
The broader numbers look much the same. Revenue rose 11.7% to $13.6 billion, while net income climbed 18.9% to $4.8 billion. Net margin reached 35.6%, up from 33.4%, meaning profit grew faster than sales.
Then the cash flow walks into the room. Operating cash flow was essentially flat at $4.1 billion, up only 1.5%. Cash conversion fell to 0.86 times from 1.00 times, so KLA converted fewer reported earnings dollars into operating cash than it did a year earlier.
Management tied the revenue increase directly to leading-edge chip investment. In the 10-K, KLA wrote:
"The 12% increase in total revenues in the fiscal year ended June 30, 2026 compared to the prior fiscal year was primarily driven by higher product revenues resulting from increased leading-edge customer investments in foundry/logic, memory and advanced packaging technologies, supported by strong demand associated with AI and HPC applications."
KLA 10-K, Aug. 6, 2026
That gives the growth a specific operating receipt: foundry, logic, memory, and advanced packaging customers bought more tools. The 21% increase in PCB and Component Inspection revenue adds a second leg, through services and the installed base rather than just new equipment.
The cash side has its own explanation, and it is more balance-sheet than income-statement. KLA’s cash fell to $1.6 billion from $2.1 billion, while inventory rose 13.6% and accounts receivable jumped 27.6%, both faster than revenue. KLA does not disclose a single reason for those working-capital changes.
The company did disclose where more cash went:
"The increase in cash used was primarily due to increases in net purchases of available-for-sale securities of $959.9 million, and capital expenditures of $40.7 million, partially offset by a $10.5 million increase in proceeds from capital-related government assistance."
KLA 10-K, Aug. 6, 2026
Capex increased 12.1% to $375.9 million, and research and development spending rose 12.6% to $1.5 billion. Those are not accounting footnotes hiding in the attic; they are spending choices that sit alongside the weaker cash conversion. The company also reported higher installation, warranty, and tariff costs, partially offset by lower inventory-related charges.
That leaves KLA with two accurate descriptions at once: a business expanding with advanced-chip demand and a cash profile that did not keep pace with the earnings line. The stock closed at $192.60 on Aug. 6, while the latest annual valuation facts put it at 6.3 times earnings. A low earnings multiple does not resolve the narrower question raised by this year’s accounts: how much of the profit growth is arriving as cash, and how much is still tied up in receivables, inventory, or investment spending?
KLA’s next reported period will provide the factual comparison that is missing here: whether operating cash flow moves closer to net income as accounts receivable and inventory change. Did the stronger demand convert into cash at the same pace as it converted into revenue?
KLA’s fiscal 2026 10-K records stronger AI-linked demand, higher margins, and lower cash conversion.