KLA reports $4.14B revenue for fiscal Q1 2027

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2 unchanged paragraphs

For the fiscal year ended June 30 , 2026

ANNUAL QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

8 unchanged paragraphs

(Registrant s telephone number, including area code) ( 408 ) 875-3000

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Securities registered pursuant to Section 12(g) of the Act:

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

1 unchanged paragraph

Non-accelerated filer o

Large accelerated filer x Accelerated filer

Non-accelerated filer Smaller reporting company

2 unchanged paragraphs

Indicate by check mark whether the registrant has filed a report on and attestation to its management s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant s executive officers during the relevant recovery period pursuant to 240.10D-1(b).

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant based upon the closing price of the registrant s stock, as of December 31, 2025, was approximately $ 159.3 billion.

The registrant had 1,306,546,783 shares of common stock outstanding as of August 3, 2026.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 2026 Annual Meeting of Stockholders ( Proxy Statement ) to be filed pursuant to Regulation 14A within 120 days after the registrant s fiscal year ended June 30, 2026, are incorporated by reference into Part III of this report.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No x

As of October 26, 2026, there were 1,302,962,435 shares of the registrant s Common Stock, $0.001 par value per share, outstanding.

PART I FINANCIAL INFORMATION

MD&A 173 changes

The following discussion of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the related notes included in Item 8 Financial Statements and Supplementary Data in this Annual Report on Form 10-K. This discussion contains forward-looking statements, which involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors, including but not limited to those discussed in Part I Item 1A Risk Factors and elsewhere in this Annual Report on Form 10-K (see Special Note Regarding Forward-Looking Statements ). Discussions and analysis of fiscal year 2025 as compared against fiscal year 2024 have been omitted and can be found in Item 7 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the SEC.

We are a leading supplier of process control and yield management solutions and services for the semiconductor and related electronics industries. Our broad portfolio of inspection and metrology products, along with related services, software and other offerings, supports R&D and manufacturing of ICs, wafers and reticles. Our products, services and expertise enable our customers to measure, detect, analyze and resolve critical nanometer-scale product defects, helping them to address manufacturing challenges and achieve higher yields at lower cost.

We also offer advanced technology solutions across a range of adjacent markets, including PCBs, advanced packaging, specialty semiconductors (such as LEDs, power devices and compound semiconductors), data storage and general materials research. In addition, our services business has grown consistently year over year and accounted for approximately 23% of our total revenues in fiscal 2026. Our services revenue, which is generated largely from recurring subscription-like contracts, provides maintenance and other services to maximize uptime, productivity and tool life for our customers, supported in part by continued demand from legacy semiconductor markets.

We are organized into three reportable segments, as follows:

Semiconductor Process Control: a comprehensive portfolio of inspection, metrology and data analytics products, as well as related service offerings that help IC manufacturers achieve target yields throughout the semiconductor fabrication process, from R&D through volume production.

Specialty Semiconductor Process: advanced vacuum deposition and etching process tools used by a broad range of specialty semiconductor customers.

PCB and Component Inspection: a range of inspection, testing and measurement, and direct imaging for patterning products used by manufacturers of PCBs, advanced packaging, MEMS and other electronic components.

The semiconductor industry continues to experience market expansion and diversification. HPC and data centers, supported by increasing adoption of AI, are contributing to industry growth and these trends are expected to continue to influence industry investment into fiscal year 2027. AI represents a key technology inflection point driving innovation and demand at the leading edge, and our portfolio of products is well positioned to support leading-edge demand and the ongoing AI infrastructure buildout. Our semiconductor customers generally operate in one or both major semiconductor device manufacturing markets: memory and foundry/logic. Long-term demand drivers include continued adoption of EUV in HVM for logic and DRAM (including high-bandwidth memory), which are increasing process control requirements and expanding our served market. Demand for advanced semiconductor technologies, particularly at leading-edge nodes such as 2-nanometer, is increasing process complexity and process control intensity, which in turn is driving incremental demand for our solutions. Increasing complexity and value of semiconductor packages, particularly for AI and HPC applications, is also driving significant growth in our advanced packaging business. Broader industry trends, including digitization, communication improvements, healthcare innovation, industrial applications, and increasing semiconductor content in automobiles and intelligent systems, are supporting continued investment in legacy and mature-node capacity, where long product lifecycles and expanding end-market demand require ongoing manufacturing investments.

While we continue to invest in technological innovation, demand for our products may be affected by the timing of customer adoption decisions and changes in delivery schedules, which can result in variability in our operating results. In addition, geopolitical factors, including government regulations and tariffs, have impacted our results of operations and may continue to do so. We have also increased our purchase commitments, in part to secure the supply of key components, which may affect the timing and magnitude of our costs and working capital requirements. Despite these dynamics, we delivered higher revenue and net income in fiscal year 2026 compared to fiscal year 2025, driven by increased sales volume and disciplined cost management. Looking ahead to fiscal year 2027, we expect continued revenue growth as customer engagement and demand signals continue to strengthen.

We are continuously assessing the aggregate potential impact of government regulations, tariffs and other geopolitical risks on our financial results and operations. See Part I Item 1A Risk Factors for more information regarding how such actions by the U.S. government or another country could significantly impact our ability to provide our products and services to existing and potential customers, especially in China, and adversely affect our business, financial condition and results of operations.

On June 11, 2026, the Company effected a ten-for-one stock split of its common stock and a proportional increase in the number of authorized shares of common stock. Share and per share information throughout this Annual Report on Form 10-K have been retroactively adjusted to reflect the stock split.

The following table sets forth some of our key consolidated financial information for each of our last three fiscal years:

(Dollar amounts in thousands, except diluted net income per share) 2026 2025 2024

Total revenues $ 13,579,476 $ 12,156,162 $ 9,812,247

Costs of revenues $ 5,255,060 $ 4,751,867 $ 3,928,073

Gross margin 61.3 % 60.9 % 60.0 %

Net income $ 4,830,771 $ 4,061,643 $ 2,761,896

Diluted net income per share $ 3.66 $ 3.04 $ 2.03

We continue to focus on returning cash to our investors, making $2.29 billion in share repurchases and paying $1.06 billion in dividends in the year ended June 30, 2026. Our Board of Directors has authorized a program that permits us to repurchase our common stock, including an increase in the authorized repurchase amount of $7.00 billion in the third quarter of fiscal 2026. As of June 30, 2026, we had $9.74 billion of repurchase authority remaining. We also announced an increase in the dividend level in the third quarter of fiscal 2026 to $0.230 per share per quarter, which was our 17th consecutive annual dividend increase. Refer to the Liquidity and Capital Resources section below for more information on our strong cash flow generation and strategy of returning excess cash to our stockholders.

CRITICAL ACCOUNTING ESTIMATES

A critical accounting estimate is defined as one that has a material impact on our financial condition and results of operations and requires us to make difficult, complex or subjective judgments, often as a result of the need to make estimates about matters that are inherently uncertain. Where applicable, we base these estimates and assumptions on historical experience and evaluate them on an ongoing basis to ensure that they remain reasonable under current conditions. Actual results could differ from those estimates. We believe that the following critical accounting policies reflect more significant judgments and estimates used in the preparation of our consolidated financial statements regarding critical accounting estimates. See Note 1 Description of Business and Summary of Significant Accounting Policies to our Consolidated Financial Statements for additional information regarding our accounting policies.

Revenue Recognition. We recognize revenue from sales at a point in time when we have satisfied our performance obligation by transferring control of the goods or services to the customer. The transaction price for our contracts with customers is allocated among the identified performance obligations and consists of both fixed and variable consideration provided it is probable that a significant reversal of revenue will not occur when the uncertainty related to variable consideration is resolved. Fixed consideration includes amounts to be contractually billed to the customer while variable consideration includes estimates for discounts and credits for future usage.

Management uses judgment in identifying performance obligations, determining the stand-alone selling price ( SSP ) for each distinct performance obligation and allocating consideration from an arrangement to the individual performance obligations based on the SSP. We estimate the SSP of products and services based on observable transactions when the products and services are sold on a stand-alone basis and those prices fall within a reasonable range. We typically have established SSP ranges for individual products and services due to the stratification of these products by customers and circumstances. In instances where the SSP is not directly observable, we determine the SSP using information that includes market conditions, entity-specific factors including discounting strategies, information about the customer or class of customer that is reasonably available and other observable inputs. While changes in the allocation of SSP between performance obligations will not affect the amount of total revenue recognized for a particular contract, any material changes could impact the timing of revenue recognition, which could have a material effect on our financial position and results of operations. Additionally, management also uses judgments to evaluate whether or not the customer has obtained control of the product and considers several indicators in evaluating whether or not control has transferred to the customer, which could also impact the timing of revenue recognition, and could have a material effect on our financial position and results of operations. Although our products are generally not sold with a right of return, we may provide other credits or sales incentives, which are accounted for either as variable consideration or a material right, depending on the specific terms and conditions of the arrangement. These credits and incentives are estimated at contract inception and updated at the end of each reporting period if and when additional information becomes available.

Inventory Valuation. Inventories are stated at the lower of cost or net realizable value using standard costs that approximate actual costs on a first-in, first-out basis. The carrying value of inventory is reduced for estimated obsolescence equal to the difference between its cost and the estimated net realizable value based on assumptions about future demand for meeting our product manufacturing plans and our customers support requirements. The estimate of net realizable value of inventory is impacted by assumptions regarding general semiconductor market conditions, manufacturing schedules, technology changes, new product introductions and possible alternative uses, and requires us to use significant judgment that may include uncertain elements. Actual demand may differ from forecasted demand, and such differences may have a material effect on recorded inventory values. If in any period we anticipate an adverse change in assumptions such as future demand or market conditions to be less favorable than our previous estimates, additional inventory write-downs may be required and would be reflected in cost of revenues, resulting in a negative impact to our gross margin in that period. The potential negative impact based on future demand is not practically quantifiable. On the other hand, if in any period we are able to sell inventories that had been written down in a previous period to a level below the ultimate realized selling price, related revenue would be recorded with a lower or no offsetting charge to cost of revenues resulting in a net benefit to our gross margin in that period. A decrease in the future average selling prices would not have a material impact on the estimated net realizable value of finished goods and work in process inventories.

Goodwill and Long-Lived Assets Impairment. We assess goodwill for impairment annually as well as whenever events or changes in circumstances indicate that the carrying value of a reporting unit may not be recoverable. Events or changes in circumstances that could affect the likelihood that we will be required to recognize an impairment charge for goodwill include, but are not limited to, declines in our stock price or market capitalization, declines in our market share and declines in revenues or profits at our reporting units. If the fair value of a reporting unit is less than its carrying value, a goodwill impairment charge is recorded for the difference.

We determine the fair value of a reporting unit using the income approach or market approach, or a combination of both. If multiple valuation methodologies are used, the results are judgmentally weighted. The income approach is estimated through discounted cash flow analysis. The estimated fair value of a reporting unit is computed by adding the present value of the estimated annual discounted cash flows over a discrete projection period to the residual value of the business at the end of the projection period. This valuation technique requires us to use significant estimates and assumptions, including long-term growth rates, discount rates and other inputs. The estimated growth rates for the projection period are based on our internal forecasts of anticipated future performance of the business. The residual value is estimated using a perpetual nominal growth rate, which is based on projected long-range inflation and long-term industry projections. The discount rates are calculated as the weighted average cost of capital of comparable peer companies, adjusted for company-specific risk. The market approach estimates the fair value of a reporting unit by utilizing the market comparable method, which uses revenue and earnings multiples from comparable companies.

We performed the required annual goodwill impairment testing for all reportable segments as of December 31, 2025, and concluded that goodwill was not impaired. As a result of our qualitative assessment, we determined that it was not necessary to perform the quantitative assessment.

During the second quarter of fiscal 2025, we noted a continued deterioration of the long-term forecast for our PCB business, which is part of our PCB and Component Inspection reportable segment. We also completed an internal reorganization affecting the composition of reporting units within our Specialty Semiconductor Process and PCB and Component Inspection reportable segments. These two events triggered goodwill and purchased intangible assets impairment tests, which resulted in a $230.4 million pre-reorganization goodwill impairment charge in the PCB and Component Inspection reportable segment. The quantitative assessment performed, which utilized a combination of the income and market approaches described above, was particularly sensitive to changes in the underlying estimates and assumptions. For example, if these estimates and assumptions were adjusted to the extent the fair value of the reporting unit was calculated to be 10% lower, we would have incurred an additional approximately $50 million impairment charge.

Long-lived assets, including both tangible and purchased intangible assets, are tested for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Events or changes in circumstances that could affect the likelihood that we will be required to recognize an impairment charge for long-lived assets primarily include declines in our operating cash flows from the use of these assets.

For finite-lived purchased intangible assets, we determine whether the assets are recoverable based on the forecasted undiscounted future cash flows that are expected to be generated by the lowest-level associated asset grouping. If the undiscounted cash flows used in the recoverability test are less than the assets carrying value, we recognize an impairment loss for the amount that the carrying value exceeds the fair value.

We determine the fair value of purchased intangible assets using the income approach, primarily by applying the relief-from-royalty or multi-period excess-earnings methods. In connection with the continued deterioration of the long-term forecast for our PCB businesses noted above, we recorded impairment losses related to purchased intangible assets of $8.7 million during the second quarter of fiscal 2025.

There can be no assurance that the estimates and assumptions used in our fair value calculations will prove to be an accurate prediction of the future. If our assumptions are not realized, or if there are future changes in any of the assumptions due to a change in economic conditions or otherwise, it is possible that a further impairment charge may need to be recorded in the future.

See Note 6 Goodwill and Purchased Intangible Assets in the Notes to our Consolidated Financial Statements for additional information.

Income Taxes. The calculation of our effective tax rate involves significant judgment in the application of complex tax laws among various tax jurisdictions worldwide; identifying uncertain tax positions; and estimating the amount of deferred tax assets that will be realized in the future. We believe that our tax positions and judgments are reasonable, but actual results may differ. If one or more taxing authorities were to successfully overturn our tax positions, it could have a material adverse effect on our effective tax rate, results of operations, or cash flows.

Unrecognized tax benefits are recorded for uncertain tax positions on the largest amount that is more than 50% likely of being realized upon ultimate settlement. Evaluation of tax positions, their technical merits, and measurements using cumulative probability are inherently subjective estimates since they require our assessment of the probability of future outcomes. We recorded unrecognized tax benefits of $257.8 million and $258.6 million for the years ended June 30, 2026 and June 30, 2025, respectively. We reevaluate these uncertain tax positions on a quarterly basis based on certain factors including, but not limited to, changes in facts or circumstances; changes in tax law; audit settlements; new audit activities; and changes in accounting standards. Any changes to these factors can result in a material change to tax expense.

Our calculations of deferred tax assets and liabilities are based on estimates and judgments related to uncertainties in the application of complex tax laws and projections of future taxable income. The guidance requires that deferred tax assets be reduced by a valuation allowance if we determine it is more likely than not that a portion of the deferred tax asset will not be realized in the foreseeable future. We have determined that a valuation allowance is necessary against a portion of the deferred tax assets, but we anticipate that our future taxable income will be sufficient to recover the remainder of our deferred tax assets. We recorded tax valuation allowances of $356.6 million and $310.6 million as of June 30, 2026 and June 30, 2025, respectively, primarily related to California credit carry-forwards. Based on the enacted income apportionment rules in California, our future California income tax liability will not be sufficient to fully utilize the credit carry-forwards. We assess on a quarterly basis whether there should be a change to the valuation allowance for some portion or all of the deferred tax assets. If there is a change in our ability to recover our deferred tax assets that are not subject to a valuation allowance, we will be required to record an additional valuation allowance against such deferred tax assets which may materially increase our tax expense. If there is a change in our ability to utilize the California credit carry-forwards, we will be required to reduce our valuation allowance against such deferred tax assets which may materially decrease our tax expense.

Recent Accounting Pronouncements

For a description of recent accounting pronouncements, including those recently adopted and the expected dates of adoption as well as estimated effects, if any, on our Consolidated Financial Statements of those not yet adopted, see Note 1 Description of Business and Summary of Significant Accounting Policies to our Consolidated Financial Statements.

RESULTS OF OPERATIONS

Revenues and Gross Margin

(Dollar amounts in thousands) 2026 2025 2024 FY26 vs. FY25 FY25 vs. FY24

Product $ 10,453,537 $ 9,472,854 $ 7,482,679 $ 980,683 10 % $ 1,990,175 27 %

Service 3,125,939 2,683,308 2,329,568 442,631 16 % 353,740 15 %

Total revenues $ 13,579,476 $ 12,156,162 $ 9,812,247 $ 1,423,314 12 % $ 2,343,915 24 %

Costs of revenues $ 5,255,060 $ 4,751,867 $ 3,928,073 $ 503,193 11 % $ 823,794 21 %

Gross margin 61.3% 60.9% 60.0% 0.4% 0.9%

Our business is affected by the concentration of our customer base and our customers capital equipment procurement schedules as a result of their investment plans. Our product revenues in any particular period are impacted by the amount of new orders we receive during that period and, depending upon the duration of manufacturing and installation cycles, in the preceding periods. Revenue is also impacted by average customer pricing, customer revenue deferrals associated with volume purchase agreements, the effect of fluctuations in foreign currency exchange rates, increased trade restrictions as discussed in the Executive Summary section above and the availability of government incentives for semiconductor capital investments. Service revenues are generated from product maintenance and support services, as well as billable time and material service calls made to our customers. The amount of our service revenues is typically a function of the number of systems installed at our customers sites and the utilization of those systems, but it is also impacted by other factors, such as our rate of service contract renewals, the types of systems being serviced and fluctuations in foreign currency exchange rates. A significant portion of our revenues continues to be generated in Asia, where a substantial portion of the world s semiconductor manufacturing capacity is located, and we expect that trend to continue.

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. Revenue growth also benefited from higher service revenues, which increased 16% due to growth in our installed base of tools.

Revenues by segment (1)

(Dollar amounts in thousands) 2026 2025 2024 FY26 vs. FY25 FY25 vs. FY24

Semiconductor Process Control $ 12,244,733 $ 10,947,359 $ 8,733,556 $ 1,297,374 12 % $ 2,213,803 25 %

Specialty Semiconductor Process 584,064 587,107 528,701 (3,043) (1) % 58,406 11 %

PCB and Component Inspection 750,415 621,721 552,491 128,694 21 % 69,230 13 %

Total segment revenues $ 13,579,212 $ 12,156,187 $ 9,814,748 $ 1,423,025 12 % $ 2,341,439 24 % (1) Segment revenues exclude corporate allocations and the effects of changes in foreign currency exchange rates. For additional details, refer to Note 17 Segment Reporting and Geographic Information to our Consolidated Financial Statements.

Revenue from our Semiconductor Process Control segment increased 12% in fiscal 2026 compared to fiscal 2025, primarily due to increased revenue from foundry/logic and memory customers, driven by continued leading-edge investment supporting AI and HPC applications. Revenue growth also benefited from strong customer adoption of our advanced packaging products and higher service revenue attributable to growth in the installed base of tools.

Revenue from our Specialty Semiconductor Process segment decreased slightly by 1% in fiscal 2026 compared to fiscal 2025, primarily due to lower customer investments and reduced product sales in China, mostly offset by higher service revenues resulting from growth in the installed base of tools.

Revenue from our PCB and Component Inspection segment increased 21% in fiscal 2026 compared to fiscal 2025, primarily driven by increased demand from customers investing in advanced packaging technologies, higher revenue from our PCB business, and increased service revenue attributable to growth in the installed base of tools. The increase was partially offset by the absence of revenue from our Display business following our exit from this business in the prior year.

Below is supplementary revenue information by major product categories for the indicated periods:

(Dollar amounts in thousands) 2026 2025 2024 FY26 vs. FY25 FY25 vs. FY24

Wafer Inspection $ 6,630,813 49 % $ 6,198,815 51 % $ 4,333,296 44 % $ 431,998 7 % $ 1,865,519 43 %

Patterning 2,706,763 20 % 2,196,347 18 % 2,054,442 21 % 510,416 23 % 141,905 7 %

Specialty Semiconductor Process 502,519 4 % 517,201 4 % 470,565 5 % (14,682) (3) % 46,636 10 %

PCB and Component Inspection 460,320 3 % 355,891 3 % 291,161 3 % 104,429 29 % 64,730 22 %

Services 3,125,939 23 % 2,683,308 22 % 2,329,568 24 % 442,631 16 % 353,740 15 %

Other 153,122 1 % 204,600 2 % 333,215 3 % (51,478) (25) % (128,615) (39) %

Total $ 13,579,476 100 % $ 12,156,162 100 % $ 9,812,247 100 % $ 1,423,314 12 % $ 2,343,915 24 %

The following customer accounted for more than 10% of our total revenues, primarily in our Semiconductor Process Control segment, for the indicated periods:

Taiwan Semiconductor Manufacturing Company Limited Taiwan Semiconductor Manufacturing Company Limited Taiwan Semiconductor Manufacturing Company Limited

Revenues by region, based on ship-to location, for the periods indicated were as follows:

(Dollar amounts in thousands) 2026 2025 2024

China $ 4,048,358 29.8 % $ 4,042,567 33.3 % $ 4,196,727 42.8 %

Taiwan 3,643,742 26.8 % 3,205,392 26.4 % 1,738,065 17.7 %

Korea 1,833,836 13.5 % 1,452,826 11.9 % 906,924 9.2 %

North America 1,757,337 13.0 % 1,362,311 11.2 % 1,070,791 10.9 %

Japan 915,111 6.7 % 1,133,002 9.3 % 963,203 9.8 %

Europe and Israel 726,693 5.4 % 574,197 4.7 % 540,263 5.6 %

Rest of Asia 654,399 4.8 % 385,867 3.2 % 396,274 4.0 %

Total $ 13,579,476 100.0 % $ 12,156,162 100.0 % $ 9,812,247 100.0 %

Revenue in China was comparable to the prior fiscal year, as continued investments in legacy-node technologies by domestic semiconductor companies were largely offset by export control restrictions affecting certain advanced technology transactions.

Revenue in Taiwan increased 13.7% compared with the prior fiscal year, primarily due to increased leading-edge customer investments in foundry/logic, memory and advanced packaging technologies, supported by strong demand associated with AI and HPC applications.

and 93 more changes in the filing

Financial statements 146 changes

Consolidated Balance Sheets as of June 30, 2026 and 2025

Consolidated Statements of Operations for each of the three years in the period ended June 30, 2026

Consolidated Statements of Comprehensive Income for each of the three years in the period ended June 30, 2026

Consolidated Statements of Stockholders Equity for each of the three years in the period ended June 30, 2026

Consolidated Statements of Cash Flows for each of the three years in the period ended June 30, 2026

Condensed Consolidated Balance Sheets

(In thousands) September 30,

Cash and cash equivalents $ 1,531,950 $ 1,649,842

Marketable securities 3,209,241 3,252,566

Accounts receivable, net 3,072,087 2,889,208

Inventories 4,090,426 3,648,538

Other current assets 669,711 941,636

Total current assets 12,573,415 12,381,790

Land, property and equipment, net 1,541,331 1,380,550

Goodwill, net 1,789,683 1,788,758

Deferred income taxes 1,054,617 1,037,224

Purchased intangible assets, net 212,598 255,835

Other non-current assets 1,233,091 1,107,378

Total assets $ 18,404,735 $ 17,951,535

LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:

Accounts payable $ 740,743 $ 623,668

Deferred system revenue 843,008 932,901

Deferred service revenue 634,232 604,127

Other current liabilities 2,337,103 2,144,231

Total current liabilities 4,555,086 4,304,927

Long-term debt 5,723,289 5,887,415

Deferred tax liabilities 452,541 473,648

Deferred service revenue 230,562 238,111

Other non-current liabilities 919,850 697,614

Total liabilities 11,881,328 11,601,715

Commitments and contingencies (Notes 8, 13 and 14)

Stockholders equity:

Common stock and capital in excess of par value 2,585,416 2,700,409

Retained earnings 3,997,397 3,683,864

Accumulated other comprehensive loss ( 59,406 ) ( 34,453 )

Total stockholders equity 6,523,407 6,349,820

Total liabilities and stockholders equity $ 18,404,735 $ 17,951,535

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).

Condensed Consolidated Statements of Operations

Three Months Ended September 30,

(In thousands, except per share amounts) 2026 2025

Product $ 3,285,469 $ 2,465,006

Service 850,546 744,690

Total revenues 4,136,015 3,209,696

Costs of revenues 1,577,791 1,243,070

Research and development 395,096 360,461

Selling, general and administrative 301,458 268,988

Interest expense 67,927 71,075

Other expense (income), net ( 30,339 ) ( 43,374 )

Income before income taxes 1,824,082 1,309,476

Provision for income taxes 275,494 188,436

Net income $ 1,548,588 $ 1,121,040

Net income per share

Diluted $ 1.18 $ 0.85

Weighted-average number of shares:

Basic 1,305,330 1,317,567

Diluted 1,311,064 1,323,808

See accompanying notes to Condensed Consolidated Financial Statements (unaudited).

Condensed Consolidated Statements of Comprehensive Income

Three Months Ended September 30,

(In thousands) 2026 2025

Net income $ 1,548,588 $ 1,121,040

Other comprehensive income (loss):

Currency translation adjustments:

Cumulative currency translation adjustments 4,962 4,640

Income tax provision ( 1,578 ) ( 716 )

Net change related to currency translation adjustments 3,384 3,924

Net unrealized gains (losses) arising during the period ( 13,014 ) 3,364

Reclassification adjustments for net gains included in net income ( 6,148 ) ( 12,212 )

Income tax benefit 2,826 2,404

Net change related to cash flow hedges ( 16,336 ) ( 6,444 )

Net change related to unrecognized gains and transition obligations in connection with defined benefit plans 410 146

Available-for-sale securities:

Net unrealized gains (losses) arising during the period ( 15,887 ) 2,446

Reclassification adjustments for net (gains) losses included in net income 85 ( 97 )

Income tax (provision) benefit 3,391 ( 505 )

Net change related to available-for-sale securities ( 12,411 ) 1,844

Other comprehensive loss ( 24,953 ) ( 530 )

Total comprehensive income $ 1,523,635 $ 1,120,510

and 66 more changes in the filing

Notes to the financial statements 159 changes

Report of Independent Registered Public Accounting Firm (PCAOB ID 238 )

Schedule II Valuation and Qualifying Accounts for the three years in the period ended June 30, 2026

Consolidated Balance Sheets

(In thousands, except par value) 2026 2025

Cash and cash equivalents $ 1,649,842 $ 2,078,908

Marketable securities 3,252,566 2,415,715

Accounts receivable, net 2,889,208 2,263,915

Inventories 3,648,538 3,212,149

Other current assets 941,636 728,102

Total current assets 12,381,790 10,698,789

Land, property and equipment, net 1,380,550 1,252,775

Goodwill, net 1,788,758 1,792,193

Deferred income taxes 1,037,224 1,105,770

Purchased intangible assets, net 255,835 444,785

Other non-current assets 1,107,378 773,614

Total assets $ 17,951,535 $ 16,067,926

LIABILITIES AND STOCKHOLDERS EQUITY

Current liabilities:

Accounts payable $ 623,668 $ 458,509

Deferred system revenue 932,901 816,834

Deferred service revenue 604,127 548,011

Other current liabilities 2,144,231 2,262,441

Total current liabilities 4,304,927 4,085,795

Long-term debt 5,887,415 5,884,257

Deferred tax liabilities 473,648 446,945

Deferred service revenue 238,111 348,844

Other non-current liabilities 697,614 609,632

Total liabilities 11,601,715 11,375,473

Commitments and contingencies (Notes 8, 14 and 15)

Stockholders equity:

Preferred stock, $ 0.001 par value, 1,000 shares authorized, none outstanding

Common stock, $ 0.001 par value, 5,000,000 shares authorized, 2,816,579 and 2,811,758 shares issued, 1,306,983 and 1,320,227 shares outstanding, as of June 30, 2026 and June 30, 2025, respectively

Capital in excess of par value 2,699,102 2,510,602

Retained earnings 3,683,864 2,179,330

Accumulated other comprehensive income (loss) ( 34,453 ) 1,201

Total stockholders equity 6,349,820 4,692,453

Total liabilities and stockholders equity $ 17,951,535 $ 16,067,926

See accompanying notes to Consolidated Financial Statements.

Consolidated Statements of Operations

(In thousands, except per share amounts) 2026 2025 2024

Product $ 10,453,537 $ 9,472,854 $ 7,482,679

Service 3,125,939 2,683,308 2,329,568

Total revenues 13,579,476 12,156,162 9,812,247

Costs of revenues 5,255,060 4,751,867 3,928,073

Research and development 1,532,118 1,360,334 1,278,981

Selling, general and administrative 1,131,518 1,029,734 969,509

Impairment of goodwill and purchased intangible assets 239,100 289,474

Interest expense 284,440 302,166 311,253

Other expense (income), net ( 229,585 ) ( 171,487 ) ( 155,075 )

Income before income taxes 5,605,925 4,644,448 3,190,032

Provision for income taxes 775,154 582,805 428,136

Net income 4,830,771 4,061,643 2,761,896

Net income per share

Basic $ 3.68 $ 3.05 $ 2.04

Diluted $ 3.66 $ 3.04 $ 2.03

Weighted-average number of shares:

Basic 1,311,516 1,330,299 1,353,452

Diluted 1,319,633 1,337,502 1,361,869

See accompanying notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income

(In thousands) 2026 2025 2024

Net income $ 4,830,771 $ 4,061,643 $ 2,761,896

Other comprehensive income (loss):

Currency translation adjustments:

Cumulative currency translation adjustments ( 11,744 ) 17,820 ( 11,763 )

Income tax (provision) benefit ( 499 ) 749 544

Net change related to currency translation adjustments ( 12,243 ) 18,569 ( 11,219 )

Net unrealized gains arising during the period 34,383 36,726 9,737

Reclassification adjustments for net gains included in net income ( 52,824 ) ( 15,429 ) ( 25,904 )

Income tax (provision) benefit 4,085 ( 2,742 ) 2,466

Net change related to cash flow hedges ( 14,356 ) 18,555 ( 13,701 )

Net change related to unrecognized losses and transition obligations in connection with defined benefit plans 3,571 3,706 3,043

Available-for-sale securities:

Net unrealized gains (losses) arising during the period ( 15,491 ) 12,090 11,527

Reclassification adjustments for net (gains) losses included in net income ( 587 ) ( 59 ) 103

Income tax (provision) benefit 3,452 ( 2,585 ) ( 2,487 )

Net change related to available-for-sale securities ( 12,626 ) 9,446 9,143

Other comprehensive income (loss) ( 35,654 ) 50,276 ( 12,734 )

Total comprehensive income $ 4,795,117 $ 4,111,919 $ 2,749,162

See accompanying notes to Consolidated Financial Statements.

and 79 more changes in the filing

Note 2: REVENUE 14 changes

1 unchanged paragraph

(Dollar amounts in thousands) 2026 2025 2024 FY26 vs. FY25 FY25 vs. FY24

Accounts receivable, net $ 2,889,208 $ 2,263,915 $ 1,833,041 $ 625,293 28 % $ 430,874 24 %

Contract assets $ 131,673 $ 105,081 $ 69,259 $ 26,592 25 % $ 35,822 52 %

Contract liabilities $ 1,775,139 $ 1,713,689 $ 1,782,242 $ 61,450 4 % $ ( 68,553 ) ( 4 ) %

(Dollar amounts in thousands) September 30, 2026 June 30, 2026 $ Change % Change

Accounts receivable, net $ 3,072,087 $ 2,889,208 $ 182,879 6 %

Contract assets $ 129,900 $ 131,673 $ ( 1,773 ) ( 1 ) %

Long-term accounts receivable, net $ 180,729 $ $ 266,755 $ 180,729 100 % $ 86,026 48 %

Contract liabilities $ 1,707,802 $ 1,775,139 $ ( 67,337 ) ( 4 ) %

1 unchanged paragraph

The change in contract assets during the fiscal year three months ended June September 30, 2026 was mainly due to $ 124.1 million of revenue recognized for which the payment is subject to conditions other than the passage of time, partially offset by $ 97.2 73.0 million of contract assets reclassified to accounts receivable, net, as our right to consideration for these contract assets became unconditional, partially offset by $ 71.4 million of revenue recognized for which the payment is subject to conditions other than passage of time. Contract assets are included in other current assets on our Condensed Consolidated Balance Sheets.

The change in contract liabilities during the fiscal year three months ended June September 30, 2026 was mainly due to the recognition as revenue of $ 932.6 million that was included in contract liabilities as of June 30, 2026, partially offset by an increase in the value of products and services billed to customers for which control of the products and services has not transferred to the customers. partially offset by the recognition as revenue of $ 1.29 billion that was included in Contract liabilities as of June 30, 2025. Contract liabilities are included in current liabilities and non-current liabilities, classified as deferred system revenue or deferred service revenue, on our Condensed Consolidated Balance Sheets.

The following table represents the transaction price for contracts that have not yet been recognized as revenue as of June September 30, 2026, which equals our contract liabilities, and when the Company expects to recognize the amounts as revenue:

1 unchanged paragraph

Contract liabilities $ 1,537,028 $ 163,356 $ 74,755 $ 1,775,139

Contract liabilities $ 1,477,240 $ 167,971 $ 62,591 $ 1,707,802

Note 3: FAIR VALUE MEASUREMENTS 54 changes

Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis as of the dates indicated below were presented on our Condensed Consolidated Balance Sheets as follows:

As of June 30, 2026 (In thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2)

As of September 30, 2026 (In thousands) Total (Level 1) (Level 2)

Corporate debt securities $ 7,523 $ $ 7,523

Money market funds and other 1,132,489 1,132,489

Sovereign securities 995 995

Municipal securities 1,000 1,000

Marketable securities:

Corporate debt securities 1,306,637 1,306,637

Municipal securities 15,851 15,851

Sovereign securities 32,924 32,924

U.S. Government agency securities 78,809 78,809

U.S. Treasury securities 1,358,138 1,319,886 38,252

Equity securities 33,289 33,289

Total cash equivalents and marketable securities (1)

Other current assets:

Derivative assets 11,550 11,550

Other non-current assets:

Executive Deferred Savings Plan assets 411,061 385,237 25,824

Long-term accounts receivable, net 266,755 266,755

Total financial assets (1)

Other current liabilities:

Derivative liabilities $ ( 25,198 ) $ $ ( 25,198 )

Interest rate swap liabilities ( 3,443 ) ( 3,443 )

Other non-current liabilities:

Interest rate swap liabilities ( 162,201 ) ( 162,201 )

Total financial liabilities $ ( 190,842 ) $ $ ( 190,842 )

(1) Excludes cash of $ 336.6 million held in operating accounts and time deposits of $ 437.0 million (of which $ 53.4 million were cash equivalents) as of September 30, 2026.

Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs

As of June 30, 2026 (In thousands) Total (Level 1) (Level 2)

10 unchanged paragraphs

Equity securities 46,772 46,772

5 unchanged paragraphs

EDSP Executive Deferred Savings Plan assets 416,389 398,414 17,975

9 unchanged paragraphs

As of June 30, 2025 (In thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2)

Municipal securities $ 6,120 $ $ 6,120

Corporate debt securities 1,498 1,498

Money market funds and other 1,531,022 1,531,022

U.S. Government agency securities 9,955 9,955

U.S. Treasury securities 9,981 9,981

Marketable securities:

Corporate debt securities 960,148 960,148

Municipal securities 51,453 51,453

U.S. Government agency securities 106,881 106,881

U.S. Treasury securities 877,578 802,682 74,896

Total cash equivalents and marketable securities (1)

Other current assets:

Derivative assets 59,503 59,503

Other non-current assets:

EDSP assets 349,530 336,090 13,440

Total financial assets (1)

Other current liabilities:

Derivative liabilities $ ( 28,615 ) $ $ ( 28,615 )

Total financial liabilities $ ( 28,615 ) $ $ ( 28,615 )

(1) Excludes cash of $ 437.8 million held in operating accounts and time deposits of $ 478.2 million (of which $ 82.5 million were cash equivalents) as of June 30, 2025.

We did not have any financial assets or liabilities measured at fair value on a recurring basis within Level 3 fair value measurements as of June September 30, 2026 or June 30, 2025. 2026. For additional details on our fair value measurement policies and hierarchy, refer to Note 1 Description of Business and Summary of Significant Accounting Policies to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.

Note 4: FINANCIAL STATEMENT COMPONENTS 71 changes

(In thousands) 2026 2025

Condensed Consolidated Balance Sheets

(In thousands) September 30, 2026 June 30, 2026

1 unchanged paragraph

Raw materials 1,849,676 1,491,786

Finished goods 238,424 285,661

Accounts receivable, gross $ 2,920,238 3,103,627 $ 2,297,930 2,920,238

Allowance for credit losses ( 31,030 31,540 ) ( 34,015 31,030 )

Customer service parts $ 622,714 639,024 $ 600,769 622,714

Raw materials 2,126,927 1,849,676

Work-in-process 1,076,942 937,724 833,933

Finished goods 247,533 238,424

1 unchanged paragraph

Prepaid expenses 224,515 201,053

Contract assets 131,673 105,081

Deferred costs of revenues $ 257,175 219,239 $ 223,829 257,175

Prepaid expenses 143,971 224,515

Contract assets 129,900 131,673

Prepaid income and other taxes 60,938 169,090 64,704

Other current assets 115,663 159,183 133,435

1 unchanged paragraph

Land $ 86,654 $ 86,677

Land $ 202,532 $ 86,654

Buildings and leasehold improvements 1,333,186 1,254,196 1,132,176

Machinery and equipment 1,479,287 1,418,112 1,238,599

Office furniture and fixtures 86,252 86,119 73,993

Construction-in-process 181,063 224,431 207,807

Less: accumulated depreciation ( 1,688,962 1,740,989 ) ( 1,486,477 1,688,962 )

1 unchanged paragraph

EDSP assets $ 416,389 $ 349,530

Operating lease ROU assets 335,065 269,714

Executive Deferred Savings Plan (1) assets

Operating lease right of use assets 345,151 335,065

Long-term accounts receivable, net 266,755 180,729

Other non-current assets 210,124 175,195 154,370

1 unchanged paragraph

Customer deposits 430,128 636,369

EDSP liabilities 417,257 350,426

Interest payable 108,913 110,056

Compensation and benefits $ 491,108 574,679 $ 418,515 491,108

Customer deposits 493,816 430,128

Executive Deferred Savings Plan (1) liabilities

Income taxes payable 142,281 83,996 167,262

Operating lease liabilities 54,013 52,937 45,192

Interest payable 46,545 108,913

Other liabilities and accrued expenses 612,572 559,892 534,621

1 unchanged paragraph

Customer deposits 3,816 6,823

Income taxes payable $ 250,846 299,437 $ 221,808 250,846

Operating lease liabilities 215,342 211,361 158,833

Pension liabilities 43,733 43,128 51,750

Customer deposits 13,960 3,816

Other non-current liabilities 347,378 188,463 170,418

(1) We have a non-qualified deferred compensation plan (known as the Executive Deferred Savings Plan or EDSP ) under which certain employees and non-employee directors may defer a portion of their compensation. The expense (benefit) associated with changes in the EDSP liability included in selling, general and administrative ( SG&A ) was $( 2.6 ) million and $ 18.2 million in the three months ended September 30, 2026 and 2025, respectively. The amount of net gains (losses) associated with changes in the EDSP assets included in SG&A expense was $( 2.6 ) million and $ 18.2 million in the three months ended September 30, 2026 and 2025, respectively. For additional details, refer to Note 1 Description of Business and Summary of Significant Accounting Policies to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.

1 unchanged paragraph

The components of Accumulated Other Comprehensive Income (Loss) ( AOCI ) as of the dates indicated below were as follows:

1 unchanged paragraph

Balance as of September 30, 2026 $ ( 66,136 ) $ ( 19,245 ) $ 34,106 $ ( 8,131 ) $ ( 59,406 )

1 unchanged paragraph

Balance as of June 30, 2025 $ ( 57,277 ) $ 5,792 $ 64,798 $ ( 12,112 ) $ 1,201

Location in the Consolidated Statements of Operations Year Ended June 30,

AOCI Components 2026 2025 2024

Interest expense 3,034 3,285 3,764

Net gains reclassified from AOCI $ 52,824 $ 15,429 $ 25,904

Consolidated Statements of Operations

The following table shows Other expense (income), net for the indicated periods:

(In thousands) 2026 2025 2024

Other expense (income), net:

Interest income $ ( 177,055 ) $ ( 180,276 ) $ ( 160,688 )

Foreign exchange (gains) losses, net ( 16,248 ) 2,964 ( 7,268 )

Net realized (gains) losses on sale of investments ( 587 ) ( 59 ) 103

Other ( 35,695 ) 5,884 12,778

The effects on net income of amounts reclassified from AOCI to our the Condensed Consolidated Statements of Operations for the indicated periods were as follows (in thousands, amounts in parentheses indicate debits or reductions to earnings):

AOCI Components Three Months Ended

Location in the Condensed Consolidated Statement of Operations September 30,

Unrealized gains on cash flow hedges from foreign exchange and interest rate contracts Revenues $ 6,826 $ 7,466 1,916 $ 18,374 210

Costs of revenues and operating expenses 42,964 4,678 3,766 3,473 11,244

Interest expense 759 758

Net gains reclassified from AOCI $ 6,148 $ 12,212

and 1 more change in the filing

Note 5: MARKETABLE SECURITIES 50 changes

1 unchanged paragraph

10 unchanged paragraphs

2 unchanged paragraphs

and 50 more changes in the filing

Note 6: GOODWILL AND PURCHASED INTANGIBLE ASSETS 41 changes

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

and 41 more changes in the filing

Note 7: DEBT 26 changes

9 unchanged paragraphs

1 unchanged paragraph

1 unchanged paragraph

and 26 more changes in the filing

Note 8: LEASES 12 changes

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

and 12 more changes in the filing

Note 9: EQUITY AND LONG-TERM INCENTIVE COMPENSATION PLANS 69 changes

2 unchanged paragraphs

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

2 unchanged paragraphs

and 69 more changes in the filing

Note 10: STOCK REPURCHASE PROGRAM 9 changes

1 unchanged paragraph

and 9 more changes in the filing

Note 11: NET INCOME PER SHARE 12 changes

2 unchanged paragraphs

and 12 more changes in the filing

Note 12: INCOME TAXES 93 changes

1 unchanged paragraph

and 93 more changes in the filing

Note 13: LITIGATION AND OTHER LEGAL MATTERS 1 change

and 1 more change in the filing

Note 14: COMMITMENTS AND CONTINGENCIES 14 changes

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

2 unchanged paragraphs

1 unchanged paragraph

and 14 more changes in the filing

Note 15: DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES 91 changes

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

3 unchanged paragraphs

2 unchanged paragraphs

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

2 unchanged paragraphs

and 91 more changes in the filing

Note 16: SEGMENT REPORTING AND GEOGRAPHIC INFORMATION 98 changes

3 unchanged paragraphs

1 unchanged paragraph

1 unchanged paragraph

3 unchanged paragraphs

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

and 98 more changes in the filing

Note 17: RESTRUCTURING CHARGES 2 changes

1 unchanged paragraph

and 2 more changes in the filing

Forward-looking statements 217 changes

3 unchanged paragraphs

8 unchanged paragraphs

26 unchanged paragraphs

and 217 more changes in the filing

Market risk 10 changes

and 10 more changes in the filing

Controls and procedures 10 changes

1 unchanged paragraph

1 unchanged paragraph

1 unchanged paragraph

and 10 more changes in the filing

Legal proceedings 1 change

and 1 more change in the filing

Risk factors 246 changes

3 unchanged paragraphs

and 246 more changes in the filing

Other information 12 changes

and 12 more changes in the filing

Exhibits 37 changes

and 37 more changes in the filing