Consolidated Balance Sheets as of June 30, 2026 and 2025 49 Consolidated Statements of Operations for each of the three years in the period ended June 30, 2026 50 Consolidated Statements of Comprehensive Income for each of the three years in the period ended June 30, 2026 51 Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended June 30, 2026 52 Consolidated Statements of Cash Flows for each of the three years in the period ended June 30, 2026 53 Notes to Consolidated Financial Statements 54 Report of Independent Registered Public Accounting Firm (PCAOB ID 238) 93 Schedule II Valuation and Qualifying Accounts for the three years in the period ended June 30, 2026 95 48 Table of Contents KLA CORPORATION Consolidated Balance Sheets As of June 30, (In thousands, except par value) 2026 2025 ASSETS Current assets: 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 1,307 1,320 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. 49 Table of Contents KLA CORPORATION Consolidated Statements of Operations Year Ended June 30, (In thousands, except per share amounts) 2026 2025 2024 Revenues: 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 and expenses: 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. 50 Table of Contents KLA CORPORATION Consolidated Statements of Comprehensive Income Year Ended June 30, (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) Cash flow hedges: 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. 51 Table of Contents KLA CORPORATION Consolidated Statements of Stockholders’ Equity Common Stock and Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity (In thousands, except per share amounts) Shares Amount Balances as of June 30, 2023 1,367,496 $ 2,107,663 $ 848,431 $ (36,341) $ 2,919,753 Net income — — 2,761,896 — 2,761,896 Other comprehensive loss — — — (12,734) (12,734) Net issuance under employee stock plans 7,074 1,908 — — 1,908 Repurchase of common stock (30,320) (42,133) (1,700,368) — (1,742,501) Cash dividends ($0.565 per share) and dividend equivalents declared — — (772,689) — (772,689) Stock-based compensation expense — 212,695 — — 212,695 Balances as of June 30, 2024 1,344,250 2,280,133 1,137,270 (49,075) 3,368,328 Net income — — 4,061,643 — 4,061,643 Other comprehensive income — — — 50,276 50,276 Net issuance under employee stock plans 6,034 18,853 — — 18,853 Repurchase of common stock (30,057) (52,075) (2,113,560) — (2,165,635) Cash dividends ($0.675 per share) and dividend equivalents declared — — (906,023) — (906,023) Stock-based compensation expense — 265,011 — — 265,011 Balances as of June 30, 2025 1,320,227 2,511,922 2,179,330 1,201 4,692,453 Net income — — 4,830,771 — 4,830,771 Other comprehensive loss — — — (35,654) (35,654) Net issuance under employee stock plans 4,997 (86,154) — — (86,154) Repurchase of common stock (18,241) (35,530) (2,268,405) — (2,303,935) Cash dividends ($0.800 per share) and dividend equivalents declared — — (1,057,832) — (1,057,832) Stock-based compensation expense — 310,171 — — 310,171 Balances as of June 30, 2026 1,306,983 $ 2,700,409 $ 3,683,864 $ (34,453) $ 6,349,820 See accompanying notes to Consolidated Financial Statements. 52 Table of Contents KLA CORPORATION Consolidated Statements of Cash Flows Year Ended June 30, (In thousands) 2026 2025 2024 Cash flows from operating activities: Net income $ 4,830,771 $ 4,061,643 $ 2,761,896 Adjustments to reconcile net income to net cash provided by operating activities: Impairment of goodwill and purchased intangible assets — 239,100 289,474 Depreciation and amortization 393,978 394,088 401,730 Unrealized foreign exchange (gain) loss and other 6,725 14,974 (12,533) Asset impairment charges — — 11,307 Stock-based compensation expense 310,171 265,011 212,695 Net gain on sale of assets (683) (161) — Deferred income taxes 77,795 (246,577) (155,228) Settlement of treasury lock agreement — — 415 Changes in assets and liabilities, net of assets acquired and liabilities assumed in business acquisitions: Accounts receivable (641,824) (367,897) (80,894) Inventories (465,963) (155,170) (164,092) Other assets (501,420) (10,459) (289,509) Accounts payable 172,357 33,789 24,976 Deferred system revenue 116,071 (169,027) 334,136 Deferred service revenue (54,617) 100,460 203,106 Other liabilities (100,282) (77,871) (228,904) Net cash provided by operating activities 4,143,079 4,081,903 3,308,575 Cash flows from investing activities: Business acquisitions, net of cash acquired — — (3,682) Capital expenditures (375,945) (335,259) (277,384) Proceeds from capital-related government assistance 16,782 6,263 — Purchases of available-for-sale and equity securities (3,711,093) (2,772,578) (2,756,987) Proceeds from maturity and sale of available-for-sale securities 2,894,046 2,915,435 1,567,637 Purchases of trading securities (264,960) (118,288) (134,098) Proceeds from sale of trading securities 248,624 105,751 121,020 Other, net 2,451 (3,805) 6,509 Net cash used in investing activities (1,190,095) (202,481) (1,476,985) Cash flows from financing activities: Proceeds from issuance of debt, net of issuance costs (1,602) — 735,043 Repayment of debt — (750,000) — Common stock repurchases (2,289,769) (2,149,946) (1,735,746) Payment of dividends to stockholders (1,057,832) (904,594) (773,041) Issuance of common stock 168,573 151,514 144,934 Tax withholding payments related to vested and released restricted stock units (204,976) (132,661) (143,024) Contingent consideration payable and other, net — — (4,183) Net cash used in financing activities (3,385,606) (3,785,687) (1,776,017) Effect of exchange rate changes on cash and cash equivalents 3,556 8,044 (6,309) Net increase (decrease) in cash and cash equivalents (429,066) 101,779 49,264 Cash and cash equivalents at beginning of period 2,078,908 1,977,129 1,927,865 Cash and cash equivalents at end of period $ 1,649,842 $ 2,078,908 $ 1,977,129 Supplemental cash flow disclosures: Income taxes paid, net $ 781,409 $ 886,937 $ 830,835 Interest paid, net of capitalized interest $ 282,505 $ 292,771 $ 276,597 Non-cash activities: Contingent consideration payable - financing activities $ — $ — $ (765) Dividends payable - financing activities $ 8,942 $ 8,660 $ 8,043 Unsettled common stock repurchase - financing activities $ 5,494 $ 5,500 $ 5,500 Accrued purchases of land, property and equipment - investing activities $ 21,531 $ 25,740 $ 13,849 See accompanying notes to Consolidated Financial Statements. 53 Table of Contents KLA CORPORATION Notes to Consolidated Financial Statements NOTE 1— DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business and Principles of Consolidation. KLA Corporation and its majority-owned subsidiaries (“KLA” or the “Company” and also referred to as “we,” “our,” “us” or similar references) is a supplier of process equipment, process control equipment, and data analytics products for a broad range of industries, including semiconductors and printed circuit boards (“PCBs”). We provide advanced process control and process-enabling solutions for manufacturing and testing wafers and reticles, integrated circuits (“ICs”), advanced packaging, light-emitting diodes, power devices, compound semiconductor devices, microelectromechanical systems (“MEMS”), data storage and PCBs as well as general materials research. We also provide comprehensive support and services across our installed base. Our extensive portfolio of inspection, metrology and data analytics products, and related services, helps IC manufacturers achieve target yield throughout the entire semiconductor fabrication process, from research and development (“R&D”) to final volume production. We develop and sell advanced vacuum deposition and etching process tools, which are used by a broad range of specialty semiconductor customers. We enable electronic device manufacturers to inspect, test and measure PCBs and ICs to verify their quality, deposit a pattern of desired electronic circuitry on the relevant substrate and perform three-dimensional shaping of metalized circuits on multiple surfaces. Our advanced products, coupled with our unique yield management software and services, allow us to deliver the solutions our semiconductor and PCB customers need to achieve their productivity goals by significantly reducing their risks and costs and improving their overall profitability and return on investment. Headquartered in Milpitas, California, we have subsidiaries both in the U.S. and key markets throughout the world. The Consolidated Financial Statements include the accounts of KLA and its majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Common Stock Split. 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 par value per share remains unchanged at $0.001 per share after the stock split. Comparability. Certain reclassifications have been made to the prior year’s Consolidated Financial Statements to conform to the current year presentation. The reclassifications did not have material effects on the prior year’s Consolidated Balance Sheets, Statements of Operations, Comprehensive Income and Cash Flows. Management Estimates. The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions in applying our accounting policies that affect the reported amounts of assets and liabilities (and related disclosure of contingent assets and liabilities) at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Cash Equivalents and Fixed Income Marketable Securities. All highly liquid debt instruments with original or remaining maturities of less than three months at the date of purchase are cash equivalents. Fixed income marketable securities are generally classified as available-for-sale for use in current operations, if required, and are reported at fair value, with unrealized gains and non-credit related unrealized losses, net of tax, presented as a separate component of stockholders’ equity under the caption Accumulated other comprehensive income (loss) (“AOCI”). All realized gains and losses are recorded in earnings in the period of occurrence. The specific identification method is used to determine the realized gains and losses on investments. We regularly review the available-for-sale debt securities in an unrealized loss position and evaluate the current expected credit loss by considering available information relevant to the collectability of the security, such as historical experience, market data, issuer-specific factors including credit ratings, default and loss rates of the underlying collateral and structure and credit enhancements, current economic conditions and reasonable and supportable forecasts. There were no credit losses on available-for-sale debt securities recognized in the years ended June 30, 2026, 2025 and 2024. If we do not expect to recover the entire amortized cost of the security, the amount representing credit losses, defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis of the debt security, is recorded as an allowance for credit losses with an offsetting entry to net income, and the amount that is not credit-related is recognized in other comprehensive income (loss) (“OCI”). If we have the intent to sell the security or it is more likely than not that we will be required to sell the security before recovery of its entire amortized cost basis, we first write off any previously recognized allowance for credit losses with an offsetting entry to the security’s amortized cost basis. If the allowance 54 Table of Contents has been fully written off and fair value is less than amortized cost basis, we write down the amortized cost basis of the security to its fair value with an offsetting entry to net income. Investments in Equity Securities. We hold equity securities in publicly and privately held companies for the promotion of business and strategic objectives. Equity securities in publicly held companies, or marketable equity securities, are measured and recorded at fair value on a recurring basis. Equity securities in privately held companies, or non-marketable equity securities, are accounted for at cost, less impairment, plus or minus observable price changes in orderly transactions for identical or similar securities of the same issuer. Non-marketable equity securities are subject to a periodic impairment review; however, since there are no open-market valuations, the impairment analysis requires significant judgment. This analysis includes assessment of the investee’s financial condition, the business outlook for its products and technology, its projected results and cash flow, financing transactions subsequent to the acquisition of the investment, the likelihood of obtaining subsequent rounds of financing and the impact of any relevant contractual equity preferences held by us or the others. Non-marketable equity securities are included in Other non-current assets on the balance sheet. Realized and unrealized gains and losses resulting from changes in fair value or the sale of our marketable and non-marketable equity securities are recorded in Other expense (income), net. 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 product 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. The carrying value of service 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 to meet our customers’ support requirements. Demonstration units are stated at their manufacturing cost and written down to their net realizable value. The Company’s policy is to assess the valuation of all inventories including manufacturing raw materials, work-in-process, finished goods and spare parts in each reporting period. 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. Our manufacturing overhead standards for product costs are calculated assuming full absorption of forecasted spending over projected volumes, adjusted for excess capacity. Abnormal inventory costs such as costs of idle facilities, excess freight and handling costs and spoilage are recognized as current period charges. Allowance for Credit Losses. A majority of our accounts receivable are derived from sales to large multinational semiconductor and electronics manufacturers throughout the world. We maintain an allowance for credit losses for expected uncollectible accounts receivable, which is recorded as an offset to accounts receivable and changes in such are classified as selling, general and administrative (“SG&A”) expense in the Consolidated Statements of Operations. We assess collectability by reviewing accounts receivable on a collective basis where similar risk characteristics exist and on an individual basis when we identify specific customers with known disputes or collectability issues. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The allowance for credit losses is reviewed on a quarterly basis to assess the adequacy of the allowance. Our assessment considered estimates of expected credit and collectability trends. The credit losses recognized on accounts receivable were not significant as of June 30, 2026 and 2025. Volatility in market conditions and evolving credit trends are difficult to predict and may cause variability that may have a material impact on our allowance for credit losses in future periods. Property and Equipment. Property and equipment are recorded at cost, net of accumulated depreciation. Depreciation of property and equipment is based on the straight-line method over the estimated useful lives of the assets. Estimated useful lives of certain assets for financial reporting purposes are as follows: buildings, 30 to 50 years, leasehold improvements, shorter of 15 years or lease term, machinery and equipment, 2 to 5 years, office furniture and fixtures, 7 years. Construction-in-process assets are not depreciated until the assets are placed in service. Depreciation expense for the fiscal years ended June 30, 2026, 2025 and 2024 was $214.5 million, $192.0 million and $181.7 million, respectively. Leases. Under Accounting Standards Codification (“ASC”) 842, Leases, a contract is or contains a lease when we have the right to control the use of an identified asset for a period of time. We determine if an arrangement is a lease at inception of the contract, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. The commencement date of the lease is the date that the lessor makes an underlying asset available for our use. On the commencement date, leases are evaluated for classification and assets and liabilities are recognized based on the present value of lease payments over the lease term. The lease term used to calculate the lease liability includes options to extend or terminate the lease when it is reasonably certain that the option will be exercised. The right of use (“ROU”) asset is initially measured as the amount of lease liability, 55 Table of Contents adjusted for any initial lease costs, prepaid lease payments and any lease incentives. Variable lease payments, consisting primarily of reimbursement of costs incurred by lessors for common area maintenance, real estate taxes and insurance, are not included in the lease liability and are recognized as they are incurred. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate at lease commencement to measure ROU assets and lease liabilities. The incremental borrowing rate used by us is based on baseline rates and adjusted by the credit spreads commensurate with our secured borrowing rate, over a similar term. We used the incremental borrowing rate on June 30, 2019 for all leases that commenced on or prior to that date. Operating lease expense is generally recognized on a straight-line basis over the lease term. We have elected the practical expedient to account for the lease and non-lease components as a single lease component for the majority of our asset classes. For leases with a term of one year or less, we have elected not to record the ROU asset or liability. Goodwill, Purchased Intangible Assets and Impairment Assessment. Goodwill represents the excess of the purchase price in a business combination over the fair value of the net tangible and intangible assets acquired. During the second quarter of fiscal 2026, the Company changed the annual goodwill impairment testing date for all reporting units from February 28 to December 31 to better align with the timing of our budgeting and strategic planning process. We believe that the change in our annual impairment test date is preferable as it allows us to evaluate any potential impact strategic decisions may have on the recoverability of goodwill as those decisions are reached. This will also enable us to use the most current information available in the assessment process. The change in the annual impairment testing date did not delay, accelerate or avoid an impairment charge. We assess goodwill for impairment annually during our second fiscal quarter or whenever events or changes in circumstances indicate the carrying value may not be fully recoverable. We have the option to perform a qualitative assessment prior to necessitating a quantitative impairment test. In the qualitative assessment, if we determine that it is more likely than not that the fair value of a reporting unit is less than the carrying value, a quantitative test is then performed, which involves comparing the estimated fair value of a reporting unit to its carrying value including goodwill. If goodwill is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value. Refer to Note 6 “Goodwill and Purchased Intangible Assets” for information related to determining the fair value of a reporting unit. Purchased intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives, which generally range from six months to nine years. The carrying values of our intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Fully amortized intangible assets are derecognized when they no longer provide future economic benefit. Impairment of Long-Lived Assets. Long-lived 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 the long-lived assets primarily include declines in our operating cash flows from the use of these assets. We determine whether long-lived 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 long-lived 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 long-lived assets using the income approach, primarily by applying the relief-from-royalty or multi-period excess-earnings methods, when deemed appropriate. Concentration of Credit Risk. Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash equivalents, short-term marketable securities, trade accounts receivable and derivative financial instruments used in hedging activities. We invest in a variety of financial instruments, such as, but not limited to, certificates of deposit, corporate debt and municipal securities, U.S. Treasury and Government agency securities, and equity securities and, by policy, we limit the amount of credit exposure with any one financial institution or commercial issuer. We have not experienced any material credit losses on our investments. A majority of our accounts receivable are derived from sales to large multinational semiconductor and electronics manufacturers located throughout the world, with a majority located in Asia. Our customer base is concentrated due to corporate consolidations, acquisitions and business closures, and to the extent that these customers experience liquidity issues in the future, we may be required to reserve for potential credit losses with respect to trade receivables. We perform ongoing credit evaluations of our customers’ financial condition and generally require little to no collateral to secure accounts receivable. We maintain an allowance for potential credit losses based upon expected collectability risk of all accounts receivable, however write-offs have historically not been significant. In addition, we may utilize letters of credit (“LC”) or non-recourse factoring to mitigate credit risk when considered appropriate. 56 Table of Contents We are exposed to credit loss in the event of non-performance by counterparties on the foreign exchange and interest rate swap contracts that we use in hedging activities and in certain factoring transactions. These counterparties are large international financial institutions, and, to date, no such counterparty has failed to meet its financial obligations to us under such contracts. Foreign Currency. The functional currencies of our foreign subsidiaries are primarily the local currencies, except as described below. Accordingly, all assets and liabilities of these foreign operations are translated to U.S. dollars at current period end exchange rates, and revenues and expenses are translated to U.S. dollars using average exchange rates in effect during the period. The gains and losses from foreign currency translation of these subsidiaries’ financial statements are recorded directly into a separate component of stockholders’ equity under the caption AOCI. Our manufacturing subsidiaries in Singapore, Israel, Germany, and the United Kingdom use the U.S. dollar as their functional currency. Accordingly, monetary assets and liabilities in non-functional currency of these subsidiaries are remeasured using exchange rates in effect at the end of the period. Revenues and costs in local currency are remeasured using average exchange rates for the period, except for costs related to those balance sheet items that are remeasured using historical exchange rates. The resulting remeasurement gains and losses are included in the Consolidated Statements of Operations as incurred. Fair Value of Financial Instruments. Our financial assets and liabilities are measured and recorded at fair value, except for our debt and certain equity investments in privately held companies. Equity investments without a readily available fair value are accounted for using the measurement alternative. The measurement alternative is calculated as cost minus impairment, if any, plus or minus changes resulting from observable price changes. See Note 7 “Debt” for disclosure of the fair value of our Senior Notes, as defined in that Note. Our non-financial assets, such as goodwill, intangible assets, and land, property and equipment, are recorded at fair value only if an impairment is recognized in the current period. We assess for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. For goodwill, we assess for impairment annually. We have evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. The fair value of our cash equivalents, accounts receivable, accounts payable and other current assets and liabilities approximate their carrying amounts due to the relatively short maturity of these items. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below: Level 1 Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. Level 2 Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. Level 3 Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The types of instruments valued based on quoted market prices in active markets include money market funds, certain U.S. Treasury securities, U.S. Government agency securities and equity securities. Such instruments are generally classified within Level 1 of the fair value hierarchy. The types of instruments valued based on other observable inputs include corporate debt securities, sovereign securities, municipal securities and certain U.S. Treasury securities. The market inputs used to value these instruments generally consist of market yields, reported trades and broker/dealer quotes. Such instruments are generally classified within Level 2 of the fair value hierarchy. 57 Table of Contents The principal market in which we execute our foreign currency and swap contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants generally are large financial institutions. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. Our interest rate swap derivatives are valued using discounted cash flow methodologies based on observable interest rate data. These contracts are typically classified within Level 2 of the fair value hierarchy. Derivative Financial Instruments. We use financial instruments, such as foreign exchange contracts including forward and options transactions, to hedge a portion of, but not all, existing and forecasted foreign currency denominated transactions. We utilize foreign exchange contracts to hedge against future movements in foreign currency exchange rates that affect certain existing and forecasted foreign currency denominated sales and purchase transactions, such as the Japanese yen, the euro, the pound sterling and the new Israeli shekel. These foreign exchange contracts, designated as cash flow hedges, generally have maturities of less than 24 months. The effect of exchange rate changes on foreign exchange contracts is expected to offset the effect of exchange rate changes on the underlying hedged items. We use forward contracts to hedge the risk associated with the variability of cash flows due to changes in the benchmark interest rate of the intended debt financing (“Rate Lock Agreements”). We also enter into interest rate contracts, such as interest rate swaps, to hedge against the changes in fair value on certain of our fixed-rate indebtedness attributable to changes in the benchmark interest rate. These contracts are designated as fair value hedges. We believe these financial instruments do not subject us to speculative risk that would otherwise result from changes in currency exchange rates or interest rates. All of our derivative financial instruments are recorded at fair value based upon quoted market prices for comparable instruments adjusted for risk of counterparty non-performance. If a financial counterparty to any of our hedging arrangements experiences financial difficulties or is otherwise unable to honor the terms of the foreign currency hedge or interest rate swap, we may experience material losses. For derivative instruments designated and qualifying as cash flow hedges of forecasted foreign currency denominated transactions or debt financing, the effective portion of the gains or losses is reported in AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. We elected to include time value for the assessment of effectiveness on all forward transactions designated as cash flow hedges. The change in fair value of the derivative is recorded in AOCI until the hedged transaction is recognized in earnings. Cash flow hedges are evaluated for effectiveness monthly, based on changes in total fair value of the derivatives. The assessment of effectiveness of options contracts designated as cash flow hedges excludes time value. The initial value of the component excluded from the assessment of effectiveness is recognized in earnings over the life of the derivative contract. Any differences between change in the fair value of the excluded components and the amounts recognized in earnings are recorded in AOCI. For foreign exchange contracts that are designated and qualify as a net investment hedge in a foreign operation and that meet the effectiveness requirements, the net gains or losses attributable to changes in spot exchange rates are recorded in cumulative translation within AOCI. The remainder of the change in value of such instruments is recorded in earnings on a straight-line basis over the lives of the associated derivative contracts. Recognition in earnings of amounts previously recorded in cumulative translation is limited to circumstances such as complete or substantially complete liquidation of the net investment in the hedged foreign operations. For foreign exchange contracts that are not designated as hedges, gains and losses are recognized in Other expense (income), net. We use foreign exchange contracts to hedge certain foreign currency denominated assets or liabilities. The gains and losses on these derivative instruments are largely offset by the changes in the fair value of the assets or liabilities being hedged. Cash flows associated with these derivatives are classified as cash flows from operating activities in the Consolidated Statement of Cash Flows to align with the underlying items. For fair value hedges, the gains and losses related to changes in the fair value of interest rate swaps substantially offset changes in the hedged portion of the underlying debt that are attributable to changes in the market interest rates. The net gains and losses on the interest rate swaps, as well as the offsetting gains or losses on the fixed-rate debt attributable to the hedged risks, are recognized as interest expense in the current period. The interest settlement payments associated with the interest rate swap agreements are classified as cash flows from operating activities in the Consolidated Statement of Cash Flows. Revenue Recognition. We primarily derive revenue from the sale of process control and process-enabling solutions for the semiconductor and related electronics industries, maintenance and support of all these products, installation and training services and the sale of spare parts. Our portfolio includes yield enhancement and production solutions for manufacturing wafers and reticles, ICs, packaging and PCBs, as well as comprehensive support and services across our installed base. Our solutions are generally not sold with a right of return, nor have we experienced significant returns from or refunds to our customers. 58 Table of Contents We account for a contract with a customer when there is approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. Our revenues are measured based on consideration stipulated in the arrangement with each customer, net of any sales incentives and amounts collected on behalf of third parties, such as sales taxes. The revenues are recognized as separate performance obligations that are satisfied by transferring control of the product or service to the customer. Our arrangements with our customers include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. A product or service is considered distinct if it is separately identifiable from other deliverables in the arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The transaction consideration, including any sales incentives, is allocated between separate performance obligations of an arrangement based on the stand-alone selling price (“SSP”) for each distinct product or service. Management considers a variety of factors to determine the SSP, such as historical stand-alone sales of products and services, discounting strategies and other observable data. From time to time, our contracts are modified to account for additional, or to change existing, performance obligations. Our contract modifications are generally accounted for prospectively. Product Revenue We recognize revenue from product sales at a point in time when we have satisfied our performance obligation by transferring control of the product to the customer. We use judgment to evaluate whether control has transferred by considering several indicators, including whether: •We have a present right to payment; •The customer has legal title; •The customer has physical possession; •The customer has significant risk and rewards of ownership; and •The customer has accepted the product, or whether customer acceptance is considered a formality based on history of acceptance of similar products (for example, when the customer has previously accepted the same tool, with the same specifications or technology, and when we can objectively demonstrate that the tool meets all of the required acceptance criteria, and when the installation of the system is deemed perfunctory). Not all of the indicators need to be met for us to conclude that control has transferred to the customer. In circumstances in which revenue is recognized prior to the product acceptance, the fair value of revenue associated with our performance obligations to install the product is deferred and recognized as revenue at a point in time, once installation is complete. We enter into volume purchase agreements with some of our customers. We adjust the transaction consideration for estimated credits and incentives earned by our customers. These credits are estimated based upon the forecasted and actual product sales for any given period and agreed incentive rate. The estimate is reviewed for material changes and updated at each reporting period. We offer perpetual and term licenses for software products. The primary difference between perpetual and term licenses is the duration over which the customer can benefit from the use of the software, while the functionality and the features of the software are the same. Software is generally bundled with post-contract customer support (“PCS”), which includes unspecified software updates that are made available throughout the entire term of the arrangement. Revenue from software licenses is recognized at a point in time, when the software is made available to the customer. Revenue from PCS is deferred at contract inception and recognized ratably over the service period, or as services are performed. Services Revenue The majority of product sales include a standard 12-month warranty that is not separately paid for by the customers. The customers may also purchase an extended warranty for periods beyond the initial period as part of the initial product sale. We have concluded that the standard 12-month warranty as well as any extended warranty periods included in the initial product sales are separate performance obligations for most of our products. The estimated fair value of warranty services is deferred and recognized ratably as revenue over the warranty period, as the customer simultaneously receives and consumes the benefits of warranty services provided by us. 59 Table of Contents Additionally, we offer product maintenance and support services, which the customer may purchase separately from the standard and extended warranty offered as part of the initial product sale. Revenue from separately negotiated maintenance and support service contracts is also recognized over time based on the terms of the applicable service period. Revenue from services performed in the absence of a maintenance contract, including training revenue, is recognized when the related services are performed. We also sell spare parts, revenue from which is recognized when control over the spare parts is transferred to the customer. Contract Assets/Liabilities The timing of revenue recognition, billings and cash collections may result in accounts receivable, contract assets, and contract liabilities (deferred revenue) on our Consolidated Balance Sheets. A receivable is recorded in the period we deliver products or provide services when we have an unconditional right to payment. Contract assets primarily relate to the value of products and services transferred to the customer for which the right to payment is not just dependent on the passage of time. Contract assets are transferred to accounts receivable when rights to payment become unconditional. A contract liability is recognized when we receive payment or have an unconditional right to payment in advance of the satisfaction of performance. The contract liabilities represent (1) deferred product revenue related to the value of products that have been shipped and billed to customers and for which control has not been transferred to the customers, and (2) deferred service revenue, which is recorded when we receive consideration, or such consideration is unconditionally due, from a customer prior to transferring services to the customer under the terms of a contract. Deferred service revenue typically results from warranty services, and maintenance and other service contracts. Contract assets and liabilities related to rights and obligations in a contract are recorded net in the Consolidated Balance Sheets. Practical expedients We apply the following practical expedients in accordance with ASC 606, Revenue from Contracts with Customers: •We account for shipping and handling costs as activities to fulfill the promise to transfer goods, instead of a promised service to our customer. •We have elected to not adjust the promised amount of consideration for the effects of a significant financing component as we expect, at contract inception, that the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service will generally be one year or less. •We have elected to expense costs to obtain a contract as incurred because the expected amortization period is one year or less. Research and Development Costs. R&D costs are expensed as incurred. Shipping and Handling Costs. Shipping and handling costs are included as a component of cost of sales. Accounting for Stock-Based Compensation Awards. We account for stock-based awards granted to employees for services based on the fair value of those awards. The fair value of stock-based awards is measured at the grant date and is recognized as expense over the employee’s requisite service period. The fair value for restricted stock units (“RSUs”) granted without “dividend equivalent” rights is determined using the closing price of our common stock on the grant date, adjusted to exclude the present value of dividends which are not accrued on the RSUs. The fair value for RSUs granted with “dividend equivalent” rights is determined using the closing price of our common stock on the grant date. The award holder is not entitled to receive payments under dividend equivalent rights unless the associated RSU award vests (i.e., the award holder is entitled to receive credits, payable in cash or shares of common stock, equal to the cash dividends that would have been received on the shares of our common stock underlying the RSUs had the shares been issued and outstanding on the dividend record date, but such dividend equivalents are only paid subject to the recipient satisfying the vesting requirements of the underlying award). Compensation expense for RSUs with performance metrics is calculated based upon expected achievement of the metrics specified in the grant, or when a grant contains a market condition, the grant date fair value using a Monte Carlo simulation. The Monte Carlo simulation incorporates estimates of the potential outcomes of the market condition on the grant date fair value of each award. Additionally, we estimate forfeitures based on historical experience and revise those estimates in subsequent periods if actual forfeitures differ from the estimated amounts. The fair value for our Employee Stock Purchase Plan (“ESPP”) is determined using a Black-Scholes valuation model for purchase rights. The Black-Scholes option-pricing model requires the input of assumptions, including the option’s expected term and the expected price volatility of the underlying stock. The expected stock price volatility assumption is based on the market-based historical implied volatility from traded options of our common stock. 60 Table of Contents Accounting for Cash-Based Long-Term Incentive Compensation. Cash-based long-term incentive (“Cash LTI”) awards issued to employees under our Cash Long-Term Incentive Plan (“Cash LTI Plan”) vest in three or four equal installments, with one-third or one-fourth of the aggregate amount of the Cash LTI award vesting on each yearly anniversary of the grant date over a three- or four-year period. In order to receive payments under a Cash LTI award, participants must remain employed by us as of the applicable award vesting date. Compensation expense related to the Cash LTI awards is recognized over the vesting term and adjusted for the impact of estimated forfeitures. Accounting for Non-qualified Deferred Compensation Plan. We have a non-qualified deferred compensation plan (known as the “Executive Deferred Savings Plan” or “EDSP”) under which certain executives and non-employee directors may defer a portion of their compensation. Participants are credited with returns based on their allocation of their account balances among measurement funds. We control the investment of these funds, and the participants remain general creditors of ours. We invest these funds in certain mutual funds and such investments are classified as trading securities in the Consolidated Balance Sheets. Investments in trading securities are measured at fair value in the statement of financial position. Unrealized holding gains and losses for trading securities are included in earnings. Distributions from the EDSP commence following a participant’s retirement or termination of employment or on a specified date allowed per the EDSP provisions, except in cases where such distributions are required to be delayed in order to avoid a prohibited distribution under Internal Revenue Code Section 409A. Participants can generally elect for the distributions to be paid in a lump sum or quarterly cash payments over a scheduled period for up to 15 years and are allowed to make subsequent changes to their existing elections as permissible under the EDSP provisions. The liability associated with the EDSP is included as a component of other current liabilities in the Consolidated Balance Sheets. Changes in the EDSP liability are recorded in SG&A expense in the Consolidated Statements of Operations. The net expense associated with changes in the liability included in SG&A expense was $60.0 million, $41.5 million and $37.2 million for the fiscal years ended June 30, 2026, 2025 and 2024, respectively. We also have a deferred compensation asset that corresponds to the liability under the EDSP and it is included as a component of other non-current assets in the Consolidated Balance Sheets. Changes in the EDSP assets are recorded as net gains or losses in SG&A expense in the Consolidated Statements of Operations. The amount of net gains included in SG&A expense were $59.4 million, $40.7 million and $36.6 million for the fiscal years ended June 30, 2026, 2025 and 2024, respectively. Income Taxes. We account for current and deferred income taxes in accordance with the authoritative guidance, which requires that the income tax impact is to be recognized in the period in which the law is enacted. Current income tax expense represents taxes paid or payable for the current period. Deferred tax assets and liabilities are recognized using enacted tax rates for the future tax impact of temporary differences between the financial statement and tax bases of recorded assets and liabilities. A valuation allowance is recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized based on historical and projected future taxable income over the periods in which the temporary differences are expected to be recovered or settled. We record income taxes on the undistributed earnings of foreign subsidiaries unless the subsidiaries’ earnings are considered indefinitely reinvested outside the U.S. Our income taxes will be greater if some or all of the indefinitely reinvested earnings are taxable when distributed to the U.S. In accordance with the authoritative guidance on accounting for uncertainty in income taxes, we recognize liabilities for uncertain tax positions based on the two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained in audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement. The Tax Cuts and Jobs Act introduced the Foreign-Derived Intangible Income (“FDII”) rules and Global Intangible Low-Taxed Income (“GILTI”) provisions, wherein U.S. taxes on foreign income are imposed in excess of a deemed return on tangible assets of foreign corporations. This income is effectively taxed at a 10.5% tax rate in general. The One Big Beautiful Bill Act (“OBBBA”) renames FDII to Foreign-Derived Deduction Eligible Income (“FDDEI”), modifies the percentage of U.S. earnings under the FDII regime that is not subject to tax in the U.S. from 37.5% to 33.34%, renames GILTI to Net Controlled Foreign Corporation (“CFC”) Tested Income (“NCTI”), modifies the general effective tax rate on GILTI to 12.6% and removes the deemed return on tangible assets deduction. We elect to account for GILTI as a component of current period tax expense and not recognize deferred tax assets and liabilities for the basis differences expected to reverse as a result of GILTI provisions. Business Combinations. We allocate the fair value of the purchase price of our acquisitions to the tangible assets acquired, liabilities assumed, and intangible assets acquired, including in-process research and development (“IPR&D”), based on their estimated fair values at acquisition date. The excess of the fair value of the purchase price over the fair values of these net tangible and intangible assets acquired is recorded as goodwill. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but our estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which will not exceed one year from the acquisition date, we record adjustments to the 61 Table of Contents assets acquired and liabilities assumed with the corresponding offset to goodwill. After the conclusion of the measurement period or final determination of the fair value of the purchase price of our acquisitions, whichever comes first, any subsequent adjustments are recorded to our Consolidated Statements of Operations. The fair value of IPR&D is initially capitalized as an intangible asset with an indefinite life and assessed for impairment thereafter whenever events or changes in circumstances indicate that the carrying value of the IPR&D assets may not be recoverable. Impairment of IPR&D is recorded to R&D expenses. When an IPR&D project is completed, the IPR&D is reclassified as an amortizable purchased intangible asset and amortized to costs of revenues over the asset’s estimated useful life. Acquisition-related expenses are recognized separately from the business combination and are expensed as incurred. Contingencies and Litigation. We are subject to the possibility of losses from various contingencies. Considerable judgment is necessary to estimate the probability and amount of any loss from such contingencies. An accrual is made when it is probable that a liability has been incurred or an asset has been impaired, and the amount of loss can be reasonably estimated. We accrue a liability and recognize as expense the estimated costs to defend or settle asserted and unasserted claims existing as of the balance sheet date. See Note 14 “Litigation and Other Legal Matters” and Note 15 “Commitments and Contingencies” for additional details. Government Incentives. We occasionally receive incentives from various international governmental entities related to capital expenditures, expenses and other activities, primarily in the form of cash grants and refundable tax credits. Government assistance is recognized when there is reasonable assurance that (1) the Company will comply with relevant conditions, such as employment levels, R&D investment, or construction of property, plant and equipment; and (2) the assistance will be received. If conditions are not satisfied or if the duration period for the arrangement is not met, the incentives may become subject to reduction, repayment, or termination. Government incentives related to the acquisition or construction of property, plant and equipment are recognized as a reduction in the carrying amounts of the related assets and reduce depreciation expense over the useful lives of the assets. Incentives related to specific operating activities are offset against the related expense in the period the expense is incurred. During the fiscal years ended June 30, 2026 and June 30, 2025, we recognized an immaterial amount of government incentives, including both cash grants and refundable tax credits. These amounts were recognized as reductions to expense in the same line item on the Consolidated Statement of Operations as the expenditure in which the incentive is intended to compensate, or as a reduction in the cost basis of property, plant and equipment. For cash grants, the corresponding receivable is recorded within other current assets or other non-current assets, as appropriate, in the Consolidated Balance Sheets. For refundable tax credits, the amounts are recorded as a reduction of income taxes payable and classified within other current liabilities or other non-current liabilities, as appropriate, in the Consolidated Balance Sheets. Collaborative Arrangements. We assess joint development arrangements to determine whether they are in the scope of ASC 808, Collaborative Arrangements. In our assessment, we evaluate whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on commercial success of the activities. This assessment is performed throughout the life of such arrangement with consideration given to the changes in the roles and responsibilities between the parties. During the quarter ended September 30, 2024, we entered into a joint development arrangement within the scope of ASC 808 to develop and commercialize a new product. Recent Accounting Pronouncements Recently Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures. The new guidance requires enhanced disclosures about income tax expenses. This standard update is effective for our annual reports beginning in the fiscal year ended June 30, 2026. We adopted ASU 2023-09 starting with our annual report for the fiscal year ended June 30, 2026 on a prospective basis. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The new guidance removes all references to prescriptive and sequential software development stages or project stages throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when management has authorized and committed to funding the software project 62 Table of Contents and it is probable that the project will be completed, and the software will be used to perform the function intended. The standard update is effective for our annual and interim reports beginning in the first quarter of our fiscal year ending June 30, 2028. Early adoption is permitted as of the beginning of an annual reporting period. We adopted ASU 2025-06 for our first quarter of the fiscal year ended June 30, 2026 using a prospective transition approach, and the effect was immaterial to our Consolidated Financial Statements. In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU provides a practical expedient to measure credit losses on current accounts receivable and contract assets arising from transactions accounted for under ASC 606. This practical expedient allows companies to assume the current conditions as of the balance sheet date do not change for the remaining life of the current accounts receivable and current contract assets. The standard update is effective for our annual and interim reports beginning in the first quarter of our fiscal year ending June 30, 2027. The amendments in this ASU should be applied on a prospective basis and early adoption is permitted. We chose to early adopt ASU 2025-05 during the quarter ended March 31, 2026, and elected the practical expedient. Since we adopted ASU 2025-05 in an interim reporting period, we are required to apply the amendments as of the beginning of the annual reporting period containing this interim reporting period. The adoption did not have a material impact on our Consolidated Financial Statements or related disclosures. Updates Not Yet Effective In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires enhanced disclosures about certain expenses in the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement. In 2025, the FASB issued ASU 2025-01 which clarifies the effective date for entities that do not have an annual reporting period that ends on December 31st. The Company is required to adopt this standard for our annual reports beginning in the fiscal year ending June 30, 2028, and interim period reports beginning in the first quarter of the fiscal year ending June 30, 2029. Early adoption is permitted. The amendments in this ASU should be applied either on a prospective or retrospective basis. We are currently evaluating the impact of this ASU on our disclosures. In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. The new guidance establishes the accounting for a government grant received by a business entity, including guidance for a grant related to an asset and a grant related to income. The new guidance also requires disclosures, including the nature of the government grant received, the accounting policies used to account for the grant, and significant terms and conditions of the grant unless legally prohibited from being disclosed. The standard update is effective for our annual and interim reports beginning in the fiscal year ending June 30, 2030. Early adoption is permitted in both interim and annual reporting periods in which the financial statements have not yet been issued or made available for issuance. If adopted in an interim reporting period, it must be adopted as of the beginning of the annual reporting period that includes that interim reporting period. The amendments in this ASU should be applied using a modified prospective, modified retrospective, or retrospective approach. We are currently evaluating the impact of this guidance on our Consolidated Financial Statements. NOTE 2 — REVENUE The following table represents the opening and closing balances of accounts receivable, net, contract assets, long-term accounts receivable, net, and contract liabilities as of the indicated dates. As of June 30, (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 % Long-term accounts receivable, net $ 180,729 $ — $ — $ 180,729 100 % $ — — % Contract liabilities $ 1,775,139 $ 1,713,689 $ 1,782,242 $ 61,450 4 % $ (68,553) (4) % Our payment terms and conditions vary by contract type, although terms generally include a requirement of payment of 70% to 90% of total contract consideration within 30 to 60 days of shipment, with the remainder payable within 30 days of acceptance. The change in contract assets during the fiscal year ended June 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 million of 63 Table of Contents contract assets reclassified to accounts receivable, net, as our right to consideration for these contract assets became unconditional. Contract assets are included in other current assets on our Consolidated Balance Sheets. The change in contract liabilities during the fiscal year ended June 30, 2026 was mainly due to 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 Consolidated Balance Sheets. The following table represents the transaction price for contracts that have not yet been recognized as revenue as of June 30, 2026, which equals our contract liabilities, and when the Company expects to recognize the amounts as revenue: (In thousands) Less than 12 months 12 to 24 months 24 months or greater Total Contract liabilities $ 1,537,028 $ 163,356 $ 74,755 $ 1,775,139 NOTE 3 — FAIR VALUE MEASUREMENTS 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 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) Assets Cash equivalents: Municipal securities $ 6,016 $ — $ 6,016 Corporate debt securities 6,075 — 6,075 Money market funds and other 1,233,035 1,233,035 — Sovereign securities 999 — 999 Marketable securities: Corporate debt securities 1,297,450 — 1,297,450 Municipal securities 17,403 — 17,403 Sovereign securities 39,219 — 39,219 U.S. Government agency securities 75,742 75,742 — U.S. Treasury securities 1,355,711 1,275,725 79,986 Equity securities 46,772 46,772 — Total cash equivalents and marketable securities(1) 4,078,422 2,631,274 1,447,148 Other current assets: Derivative assets 41,821 — 41,821 Interest rate swap assets 2,534 — 2,534 Other non-current assets: EDSP assets 416,389 398,414 17,975 Interest rate swap assets 6,990 — 6,990 Long-term accounts receivable, net 180,729 — 180,729 Total financial assets(1) $ 4,726,885 $ 3,029,688 $ 1,697,197 Liabilities Other current liabilities: Derivative liabilities $ (12,546) $ — $ (12,546) Other non-current liabilities: Interest rate swap liabilities (10,107) — (10,107) Total financial liabilities $ (22,653) $ — $ (22,653) __________________ (1)Excludes cash of $333.8 million held in operating accounts and time deposits of $490.2 million (of which $70.0 million were cash equivalents) as of June 30, 2026. 64 Table of Contents As of June 30, 2025 (In thousands) Total Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Assets Cash equivalents: 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 Equity securities 23,962 23,962 — Total cash equivalents and marketable securities(1) 3,578,598 2,464,547 1,114,051 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) $ 3,987,631 $ 2,800,637 $ 1,186,994 Liabilities 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 30, 2026 or June 30, 2025. 65 Table of Contents NOTE 4 — FINANCIAL STATEMENT COMPONENTS Consolidated Balance Sheets As of June 30, (In thousands) 2026 2025 Accounts receivable, net: Accounts receivable, gross $ 2,920,238 $ 2,297,930 Allowance for credit losses (31,030) (34,015) $ 2,889,208 $ 2,263,915 Inventories: Customer service parts $ 622,714 $ 600,769 Raw materials 1,849,676 1,491,786 Work-in-process 937,724 833,933 Finished goods 238,424 285,661 $ 3,648,538 $ 3,212,149 Other current assets: Deferred costs of revenues $ 257,175 $ 223,829 Prepaid expenses 224,515 201,053 Prepaid income and other taxes 169,090 64,704 Contract assets 131,673 105,081 Other current assets 159,183 133,435 $ 941,636 $ 728,102 Land, property and equipment, net: Land $ 86,654 $ 86,677 Buildings and leasehold improvements 1,254,196 1,132,176 Machinery and equipment 1,418,112 1,238,599 Office furniture and fixtures 86,119 73,993 Construction-in-process 224,431 207,807 3,069,512 2,739,252 Less: accumulated depreciation (1,688,962) (1,486,477) $ 1,380,550 $ 1,252,775 Other non-current assets: EDSP assets $ 416,389 $ 349,530 Operating lease ROU assets 335,065 269,714 Long-term accounts receivable, net 180,729 — Other non-current assets 175,195 154,370 $ 1,107,378 $ 773,614 Other current liabilities: Compensation and benefits $ 491,108 $ 418,515 Customer deposits 430,128 636,369 EDSP liabilities 417,257 350,426 Interest payable 108,913 110,056 Income taxes payable 83,996 167,262 Operating lease liabilities 52,937 45,192 Other liabilities and accrued expenses 559,892 534,621 $ 2,144,231 $ 2,262,441 Other non-current liabilities: Income taxes payable $ 250,846 $ 221,808 Operating lease liabilities 211,361 158,833 Pension liabilities 43,128 51,750 Customer deposits 3,816 6,823 Other non-current liabilities 188,463 170,418 $ 697,614 $ 609,632 66 Table of Contents Accumulated Other Comprehensive Income (Loss) The components of AOCI as of the dates indicated below were as follows: (In thousands) Currency Translation Adjustments Unrealized Gains (Losses) on Available-for-Sale Securities Unrealized Gains (Losses) on Derivatives Unrealized Gains (Losses) on Defined Benefit Plans Total Balance as of June 30, 2026 $ (69,520) $ (6,834) $ 50,442 $ (8,541) $ (34,453) Balance as of June 30, 2025 $ (57,277) $ 5,792 $ 64,798 $ (12,112) $ 1,201 The effects on net income of amounts reclassified from AOCI to our Consolidated Statements of Operations for the indicated periods were as follows (in thousands, amounts in parentheses indicate debits or reductions to earnings): Location in the Consolidated Statements of Operations Year Ended June 30, AOCI Components 2026 2025 2024 Unrealized gains on cash flow hedges from foreign exchange and interest rate contracts Revenues $ 6,826 $ 7,466 $ 18,374 Costs of revenues and operating expenses 42,964 4,678 3,766 Interest expense 3,034 3,285 3,764 Net gains reclassified from AOCI $ 52,824 $ 15,429 $ 25,904 Unrealized gains (losses) on available-for-sale securities Other expense (income), net $ 587 $ 59 $ (103) Consolidated Statements of Operations The following table shows Other expense (income), net for the indicated periods: Year Ended June 30, (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 $ (229,585) $ (171,487) $ (155,075) 67 Table of Contents NOTE 5 — MARKETABLE SECURITIES The amortized cost and fair value of our fixed income marketable securities as of the dates indicated below were as follows: As of June 30, 2026 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 1,304,718 $ 1,123 $ (2,316) $ 1,303,525 Money market funds and other 1,233,035 — — 1,233,035 Municipal securities 23,417 12 (10) 23,419 Sovereign securities 40,245 — (27) 40,218 U.S. Government agency securities 75,848 81 (187) 75,742 U.S. Treasury securities 1,363,089 266 (7,644) 1,355,711 Subtotal 4,040,352 1,482 (10,184) 4,031,650 Add: Time deposits(1) 490,231 — — 490,231 Less: Cash equivalents 1,316,087 — — 1,316,087 Marketable securities(2) $ 3,214,496 $ 1,482 $ (10,184) $ 3,205,794 As of June 30, 2025 (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Corporate debt securities $ 957,256 $ 4,456 $ (66) $ 961,646 Money market funds and other 1,531,022 — — 1,531,022 Municipal securities 57,445 129 (1) 57,573 U.S. Government agency securities 116,436 458 (58) 116,836 U.S. Treasury securities 885,101 2,787 (329) 887,559 Subtotal 3,547,260 7,830 (454) 3,554,636 Add: Time deposits(1) 478,191 — — 478,191 Less: Cash equivalents 1,641,074 1 (1) 1,641,074 Marketable securities(2) $ 2,384,377 $ 7,829 $ (453) $ 2,391,753 __________________ (1)Time deposits excluded from fair value measurements. (2)Excludes equity marketable securities. Our investment portfolio includes both corporate and government securities that have a maximum maturity of three years. The longer the duration of these securities, the more susceptible they are to changes in market interest rates and bond yields. As yields increase, those securities with a lower yield-at-cost show a mark-to-market unrealized loss. Most of our unrealized losses are due to changes in market interest rates, and bond yields. We believe that we have the ability to realize the full value of all these investments upon maturity. As of June 30, 2026, we had 555 investments in a gross unrealized loss position. The following table summarizes the fair value and gross unrealized losses of our investments that were in an unrealized loss position as of the dates indicated below: As of June 30, 2026 Less than 12 Months 12 Months or Greater Total (In thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate debt securities $ 703,303 $ (2,316) $ — $ — $ 703,303 $ (2,316) Municipal securities 9,957 (10) — — 9,957 (10) Sovereign securities 37,200 (27) — — 37,200 (27) U.S. Government agency securities 47,855 (187) — — 47,855 (187) U.S. Treasury securities 1,185,956 (7,644) — — 1,185,956 (7,644) Total $ 1,984,271 $ (10,184) $ — $ — $ 1,984,271 $ (10,184) 68 Table of Contents As of June 30, 2025 Less than 12 Months 12 Months or Greater Total (In thousands) Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Fair Value Gross Unrealized Losses Corporate debt securities $ 98,149 $ (63) $ 2,528 $ (3) $ 100,677 $ (66) Municipal securities 5,774 (1) — — 5,774 (1) U.S. Government agency securities 32,780 (58) — — 32,780 (58) U.S. Treasury securities 238,627 (297) 20,330 (32) 258,957 (329) Total $ 375,330 $ (419) $ 22,858 $ (35) $ 398,188 $ (454) The contractual maturities of securities classified as available-for-sale, regardless of their classification on our Consolidated Balance Sheets, as of the date indicated below were as follows: As of June 30, 2026 (In thousands) Amortized Cost Fair Value Due within one year $ 1,468,388 $ 1,468,438 Due after one year through three years 1,746,108 1,737,356 Total $ 3,214,496 $ 3,205,794 Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Realized gains and losses on available-for-sale securities for the fiscal years ended June 30, 2026, 2025 and 2024 were immaterial. The costs for our equity marketable securities were $22.9 million as of both June 30, 2026, and June 30, 2025. Unrealized gains and losses for our equity marketable securities for the fiscal years ended June 30, 2026, 2025 and 2024 were immaterial. NOTE 6 — GOODWILL AND PURCHASED INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in business combinations. Goodwill is not subject to amortization but is tested for impairment annually during the second fiscal quarter, as well as whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The following table presents changes in goodwill carrying value by reportable segment during the fiscal years ended June 30, 2026 and 2025: (In thousands) Semiconductor Process Control Specialty Semiconductor Process PCB & Component Inspection Total Balances as of June 30, 2024 $ 753,018 $ 681,858 $ 580,850 $ 2,015,726 Goodwill impairment — — (230,400) (230,400) Foreign currency adjustments 6,867 — — 6,867 Balances as of June 30, 2025 759,885 681,858 350,450 1,792,193 Foreign currency adjustments (1,669) (768) (998) (3,435) Balances as of June 30, 2026 $ 758,216 $ 681,090 $ 349,452 $ 1,788,758 We performed the required annual goodwill impairment test as of December 31, 2025 and concluded that goodwill was not impaired. As a result of our qualitative assessments, we determined that it was not necessary to perform a quantitative assessment at that time. During the second quarter of fiscal 2025, in connection with our annual strategic planning process, 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. In addition, in the second quarter of fiscal 2025, we completed an internal reorganization affecting the composition of reporting units within our Specialty Semiconductor Process and PCB and Component Inspection reportable segments. The downward revision of financial outlook for PCB and the reorganization of reporting units triggered goodwill impairment tests. As a result of our quantitative assessment before reorganization, we recorded a total goodwill impairment charge of $230.4 million in the former PCB reporting unit, which was part of the PCB and Component Inspection reportable segment, in the 69 Table of Contents second quarter of fiscal 2025. No goodwill impairment was identified in the Specialty Semiconductor Process reportable segment. We assessed for impairment subsequent to the reorganization and noted no impairment. The goodwill balances of our new reporting units after reorganization were allocated on a relative fair value basis. During the second quarter of fiscal 2024, we noted a significant deterioration of the long-term forecast for our PCB and flat and flexible panel displays (“Display”) businesses, which were part of our former PCB and Display operating segment, as the Company initiated its annual strategic planning process. The downward revision of financial outlook for the PCB and Display businesses triggered a goodwill impairment test. In addition, in the second quarter of fiscal 2024, we began to evaluate strategic options for our Display business. Effective from the second quarter of fiscal 2024, our PCB and Display operating segment was comprised of two reporting units, 1) PCB and 2) Display while, prior to the change, the PCB and Display operating segment represented a single reporting unit. As a result of our quantitative assessment, we recorded a total goodwill impairment charge of $192.6 million for the PCB and Display reporting unit in the second quarter of fiscal 2024. The goodwill balances of the new PCB and Display reporting units were determined based on their relative fair values. We assessed for impairment subsequent to the reporting unit change and noted no impairment. To determine the fair value of the reporting units noted above, we utilized income and market approaches and applied a weighting of 75 percent and 25 percent, respectively. The income approach was estimated through discounted cash flow analysis. The estimated fair value of this reporting unit was 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 required 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 were based on our internal forecasts of anticipated future performance of the business. The residual value was estimated using a perpetual nominal growth rate, which was based on projected long-range inflation and long-term industry projections. The discount rates were calculated as the weighted average cost of capital of comparable peer companies, adjusted for company-specific risk. The market approach estimated the fair value of the 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 reporting units as of February 29, 2024, and concluded that goodwill was not impaired, except for the Display reporting unit. As a result of this qualitative assessment, we determined that it was not necessary to perform a quantitative assessment for the reporting units subject to testing other than Display. In March 2024, we announced the end of manufacturing of most Display products, but we will continue to provide services to the installed base of Display products for existing customers. The exit of the business does not qualify as a discontinued operation under the relevant accounting guidance, but the decision triggered a quantitative impairment assessment for the Display reporting unit, which resulted in a total goodwill impairment charge of $70.5 million in the third quarter of fiscal 2024. To determine the fair value of the Display reporting unit, we utilized an income approach estimated through a discounted cash flow analysis, by adding the present value of the estimated annual discounted cash flows over a discrete projection period. This valuation technique required us to use significant estimates and assumptions, including discount rates and internal forecasts of the anticipated future performance of the business. The discount rates were calculated as the weighted average cost of capital of comparable peer companies, adjusted for company-specific risk. There can be no assurance that these estimates and assumptions will prove to be an accurate prediction of the future, and a downward revision of these estimates and/or assumptions would decrease the fair value of our reporting units, which could result in additional impairment charges in the future. There have been no significant events or circumstances affecting the valuation of goodwill subsequent to the assessment performed in the second quarter of the fiscal year ended June 30, 2026. The next annual assessment of goodwill by reporting unit is scheduled to be performed in the second quarter of the fiscal year ending June 30, 2027. As of both June 30, 2026 and 2025, following the internal reorganization noted above, goodwill is net of accumulated impairment losses of $277.6 million and $70.5 million in the Semiconductor Process Control and PCB and Component Inspection reportable segments, respectively. As of June 30, 2024, following the fiscal 2024 goodwill impairment and changes to the PCB and Display operating segment noted above, goodwill is net of accumulated impairment losses of $277.6 million, $144.2 million and $70.5 million in the Semiconductor Process Control, Specialty Semiconductor Process and PCB and Component Inspection reportable segments, respectively. Purchased Intangible Assets Changes in the gross carrying amount of intangible assets result from changes in foreign currency exchange rates and acquisitions and derecognition of fully amortized intangible assets that no longer provide future economic benefit. The 70 Table of Contents components of purchased intangible assets as of the dates indicated below were as follows: (In thousands) As of June 30, 2026 As of June 30, 2025 Category Gross Carrying Amount Accumulated Amortization and Impairment Net Amount Gross Carrying Amount Accumulated Amortization and Impairment Net Amount Existing technology $ 1,531,405 $ 1,346,585 $ 184,820 $ 1,555,688 $ 1,222,520 $ 333,168 Customer relationships 323,297 283,438 39,859 359,555 285,274 74,281 Trade name/trademark 98,238 98,192 46 119,409 113,210 6,199 Order backlog and other 8,612 2,549 6,063 89,309 84,419 4,890 Intangible assets subject to amortization 1,961,552 1,730,764 230,788 2,123,961 1,705,423 418,538 IPR&D 43,907 18,860 25,047 46,074 19,827 26,247 Total $ 2,005,459 $ 1,749,624 $ 255,835 $ 2,170,035 $ 1,725,250 $ 444,785 Refer to Note 1 “Description of Business and Summary of Significant Accounting Policies” for our policy of testing purchased intangible assets for impairment. In connection with the evaluation of the goodwill impairment in the PCB and Component Inspection reportable segment during the second quarter of fiscal 2025, due to the continued deterioration of financial outlook for the businesses and internal reorganization both noted above, the Company assessed tangible and intangible assets for impairment prior to performing the goodwill impairment test. The Company first performed a recoverability test for each asset group identified in the PCB and Component Inspection reportable segment by comparing projected undiscounted cash flows from the use and eventual disposition of each asset group to its carrying value. This test indicated that the undiscounted cash flows were not sufficient to recover the carrying value of the asset groups. We then compared the carrying value of the individual long-lived assets within those asset groups against their fair value in order to measure the impairment loss. As a result of this assessment, we recorded a total purchased intangible asset impairment charge of $8.7 million. No impairment was identified for other long-lived assets in the second quarter of fiscal 2025. As part of the evaluation of goodwill impairment in the former PCB and Display operating segment in the second quarter of fiscal 2024 noted above, the Company assessed long-lived assets for impairment prior to performing the goodwill impairment test. As a result, we recorded a total purchased intangible asset impairment charge of $26.4 million in the second quarter of fiscal 2024. In the third quarter of fiscal 2024, in connection with the Company’s decision to exit the Display business, as described above, an immaterial amount of purchased intangible assets were abandoned. The total impairment charges for goodwill and purchased intangible assets of $239.1 million during the second quarter of fiscal 2025 and $219.0 million during the second quarter of fiscal 2024, as well as the goodwill impairment charge of $70.5 million in the third quarter of fiscal 2024, were recognized as separate charges and included in income (loss) from operations. As of June 30, 2026 and 2025, there were no impairment indicators for purchased intangible assets. Amortization expense for purchased intangible assets was $190.8 million, $220.4 million, and $239.3 million, for the fiscal years ended June 30, 2026, 2025 and 2024, respectively. Based on the purchased intangible assets gross carrying amount recorded as of June 30, 2026, the remaining estimated annual amortization expense is expected to be as follows: Fiscal Year Ending June 30: Amortization (In thousands) 2027 $ 129,024 2028 49,123 2029 35,566 2030 14,760 2031 1,514 Thereafter 801 Total $ 230,788 71 Table of Contents The expected amortization expense is an estimate. Actual amounts of amortization may differ from estimated amounts due to additional intangible asset acquisitions, changes in foreign currency exchange rates, impairment of intangible assets and other events. NOTE 7 — DEBT The following table summarizes our debt as of June 30, 2026 and June 30, 2025: As of June 30, 2026 As of June 30, 2025 Amount (In thousands) Effective Interest Rate Amount (In thousands) Effective Interest Rate Fixed-rate 4.100% Senior Notes due on March 15, 2029 $ 800,000 4.159 % $ 800,000 4.159 % Fixed-rate 4.650% Senior Notes due on July 15, 2032 1,000,000 4.657 % 1,000,000 4.657 % Fixed-rate 4.700% Senior Notes due on February 1, 2034 500,000 4.777 % 500,000 4.777 % Fixed-rate 5.650% Senior Notes due on November 1, 2034 250,000 5.670 % 250,000 5.670 % Fixed-rate 5.000% Senior Notes due on March 15, 2049 400,000 5.047 % 400,000 5.047 % Fixed-rate 3.300% Senior Notes due on March 1, 2050 750,000 3.302 % 750,000 3.302 % Fixed-rate 4.950% Senior Notes due on July 15, 2052 1,450,000 5.023 % 1,450,000 5.023 % Fixed-rate 5.250% Senior Notes due on July 15, 2062 800,000 5.259 % 800,000 5.259 % Total 5,950,000 5,950,000 Fair value of interest rate swaps (584) — Unamortized discount (21,873) (23,338) Unamortized debt issuance costs (40,128) (42,405) Total $ 5,887,415 $ 5,884,257 Reported as: Long-term debt $ 5,887,415 $ 5,884,257 Total $ 5,887,415 $ 5,884,257 Senior Notes and Debt Redemption In 2026, we entered into interest rate swaps on $2.00 billion principal amount of the 2022 Senior Notes (defined below). The interest rate swaps effectively convert the fixed interest rates on the Senior Notes to floating interest rates based on the Secured Overnight Financing Rate (“SOFR”) swap rate. Under the terms of the swaps, we pay semi-annual interest at the daily compounded SOFR swap plus a fixed number of basis points on the notional amount and in exchange, we receive semi-annual fixed-rate interest on the Senior Notes from the swap. The interest rate swaps are accounted for as fair value hedges, and as a result the carrying value of the hedged portion of our 2022 Senior Notes reflects adjustments in fair value. In November 2024, we repaid $750.0 million of the Senior Notes that were due on November 1, 2024. In February 2024, KLA Corporation (the “Issuer”) issued $750.0 million aggregate principal amount of senior, unsecured notes as follows: $500.0 million of 4.700% senior, unsecured notes (the “2024 Senior Notes”) due February 1, 2034; and an additional $250.0 million of 4.950% senior, unsecured notes due July 15, 2052 which was originally issued in June 2022, resulting in an aggregate principal amount of $1.45 billion. The net proceeds were used for general corporate purposes, including repayment of outstanding indebtedness. In June 2022, we issued $3.00 billion aggregate principal amount of senior, unsecured notes (the “2022 Senior Notes”) as follows: $1.00 billion of 4.650% senior, unsecured notes due July 15, 2032; $1.20 billion of 4.950% senior, unsecured notes due July 15, 2052; and $800.0 million of 5.250% senior, unsecured notes due July 15, 2062. A portion of the net proceeds of the 2022 Senior Notes was used to complete a tender offer in July 2022 for $500.0 million of our 2014 Senior Notes (defined below) due 2024 including associated redemption premiums, accrued interest and other fees and expenses. The redemption resulted in a pre-tax net loss on extinguishment of debt of $13.3 million for the fiscal year ended June 30, 2023. The remainder of the net proceeds was used for share repurchases and for general corporate purposes. In February 2020, March 2019 and November 2014, we issued $750.0 million, $1.20 billion and $2.50 billion, respectively (the “2020 Senior Notes,” “2019 Senior Notes” and “2014 Senior Notes,” respectively, and, collectively with the 2024 and 2022 Senior Notes, the “Senior Notes”) aggregate principal amount of senior, unsecured notes. In July 2022, February 72 Table of Contents 2020, October 2019 and November 2017, we repaid $500.0 million, $500.0 million, $250.0 million and $250.0 million of the Senior Notes, respectively. The original discounts on the Senior Notes are being amortized over the life of the debt. Interest is payable as follows: semi-annually on February 1 and August 1 of each year for the 2024 Senior Notes; semi-annually on January 15 and July 15 of each year for the 2022 Senior Notes; semi-annually on March 1 and September 1 of each year for the 2020 Senior Notes; semi-annually on March 15 and September 15 of each year for the 2019 Senior Notes; and semi-annually on May 1 and November 1 of each year for the 2014 Senior Notes. The relevant indentures for the Senior Notes (collectively, the “Indenture”) include covenants that limit our ability to grant liens on our facilities and enter into sale and leaseback transactions. The Senior Notes rank senior in right of payment to all of the Issuer’s future subordinated indebtedness, equally in right of payment with all of the Issuer’s existing and future unsecured and unsubordinated indebtedness, are effectively subordinated in right of payment to all of the Issuer’s future secured indebtedness to the extent of the collateral securing such indebtedness and structurally subordinated in right of payment to all existing and future indebtedness and other liabilities of the Issuer’s subsidiaries. In certain circumstances involving a change of control followed by a downgrade of the rating of a series of Senior Notes by at least two of Moody’s Investors Service, S&P Global Ratings and Fitch Inc., unless we have exercised our rights to redeem the Senior Notes of such series, we will be required to make an offer to repurchase all or, at the holder’s option, any part, of each holder’s Senior Notes of that series pursuant to the offer described below (the “Change of Control Offer”). In the Change of Control Offer, we will be required to offer payment in cash equal to 101% of the aggregate principal amount of Senior Notes repurchased plus accrued and unpaid interest, if any, on the Senior Notes repurchased, up to, but not including, the date of repurchase. Based on the trading prices of the Senior Notes on the applicable dates, the fair value of the Senior Notes as of June 30, 2026 and 2025 was $5.48 billion and $5.54 billion, respectively. While the Senior Notes are recorded at cost, the fair value of the long-term debt was determined based on quoted prices in markets that are not active; accordingly, the long-term debt is categorized as Level 2 for purposes of the fair value measurement hierarchy. As of June 30, 2026, we were in compliance with all of our covenants under the Indenture associated with the Senior Notes. Revolving Credit Facility On July 3, 2025, we entered into a revolving credit facility (“Revolving Credit Facility”) with a maturity date of July 3, 2030 that allows us to borrow up to $1.50 billion, pursuant to the terms set forth in the credit agreement (“Credit Agreement”). The Revolving Credit Facility replaced our Prior Revolving Credit Facility described below. Subject to the terms of the Credit Agreement, the Revolving Credit Facility may be increased by an amount up to $500.0 million in the aggregate. As of June 30, 2026, we had no outstanding borrowings under the Revolving Credit Facility. As of June 30, 2025, we had in place a Credit Agreement dated June 8, 2022 (“Prior Credit Agreement”) for an unsecured Revolving Credit Facility (“Prior Revolving Credit Facility”) having a maturity date of June 8, 2027 that allowed us to borrow up to $1.50 billion. Subject to the terms of the Prior Credit Agreement, the Prior Revolving Credit Facility could have been increased by an amount up to $250.0 million in the aggregate. As of June 30, 2025, we had no outstanding borrowings under the Prior Revolving Credit Facility. Under the Revolving Credit Facility, we may borrow, repay and reborrow funds until the maturity date, which may be extended following the exercise of no more than two one-year extension options with the consent of the lenders. We may prepay outstanding borrowings under the Revolving Credit Facility at any time without a prepayment penalty. Borrowings under the Revolving Credit Facility can be made as Term SOFR Loans or Alternate Base Rate (“ABR”) Loans, at the Company’s option. In the event that Term SOFR is unavailable, any Term SOFR elections will be converted to Daily Simple SOFR, as long as it is available. Each Term SOFR Loan will bear interest at a rate per annum equal to the applicable Adjusted Term SOFR rate, which is equal to the applicable Term SOFR rate plus a spread ranging from 62.5 bps to 100.0 bps, as determined by the Company’s credit ratings at the time. Each ABR Loan will bear interest at a rate per annum equal to the ABR, as determined by the Company’s credit ratings at the time. We are also obligated to pay an annual commitment fee on the daily undrawn balance of the Revolving Credit Facility, which ranges from 4.0 bps to 10.0 bps, subject to an adjustment in conjunction with changes to our credit rating. The applicable interest rates and commitment fees are also subject to adjustment based on the Company’s performance against certain environmental sustainability key performance indicators (“KPIs”) related to greenhouse gas (“GHG”) emissions and renewable electricity usage. Our performance against these KPIs in calendar year 2025 resulted in reductions to the fees associated with our Revolving Credit Facility. As of June 30, 2026, the applicable commitment fee on the daily undrawn balance of the Revolving Credit Facility was 5.5 bps. 73 Table of Contents Under the Revolving Credit Facility, the maximum net leverage ratio on a quarterly basis is 3.25 to 1.00, covering the trailing four consecutive fiscal quarters for each fiscal quarter, which may be increased to 3.75 to 1.00 for a period of time in connection with a material acquisition or a series of material acquisitions. As of June 30, 2026, our maximum allowed net leverage ratio was 3.25 to 1.00. We were in compliance with all covenants under the Credit Agreement as of June 30, 2026. NOTE 8 — LEASES We have operating leases for facilities, vehicles and other equipment. Our facility leases are primarily used for administrative functions, R&D, manufacturing, and storage and distribution. Our finance leases are not material. Our existing leases do not contain significant restrictive provisions or residual value guarantees; however, certain leases contain provisions for the payment of maintenance, real estate taxes or insurance costs by us. Our leases have remaining lease terms ranging from less than one year to 26 years, including periods covered by options to extend the lease when it is reasonably certain that the option will be exercised. Lease expense was $61.4 million, $51.5 million and $54.6 million for the fiscal years ended June 30, 2026, 2025 and 2024, respectively. Expense related to short-term leases, which were not recorded on the Consolidated Balance Sheets, were not material for the fiscal years ended June 30, 2026 and 2025. As of June 30, 2026 and 2025, the weighted-average remaining lease term was 6.5 years and 6.2 years, respectively, and the weighted-average discount rate for operating leases was 3.74% and 4.06%, as of June 30, 2026 and 2025, respectively. Supplemental cash flow information related to leases was as follows: Year Ended June 30, (In thousands) 2026 2025 Operating cash outflows from operating leases $ 56,558 $ 47,183 ROU assets obtained in exchange for new operating lease liabilities $ 101,074 $ 46,018 Maturities of lease liabilities as of June 30, 2026 were as follows: Fiscal Year Ending June 30: Amount (In thousands) 2027 $ 62,474 2028 54,245 2029 42,585 2030 38,615 2031 30,180 2032 and thereafter 73,387 Total lease payments 301,486 Less imputed interest (37,188) Total $ 264,298 As of June 30, 2026, we did not have any material leases that had not yet commenced. NOTE 9 — EQUITY AND LONG-TERM INCENTIVE COMPENSATION PLANS Equity Incentive Program On August 3, 2023, our Board of Directors adopted the KLA Corporation 2023 Incentive Award Plan (the “2023 Plan”), which replaced our 2004 Equity Incentive Plan (the “2004 Plan”) for grants of equity awards occurring on or after November 1, 2023. The new plan was approved by our stockholders at the annual meeting of stockholders held on November 1, 2023. As of June 30, 2026, we were able to issue new equity incentive awards, such as RSUs and stock options, to our employees, consultants and members of our Board of Directors under our 2023 Plan, with 91.5 million shares available for issuance. Any 2004 Plan and 2023 Plan awards of RSUs, performance shares, performance units or deferred stock units are counted against the total number of shares issuable under the 2023 Plan share reserve, or previously under the 2004 Plan reserve, as two shares for every one share subject thereto. 74 Table of Contents In addition, the plan administrator has the ability to grant “dividend equivalent” rights in connection with awards of RSUs, performance shares, performance units and deferred stock units before they are fully vested. The plan administrator, at its discretion, may grant a right to receive dividends on the aforementioned awards, which may be settled in cash or our stock subject to meeting the vesting requirement of the underlying awards. All grants during the fiscal years ended June 30, 2026, 2025 and 2024 included dividend equivalent rights. Equity Incentive Plans - General Information The following table summarizes the combined activity under our equity incentive plans: (In thousands) Available For Grant(1) Balances as of June 30, 2023 77,602 Plan shares increased 32,500 RSUs granted(2) (8,484) RSUs canceled 783 Balances as of June 30, 2024 102,401 RSUs granted(2) (8,050) RSUs granted adjustment(3) 617 RSUs canceled 774 Balances as of June 30, 2025 95,742 RSUs granted(2) (5,367) RSUs granted adjustment(3) 535 RSUs canceled 572 Balances as of June 30, 2026 91,482 __________________ (1)The number of RSUs reflects the application of the award multiplier of 2.0x as described above. (2)Includes RSUs granted to senior management with performance-based vesting criteria (in addition to service-based vesting criteria for any of such RSUs that are deemed to have been earned) (“performance-based RSUs”). As of June 30, 2026, it had not yet been determined the extent to which (if at all) the performance-based vesting criteria had been satisfied. Therefore, this line item includes all such performance-based RSUs granted during the fiscal year, reported at the maximum possible number of shares that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied (1.5 million shares, 1.5 million shares and 1.7 million shares for the fiscal years ended June 30, 2026, 2025 and 2024, respectively, reflecting the application of the 2.0x multiplier described above). (3)Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during the fiscal year ended June 30, 2026. The fair value of stock-based awards is measured at the grant date and is recognized as an expense over the employee’s requisite service period. The fair value for RSUs granted with “dividend equivalent” rights is determined using the closing price of our common stock on the grant date. The fair value for market-based RSUs is estimated on the grant date using a Monte Carlo simulation model with the following assumptions: expected volatilities ranging from 27.8% to 28.1%, based on a combination of implied volatility from traded options on our common stock and the historical volatility of our common stock; dividend yield ranging from 2.4% to 2.5%, based on our current expectations for our anticipated dividend policy; risk-free interest rate ranging from 2.3% to 2.4%, based on the implied yield available on U.S. Treasury zero-coupon issues with terms equal to the contractual terms of each tranche; and an expected term that takes into consideration the vesting term and the contractual term of the market-based award. The awards are amortized over service periods of three, four, and five years, which is the longer of the explicit service period or the period in which the market target is expected to be met. The fair value for purchase rights under our ESPP is determined using a Black-Scholes model. 75 Table of Contents The following table shows stock-based compensation (“SBC”) expense for the indicated periods: Year Ended June 30, (In thousands) 2026 2025 2024 SBC expense by: Costs of revenues $ 57,680 $ 46,502 $ 35,942 R&D 95,249 77,271 60,124 SG&A 157,242 141,238 116,629 Total SBC expense $ 310,171 $ 265,011 $ 212,695 SBC capitalized as inventory as of June 30, 2026 and 2025 was $34.0 million and $26.3 million, respectively. Restricted Stock Units The following table shows the activity and weighted-average grant date fair values for RSUs during the fiscal year ended June 30, 2026: Shares(In thousands) (1) Weighted-Average Grant Date Fair Value Outstanding RSUs as of June 30, 2025(2) 12,926 $ 53.63 Granted(3) 2,683 $ 128.33 Granted adjustments(4) (267) $ 39.74 Vested and released (5,035) $ 46.94 Forfeited (286) $ 62.64 Outstanding RSUs as of June 30, 2026(2) 10,021 $ 77.11 __________________ (1)Share numbers reflect actual shares subject to awarded RSUs. (2)Includes performance-based RSUs. (3)This line item includes performance-based RSUs granted during the fiscal year ended June 30, 2026 reported at the maximum possible number of shares that may ultimately be issuable if all applicable performance-based criteria are achieved at their maximum levels and all applicable service-based criteria are fully satisfied (0.7 million shares for the fiscal year ended June 30, 2026, reflect the application of the multiplier described above). (4)Represents the portion of RSUs granted with performance-based vesting criteria and reported at the actual number of shares issued upon achievement of the performance vesting criteria during the fiscal year ended June 30, 2026. The RSUs granted by us generally vest as follows, in each case subject to the recipient remaining employed by us as of the applicable vesting date: (a) with respect to awards with only service-based vesting criteria, over periods ranging from two to four years and (b) with respect to awards with both performance-based and service-based vesting criteria, over periods ranging from three to four years. The RSUs granted to the independent members of the Board of Directors vest annually. The following table shows the weighted-average grant date fair value per unit for the RSUs granted, aggregate grant date fair value of RSUs vested, and tax benefits realized by us in connection with vested and released RSUs for the indicated periods: (In thousands, except for weighted-average grant date fair value) Year Ended June 30, 2026 2025 2024 Weighted-average grant date fair value per unit $ 128.33 $ 72.68 $ 58.45 Grant date fair value of vested RSUs $ 236,333 $ 191,352 $ 144,888 Tax benefits realized by us in connection with vested and released RSUs $ 108,264 $ 48,858 $ 47,315 As of June 30, 2026, the unrecognized SBC expense balance related to RSUs was $558.1 million, excluding the impact of estimated forfeitures, and will be recognized over an estimated weighted-average amortization period of 1.3 years. The intrinsic value of outstanding RSUs as of June 30, 2026 was $3.02 billion. 76 Table of Contents Cash LTI Compensation As part of our employee compensation program, we issue Cash LTI awards to many of our employees. Executives and non-employee members of the Board of Directors do not participate in the Cash LTI Plan. During the fiscal years ended June 30, 2026 and 2025, we approved Cash LTI awards of $33.4 million and $41.7 million, respectively. Cash LTI awards issued to employees under the Cash LTI Plan will vest in three or four equal installments, with one-third or one-fourth of the aggregate amount of the Cash LTI award vesting on each anniversary of the grant date over a three or four-year period. In order to receive payments under a Cash LTI award, participants must remain employed by us as of the applicable award vesting date. During the fiscal years ended June 30, 2026, 2025 and 2024, we recognized $45.5 million, $56.8 million and $70.3 million, respectively, in compensation expense under the Cash LTI Plan. As of June 30, 2026, the unrecognized compensation balance (excluding the impact of estimated forfeitures) related to the Cash LTI Plan was $81.7 million. Employee Stock Purchase Plan Our ESPP provides that eligible employees may contribute up to 15% of their eligible earnings toward the semi-annual purchase of our common stock. The ESPP is qualified under Section 423 of the Internal Revenue Code. The employee’s purchase price is derived from a formula based on the closing price of the common stock on the first day of the offering period versus the closing price on the date of purchase (or, if not a trading day, on the immediately preceding trading day). The offering period (or length of the look-back period) under the ESPP has a duration of six months, and the purchase price with respect to each offering period beginning on or after such date is, until otherwise amended, equal to 85% of the lesser of (i) the fair market value of our common stock at the commencement of the applicable six-month offering period or (ii) the fair market value of our common stock on the purchase date. We estimate the fair value of purchase rights under the ESPP using a Black-Scholes model. The fair value of each purchase right under the ESPP was estimated on the date of grant using the Black-Scholes model and the straight-line attribution approach with the following weighted-average assumptions: Year Ended June 30, 2026 2025 2024 Stock purchase plan: Expected stock price volatility 41.3 % 33.8 % 32.2 % Risk-free interest rate 4.1 % 5.0 % 5.3 % Dividend yield 0.7 % 0.9 % 1.1 % Expected life (in years) 0.50 0.50 0.50 The following table shows total cash received from employees for the issuance of shares under the ESPP, the number of shares purchased by employees through the ESPP, the tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP and the weighted-average fair value per share for the indicated periods: (In thousands, except for weighted-average fair value per share) Year Ended June 30, 2026 2025 2024 Total cash received from employees for the issuance of shares under the ESPP $ 168,573 $ 151,514 $ 144,934 Number of shares purchased by employees through the ESPP 1,770 2,809 3,201 Tax benefits realized by us in connection with the disqualifying dispositions of shares purchased under the ESPP $ 3,812 $ 2,834 $ 2,623 Weighted-average fair value per share based on Black-Scholes model $ 27.91 $ 16.49 $ 12.50 The ESPP shares are replenished annually on the first day of each fiscal year by virtue of an evergreen provision. The provision allows for share replenishment equal to the lesser of 20.0 million shares or the number of shares that we estimate will be required to be issued under the ESPP during the forthcoming fiscal year. As of June 30, 2026, a total of 24.7 million shares were reserved and available for issuance under the ESPP. Quarterly cash dividends On June 2, 2026, we paid a quarterly cash dividend of $0.230 per share on the outstanding shares of our common stock to stockholders of record as of the close of business on May 18, 2026. The total amount of regular quarterly cash dividends and dividend equivalents paid during the fiscal years ended June 30, 2026 and 2025 was $1.06 billion and $904.6 million, 77 Table of Contents respectively. The amount of accrued dividend equivalents payable related to unvested RSUs with dividend equivalent rights was $13.3 million as of both June 30, 2026 and 2025. These amounts will be paid upon vesting of the underlying RSUs. Refer to Note 19 “Subsequent Events” to our Consolidated Financial Statements for additional information regarding the declaration of our quarterly cash dividend announced subsequent to June 30, 2026. NOTE 10 — STOCK REPURCHASE PROGRAM Our Board of Directors has authorized a program that permits us to repurchase our common stock, including increases in the authorized repurchase amount of $5.00 billion in the fourth quarter of fiscal 2025 and $7.00 billion in the third quarter of fiscal 2026. The stock repurchase program has no expiration date and may be suspended at any time. The intent of the program is, in part, to mitigate the potential dilutive impact related to our equity incentive plans and shares issued in connection with our ESPP as well as to return excess cash to our stockholders. Any and all share repurchase transactions are subject to market conditions and applicable legal requirements. Under the authoritative guidance, share repurchases are recognized as a reduction to retained earnings to the extent available, with any excess recognized as a reduction of capital in excess of par value. In addition, as explained further in Note 13 “Income Taxes,” the Inflation Reduction Act of 2022 (“IRA”) introduced a 1% excise tax imposed on certain stock repurchases made after December 31, 2022 by publicly traded companies. The excise tax is recorded as part of the cost basis of treasury stock repurchased after December 31, 2022 and, as such, is included in stockholders’ equity. As of June 30, 2026, an aggregate of $9.74 billion of authorization was available for repurchase under the stock repurchase program. Share repurchases for the indicated periods (based on the trade date of the applicable repurchase) were as follows: (In thousands) Year Ended June 30, 2026 2025 2024 Number of shares of common stock repurchased 18,241 30,057 30,320 Total cost of repurchases $ 2,303,935 $ 2,165,635 $ 1,742,501 NOTE 11 — NET INCOME PER SHARE Basic net income per share is calculated by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net income per share is calculated by using the weighted-average number of shares of common stock outstanding during the period, increased to include the number of additional shares of common stock that would have been outstanding if the shares of common stock underlying our outstanding dilutive RSUs had been issued. The dilutive effect of outstanding RSUs is reflected in diluted net income per share by application of the treasury stock method. The following table sets forth the computation of basic and diluted net income per share: (In thousands, except per share amounts) Year Ended June 30, 2026 2025 2024 Numerator: Net income $ 4,830,771 $ 4,061,643 $ 2,761,896 Denominator: Weighted-average shares – basic, excluding unvested RSUs 1,311,516 1,330,299 1,353,452 Effect of dilutive RSUs and options 8,117 7,203 8,417 Weighted-average shares – diluted 1,319,633 1,337,502 1,361,869 Basic net income per share $ 3.68 $ 3.05 $ 2.04 Diluted net income per share $ 3.66 $ 3.04 $ 2.03 Anti-dilutive securities excluded from the computation of diluted net income per share 162 — 353 78 Table of Contents NOTE 12 — EMPLOYEE BENEFIT PLANS Profit-sharing program and U.S. 401(k) We have a profit-sharing program for eligible employees, which distributes a percentage of our pre-tax profits on a quarterly basis. In addition, we have an employee savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Beginning in July 2025, the employer match is 100% of an employee’s eligible contributions up to 4% of eligible compensation. Prior to July 2025, the employer match was the greater of 50% of the first $8,000 of an eligible employee’s contributions or 50% of the first 5% of eligible compensation contributed plus 25% of the next 5% of compensation contributed. The total expenses under the profit-sharing and 401(k) programs amounted to $50.1 million, $43.2 million, and $39.4 million in the fiscal years ended June 30, 2026, 2025 and 2024, respectively. Employee benefit plans In addition to the profit-sharing plan and the U.S. 401(k), several of our foreign subsidiaries have retirement plans for their full-time employees, many of which are defined benefit plans. The assumptions used in calculating the obligations for the foreign plans depend on the local economic environment. Discount rates for the plans are derived by reference to appropriate benchmark yields on high-quality corporate bonds, allowing for the approximate duration of both plan obligations and the relevant benchmark index. Asset return assumptions are developed by considering the historical returns and expectations of future returns relevant to the country in which each plan is in effect and the investments applicable to the corresponding plan. The foreign plans’ investments are measured at fair value on a recurring basis. They are managed by third-party trustees consistent with the regulations or market practice of the country where the assets are invested. We are not actively involved in the investment strategy, nor do we have control over the target allocation of these investments. We manage a variety of risks, including market, credit and liquidity risks, across our plan assets through our investment managers. We define a concentration of risk as an undiversified exposure to one of the above-mentioned risks that increases the exposure of the loss of plan assets unnecessarily. We monitor exposure to such risks in the foreign plans by monitoring the magnitude of the risk in each plan and diversifying our exposure to such risks across a variety of instruments, markets and counterparties. As of June 30, 2026, we did not have concentrations of plan asset investment risk in any single entity, manager, counterparty, sector, industry or country. We apply authoritative guidance that requires an employer to recognize the funded status of each of our defined benefit pension and post-retirement benefit plans as a net asset or liability on its balance sheets. Additionally, the authoritative guidance requires an employer to measure the funded status of each of its plans as of the date of its year-end statement of financial position. The benefit obligations and related assets under our plans have been measured as of June 30, 2026 and 2025 and were immaterial. The net funded status of these plans is recognized as a liability and included in other current or non-current liabilities in the Consolidated Balance Sheets in the years presented. The net periodic benefit costs were immaterial for the fiscal years ended June 30, 2026, 2025 and 2024. NOTE 13 — INCOME TAXES The components of income before income taxes were as follows: Year Ended June 30, (In thousands) 2026 2025 2024 Domestic income before income taxes $ 3,629,727 $ 3,070,097 $ 1,997,090 Foreign income before income taxes 1,976,198 1,574,351 1,192,942 Total income before income taxes $ 5,605,925 $ 4,644,448 $ 3,190,032 79 Table of Contents The provision for income taxes was comprised of the following: (In thousands) Year Ended June 30, 2026 2025 2024 Current: Federal $ 330,215 $ 624,002 $ 395,876 State 9,621 21,161 10,737 Foreign 348,301 182,448 160,401 688,137 827,611 567,014 Deferred: Federal 80,690 (222,907) (110,686) State 952 (5,433) (2,770) Foreign 5,375 (16,466) (25,422) 87,017 (244,806) (138,878) Provision for income taxes $ 775,154 $ 582,805 $ 428,136 The significant components of deferred income tax assets and liabilities were as follows: (In thousands) As of June 30, 2026 2025 Deferred tax assets: Tax credits and net operating losses $ 364,290 $ 327,618 Capitalized R&D expenses 361,467 447,043 Depreciation and amortization 220,997 190,256 Inventory reserves 144,298 135,121 Employee benefits accrual 125,406 106,746 Non-deductible reserves 63,679 69,790 Unearned revenue 52,454 48,372 SBC 19,978 18,835 Other 17,936 43,843 Gross deferred tax assets 1,370,505 1,387,624 Valuation allowance (356,639) (310,599) Net deferred tax assets $ 1,013,866 $ 1,077,025 Deferred tax liabilities: Unremitted earnings of foreign subsidiaries not indefinitely reinvested $ (411,657) $ (360,544) Deferred profit (31,064) (41,378) Unrealized gain on investments (7,569) (16,278) Total deferred tax liabilities (450,290) (418,200) Total net deferred tax assets $ 563,576 $ 658,825 Our deferred tax assets for the years ended June 30, 2026 and 2025 reflect the impact of the mandatory capitalization of research and experimental expenditures as required by the 2017 Tax Cuts and Jobs Act, which was subsequently modified by the OBBBA to require capitalization of only foreign research expenses. As of June 30, 2026, we had U.S. federal, state and foreign net operating loss (“NOL”) carry-forwards of $1.3 million, $10.0 million and $83.2 million, respectively. We also had foreign capital loss carry-forwards of $1.7 million as of June 30, 2026. The U.S. federal NOL carry-forwards will expire at various dates from 2027 through 2035. The utilization of NOLs created by acquired companies is subject to annual limitations under Section 382 of the Internal Revenue Code. However, it is not expected that such annual limitation will significantly impair the realization of these NOLs. The state NOLs will expire at various dates beginning in 2031 through 2036. Foreign NOLs and capital loss carry-forwards will be carried forward indefinitely. State credits of $440.8 million will also be carried forward indefinitely. 80 Table of Contents The net deferred tax asset valuation allowance was $356.6 million and $310.6 million as of June 30, 2026 and 2025, respectively. The change was primarily due to an increase in the valuation allowance related to state credit carry-forwards generated in the fiscal year ended June 30, 2026. The valuation allowance is based on our assessment that it is more likely than not that certain deferred tax assets will not be realized in the foreseeable future. Of the valuation allowance as of June 30, 2026, $355.9 million was related to federal and state credit carry-forwards. The remainder of the valuation allowance was related to state NOL carry-forwards. As of June 30, 2026, we intend to indefinitely reinvest $185.9 million of cumulative undistributed earnings held by certain non-U.S. subsidiaries. If these undistributed earnings were repatriated to the U.S., the potential deferred tax liability associated with the undistributed earnings would be approximately $39 million. We benefit from tax holidays in Singapore where we manufacture certain of our products. These tax holidays are on approved investments. The tax holidays were amended and renewed under substantially similar terms as of July 1, 2025, and are scheduled to expire through December 2032. We are in compliance with all the terms and conditions of the tax holidays as of June 30, 2026. The net impact of these tax holidays was to decrease our tax expense by $120.9 million, $198.6 million, and $159.4 million in the fiscal years ended June 30, 2026, 2025, and 2024, respectively. The benefits of the tax holidays on diluted net income per share were $0.09, $0.15 and $0.12 for the fiscal years ended June 30, 2026, 2025, and 2024, respectively. Beginning in the fiscal year ended June 30, 2026, we adopted ASU 2023-09 on a prospective basis. The reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate pursuant to the disclosure requirements of ASU 2023-09 for the fiscal year ended June 30, 2026 was as follows: (Dollar amounts in thousands) Year Ended June 30, 2026 Federal statutory income tax rate $ 1,177,244 21.0 % State and local income taxes, net of federal income tax effect(1) 8,553 0.2 % Effect of cross border tax laws FDII (222,284) (4.0) % Other 17,952 0.3 % Tax credits R&D credit (59,203) (1.0) % Other (9,043) (0.2) % Nontaxable or nondeductible items 12,380 0.2 % Changes in unrecognized tax benefits (8,439) (0.2) % Other adjustments SBC (72,329) (1.3) % Other (4,499) (0.1) % Foreign tax effects Singapore Tax incentives (95,804) (1.7) % Other(2) (38,928) (0.7) % China 48,337 0.9 % Other jurisdictions 21,217 0.4 % Effective income tax rate $ 775,154 13.8 % ________________ (1)Oregon makes up the majority of the effect of the state and local income tax category. (2)Includes foreign tax rate differential. 81 Table of Contents The reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate was as follows: Year Ended June 30, 2025 2024 Federal statutory rate 21.0 % 21.0 % GILTI 2.9 % 3.7 % Goodwill impairment 1.1 % 1.7 % Net change in tax reserves 0.3 % 1.1 % State income taxes, net of federal benefit 0.3 % 0.3 % FDII (6.6) % (5.9) % Effect of foreign operations taxed at various rates (5.1) % (6.6) % R&D tax credit (1.1) % (1.6) % Other (0.3) % (0.3) % Effective income tax rate 12.5 % 13.4 % Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended June 30, 2026 was as follows: (In thousands) Year Ended June 30, 2026 Federal $ 509,387 State 12,426 Foreign China 91,214 Other 168,382 Cash paid for income taxes, net of refunds received $ 781,409 A reconciliation of gross unrecognized tax benefits was as follows: Year Ended June 30, (In thousands) 2026 2025 2024 Unrecognized tax benefits at the beginning of the year $ 258,604 $ 245,707 $ 213,092 Increases for tax positions taken in current year 38,538 35,429 40,209 Increases for tax positions taken in prior years 10,685 10,862 23,291 Increases (decreases) for settlements with taxing authorities 1,808 (4,687) — Decreases for tax positions taken in prior years (31,840) (11,607) (26,766) Decreases for lapsing of statutes of limitations (20,028) (17,100) (4,119) Unrecognized tax benefits at the end of the year $ 257,767 $ 258,604 $ 245,707 The amounts of unrecognized tax benefits that would impact the effective tax rate were $237.7 million, $244.9 million and $244.6 million as of June 30, 2026, 2025 and 2024, respectively. The amounts of interest and penalties recognized during the years ended June 30, 2026, 2025 and 2024 were expenses (benefits) of ($4.5 million), $9.0 million and $8.3 million, respectively. Our policy is to include interest and penalties related to unrecognized tax benefits within Other expense (income), net. The amounts of interest and penalties accrued as of June 30, 2026 and 2025 were $45.8 million and $50.1 million, respectively. In the normal course of business, we are subject to examination by tax authorities throughout the world. We are subject to U.S. federal income tax examinations for all years beginning from the fiscal year ended June 30, 2023 and are under U.S. federal income tax examination for the fiscal year ended June 30, 2018. We are subject to state income tax examinations for all years beginning from the fiscal year ended June 30, 2022. We are also subject to examinations in other major foreign jurisdictions, including Singapore and Israel, for all years beginning from the fiscal year ended June 30, 2019. We have completed the audit in Israel for calendar year ended December 31, 2019 to the fiscal year ended June 30, 2022. We believe our current unrecognized tax benefits are sufficient. 82 Table of Contents Legislative Developments In January 2026, the Organization for Economic Co-operation and Development (“OECD”) introduced two new Pillar Two safe harbors which are expected to be available for fiscal years beginning on or after January 1, 2026: (1) the Side-by-Side Safe Harbor (“SBSSH”) for multinational entities headquartered in the jurisdictions with both eligible domestic and worldwide tax systems, and (2) the Ultimate Parent Entity (“UPE”) Safe Harbor for multinational entities with a UPE located in a jurisdiction that has only an eligible domestic tax system. The U.S. is an eligible jurisdiction for the SBSSH. We are not expecting a material tax impact to our Consolidated Financial Statements when countries begin to enact legislation to adopt the SBSSH provisions. In December 2025, Israel adopted the Pillar Two Global Anti-Base Erosion (“GloBE”) rules under the Multinational Enterprise (“Minimum Tax”) Act, which includes a domestic minimum tax of 15% that will be effective for us beginning in the fiscal year ending June 30, 2027. The Pillar Two GloBE rules are deemed an alternative minimum tax so we did not recognize any deferred taxes for the estimated effects of the future minimum tax under current GAAP. We are not expecting a material tax impact to our Consolidated Financial Statements. On July 4, 2025, President Trump signed into law the OBBBA. The OBBBA provides for several permanent changes to the U.S. tax code among other items, including modifying the GILTI and FDII rules from the Tax Cuts and Jobs Act; restoring full expensing for domestic research expenses; and reinstating 100% bonus depreciation provisions. ASC 740, Income Taxes, requires that the tax effects of changes in tax rates and laws be recognized in the period in which the legislation is enacted. The OBBBA provisions resulted in an increase to our cash flows from operating activities and an increase to our effective tax rate in our fiscal year ended June 30, 2026. The effective tax rate changes have been reflected in the Consolidated Financial Statements for the fiscal year ended June 30, 2026, and did not have a material impact to our Consolidated Financial Statements. In November 2024, Singapore adopted the Pillar Two GloBE rules under the Minimum Tax Act, which includes a domestic minimum tax of 15% that is effective for us in the fiscal year ended June 30, 2026. There was no material impact to our Consolidated Financial Statements during the fiscal year ended June 30, 2026. The Pillar Two GloBE rules are deemed an alternative minimum tax so we did not recognize any deferred taxes for the estimated effects of the future minimum tax under current GAAP. California Governor Newsom approved the 2024-25 California State Budget on June 27, 2024, which includes a provision to suspend the use of all NOLs and limits the use of R&D tax credits to $5 million for tax years 2024 through 2026. On June 29, 2026, Governor Newsom approved the 2026-27 California State Budget, which extends the $5 million limitation through tax years beginning before January 1, 2030. Effective for tax years beginning on or after January 1, 2030, the business credit limitation will apply permanently and it will equal the greater of 70% of the total taxes imposed or $5 million per tax year. There was no material tax impact to our Consolidated Financial Statements in our fiscal years ended June 30, 2026 and June 30, 2025 from the California State Budget provisions. President Biden signed into law the CHIPS and Science Act of 2022 (“CHIPS Act,” where “CHIPS” stands for Creating Helpful Incentives to Produce Semiconductors) on August 9, 2022. The CHIPS Act provides for various incentives and tax credits among other items, including the Advanced Manufacturing Investment Credit (“AMIC”), which equals 25% of qualified investments in an advanced manufacturing facility that is placed in service after December 31, 2022. There was no material tax impact to our Consolidated Financial Statements from the AMIC provision. President Biden also signed into law the IRA on August 16, 2022. The IRA has several provisions including a 15% corporate alternative minimum tax (“CAMT”) for certain large corporations that have at least an average of $1.0 billion of adjusted financial statement income over a consecutive three-tax-year period. There was no material tax impact to our Consolidated Financial Statements in our fiscal year ended June 30, 2026 from the CAMT provision. In December 2021, the OECD’s Inclusive Framework on Base Erosion and Profit Shifting released GloBE rules under Pillar Two. For the countries that have enacted legislation to adopt the Pillar Two GloBE rules, the provision requiring a 15% minimum effective tax rate on income earned in the respective countries and a global 15% minimum effective top-up tax are effective for us beginning in our fiscal year ended June 30, 2025. There was no material tax impact to our Consolidated Financial Statements from these Pillar Two provisions during our fiscal years ended June 30, 2026 and June 30, 2025. NOTE 14 — LITIGATION AND OTHER LEGAL MATTERS We are named, from time to time, as a party to lawsuits and other types of legal proceedings and claims in the normal course of our business. Actions filed against us include commercial, intellectual property (“IP”), customer, and labor and employment related claims, including complaints of alleged wrongful termination and potential class action lawsuits regarding alleged violations of federal and state wage and hour and other laws. In general, legal proceedings and claims, regardless of 83 Table of Contents their merit, and associated internal investigations (especially those relating to IP or confidential information disputes) are often expensive to prosecute, defend or conduct and may divert management’s attention and other Company resources. Moreover, the results of legal proceedings are difficult to predict, and the costs incurred in litigation can be substantial, regardless of outcome. We believe the amounts provided in our Consolidated Financial Statements are adequate in light of the probable and estimated liabilities. However, because such matters are subject to many uncertainties and the ultimate outcomes are not predictable, there can be no assurances that the actual amounts required to satisfy alleged liabilities from the matters described above will not exceed the amounts reflected in our Consolidated Financial Statements or will not have a material adverse effect on our results of operations, financial condition or cash flows. NOTE 15 — COMMITMENTS AND CONTINGENCIES Factoring. We have factoring agreements with financial institutions to sell certain of our trade receivables and promissory notes from customers without recourse. We do not believe we are at risk for any material losses as a result of these agreements. In addition, we periodically sell certain LC, without recourse, received from customers in payment for goods and services. The following table shows total receivables sold under factoring agreements and proceeds from sales of LC for the indicated periods: Year Ended June 30, (In thousands) 2026 2025 2024 Receivables sold under factoring agreements $ 515,480 $ 230,552 $ 254,889 Proceeds from sales of LC $ 86,020 $ 55,525 $ 22,242 Factoring and LC fees for the sale of certain trade receivables were recorded in Other expense (income), net and were not material for the periods presented. KLA may continue servicing the receivables that are sold. Purchase Commitments. We maintain commitments to purchase inventory from our suppliers as well as goods, services, and other assets in the ordinary course of business. Our liability under these purchase commitments is generally restricted to a forecasted time-horizon as mutually agreed between the parties. This forecasted time-horizon can vary among different suppliers. Our estimate of our significant purchase commitments primarily for material, services, supplies and asset purchases is approximately $5.97 billion as of June 30, 2026, a majority of which are due within the next 12 months. Actual expenditures will vary based upon the volume of the transactions and length of contractual service provided. In addition, the amounts paid under these arrangements may be less in the event that the arrangements are renegotiated or canceled. Certain agreements provide for potential cancellation penalties. Cash LTI Plan. As of June 30, 2026, we have committed $101.2 million for future payment obligations under our Cash LTI Plan. Cash LTI awards issued to employees under the Cash LTI Plan vest in three or four equal installments, with one-third or one-fourth of the aggregate amount of the Cash LTI award vesting on each anniversary of the grant date over a three or four-year period. In order to receive payments under a Cash LTI award, participants must remain employed by us as of the applicable award vesting date. Guarantees and Contingencies. We maintain guarantee arrangements available through various financial institutions for up to $176.2 million, of which $142.5 million had been issued as of June 30, 2026, primarily to fund guarantees to customs authorities for value-added tax and other operating requirements of our consolidated subsidiaries worldwide. We have a duty drawback program that allows for the recovery of certain import duties upon the export of qualifying goods. Our accounting policy is to recognize a receivable for duty drawback upon submission of a qualifying claim to U.S. Customs and Border Protection when recovery is considered probable and estimable. In February 2026, the U.S. Supreme Court held that certain tariffs imposed under the International Emergency Economic Powers Act were not authorized. As a result, we are pursuing recovery of duties previously paid and have submitted and will continue to submit qualifying claims through the administrative refund process established by U.S. Customs and Border Protection. We have also begun receiving refunds through this process. Our accounting policy is to recognize a receivable for a tariff refund upon submission of a qualifying claim to U.S. Customs and Border Protection. Changes in the refund process or related legal challenges could impact the timing of cash receipts and our results of operations; however, we do not expect the impact to be material. In January 2025, we entered into a long-term virtual power purchase agreement to purchase a portion of the output generated from a solar energy project for a fixed price. As part of this agreement, we will also receive renewable energy credits 84 Table of Contents commensurate with the power we acquire. These credits can be applied against our GHG emissions, accelerating the progress towards our goals of 100% renewable electricity across our global operations by 2030, reduction of our Scope 1 and 2 emissions from our 2021 baseline by 50% by 2030 and achievement of net zero Scope 1 and Scope 2 emissions by 2050. This agreement did not have a material impact on our results of operations, financial condition or cash flows during the fiscal years ended June 30, 2026 and June 30, 2025. Indemnification Obligations. Subject to certain limitations, we are obligated to indemnify our current and former directors, officers and employees with respect to certain litigation matters and investigations that arise in connection with their service to us. These obligations arise under the terms of our certificate of incorporation, bylaws, applicable contracts, and Delaware and California law. The obligation to indemnify generally means that we are required to pay or reimburse the individuals’ reasonable legal expenses and possibly damages and other liabilities incurred by several of our current and former directors, officers and employees in connection with these matters. For example, we have paid or reimbursed legal expenses incurred in connection with the investigation of our historical stock option practices and the related litigation and government inquiries. Although the maximum potential amount of future payments we could be required to make under the indemnification obligations generally described in this paragraph is theoretically unlimited, we believe the fair value of this liability, to the extent estimable, is appropriately considered within the reserve we have established for currently pending legal proceedings. We are a party to a variety of agreements pursuant to which we may be obligated to indemnify the other party with respect to certain matters. Typically, these obligations arise in connection with contracts and license agreements or the sale of assets, under which we customarily agree to hold the other party harmless against losses arising therefrom, or provide customers with other remedies to protect against, bodily injury or damage to personal property caused by our products, non-compliance with our product performance specifications, infringement by our products of third-party IP rights and a breach of warranties, representations and covenants related to matters such as title to assets sold, validity of certain IP rights, non-infringement of third-party rights, and certain income tax-related matters. In each of these circumstances, payment by us is typically subject to the other party making a claim to and cooperating with us pursuant to the procedures specified in the particular contract. This usually allows us to challenge the other party’s claims or, in case of breach of IP representations or covenants, to control the defense or settlement of any third-party claims brought against the other party. Further, our obligations under these agreements may be limited in terms of amounts, activity (typically at our option to replace or correct the products or terminate the agreement with a refund to the other party), and duration. In some instances, we may have recourse against third parties and/or insurance covering certain payments made by us. In addition, we may, in limited circumstances, enter into agreements that contain customer-specific commitments on pricing, tool reliability, spare parts stocking levels, response time and other commitments. Furthermore, we may give these customers limited audit or inspection rights to enable them to confirm that we are complying with these commitments. If a customer elects to exercise its audit or inspection rights, we may be required to expend significant resources to support the audit or inspection, as well as to defend or settle any dispute with a customer that could potentially arise out of such audit or inspection. To date, we have made no significant accruals in our Consolidated Financial Statements for this contingency. While we have not in the past incurred significant expenses for resolving disputes regarding these types of commitments, we cannot make any assurance that we will not incur any such liabilities in the future. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of our obligations and the unique facts and circumstances involved in each particular agreement. Historically, payments made by us under these agreements have not had a material effect on our business, financial condition, results of operations or cash flows. NOTE 16 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The authoritative guidance requires companies to recognize all derivative instruments, including foreign exchange contracts, rate lock agreements and interest rate swaps (collectively “derivatives”), as either assets or liabilities at fair value on the Consolidated Balance Sheets. In accordance with the accounting guidance, we designate foreign currency forward transactions and options contracts and interest rate forward transactions as cash flow hedges. In accordance with the accounting guidance, we also designate certain foreign currency exchange contracts as net investment hedge transactions intended to mitigate the variability of the value of certain investments in foreign subsidiaries. Since fiscal 2015, we have entered into five sets of Rate Lock Agreements to hedge the benchmark interest rate on portions of our Senior Notes prior to issuance. Upon issuance of the associated debt, the Rate Lock Agreements were settled and their fair values were recorded within AOCI. The resulting gains and losses from these transactions are amortized to interest expense over the lives of the associated debt. As of June 30, 2026, the aggregate unamortized portion of the fair value of the forward contracts for the Rate Lock Agreements was a $41.3 million net gain. 85 Table of Contents We utilize fixed-to-floating interest rate swaps designated as fair value hedges to minimize certain exposures to changes in the fair value of fixed-rate debt that result from fluctuations in benchmark interest rates. The interest rate swaps effectively convert the fixed interest rates on a portion of our 2022 Senior Notes to floating interest rates based on the SOFR swap rate. Under the terms of the swaps, we pay semi-annual interest at the daily compounded SOFR swap rate plus a fixed number of basis points on the $2.00 billion notional amount of Senior Notes hedged, and in exchange, we receive fixed-rate interest on the Senior Notes hedged from the swap counterparties on a semi-annual basis. If a financial counterparty to any of our hedging arrangements experiences financial difficulties or is otherwise unable to honor the terms of the interest rate swap, we may experience material losses. We apply the shortcut method to these fair value hedges as they are assumed to be perfectly effective in hedging the change in interest rates related to a portion of our 2022 Senior Notes. The resulting gains and losses from these transactions are recognized in interest expense each period. Derivatives in Hedging Relationships: Foreign Exchange Contracts and Rate Lock Agreements The gains (losses) on derivatives in cash flow and net investment hedging relationships recognized in OCI for the indicated periods were as follows: Year Ended June 30, (In thousands) 2026 2025 2024 Derivatives Designated as Cash Flow Hedging Instruments: Rate lock agreements: Amounts included in the assessment of effectiveness $ — $ — $ 415 Foreign exchange contracts: Amounts included in the assessment of effectiveness $ 34,281 $ 36,747 $ 9,176 Amounts excluded from the assessment of effectiveness $ 102 $ (21) $ 146 Derivatives Designated as Net Investment Hedging Instruments: Foreign exchange contracts(1) $ 19,053 $ (23,630) $ 3,459 ________________ (1)No amounts were reclassified from AOCI into earnings related to the sale of a subsidiary, as there were no such sales during the periods presented. 86 Table of Contents The locations and amounts of designated and non-designated derivatives’ gains and losses reported in the Consolidated Statements of Operations for the indicated periods were as follows: (In thousands) Revenues Costs of Revenues and Operating Expense Interest Expense Other Expense (Income), Net For the year ended June 30, 2024 Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 9,812,247 $ 6,466,037 $ 311,253 $ (155,075) Gains (Losses) on Derivatives Designated as Hedging Instruments: Rate lock agreements: Amount of gains reclassified from AOCI to earnings $ — $ — $ 3,764 $ — Foreign exchange contracts: Amount of gains reclassified from AOCI to earnings $ 19,246 $ 3,766 $ — $ — Amount excluded from the assessment of effectiveness recognized in earnings $ (872) $ — $ — $ 2,328 Gains (Losses) on Derivatives Not Designated as Hedging Instruments: Amount of gains recognized in earnings $ — $ — $ — $ 10,597 For the year ended June 30, 2025 Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow hedges are recorded $ 12,156,162 $ 7,381,035 $ 302,166 $ (171,487) Gains (Losses) on Derivatives Designated as Hedging Instruments: Rate lock agreements: Amount of gains reclassified from AOCI to earnings $ — $ — $ 3,285 $ — Foreign exchange contracts: Amount of gains reclassified from AOCI to earnings $ 8,950 $ 4,678 $ — $ — Amount excluded from the assessment of effectiveness recognized in earnings $ (1,484) $ — $ — $ 2,984 Gains (Losses) on Derivatives Not Designated as Hedging Instruments: Amount of gains recognized in earnings $ — $ — $ — $ 37,588 For the year ended June 30, 2026 Total amounts presented in the Consolidated Statements of Operations in which the effects of cash flow and fair value hedges are recorded $ 13,579,476 $ 7,918,696 $ 284,440 $ (229,585) Gains (Losses) on Derivatives Designated as Hedging Instruments: Rate lock agreements: Amount of gains reclassified from AOCI to earnings $ — $ — $ 3,034 $ — Foreign exchange contracts: Amount of gains reclassified from AOCI to earnings $ 7,577 $ 42,964 $ — $ — Amount excluded from the assessment of effectiveness recognized in earnings $ (751) $ — $ — $ 18,944 Interest rate contracts: Amount of gains recognized in earnings $ — $ — $ 559 $ — Gains (Losses) on Derivatives Not Designated as Hedging Instruments: Amount of gains recognized in earnings $ — $ — $ — $ 24,135 87 Table of Contents The U.S. dollar equivalent of all outstanding notional amounts of foreign currency hedge contracts, with maximum remaining maturities of approximately 11 months as of June 30, 2026 and 14 months as of June 30, 2025, were as follows: (In thousands) As of June 30, 2026 As of June 30, 2025 Cash flow hedge contracts - foreign currency Purchase $ 533,193 $ 405,349 Sell $ 61,209 $ 159,475 Net Investment hedge contracts - foreign currency Sell $ 343,791 $ 384,130 Other foreign currency hedge contracts Purchase $ 978,174 $ 618,844 Sell $ 608,933 $ 429,643 The locations and fair value of our derivatives reported in our Consolidated Balance Sheets as of the dates indicated below were as follows: Asset Derivatives Liability Derivatives Balance Sheet Location As of June 30, 2026 As of June 30, 2025 Balance Sheet Location As of June 30, 2026 As of June 30, 2025 (In thousands) Fair Value Fair Value Derivatives designated as hedging instruments Foreign exchange contracts Other current assets $ 28,423 $ 29,492 Other current liabilities $ (5,385) $ (24,331) Interest rate contracts Other current assets 2,534 — Interest rate contracts Other non-current assets 6,990 — Other non-current liabilities (10,107) — Total derivatives designated as hedging instruments 37,947 29,492 (15,492) (24,331) Derivatives not designated as hedging instruments Foreign exchange contracts Other current assets 13,398 30,011 Other current liabilities (7,161) (4,284) Total derivatives not designated as hedging instruments 13,398 30,011 (7,161) (4,284) Total derivatives $ 51,345 $ 59,503 $ (22,653) $ (28,615) The changes in AOCI, before taxes, related to derivatives for the indicated periods were as follows: Year Ended June 30, (In thousands) 2026 2025 2024 Beginning balance $ 66,570 $ 68,903 $ 81,611 Amount reclassified to earnings as net gains (52,824) (15,429) (25,904) Net change in unrealized gains 53,436 13,096 13,196 Ending balance $ 67,182 $ 66,570 $ 68,903 As of June 30, 2026, the net gain reported in AOCI that is expected to be reclassified into earnings within the next 12 months is $16.7 million. 88 Table of Contents Offsetting of Derivative Assets and Liabilities We present derivatives at gross fair values in the Consolidated Balance Sheets. We have entered into arrangements with each of our counterparties, which reduce credit risk by permitting net settlement of transactions with the same counterparty under certain conditions. The information related to the offsetting arrangements for the periods indicated was as follows: As of June 30, 2026 Gross Amounts of Derivatives Not Offset in the Consolidated Balance Sheets (In thousands) Gross Amounts of Derivatives Gross Amounts of Derivatives Offset in the Consolidated Balance Sheets Net Amount of Derivatives Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount Derivatives - assets $ 51,345 $ — $ 51,345 $ (17,605) $ — $ 33,740 Derivatives - liabilities $ (22,653) $ — $ (22,653) $ 17,605 $ — $ (5,048) As of June 30, 2025 Gross Amounts of Derivatives Not Offset in the Consolidated Balance Sheets (In thousands) Gross Amounts of Derivatives Gross Amounts of Derivatives Offset in the Consolidated Balance Sheets Net Amount of Derivatives Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount Derivatives - assets $ 59,503 $ — $ 59,503 $ (28,615) $ — $ 30,888 Derivatives - liabilities $ (28,615) $ — $ (28,615) $ 28,615 $ — $ — NOTE 17 — SEGMENT REPORTING AND GEOGRAPHIC INFORMATION ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. Our operating segments are aggregated into reportable segments based on several factors including, but not limited to, customer base, homogeneity of products, technology, delivery channels and similar economic characteristics. We have three reportable segments: Semiconductor Process Control; Specialty Semiconductor Process; and PCB and Component Inspection. Semiconductor Process Control The Semiconductor Process Control segment offers a comprehensive portfolio of inspection, metrology and data analytics products, and related services, which helps IC manufacturers achieve target yield throughout the entire semiconductor fabrication process, from R&D to final volume production. Our differentiated products and services are designed to provide comprehensive solutions that help our customers accelerate development and production ramp cycles, achieve higher and more stable semiconductor die yields and improve their overall profitability. Specialty Semiconductor Process The Specialty Semiconductor Process segment develops and sells advanced vacuum deposition and etching process tools, which are used by a broad range of specialty semiconductor customers, including manufacturers of MEMS, radio frequency communication chips, and power semiconductors for automotive and industrial applications. PCB and Component Inspection The PCB and Component Inspection segment enables electronic device manufacturers to inspect, test and measure PCBs, flat panel displays and ICs to verify their quality, pattern the desired electronic circuitry on the relevant substrate and perform three-dimensional shaping of metalized circuits on multiple surfaces. In March 2024, we announced the end of manufacturing of most Display products, but will continue to provide services to the installed base of Display products for existing customers. The CODM uses total segment revenues and segment profit (loss) to assess performance and allocate resources (including employees, financial or capital resources), primarily during the annual strategic long-term planning and budgeting process. The CODM considers changes in market conditions, technology constraints and the competitive environment when making decisions about allocating resources to segments. The CODM does not evaluate segments using discrete asset information because asset allocation is not managed at the segment level and assets are not tracked by segment in a way that it 89 Table of Contents is meaningful for decision-making. Segment profit (loss) represents segment income (loss) before income taxes, and excludes interest expense, other expense (income), net, restructuring costs, effects of changes in foreign currency exchange rates, and other corporate expenses. The following is a summary of results for each of our three reportable segments for the indicated periods. (In thousands) Semiconductor Process Control Specialty Semiconductor Process PCB and Component Inspection Total For the year ended June 30, 2024 Revenues $ 8,733,556 $ 528,701 $ 552,491 $ 9,814,748 Less: Costs of revenues 3,104,254 245,791 393,531 R&D 1,077,366 40,043 147,867 SG&A 728,349 43,959 116,074 Other segment items (1) 56,014 108,069 365,292 Segment profit (loss) $ 3,767,573 $ 90,839 $ (470,273) $ 3,388,139 For the year ended June 30, 2025 Revenues $ 10,947,359 $ 587,107 $ 621,721 $ 12,156,187 Less: Costs of revenues 3,922,735 283,160 358,847 R&D 1,165,858 47,054 133,487 SG&A 814,074 48,980 102,662 Other segment items (1) 41,946 108,961 307,882 Segment profit (loss) $ 5,002,746 $ 98,952 $ (281,157) $ 4,820,541 For the year ended June 30, 2026 Revenues $ 12,244,733 $ 584,064 $ 750,415 $ 13,579,212 Less: Costs of revenues 4,453,558 305,303 365,120 R&D 1,341,321 59,418 130,166 SG&A 930,850 47,423 100,930 Other segment items (1) 36,174 107,347 46,155 Segment profit $ 5,482,830 $ 64,573 $ 108,044 $ 5,655,447 __________________ (1)Other segment items for each reportable segment includes: •Semiconductor Process Control — amortization of purchased intangible assets and acquisition related expenses. •Specialty Semiconductor Process — amortization of purchased intangible assets. •PCB and Component Inspection — amortization of purchased intangible assets for all periods presented and impairment of goodwill and purchased intangible assets for the years ended June 30, 2024 and 2025. The following table reconciles total reportable segment revenue to total revenue for the indicated periods: Year Ended June 30, (In thousands) 2026 2025 2024 Total revenues for reportable segments $ 13,579,212 $ 12,156,187 $ 9,814,748 Effects of changes in foreign currency exchange rates 264 (25) (2,501) Total revenues $ 13,579,476 $ 12,156,162 $ 9,812,247 90 Table of Contents The following table reconciles total segment profit to total income before income taxes for the indicated periods: Year Ended June 30, (In thousands) 2026 2025 2024 Total segment profit $ 5,655,447 $ 4,820,541 $ 3,388,139 Unallocated amounts (1) (5,333) 45,414 41,929 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 __________________ (1)Unallocated amounts include effects of changes in exchange rates, restructuring costs and other corporate expenses. Our significant operations outside the U.S. include manufacturing facilities in Singapore, Israel, China and various locations throughout Europe and sales and service facilities in major semiconductor manufacturing regions around the world to support our global customer base. For geographical revenue reporting, revenues are attributed to the geographic location in which the customer is located. Long-lived assets consist of land, property and equipment, net, and are attributed to the geographic region in which they are located. The following is a summary of revenues by geographic region, based on ship-to location, for the indicated periods: (Dollar amounts in thousands) Year Ended June 30, 2026 2025 2024 Revenues: 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 % The following is a summary of revenues by major product categories for the indicated periods: (Dollar amounts in thousands) Year Ended June 30, 2026 2025 2024 Revenues: Wafer Inspection $ 6,630,813 49 % $ 6,198,815 51 % $ 4,333,296 44 % Patterning 2,706,763 20 % 2,196,347 18 % 2,054,442 21 % Specialty Semiconductor Process 502,519 4 % 517,201 4 % 470,565 5 % PCB and Component Inspection 460,320 3 % 355,891 3 % 291,161 3 % Services 3,125,939 23 % 2,683,308 22 % 2,329,568 24 % Other 153,122 1 % 204,600 2 % 333,215 3 % Total $ 13,579,476 100 % $ 12,156,162 100 % $ 9,812,247 100 % Wafer Inspection and Patterning products are offered in the Semiconductor Process Control segment. Services are offered in multiple segments. Other includes primarily refurbished systems, remanufactured legacy systems, and enhancements and upgrades for previous-generation products that are part of the Semiconductor Process Control segment. In each of the fiscal years ended June 30, 2026 and 2025, one customer accounted for approximately 19% of total revenues. In the fiscal year ended June 30, 2024, one customer accounted for approximately 13% of total revenues. 91 Table of Contents Land, property and equipment, net by geographic region as of the dates indicated below were as follows: As of June 30, (In thousands) 2026 2025 Land, property and equipment, net: U.S. $ 771,331 $ 728,162 Europe 289,614 253,848 Singapore 191,534 153,052 Rest of Asia 73,110 49,109 Israel 54,961 68,604 Total $ 1,380,550 $ 1,252,775 NOTE 18 — RESTRUCTURING CHARGES From time to time, management approves restructuring plans including workforce reductions in an effort to streamline operations. Restructuring charges were $1.2 million, $7.7 million and $21.6 million for fiscal years ended June 30, 2026, June 30, 2025 and June 30, 2024, respectively, primarily due to severance and related charges for the restructuring of the former PCB and Display operating segment, as described further in Note 6 “Goodwill and Purchased Intangible Assets.” Restructuring charges for fiscal years 2025 and 2024 also included write-downs of certain ROU assets and fixed assets that were abandoned. The amounts of restructuring charges accrued were $5.3 million and $5.9 million as of June 30, 2026 and 2025, respectively. NOTE 19— SUBSEQUENT EVENTS On August 6, 2026, we announced that our Board of Directors had declared a quarterly cash dividend of $0.230 per share to be paid on September 1, 2026 to stockholders of record as of the close of business on August 17, 2026. 92 Table of Contents Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of KLA Corporation Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of KLA Corporation and its subsidiaries (the “Company”) as of June 30, 2026 and 2025, and the related consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended June 30, 2026, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2026 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 93 Table of Contents Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Revenue Recognition As described in Note 1 to the consolidated financial statements, the Company’s arrangements with its customers include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The transaction consideration, including any sales incentives, is allocated between separate performance obligations of an arrangement based on the stand-alone selling price for each distinct product or service. Revenues are measured based on consideration stipulated in the arrangement with each customer. Revenue is recognized from product sales at a point in time when the performance obligation has been satisfied by transferring control of the product to the customer. Services revenue is recognized ratably over the period the customer simultaneously receives and consumes the benefits of the services provided or when the related service is performed. The Company’s total revenues were $13,579.5 million for the year ended June 30, 2026. The principal consideration for our determination that performing procedures relating to revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the recording of product and services revenue at the transaction consideration once control passes to the customer. These procedures also included, among others (i) testing the completeness, accuracy, and occurrence of revenue recognized for a sample of product revenue transactions by obtaining and inspecting source documents, such as purchase orders, sales orders, and proof of shipment; (ii) testing the completeness, accuracy, and occurrence of a sample of service revenue transactions by obtaining and inspecting source documents, such as purchase orders, sales orders, and other evidence supporting the service period; and (iii) for a sample of outstanding customer invoice balances as of June 30, 2026, obtaining and inspecting source documents, such as invoices, proof of shipment, and subsequent cash receipts. /s/ PricewaterhouseCoopers LLP San Jose, California August 6, 2026 We have served as the Company’s auditor since 1977. 94 Table of Contents SCHEDULE II Valuation and Qualifying Accounts (In thousands) Balance at Beginning of Period Charged to Expense Deductions/Adjustments Balance at End of Period Fiscal Year Ended June 30, 2024: Allowance for Credit Losses $ 33,632 $ 5,912 $ (6,762) $ 32,782 Allowance for Deferred Tax Assets $ 259,172 $ — $ 30,362 $ 289,534 Fiscal Year Ended June 30, 2025: Allowance for Credit Losses $ 32,782 $ 11,494 $ (10,261) $ 34,015 Allowance for Deferred Tax Assets $ 289,534 $ (1,315) $ 22,380 $ 310,599 Fiscal Year Ended June 30, 2026: Allowance for Credit Losses $ 34,015 $ 28,398 $ (31,383) $ 31,030 Allowance for Deferred Tax Assets $ 310,599 $ (1,366) $ 47,406 $ 356,639