Semiconductor production equipment company Kulicke & Soffa (NASDAQ: KLIC) beat Wall Street’s revenue expectations in Q2 CY2026, with sales up 123% year on year to $330.4 million. On top of that, next quarter’s revenue guidance ($375 million at the midpoint) was surprisingly good and 14% above what analysts were expecting. Its non-GAAP profit of $1.20 per share was 19.2% above analysts’ consensus estimates.
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Kulicke and Soffa (KLIC) Q2 CY2026 Highlights:
- Revenue: $330.4 million vs analyst estimates of $312.5 million (123% year-on-year growth, 5.7% beat)
- Adjusted EPS: $1.20 vs analyst estimates of $1.01 (19.2% beat)
- Adjusted Operating Income: $75.81 million vs analyst estimates of $64.63 million (22.9% margin, 17.3% beat)
- Revenue Guidance for Q3 CY2026 is $375 million at the midpoint, above analyst estimates of $328.9 million
- Adjusted EPS guidance for Q3 CY2026 is $1.42 at the midpoint, above analyst estimates of $1.12
- Operating Margin: 20.7%, up from -4.1% in the same quarter last year
- Free Cash Flow Margin: 12.4%, up from 3.6% in the same quarter last year
- Inventory Days Outstanding: 120, down from 153 in the previous quarter
- Market Capitalization: $4.91 billion
Lester Wong, Kulicke & Soffa's Interim Chief Executive Officer and Chief Financial Officer, stated, "We see strong sequential growth in the third quarter and demand conditions continue to improve across all end markets. We remain closely engaged to support the evolving technology requirements of our industry, and remain committed to address the immediate and long-term production needs of our customers."
Company Overview
Headquartered in Singapore, Kulicke & Soffa (NASDAQ: KLIC) is a provider of production equipment and tools used to assemble semiconductor devices
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Kulicke and Soffa’s demand was weak and its revenue declined by 4.7% per year. This was below our standards and is a sign of poor business quality. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. Kulicke and Soffa’s annualized revenue growth of 14.3% over the last two years is above its five-year trend, suggesting some bright spots. 
This quarter, Kulicke and Soffa reported magnificent year-on-year revenue growth of 123%, and its $330.4 million of revenue beat Wall Street’s estimates by 5.7%. Beyond the beat, we believe the company is still in the early days of an upcycle as this was the third consecutive quarter of growth - a typical upcycle tends to last 8-10 quarters. Company management is currently guiding for a 111% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 31.3% over the next 12 months, an improvement versus the last two years. This projection is above the sector average and suggests its newer products and services will catalyze better top-line performance.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’s capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, Kulicke and Soffa’s DIO came in at 120, which is 50 days below its five-year average. At the moment, these numbers show no indication of an excessive inventory buildup.
Key Takeaways from Kulicke and Soffa’s Q2 Results
We were impressed by Kulicke and Soffa’s strong improvement in inventory levels. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. Investors were likely hoping for more, and shares traded down 2.8% to $92.90 immediately after reporting.
Is Kulicke and Soffa an attractive investment opportunity at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
