Track how companies discuss tariffs and trade policies in their earnings calls, and understand their impact across different industries and regions.
Non-GAAP gross margin of 68.2% for the first quarter was up 80 basis points year over year, driven by cost efficiencies and higher revenue, partly offset by tariffs.
Costs related to tariffs introduced since the beginning of 2025 were approximately $600 million in the quarter.
Additionally, and as expected, we saw higher costs related to tariffs, which were not present in the prior year period and higher manufacturing costs, including lower absorption.
Our first quarter gross margins were not materially impacted by the changes within the tariff environment as our net tariff exposure has remained relatively stable.
In Q1, we recognized a $1.3 billion benefit related to IEEPA tariffs.
clients took a bit of a breather in April as they stepped back and recalibrated their forward strategies post the announcement of tariffs
While the IEEPA tariffs have been repealed, the administration has implemented new tariffs in reaction to this. For our businesses, these new tariffs are largely consistent with the ones repealed such that we currently do not anticipate much of a net impact to our financial results.
changes in global economic and geopolitical conditions, tariff and trade policies
We have taken a prudent approach in our second quarter outlook by assuming some impact on both Clear Aligner and scanner demand.
I would expect that the tariff headwind that we have at KLA will become less, but it's still meaningful.