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Kulicke & Soffa Industries (KLIC): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 FY26, to Jul 4, 2026, filed Aug 6, 2026; rules v1.1
Kulicke & Soffa Industries (KLIC): 1 rule of 10 triggered on the filings to Jul 4, 2026: adjusted profit = economic profit. 1 to review; 2 with insufficient data; 3 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Adjusted profit = economic profit Triggered · severity medium · confidence low
Adjusted EPS was at least 10% above GAAP in 3 of the last 3 quarters (on average 18% above). Costs excluded every quarter (restructuring, stock compensation, amortisation of acquired intangibles, litigation) are a recurring cost of the business, not a one-off.
Innocent reading: A genuine one-off this year (an impairment, a settlement) that happens to span several quarters.
A precise DCF value = the true value To review · confidence high
The DCF's point value is 60.39 a share (price 74.21); 75% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 48.33 to 72.45; across every method the research ran the range is -23 to 248. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence medium
Free cash flow rose $81M to $96M; working capital and lower capex explain 2% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY24 |
| Fiscal year | FY25 |
| Operating cash flow, year before | $31M |
| Operating cash flow | $114M |
| Capex, year before | $16M |
| Capex | $17M |
| Free cash flow, year before | $15M |
| Free cash flow | $96M |
| Change in FCF | $81M |
| Change in capex | $1M |
| Working capital: change in its cash contribution | $2M |
| Of which: capex cut | 0.00 |
| Of which: working capital released | $2M |
| Share of the increase that need not repeat | +2.2% |
| Operating cash flow before working capital: change | 80766000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY25 (cash flow statement, fiscal year) · FY24 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 4.4% of revenue, but buybacks of $97M covered it (3.4×) and the diluted share count fell 4.4%: the dilution has been paid for in cash.
The figures and how they are read
| Fiscal year | FY25 |
| Stock compensation | $29M |
| Revenue | $654M |
| SBC / revenue | +4.4% |
| Buybacks | $97M |
| Buybacks / SBC | 3.4 |
| Diluted shares, year before | 55.6M shares |
| Diluted shares | 53.2M shares |
| Diluted shares: change | -4.3% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY25 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Insufficient data
fewer than five quarters with receivables and revenue on file (a year-over-year comparison needs five)
B08 Adjusted profit = economic profit Triggered severity medium · confidence low
Adjusted EPS was at least 10% above GAAP in 3 of the last 3 quarters (on average 18% above). Costs excluded every quarter (restructuring, stock compensation, amortisation of acquired intangibles, litigation) are a recurring cost of the business, not a one-off.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-12-31 / 0.44 / 0.32 / 0.273; 2026-03-31 / 0.79 / 0.66 / 0.165; 2026-06-30 / 1.2 / 1.07 / 0.108 |
| Quarters with adjusted ≥ 10% above GAAP | 3 |
| Quarters compared | 3 |
| Latest gap | +10.8% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-12-31 (adjusted 0.44 vs GAAP 0.32) · 2026-03-31 (adjusted 0.79 vs GAAP 0.66) · 2026-06-30 (adjusted 1.20 vs GAAP 1.07)
What would explain it innocently
- A genuine one-off this year (an impairment, a settlement) that happens to span several quarters
- Amortisation of acquired intangibles, which many investors also exclude by choice
- The analysts' 'actual' is not the company's own adjusted figure
What to look for in the filing
- The reconciliation table in the earnings release: which items, how much, how often
- Whether the same items were excluded in earlier years
What would show the trap does not apply
- The reconciliation shows the excluded items ending (a restructuring with its final charge, a settlement paid) and the gap to GAAP closes in the next quarters
- The excluded items are only amortisation of acquired intangibles and the cash paid for the deals is in the investing cash flow
Look again: next filing.
C02 Low net debt = no refinancing risk Insufficient data
no debt figure could be read from the balance sheet (the filing may tag it in other lines)
D03 EPS growth = profit growth Not applicable
a loss in one of the quarters: EPS growth has no meaning
E02 Low P/E at a cyclical peak = undervalued Not triggered confidence medium
Net income of $116M is not at a cyclical high against the last eight years (median $57M, best $434M): the P/E of 34.3× is on a normal year.
The figures and how they are read
| market value | $4.0B |
| net income ttm | $116M |
| pe ttm | 34.30 |
| net income median fy | $57M |
| pe mid cycle | 70.00 |
| net income peak fy | $434M |
| years | FY18 / 57.0; FY19 / 12.0; FY20 / 52.0; FY21 / 367.0; FY22 / 434.0; FY23 / 57.0; FY24 / -69.0; FY25 / 0.0 |
| down years in window | 3 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q3 FY26 (net income, trailing twelve months)
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 60.39 a share (price 74.21); 75% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 48.33 to 72.45; across every method the research ran the range is -23 to 248. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 60.39 |
| price | 74.21 |
| terminal value share | +74.7% |
| swing by input | Operating margin / ±3 pts / 48.33 / 72.45; Revenue growth (each year) / ±5 pts / 52.24 / 69.87; WACC / ±1 pt / 54.44 / 68.0; Tax rate / ±5 pts / 57.08 / 63.71 |
| range all methods | -22.96; 248.18 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Kulicke & Soffa Industries: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.