KLA Corp. (NASDAQ:KLAC)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes exhibits a consistent upward trend from 2020 to 2025. Starting at approximately 1.31 billion US dollars in 2020, it nearly triples by 2022, reaching over 3.4 billion US dollars. Although there is a slight decline in 2024 relative to 2023, the figure recovers strongly in 2025, peaking at approximately 3.85 billion US dollars. This indicates steady growth in operating profitability over the period, with minor fluctuations towards the later years.

Cost of Capital

The cost of capital shows a gradual increase over the six-year span. Beginning at 16.06% in 2020, it marginally rises each year, reaching 17.09% by 2025. This steady increment suggests a slight increase in the company’s risk profile or required returns demanded by investors, potentially influencing investment and financing decisions.

Invested Capital

Invested capital demonstrates a continuous increase throughout the period. Starting from around 6.59 billion US dollars in 2020, it rises steadily each year to approximately 9.24 billion US dollars by 2025. This reflects ongoing investments in business assets or operations, indicating expansion or asset base growth aligned with rising profitability.

Economic Profit

Economic profit, representing the value created beyond the cost of capital, shows pronounced growth from 2020 to 2022, increasing from 252 million to over 2.1 billion US dollars. It slightly declines in the subsequent years but remains robust, with 2.27 billion US dollars recorded in 2025. Despite the increasing cost of capital, the company consistently generates significant value above its capital charges, evidencing effective utilization of invested capital over time.

The financial performance over the reviewed periods demonstrates notable fluctuations and growth patterns in key profitability metrics.

Net Income Attributable to KLA

The net income shows a strong upward trajectory from 1,216,785 thousand US dollars in mid-2020 to 3,381,277 thousand US dollars by mid-2023, indicating a substantial increase in profitability over the initial years. However, there is a decline in mid-2024 to 2,761,896 thousand US dollars, suggesting a temporary setback or increased expenses during this period. This is followed by a significant recovery and peak at 4,061,643 thousand US dollars in mid-2025, marking the highest profit level recorded in these periods.

Net Operating Profit After Taxes (NOPAT)

NOPAT trends closely follow the net income pattern, starting at 1,310,622 thousand US dollars in mid-2020 and rising steadily to 3,464,285 thousand US dollars by mid-2023. There is a minor decline to 3,284,868 thousand US dollars in mid-2024, aligning with the net income dip and possibly indicating operational challenges or market factors impacting earnings. By mid-2025, NOPAT recovers to 3,852,307 thousand US dollars, reflecting improved operational efficiency and profitability.

Overall, the data indicates robust growth in profitability over the five-year span with a minor interruption around mid-2024. The subsequent recovery in the latest period suggests resilience and effectiveness in addressing prior challenges.

The financial data reveals notable fluctuations in the taxation-related expenses over the analyzed periods.

Provision for Income Taxes

This item exhibits a generally increasing trend with some volatility. Starting from approximately 101.7 million USD in mid-2020, the provision saw a significant rise to 283.1 million USD by mid-2021. However, it then decreased to 167.2 million USD in mid-2022 before sharply increasing again to 401.8 million USD in mid-2023. The upward momentum continued, reaching 428.1 million USD in mid-2024 and further increasing to 582.8 million USD by mid-2025. Overall, there is a clear upward trajectory with a notable dip in the middle of the period.

Cash Operating Taxes

Cash operating taxes show a consistent and marked upward trend over the time horizon. Beginning at 224.5 million USD in mid-2020, the figure rose steadily to 360.2 million USD in mid-2021 and further climbed to 553.4 million USD by mid-2022. This increase continued substantially, reaching 805.2 million USD in mid-2023. A temporary decrease occurred in mid-2024 to 600.4 million USD, after which the amount surged again to a peak of 854.9 million USD by mid-2025. Despite the single-year decline in mid-2024, the overall pattern is one of significant growth in cash operating tax payments.

In summary, both provision for income taxes and cash operating taxes show increasing trends over the five-year period, indicative of either growth in taxable income, changes in tax rates, or adjustments in tax accounting. The volatility in the provision for income taxes suggests variability in anticipated tax expenses, while the cash operating taxes generally increase, reflecting the actual cash outflows related to tax payments with a minor temporary decline. These trends highlight growing fiscal obligations and possibly evolving tax strategies or financial conditions during the period analyzed.

The annual financial data reveals several notable trends in the company's capital structure from 2020 to the projected figures in 2025.

Total Reported Debt & Leases

The total reported debt and leases showed some volatility over the period analyzed. Initially, the debt level was approximately $3.57 billion in mid-2020, slightly decreasing to around $3.55 billion in mid-2021. Subsequently, there was a marked increase, with debt nearly doubling to about $6.77 billion by mid-2022. This peak was followed by a decline to approximately $6.06 billion in mid-2023. The debt rose again to an estimated $6.82 billion in mid-2024 before decreasing to roughly $6.09 billion by mid-2025. Overall, the company's debt levels experienced significant fluctuations, suggesting adjustments in financing strategy or capital needs during this period.

Total KLA Stockholders’ Equity

Stockholders’ equity grew from approximately $2.67 billion in mid-2020 to a peak near $3.38 billion in mid-2021. However, it then sharply declined to about $1.40 billion by mid-2022. This sudden drop contrasts with a recovery trend starting in mid-2023, when equity climbed back to nearly $2.92 billion, rising further to approximately $3.37 billion in mid-2024 and ultimately reaching an estimated $4.69 billion in mid-2025. This pattern indicates a strong rebound in equity after a significant contraction, possibly due to operational results, capital injections, or asset revaluations during this timeframe.

Invested Capital

Invested capital shows a consistent upward trend throughout the period examined. Starting at about $6.59 billion in mid-2020, it increased steadily each year to reach an estimated $9.24 billion by mid-2025. This gradual rise suggests ongoing investments in the business's productive assets, reflecting growth initiatives or expansion strategies employed by the company.

In summary, while invested capital demonstrated steady growth, the capital structure evidenced by debt and equity components experienced significant variability. The fluctuations in debt and equity, particularly the sharp decline and subsequent recovery in stockholders’ equity, signal dynamic financial management possibly responding to external conditions or strategic shifts. The overall increase in invested capital alongside these changes implies that the company is actively managing its financial resources to support its operations and growth outlook over the medium term.

Economic Profit

The economic profit exhibited a significant upward trend from 2020 to 2022, increasing from approximately 252 million to over 2.1 billion US dollars. Although there was a slight decline in 2023 and 2024, economic profit remained substantially elevated compared to 2020 levels, before recovering to reach its highest point in 2025 at over 2.2 billion US dollars. This pattern suggests strong profitability growth with some fluctuations in the mid-period.

Invested Capital

The invested capital showed a consistent increase each year, growing steadily from about 6.6 billion US dollars in 2020 to over 9.2 billion in 2025. This steady growth in invested capital indicates ongoing investments or asset accumulation over the period, supporting the company’s capacity for generating returns.

Economic Spread Ratio

The economic spread ratio, which reflects the efficiency with which invested capital generates economic profit, improved markedly from 3.82% in 2020 to a peak of 26.3% in 2022. Following this peak, the ratio experienced a decline in 2023 and 2024 but remained at a relatively high level above 20%. By 2025, the spread ratio recovered appreciably to approximately 24.58%. This trend shows a high level of profitability relative to capital employed, with some volatility but maintaining generally strong margins.

Economic Profit

The economic profit of the company exhibited substantial growth from 2020 to 2022, increasing from approximately 252 million to over 2.1 billion USD. In 2023, a slight decline is observed, with profit decreasing to about 2 billion USD, followed by a further decrease in 2024 to approximately 1.79 billion USD. However, the economic profit rebounded strongly in 2025, reaching around 2.27 billion USD, the highest in the observed period.

Adjusted Revenues

Adjusted revenues demonstrated a generally increasing trend over the six-year period. Starting at roughly 5.88 billion USD in 2020, revenues grew steadily and peaked in 2023 at about 10.7 billion USD. In 2024, there was a slight dip to approximately 10.35 billion USD, followed by a significant increase in 2025 to nearly 12.1 billion USD, representing the highest revenue level in the dataset.

Economic Profit Margin

The economic profit margin showed marked improvement from 2020 to 2022, rising from 4.28% to a peak of 22.24%. This indicates an enhancement in profitability relative to revenues during these years. After 2022, the margin declined to 19.08% in 2023 and further to 17.29% in 2024, suggesting some compression in profit relative to revenues. In 2025, the margin experienced a partial recovery, increasing to 18.8%.

Overall Trends and Insights

The company’s financial data over the observed years indicates strong growth in both economic profit and adjusted revenues, particularly from 2020 through 2022. Despite some volatility in economic profit and profit margins between 2023 and 2024, the company demonstrated resilience with a recovery trend in 2025. The increase in economic profit margin by 2025, although below the 2022 peak, suggests improved efficiency or cost management relative to the revenue base. The slight dip in revenues in 2024 may be attributed to external or operational factors, but the subsequent rebound reflects positive momentum.