KLA Corp. (NASDAQ:KLAC)

The financial data reveals several noteworthy trends regarding the company's operational efficiency, capital structure, and value creation over the examined periods.

Net Operating Profit After Taxes (NOPAT)

NOPAT demonstrates a strong upward trajectory from the initial period to the latest. Specifically, it increased significantly from approximately 1.31 billion USD to 3.85 billion USD over five years, reflecting improved profitability and possibly enhanced operational performance.

Cost of Capital

The cost of capital exhibits a slight but consistent rise over the periods, moving from 16.05% to 17.08%. This increase suggests a marginally higher required return on invested capital, which could be influenced by market conditions or changes in the company’s risk profile.

Invested Capital

Invested capital shows a steady increase over time, growing from roughly 6.59 billion USD to 9.24 billion USD. This growth indicates ongoing investments in the business, potentially through asset acquisitions, capital expenditures, or working capital increases.

Economic Profit

Economic profit presents significant growth initially, rising from approximately 253 million USD to over 2.12 billion USD, which indicates increasing value creation beyond capital costs. However, this metric experienced a slight decline after peaking around the middle periods before partially recovering in the latest period to about 2.27 billion USD. The fluctuations in economic profit, concurrent with rising cost of capital, may reflect changes in operational efficiency or investment returns.

Overall, the company appears to enhance its profitability and value creation capacity despite a modest increase in the cost of capital. The consistent growth in invested capital combined with rising NOPAT signals effective deployment of resources. Nonetheless, the slight variations in economic profit near the latter years merit further analysis to ensure sustained value generation above the cost of capital.

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.

The financial data reveals notable trends in the performance and capital efficiency over the observed periods.

Economic Profit

Economic profit exhibited a strong upward trajectory from 2020 to 2022, increasing from approximately 253 million to over 2.1 billion US dollars. This marks a significant enhancement in value creation. Although a slight decline is observed in 2023 and 2024, with values around 2.0 billion and 1.79 billion respectively, the economic profit recovers strongly by 2025, reaching roughly 2.27 billion US dollars, indicating resilience and potential strategic adjustments contributing to value generation.

Invested Capital

Invested capital steadily increased through the period, starting from about 6.6 billion US dollars in 2020 and rising each year to reach approximately 9.25 billion US dollars by 2025. This consistent growth suggests ongoing investments to support business operations and expansion, reflecting a long-term commitment to capital deployment.

Economic Spread Ratio

The economic spread ratio demonstrated a marked improvement, moving from a relatively low 3.83% in 2020 to a peak of 26.31% in 2022. Despite a subsequent dip to 20.16% in 2024, the ratio recovers to 24.59% in 2025. This pattern indicates enhanced efficiency in the use of invested capital to generate returns above the cost of capital, although some volatility is present in the mid-period years.

Overall, the data indicates a company focused on increasing economic profit and invested capital, with a clear improvement in capital efficiency as shown by the economic spread ratio. Despite some fluctuations in economic profit and spread ratio, the general trend reflects effective value creation and solid capital management strategies over the fiscal years reviewed.

Economic Profit

Economic profit demonstrated significant growth from 252.6 million USD in mid-2020 to over 2.27 billion USD by mid-2025. After a sharp increase between 2020 and 2022, economic profit slightly declined in 2023 and 2024 before recovering strongly in 2025, maintaining an overall upward trajectory.

Adjusted Revenues

Adjusted revenues showed a consistent upward trend across the observed periods, rising from approximately 5.88 billion USD in 2020 to nearly 12.09 billion USD in 2025. This growth was steady, with a slight dip in 2024, followed by a notable increase in 2025.

Economic Profit Margin

The economic profit margin increased markedly from 4.29% in 2020 to a peak of 22.25% in 2022. Subsequently, the margin decreased to 17.3% by 2024 but experienced a moderate recovery to 18.81% in 2025. Despite some fluctuations, the margin remained significantly higher than the initial period, indicating improved profitability relative to revenues.

Summary Insights

The data exhibits strong growth in both economic profit and adjusted revenues over the evaluated years, with economic profit margins reflecting improved profit efficiency despite some volatility. The temporary declines in profit margin and economic profit during 2023 and 2024 suggest potential operational or market challenges, though the recovery in 2025 indicates resilience and the potential for continued profitability improvement.