KLA Corp. (NASDAQ:KLAC)

Net Operating Profit After Taxes (NOPAT)

The NOPAT demonstrated a consistent upward trend over the periods analyzed. Starting at approximately 1.31 billion USD, it increased significantly to over 3.85 billion USD by the most recent period. This overall growth indicates improved profitability and operational efficiency, despite a slight dip observed in the period ending June 30, 2024.

Cost of Capital

The cost of capital showed a gradual increase over the time frame, rising from 16.01% to 17.04%. This upward movement suggests either rising market risks, increased capital costs, or changes in the capital structure, which may exert pressure on the company's hurdle rate for investment returns.

Invested Capital

Invested capital steadily increased from approximately 6.59 billion USD to over 9.24 billion USD. This consistent growth indicates ongoing investment into the company’s operational assets or expansion activities, reflecting a strategy of capital deployment to support business growth.

Economic Profit

Economic profit experienced significant growth from 255 million USD to a peak of over 2.12 billion USD in the middle periods, followed by a decline to around 1.79 billion USD before increasing again to nearly 2.28 billion USD. This pattern reflects varying levels of value creation relative to the cost of invested capital, with the company maintaining positive economic profit throughout, signaling value generation above the cost of capital despite fluctuations.

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 several notable trends in economic profit, invested capital, and the economic spread ratio over the six-year period ending June 30, 2025.

Economic Profit

Economic profit experienced a significant increase from US$255,088 thousand in 2020 to over US$1 billion by 2021. This upward trajectory continued into 2022, reaching a peak of approximately US$2.13 billion. Following a slight decline in 2023 and 2024, economic profit surged again in 2025, culminating at approximately US$2.28 billion. This pattern indicates strong profitability growth overall, notwithstanding minor fluctuations in the middle years.

Invested Capital

Invested capital steadily increased each year, starting from about US$6.59 billion in 2020 and progressing to approximately US$9.24 billion by 2025. The rise in invested capital was consistent and gradual, reflecting ongoing investments and possibly expansion or asset accumulation strategies over the evaluation period.

Economic Spread Ratio

The economic spread ratio, which measures the difference between return on invested capital and cost of capital expressed as a percentage, showed a marked improvement from 3.87% in 2020 to a peak of 26.35% in 2022. This ratio decreased somewhat in subsequent years to 20.2% in 2024 but then rebounded to 24.63% in 2025. The initial surge followed by a modest dip and recovery suggests that the company's efficiency in generating returns above its cost of capital has been largely positive, albeit with some volatility.

In summary, the data suggests that economic profitability has grown robustly over the period, supported by a steady increase in invested capital and generally high economic spread ratios. The fluctuations in economic profit and spread ratio during the middle years merit further investigation to understand underlying factors, but overall the company demonstrates a strong capacity to generate economic value above its invested capital cost.

The financial data reveals significant growth in both economic profit and adjusted revenues over the time periods analyzed, along with fluctuations in the economic profit margin.

Economic Profit

The economic profit exhibited a notable upward trend from approximately 255 million US dollars in mid-2020 to over 2.27 billion US dollars by mid-2025. This represents a substantial increase across the six-year span, with particularly strong growth between 2020 and 2022. A slight dip is observed in the period ending mid-2024, followed by a recovery and further growth by mid-2025.

Adjusted Revenues

Adjusted revenues showed consistent expansion over the six-year period, rising from about 5.88 billion US dollars to approximately 12.09 billion US dollars. The growth accelerated between 2021 and 2023, peaking slightly in mid-2023 before experiencing a minor downturn in mid-2024, and then climbing again significantly in mid-2025. This pattern indicates generally strong revenue growth with some volatility in the middle years.

Economic Profit Margin

The economic profit margin started at a modest 4.33% in 2020 and surged to over 22% by 2022, reflecting improved profitability relative to revenues. However, following this peak, the margin declined to around 17-19% in subsequent years through mid-2025. Despite this decline from the highest point, the margin remains robust compared to the initial value, indicating a sustained capacity to generate economic profit relative to revenue.

Overall, the data suggest that the company has achieved significant gains in both profitability and revenue size over the reported periods. The temporary fluctuations in both economic profit and profit margin around 2023 and 2024 highlight potential operational or market challenges during those years, yet the recovery by mid-2025 indicates resilience and effective management of such challenges.