KLA Corp. (NASDAQ:KLAC)

The analysis of the financial indicators over the examined periods reveals several noteworthy trends in the company's performance and financial health.

Net Operating Profit After Taxes (NOPAT)

The NOPAT demonstrates a consistent upward trajectory from 2020 through 2025, increasing from approximately $1.31 billion to about $3.85 billion. This reflects significant growth in operational profitability over the years, although there is a slight decline observed in 2024 compared to 2023, indicating a minor setback or fluctuation before rebounding strongly in 2025.

Cost of Capital

The cost of capital exhibits a gradual increase from 16.06% in 2020 to 17.09% in 2025. This rising trend suggests an increasing expense associated with financing the company’s investments, potentially due to market conditions or changes in the company’s risk profile. Despite this increase, the company's profitability growth appears to outpace the rising capital costs.

Invested Capital

Invested capital shows a steady growth each year, rising from roughly $6.59 billion in 2020 to approximately $9.24 billion in 2025. This reflects ongoing investments into the company’s asset base or working capital, supporting expansion or maintaining competitive operations. The incremental increases each year indicate a continual commitment to capital investment.

Economic Profit

Economic profit, which represents the value created above the cost of capital, also experiences significant growth with some variability. Starting from $252 million in 2020, it climbs sharply to over $2.27 billion by 2025. There is a notable surge between 2020 and 2022, followed by a slight dip in 2023 and 2024 before rising again in 2025. This pattern suggests that while the company has generally been generating substantial economic profit, there were temporary pressures or investments that slightly impacted value creation during the 2023-2024 periods.

Overall, the data indicate strong financial performance characterized by increasing operational profitability and capital investment. Despite a rising cost of capital, the company has continued to enhance value creation, as reflected in the substantial growth in economic profit. Minor fluctuations in net operating profit and economic profit around 2023 and 2024 warrant attention but do not obscure the overall positive trend.

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 key trends in economic performance and capital investment over a five-year period.

Economic Profit

The economic profit exhibited a strong upward trend initially, increasing substantially from approximately $252 million to over $1 billion between 2020 and 2021. This growth continued more than doubling again to about $2.12 billion in 2022. Although there was a slight decline in 2023 and 2024, the economic profit rebounded significantly in 2025, reaching a new peak of approximately $2.27 billion. Overall, this indicates robust profitability growth with some volatility in the middle years.

Invested Capital

Invested capital showed a steady, continuous increase throughout the entire period. Beginning at about $6.59 billion in 2020, it gradually rose each year to reach roughly $9.24 billion by 2025. This sustained growth reflects consistent capital deployment or asset investment over the years, likely supporting ongoing business expansion or operational scale-up.

Economic Spread Ratio

The economic spread ratio, representing the return on invested capital relative to the cost of capital, also grew significantly at the start. It climbed from a modest 3.82% in 2020 to a peak of 26.3% in 2022. After this peak, the ratio experienced a moderate decline over the next two years, falling to about 20.15% in 2024. However, it rebounded again in 2025 to 24.58%. This pattern suggests initially improving efficiency or profitability on capital investment, followed by some fluctuations but generally maintaining a strong return level.

In summary, the data reflects a company experiencing substantial growth in economic profit and invested capital, alongside a generally high and somewhat fluctuating economic spread ratio. Despite minor declines in certain years, the overall trajectory remains positive, highlighting strong value creation over the analyzed timeframe.

The financial data over the analyzed periods show notable trends in economic profit, adjusted revenues, and economic profit margin, reflecting the company’s financial performance and efficiency in value creation.

Adjusted Revenues

There has been a consistent upward trend in adjusted revenues over the six years. Starting from approximately $5.88 billion, revenues increased each year, reaching close to $12.09 billion in the most recent period. This growth suggests successful expansion and/or increased sales volume over time.

Economic Profit

Economic profit exhibited a significant rise from $252 million initially to over $2.27 billion in the latest period. There was a substantial jump between the first and second years, followed by continued strong increases, though fluctuations were observed after the peak in the third year. Despite a slight decrease in the fourth and fifth years, the economic profit rebounded strongly in the last period.

Economic Profit Margin

The economic profit margin mirrored the growth in economic profit, starting at a modest 4.28%, climbing sharply to a peak of 22.24% in the third year, and then showing some decline to around 17-19% in the subsequent years. This reduction in margin in later years, despite rising adjusted revenues, may indicate increasing costs or competitive pressures impacting profitability efficiency.

Overall, the data indicates robust revenue growth coupled with strong economic profitability. However, the slight decline in economic profit margin following its peak suggests that maintaining high profitability levels may require ongoing focus on cost management or operational efficiencies. The recent rebound in economic profit is a positive sign of resilience and potential for sustained value creation.