Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
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KLA Corp. pages available for free this week:
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Economic Profit
KLA Corp., economic profit calculation
US$ in thousands
| 12 months ended: | Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | |||||||
| Cost of capital2 | |||||||
| Invested capital3 | |||||||
| Economic profit4 | |||||||
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
- Net Operating Profit After Taxes (NOPAT)
- NOPAT has shown a significant upward trend overall between June 30, 2020, and June 30, 2025. The value increased from approximately 1,310,622 thousand US dollars in 2020 to 3,852,307 thousand US dollars in 2025. However, a slight decline is observed in 2024 compared to 2023, where NOPAT decreased from about 3,464,285 to 3,284,868 thousand US dollars, before rising again in 2025.
- Cost of Capital
- The cost of capital has steadily increased over the six-year period, moving from 16.01% in 2020 to 17.04% in 2025. This gradual rise indicates a growing expense or risk associated with the company's capital financing during this timeframe.
- Invested Capital
- Invested capital has consistently increased each year, growing from approximately 6,592,642 thousand US dollars in 2020 to 9,244,891 thousand US dollars in 2025. This steady growth suggests ongoing investments or expansion of the company's operational base.
- Economic Profit
- Economic profit demonstrated considerable growth from 255,020 thousand US dollars in 2020 to a peak of 2,127,725 thousand US dollars in 2022. Although it slightly decreased during 2023 and 2024 to 2,052,176 and 1,794,104 thousand US dollars respectively, economic profit rebounded to 2,276,755 thousand US dollars in 2025. This pattern indicates a generally positive performance in value creation, despite short-term fluctuations.
- Overall Insights
- The company appears to be generating increasing profitability and creating economic value over time. The steady rise in invested capital alongside increasing NOPAT suggests effective utilization of assets to grow earnings. The upward trend in the cost of capital may indicate elevated financing costs or perceived risk, which could impact economic profit. However, economic profit remains positive and strong, reflecting the company's ability to generate returns above its cost of capital, albeit with some volatility in the mid-period years.
Net Operating Profit after Taxes (NOPAT)
KLA Corp., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses.
3 Addition of increase (decrease) in deferred system and service revenue.
4 Addition of increase (decrease) in equity equivalents to net income attributable to KLA.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net income attributable to KLA.
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
9 Elimination of after taxes investment income.
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.
Cash Operating Taxes
KLA Corp., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30).
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.
Invested Capital
KLA Corp., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of deferred system and service revenue.
5 Addition of equity equivalents to total KLA stockholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction-in-process.
8 Subtraction of marketable securities.
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 $9.24 billion by mid-2025. This gradual rise suggests ongoing investments in the business's productive assets, reflecting growth initiatives or expansion strategies employed by the company.
In summary, while invested capital demonstrated steady growth, the capital structure evidenced by debt and equity components experienced significant variability. The fluctuations in debt and equity, particularly the sharp decline and subsequent recovery in stockholders’ equity, signal dynamic financial management possibly responding to external conditions or strategic shifts. The overall increase in invested capital alongside these changes implies that the company is actively managing its financial resources to support its operations and growth outlook over the medium term.
Cost of Capital
KLA Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-06-30).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-06-30).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-06-30).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-06-30).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-06-30).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-06-30).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
KLA Corp., economic spread ratio calculation, comparison to benchmarks
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| Economic spread ratio3 | |||||||
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | |||||||
| Analog Devices Inc. | |||||||
| Applied Materials Inc. | |||||||
| Broadcom Inc. | |||||||
| Intel Corp. | |||||||
| Lam Research Corp. | |||||||
| Micron Technology Inc. | |||||||
| NVIDIA Corp. | |||||||
| Qualcomm Inc. | |||||||
| Texas Instruments Inc. | |||||||
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Economic Profit
- The economic profit exhibits a substantial upward trend from 2020 to 2025, starting at approximately 255 million US dollars in 2020 and experiencing dramatic growth through 2022, reaching over 2.12 billion US dollars. Although a slight decline occurs in 2023 and 2024, with values of around 2.05 billion and 1.79 billion US dollars respectively, the economic profit rebounds sharply in 2025 to about 2.28 billion US dollars. This trajectory indicates strong profitability with some fluctuations but overall growth over the period.
- Invested Capital
- The invested capital shows a consistent and moderate increase throughout the six-year period. Starting from just under 6.6 billion US dollars in 2020, the capital invested rises steadily each year, reaching approximately 9.24 billion US dollars by 2025. This steady increase suggests ongoing investments or asset growth to support the company's operations or expansion strategies.
- Economic Spread Ratio
- The economic spread ratio, representing the return on invested capital relative to its cost, trends upward significantly from 2020 to 2022, moving from 3.87% to a peak of 26.35%. This indicates improved efficiency or profitability in capital utilization during this timeframe. A decline follows in 2023 and 2024, descending to 24.07% and 20.2% respectively, which points to some erosion in margin spreads or increased capital costs. However, the ratio recovers to 24.63% in 2025, suggesting a positive adjustment or improvement in capital returns.
- Overall Analysis
- The data reveals strong economic profitability alongside a steady accumulation of invested capital. Despite short-term fluctuations in both economic profit and spread ratio, the overall pattern reflects a robust financial performance with significant value creation over the multi-year span. The upward trend in invested capital, coupled with generally high economic spread ratios, supports the view of effective use of capital and sustainable earnings growth.
Economic Profit Margin
KLA Corp., economic profit margin calculation, comparison to benchmarks
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | |||||||
| Revenues | |||||||
| Add: Increase (decrease) in deferred system and service revenue | |||||||
| Adjusted revenues | |||||||
| Performance Ratio | |||||||
| Economic profit margin2 | |||||||
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Advanced Micro Devices Inc. | |||||||
| Analog Devices Inc. | |||||||
| Applied Materials Inc. | |||||||
| Broadcom Inc. | |||||||
| Intel Corp. | |||||||
| Lam Research Corp. | |||||||
| Micron Technology Inc. | |||||||
| NVIDIA Corp. | |||||||
| Qualcomm Inc. | |||||||
| Texas Instruments Inc. | |||||||
Based on: 10-K (reporting date: 2025-06-30), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data indicates significant growth in economic profit over the six-year period, with an initial value of 255,020 thousand US dollars in 2020 increasing sharply to 2,276,755 thousand US dollars by 2025. This represents a substantial upward trend, though there is a noted dip in 2024 compared to 2023, followed by a rebound in 2025.
Adjusted revenues also show consistent growth throughout the period, rising from 5,884,690 thousand US dollars in 2020 to 12,087,609 thousand US dollars in 2025. A particularly strong increase occurs between 2021 and 2023, with revenues exceeding 10 billion US dollars from 2023 onward. There is a minor decrease in revenues between 2023 and 2024, but the upward trajectory resumes in 2025.
The economic profit margin, expressed as a percentage, exhibits marked improvement from 4.33% in 2020 to a peak of 22.28% in 2022. Following this peak, the margin declines to 17.34% in 2024 before recovering slightly to 18.84% in 2025. This suggests some volatility in profitability relative to revenues despite overall economic profit growth.
- Economic profit trend
- Substantial increase from 2020 to 2022, slight fluctuations in 2023 and 2024, and recovery in 2025.
- Adjusted revenues trend
- Continuous growth with accelerated gains particularly between 2021 and 2023; minor dip in 2024 followed by growth in 2025.
- Economic profit margin trend
- Improvement through 2022 with a peak value above 22%, subsequent decline, and partial recovery by 2025, indicating variable profitability levels relative to revenue.
- Overall insight
- The data reflects expanding business scale with increasing revenues and economic profit, although the economic profit margin shows some fluctuations, which may indicate changing cost structures, market dynamics, or investments impacting efficiency and profitability.