KLA Corp. (NASDAQ:KLAC)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes demonstrated a consistent upward trend over the analyzed periods. Starting at approximately 1.31 billion USD, it more than doubled by the second period to roughly 2.16 billion USD. This growth continued into the third period, reaching about 3.43 billion USD, followed by a slight plateau in the fourth period near 3.46 billion USD. There was a minor decline in the subsequent period to around 3.28 billion USD, after which NOPAT increased again to approximately 3.85 billion USD in the final period. Overall, the trajectory indicates robust growth with some minor fluctuations.

Cost of Capital

The cost of capital exhibited a gradual upward trend throughout the time frame. Initially reported at around 16.05%, it increased modestly to 16.71% in the second period, slightly declined to 16.20% in the third period, and subsequently rose steadily to reach 17.08% by the final period. This indicates rising capital costs over time, with a small dip in the middle of the series, which may reflect market or company-specific financial conditions.

Invested Capital

Invested capital showed a steady and consistent increase over the periods analyzed. Beginning at about 6.59 billion USD, invested capital grew each year, reaching approximately 9.24 billion USD by the last period. This gradual expansion suggests an ongoing commitment to investment and asset growth to support operations and future profitability.

Economic Profit

Economic profit demonstrated significant growth from the first to the third period, starting around 253 million USD and increasing sharply to over 2.12 billion USD. After peaking in the third period, economic profit exhibited a slight decline in the fourth and fifth periods, falling to approximately 1.79 billion USD. However, it rebounded in the final period to approximately 2.27 billion USD. This pattern reflects strong value creation initially, followed by some variability, but maintaining relatively high levels of economic profit towards the end.

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 exhibits a general upward trend over the analyzed period. Starting at approximately 252.6 million USD in mid-2020, it experiences a significant increase to over 1 billion USD by mid-2021. This growth continues substantially, peaking above 2.1 billion USD in mid-2022. Subsequently, there is a slight decline in mid-2023 and mid-2024, with values around 2.0 billion USD and 1.8 billion USD respectively, followed by a recovery reaching approximately 2.3 billion USD in mid-2025.

Invested Capital

Invested capital shows a steady upward progression over the entire timeframe. It increases from about 6.6 billion USD in mid-2020 to roughly 9.2 billion USD by mid-2025. The growth is consistent year-over-year, indicating continued capital deployment or asset accumulation by the company.

Economic Spread Ratio

The economic spread ratio, expressed as a percentage, reflects the company's ability to generate returns over its cost of capital. It rises significantly from 3.83% in mid-2020 to a peak of 26.31% in mid-2022. Following this peak, the ratio dips somewhat to 24.03% in mid-2023 and further to 20.16% in mid-2024, before rebounding to 24.59% in mid-2025. This pattern suggests fluctuations in profitability relative to invested capital, with the company maintaining a strong economic spread overall.

Summary

The data reveals strong financial performance characterized by robust economic profit growth and increasing invested capital. While economic profit experienced a slight decline after the mid-2022 peak, it regained momentum by mid-2025. The economic spread ratio mirrors these fluctuations but remains at elevated levels, indicating effective capital utilization and sustained profitability above cost of capital. Overall, the financial metrics suggest solid value creation throughout the periods under review.

Economic Profit

The economic profit demonstrated a significant upward trajectory from 2020 to 2022, starting at approximately 253 million USD and reaching over 2.1 billion USD in 2022. Although there was a slight decline in 2023 and 2024, dropping to around 1.8 billion USD in 2024, economic profit rebounded strongly in 2025, surpassing 2.2 billion USD. This indicates robust profitability with some fluctuations in the mid-term.

Adjusted Revenues

Adjusted revenues consistently increased over the six-year period. From 5.9 billion USD in 2020, revenues rose steadily to over 12 billion USD by 2025. The growth trend was nearly continuous, with minor deceleration observed in 2024. This reflects sustained top-line expansion and effective revenue generation strategies.

Economic Profit Margin

The economic profit margin showed marked improvement from 4.29% in 2020 to a peak of 22.24% in 2022. Following this peak, the margin decreased to 17.3% in 2024 but showed a recovery trend in 2025, rising again to 18.8%. Despite some volatility, the margin levels remained substantially higher than the starting point, signaling enhanced operational efficiency and profitability relative to revenues.

Overall Analysis

Over the six-year span, the data reflect a company experiencing strong growth in both profitability and revenues. The initial rapid increase in economic profit and margin suggests effective scaling or improved cost management. Although there were moderate declines in economic profit and margin during 2023 and 2024, the recovery in 2025 indicates resilience. Adjusted revenues grew steadily, supporting an overall positive financial performance trend.