Goodwill and Intangible Asset Disclosure
Adjustments to Financial Statements: Removal of Goodwill
Adjusted Financial Ratios: Removal of Goodwill (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

KLA Corp., balance sheet: goodwill and intangible assets

US$ in thousands

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Goodwill	2,278,820)	2,320,049)	2,011,172)	2,045,402)	2,211,858)	354,698)
Existing technology	1,536,826)	1,523,691)	1,382,612)	1,269,883)	1,224,629)	160,859)
Customer relationships	358,567)	366,567)	305,817)	305,817)	297,250)	56,680)
Trade name/trademark	116,583)	121,083)	117,383)	117,383)	114,573)	20,993)
Order backlog and other	85,836)	87,836)	50,403)	50,404)	43,969)	660)
Intangible assets subject to amortization	2,097,812)	2,099,177)	1,856,215)	1,743,487)	1,680,421)	239,192)
In-process research and development (IPR&D)	61,322)	64,457)	63,256)	175,834)	187,500)	—)
Purchased intangible assets, gross carrying amount	2,159,134)	2,163,634)	1,919,471)	1,919,321)	1,867,921)	239,192)
Accumulated amortization and impairment	(1,223,831)	(969,220)	(734,160)	(527,908)	(307,251)	(219,859)
Purchased intangible assets, net amount	935,303)	1,194,414)	1,185,311)	1,391,413)	1,560,670)	19,333)
Goodwill and purchased intangible assets	3,214,123)	3,514,463)	3,196,483)	3,436,815)	3,772,528)	374,031)

Based on: 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), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

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Item	Description	The company
Goodwill	Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized.	KLA Corp. goodwill increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.
Purchased intangible assets, net amount	Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	KLA Corp. purchased intangible assets, net amount increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.
Goodwill and purchased intangible assets	Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges.	KLA Corp. goodwill and purchased intangible assets increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

KLA Corp., adjustments to financial statements

US$ in thousands

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Adjustment to Total Assets
Total assets (as reported)	14,072,357)	12,597,088)	10,271,124)	9,279,960)	9,008,516)	5,619,356)
Less: Goodwill	2,278,820)	2,320,049)	2,011,172)	2,045,402)	2,211,858)	354,698)
Total assets (adjusted)	11,793,537)	10,277,039)	8,259,952)	7,234,558)	6,796,658)	5,264,658)
Adjustment to Total KLA Stockholders’ Equity
Total KLA stockholders’ equity (as reported)	2,919,753)	1,401,351)	3,377,554)	2,665,424)	2,659,108)	1,620,511)
Less: Goodwill	2,278,820)	2,320,049)	2,011,172)	2,045,402)	2,211,858)	354,698)
Total KLA stockholders’ equity (adjusted)	640,933)	(918,698)	1,366,382)	620,022)	447,250)	1,265,813)
Adjustment to Net Income Attributable To KLA
Net income attributable to KLA (as reported)	3,387,277)	3,321,807)	2,078,292)	1,216,785)	1,175,617)	802,265)
Add: Goodwill impairment	—)	—)	—)	256,649)	—)	—)
Net income attributable to KLA (adjusted)	3,387,277)	3,321,807)	2,078,292)	1,473,434)	1,175,617)	802,265)

Based on: 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), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

KLA Corp., Financial Data: Reported vs. Adjusted

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KLA Corp., adjusted financial ratios

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
Net Profit Margin
Reported net profit margin	32.27%	36.06%	30.04%	20.96%	25.73%	19.87%
Adjusted net profit margin	32.27%	36.06%	30.04%	25.38%	25.73%	19.87%
Total Asset Turnover
Reported total asset turnover	0.75	0.73	0.67	0.63	0.51	0.72
Adjusted total asset turnover	0.89	0.90	0.84	0.80	0.67	0.77
Financial Leverage
Reported financial leverage	4.82	8.99	3.04	3.48	3.39	3.47
Adjusted financial leverage	18.40	—	6.05	11.67	15.20	4.16
Return on Equity (ROE)
Reported ROE	116.01%	237.04%	61.53%	45.65%	44.21%	49.51%
Adjusted ROE	528.49%	—	152.10%	237.64%	262.85%	63.38%
Return on Assets (ROA)
Reported ROA	24.07%	26.37%	20.23%	13.11%	13.05%	14.28%
Adjusted ROA	28.72%	32.32%	25.16%	20.37%	17.30%	15.24%

Based on: 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), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	KLA Corp. adjusted net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	KLA Corp. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	KLA Corp. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

KLA Corp., Financial Ratios: Reported vs. Adjusted

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	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to KLA	3,387,277)	3,321,807)	2,078,292)	1,216,785)	1,175,617)	802,265)
Revenues	10,496,056)	9,211,883)	6,918,734)	5,806,424)	4,568,904)	4,036,701)
Profitability Ratio
Net profit margin¹	32.27%	36.06%	30.04%	20.96%	25.73%	19.87%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to KLA	3,387,277)	3,321,807)	2,078,292)	1,473,434)	1,175,617)	802,265)
Revenues	10,496,056)	9,211,883)	6,918,734)	5,806,424)	4,568,904)	4,036,701)
Profitability Ratio
Adjusted net profit margin²	32.27%	36.06%	30.04%	25.38%	25.73%	19.87%

Based on: 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), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

2023 Calculations

¹ Net profit margin = 100 × Net income attributable to KLA ÷ Revenues
= 100 × 3,387,277 ÷ 10,496,056 = 32.27%

² Adjusted net profit margin = 100 × Adjusted net income attributable to KLA ÷ Revenues
= 100 × 3,387,277 ÷ 10,496,056 = 32.27%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	KLA Corp. adjusted net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in thousands)
Revenues	10,496,056)	9,211,883)	6,918,734)	5,806,424)	4,568,904)	4,036,701)
Total assets	14,072,357)	12,597,088)	10,271,124)	9,279,960)	9,008,516)	5,619,356)
Activity Ratio
Total asset turnover¹	0.75	0.73	0.67	0.63	0.51	0.72
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Revenues	10,496,056)	9,211,883)	6,918,734)	5,806,424)	4,568,904)	4,036,701)
Adjusted total assets	11,793,537)	10,277,039)	8,259,952)	7,234,558)	6,796,658)	5,264,658)
Activity Ratio
Adjusted total asset turnover²	0.89	0.90	0.84	0.80	0.67	0.77

Based on: 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), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

2023 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 10,496,056 ÷ 14,072,357 = 0.75

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 10,496,056 ÷ 11,793,537 = 0.89

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	KLA Corp. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023.

	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total assets	14,072,357)	12,597,088)	10,271,124)	9,279,960)	9,008,516)	5,619,356)
Total KLA stockholders’ equity	2,919,753)	1,401,351)	3,377,554)	2,665,424)	2,659,108)	1,620,511)
Solvency Ratio
Financial leverage¹	4.82	8.99	3.04	3.48	3.39	3.47
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted total assets	11,793,537)	10,277,039)	8,259,952)	7,234,558)	6,796,658)	5,264,658)
Adjusted total KLA stockholders’ equity	640,933)	(918,698)	1,366,382)	620,022)	447,250)	1,265,813)
Solvency Ratio
Adjusted financial leverage²	18.40	—	6.05	11.67	15.20	4.16

Based on: 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), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

2023 Calculations

¹ Financial leverage = Total assets ÷ Total KLA stockholders’ equity
= 14,072,357 ÷ 2,919,753 = 4.82

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total KLA stockholders’ equity
= 11,793,537 ÷ 640,933 = 18.40

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	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to KLA	3,387,277)	3,321,807)	2,078,292)	1,216,785)	1,175,617)	802,265)
Total KLA stockholders’ equity	2,919,753)	1,401,351)	3,377,554)	2,665,424)	2,659,108)	1,620,511)
Profitability Ratio
ROE¹	116.01%	237.04%	61.53%	45.65%	44.21%	49.51%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to KLA	3,387,277)	3,321,807)	2,078,292)	1,473,434)	1,175,617)	802,265)
Adjusted total KLA stockholders’ equity	640,933)	(918,698)	1,366,382)	620,022)	447,250)	1,265,813)
Profitability Ratio
Adjusted ROE²	528.49%	—	152.10%	237.64%	262.85%	63.38%

Based on: 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), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

2023 Calculations

¹ ROE = 100 × Net income attributable to KLA ÷ Total KLA stockholders’ equity
= 100 × 3,387,277 ÷ 2,919,753 = 116.01%

² Adjusted ROE = 100 × Adjusted net income attributable to KLA ÷ Adjusted total KLA stockholders’ equity
= 100 × 3,387,277 ÷ 640,933 = 528.49%

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	Jun 30, 2023	Jun 30, 2022	Jun 30, 2021	Jun 30, 2020	Jun 30, 2019	Jun 30, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to KLA	3,387,277)	3,321,807)	2,078,292)	1,216,785)	1,175,617)	802,265)
Total assets	14,072,357)	12,597,088)	10,271,124)	9,279,960)	9,008,516)	5,619,356)
Profitability Ratio
ROA¹	24.07%	26.37%	20.23%	13.11%	13.05%	14.28%
Adjusted for Goodwill
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to KLA	3,387,277)	3,321,807)	2,078,292)	1,473,434)	1,175,617)	802,265)
Adjusted total assets	11,793,537)	10,277,039)	8,259,952)	7,234,558)	6,796,658)	5,264,658)
Profitability Ratio
Adjusted ROA²	28.72%	32.32%	25.16%	20.37%	17.30%	15.24%

Based on: 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), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

2023 Calculations

¹ ROA = 100 × Net income attributable to KLA ÷ Total assets
= 100 × 3,387,277 ÷ 14,072,357 = 24.07%

² Adjusted ROA = 100 × Adjusted net income attributable to KLA ÷ Adjusted total assets
= 100 × 3,387,277 ÷ 11,793,537 = 28.72%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	KLA Corp. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

KLA Corp. (NASDAQ:KLAC)

Analysis of Goodwill and Intangible Assets

Goodwill and Intangible Asset Disclosure

Adjustments to Financial Statements: Removal of Goodwill

KLA Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Goodwill (Summary)

KLA Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)