KLA Corp. (NASDAQ:KLAC)

The analysis of the financial data reveals several significant trends over the observed periods.

Goodwill

Goodwill decreased overall from US$ 2,045,402 thousand in June 2020 to US$ 1,792,193 thousand in June 2025, with some fluctuations. It peaked at US$ 2,320,049 thousand in June 2022 before declining steadily in subsequent years.

Existing Technology

This intangible asset displayed consistent growth, rising from US$ 1,269,883 thousand in June 2020 to US$ 1,555,688 thousand in June 2025, indicating ongoing investment or successful acquisitions related to technology.

Customer Relationships

The value remained relatively stable, starting at US$ 305,817 thousand in June 2020 and increasing moderately to US$ 359,555 thousand by June 2025. There was a peak at US$ 366,567 thousand in June 2022, followed by a slight decline.

Trade Name/Trademark

This item also remained fairly steady, fluctuating around the US$ 117,383-119,409 thousand range. Minor variations were seen, with a small trough in June 2023 and gradual recovery afterward.

Order Backlog and Other

The balance increased from about US$ 50,404 thousand in June 2020 to US$ 89,309 thousand in June 2025, suggesting potential growth in outstanding orders or similar assets.

Intangible Assets Subject to Amortization

This category expanded steadily from US$ 1,743,487 thousand in June 2020 to US$ 2,123,961 thousand by June 2025, supporting a trend of increasing investment in intangible assets.

In-Process Research and Development (IPR&D)

IPR&D values experienced a significant decrease, dropping from US$ 175,834 thousand in June 2020 down to US$ 46,074 thousand in June 2025, indicating reduced ongoing development projects or successful capitalization/amortization of previously in-process initiatives.

Purchased Intangible Assets, Gross Carrying Amount

The gross carrying amount remained relatively flat, fluctuating slightly around the US$ 2,159,134 thousand mark after an initial increase from US$ 1,919,321 thousand in June 2020 to US$ 2,163,634 thousand in June 2022.

Accumulated Amortization and Impairment

A clear upward trend is evident here, with accumulated amortization and impairment increasing in absolute terms from -US$ 527,908 thousand in June 2020 to -US$ 1,725,250 thousand by June 2025. This reflects increasing amortization expense and impairments over the years, impacting net asset values.

Purchased Intangible Assets, Net Amount

Net intangible assets declined markedly from US$ 1,391,413 thousand in June 2020 to US$ 444,785 thousand in June 2025. This decrease largely aligns with the rising accumulated amortization and impairment and points to a reduction in intangible asset net book values.

Goodwill and Purchased Intangible Assets Combined

The combined figure demonstrates a downward trend after peaking at US$ 3,514,463 thousand in June 2022. It subsequently declined to US$ 2,236,978 thousand by June 2025, highlighting a net reduction in these major asset components.

In summary, the overall pattern indicates growth in certain intangible assets such as existing technology and backlog-related items, while goodwill and net purchased intangible assets are trending downward. The increasing accumulated amortization and impairment expenses suggest that amortization policies or impairments are significantly affecting asset valuations. The reduction in IPR&D balances further supports a potential shift from in-process development to capitalized or amortized assets. Together, these trends may reflect changes in acquisition strategies, asset utilization, or impairment recognition over time.

Total Assets

The reported total assets displayed a consistent upward trend over the analyzed periods, increasing from approximately $9.28 billion in mid-2020 to about $16.07 billion by mid-2025. This represents a significant growth indicating expanding asset base. Similarly, the adjusted total assets, which presumably exclude goodwill or intangible asset effects, also showed a steady increase from about $7.23 billion to approximately $14.28 billion over the same timeframe. Both reported and adjusted figures indicate robust asset growth, with the adjusted values being consistently lower, reflecting the impact of goodwill adjustments.

Stockholders’ Equity

The reported total stockholders’ equity exhibited fluctuations with a notable decline in the midpoint of the timeline. Initially, equity grew from $2.67 billion in 2020 to over $3.38 billion in 2021, then sharply dropped to $1.4 billion in 2022. Afterwards, it recovered to approximately $2.92 billion in 2023 and continued to grow, reaching roughly $4.69 billion by 2025. In contrast, the adjusted total stockholders’ equity showed greater volatility; it started lower at around $620 million in 2020, increased to about $1.37 billion in 2021, then became negative in 2022 at nearly -$919 million, suggesting impairment or large goodwill adjustments in that period. The adjusted equity then returned to positive values in subsequent years, finishing at nearly $2.9 billion by 2025. This pattern points to substantial adjustments related to non-tangible assets affecting equity calculations.

Net Income Attributable to KLA

Both reported and adjusted net income figures generally trended upwards, indicating overall profitability improvement. The reported net income rose from roughly $1.22 billion in 2020 to $4.06 billion by 2025, peaking in 2023 at about $3.39 billion before a slight dip in 2024. Adjusted net income closely matched reported numbers from 2021 to 2023, but was higher in 2020, 2024, and 2025, with adjusted figures exceeding reported ones by noticeable margins in these years. This suggests that adjustments, possibly related to goodwill amortization or impairment, had a positive effect on net income in those periods.

Overall Insights

The data indicate robust asset growth alongside volatility in equity when adjustments for goodwill are considered, highlighting the significant impact of intangible assets on financial position. The negative adjusted equity in 2022 suggests a major impairment or write-down event affecting the company's net asset value at that time. Net income trends show solid profitability with upward trajectory, and adjustments lead to occasional increases in reported earnings, implying the exclusion of certain charges or expenses in adjusted figures. The divergence between reported and adjusted equity underscores the importance of considering goodwill and intangible asset impacts when evaluating financial health.

Net Profit Margin

The reported net profit margin exhibits a general upward trend from 20.96% in 2020 to a peak of 36.06% in 2022, followed by a decline to 28.15% in 2024, then a rebound to 33.41% in 2025. The adjusted net profit margin follows a similar pattern but remains consistently higher than the reported margin from 2024 onwards, indicating that adjustments, likely related to goodwill, improve perceived profitability.

Total Asset Turnover

The reported total asset turnover ratio increases from 0.63 in 2020 to 0.75 in 2023, before falling to 0.64 in 2024, then rising again to 0.76 in 2025. The adjusted total asset turnover is consistently higher than the reported ratio, starting at 0.8 in 2020 and peaking at 0.9 in 2022. This suggests that asset efficiency is perceived to be better when goodwill is adjusted, though a decline in asset turnover is noted in 2024 in both cases.

Financial Leverage

Reported financial leverage shows variability, beginning at 3.48 in 2020 and peaking sharply at 8.99 in 2022, then decreasing to 3.42 by 2025. Adjusted financial leverage is notably higher than the reported figures for most periods, with a very pronounced spike at 18.4 in 2023, but some data points are missing. The elevated adjusted leverage indicates a higher degree of indebtedness or reliance on debt, especially when goodwill is considered.

Return on Equity (ROE)

Reported ROE demonstrates significant volatility, rising from 45.65% in 2020 to an extraordinary 237.04% in 2022, then declining sharply to 82% by 2024 and slightly increasing thereafter. The adjusted ROE values, where available, are substantially higher than reported figures, with an extreme peak at 528.49% in 2023. This highlights extraordinary returns when adjusting for goodwill, but also raises concerns about underlying capital structure or accounting treatments affecting equity.

Return on Assets (ROA)

The reported ROA shows a growth trend from 13.11% in 2020 to 26.37% in 2022 followed by a modest decline to 17.9% in 2024 and recovery to 25.28% in 2025. Adjusted ROA is consistently higher, peaking at 32.32% in 2022, reflecting better asset profitability when goodwill is removed. Both reported and adjusted ROA display similar patterns of improvement and occasional dips, indicating operational efficiency fluctuations.

Overall Insights

The data reveals that adjustments for goodwill generally enhance profitability and efficiency ratios, such as net profit margin, asset turnover, and return measures. However, leverage metrics adjusted for goodwill suggest a more leveraged position than reported, implying additional financial risk when goodwill is considered. The high volatility in both reported and adjusted ROE points to significant changes in equity base or earnings that warrant further investigation. Fluctuations in asset turnover and ROA indicate variable asset utilization and operational performance over the period analyzed.

Net Income Trends

Reported net income attributable to the company exhibited a general upward trend from 1,216,785 thousand US$ in 2020 to 4,061,643 thousand US$ projected for 2025, with notable increases particularly between 2020 and 2022, and a slight decline observed in 2024 before rising again in 2025. Adjusted net income follows a similar pattern, with values consistently higher than the reported figures, reflecting adjustments that increase net income estimates. Notably, adjusted net income shows a slight moderation in the dip during 2024, indicating adjustments provide a smoother growth outlook.

Profit Margin Analysis

Reported net profit margin improved significantly from 20.96% in 2020 to a peak of 36.06% in 2022, before declining to 28.15% in 2024 and then increasing again to 33.41% in 2025. The adjusted net profit margin largely mirrors this trend but maintains higher percentages throughout the period, reaching 35.31% in 2025 compared to the reported 33.41%. This suggests that adjustments, likely goodwill-related, enhance the profitability ratio, indicating stronger core earnings performance.

Overall Financial Performance Insights

The company demonstrates robust growth in net income across the period, with the adjusted figures providing a more optimistic profitability profile. Although there is a reduction in both net income and profit margins in 2024, the projections for 2025 indicate a recovery and further improvement. The adjusted measures highlight the positive impact of accounting adjustments on profitability metrics, reflecting potentially non-cash or one-time items affecting reported results. Overall, the data suggests sustained profitability growth with some short-term fluctuation before expected future strengthening.

Total Assets

The reported total assets of the company exhibit a consistent upward trend from June 30, 2020, to June 30, 2025. The value increases from approximately 9.28 billion US dollars in 2020 to around 16.07 billion US dollars in 2025, reflecting sustained asset growth over the analyzed period. Similarly, the adjusted total assets, which exclude goodwill, also show a steady increase from about 7.23 billion US dollars in 2020 to 14.28 billion US dollars in 2025. This suggests that both reported and adjusted asset bases are expanding significantly over time, with the adjusted total assets consistently lower than reported total assets due to the exclusion of goodwill.

Total Asset Turnover

Regarding total asset turnover, the reported ratio generally improves from 0.63 in 2020 to 0.76 in 2025, with some fluctuations during the intermediate years. Notably, there is an increase from 0.63 in 2020 to 0.75 in 2023, followed by a decline to 0.64 in 2024, and then a recovery to 0.76 in 2025. In contrast, the adjusted total asset turnover is consistently higher than the reported ratio in all periods, beginning at 0.80 in 2020, peaking at 0.90 in 2022, slightly decreasing to 0.89 in 2023, then dipping to 0.73 in 2024 before rising again to 0.85 in 2025. The adjusted turnover demonstrates a similar pattern of growth and minor volatility but remains more efficient relative to the reported figures due to the asset base's adjustment for goodwill.

Overall Analysis

The data indicates that the company is effectively growing its asset base while maintaining or improving its efficiency in utilizing those assets to generate revenue, particularly when considering adjusted assets. The fluctuations in total asset turnover ratios toward 2024 suggest some operational challenges or changes in asset utilization, but recovery in 2025 points to a potential return to improved efficiency. The consistently higher adjusted turnover ratios highlight the impact of goodwill on reported assets and suggest that excluding goodwill provides a clearer view of asset productivity.

The analysis of the financial data reveals distinct trends in reported and goodwill adjusted figures over the examined periods. Both total assets and stockholders' equity exhibit significant changes, with corresponding effects on financial leverage ratios.

Total Assets

Reported total assets show a consistent upward trend from US$9,279,960 thousand in mid-2020 to US$16,067,926 thousand by mid-2025. This represents a nearly 73% increase over five years, indicating growth in the company's asset base. The adjusted total assets, excluding goodwill, follow a similar upward trajectory but consistently present lower values than the reported totals, reflecting the impact of goodwill on the asset base. Adjusted assets increased from US$7,234,558 thousand to US$14,275,733 thousand over the same period, nearly doubling.

Stockholders’ Equity

Reported total KLA stockholders’ equity experiences notable volatility. Starting at US$2,665,424 thousand in 2020, it increases to a peak of US$3,377,554 thousand in 2021, then sharply declines to US$1,401,351 thousand in 2022 before recovering in subsequent years to reach US$4,692,453 thousand in 2025. This fluctuation suggests possible one-time events or adjustments impacting equity in 2022.

Adjusted total stockholders’ equity shows even more pronounced variability and negative values in 2022 (-US$918,698 thousand), indicating that after removing goodwill, equity was negative in that year. It recovers to positive figures afterward, reaching US$2,900,260 thousand in 2025 but remains significantly lower than reported equity, underscoring goodwill's significant contribution to reported equity values.

Financial Leverage

Reported financial leverage ratios decline from 3.48 in 2020 to 3.42 in 2025, after peaking sharply at 8.99 in 2022. This peak corresponds with the dip in reported stockholders' equity in 2022, implying increased reliance on debt or liabilities during that period relative to equity.

The adjusted financial leverage ratios are notably higher than the reported ones, starting at 11.67 in 2020 and declining to 4.92 in 2025, but with missing data for 2022. A sharp increase to 18.4 in 2023 also aligns with the volatility observed in equity, indicating a highly leveraged position when goodwill is excluded. The overall declining trend post-2023 suggests an improving balance sheet structure and reduced leverage risk over time.

In summary, the company demonstrates steady asset growth with significant goodwill impact influencing equity levels and leverage measures. The year 2022 stands out as a period of financial strain or revaluation, evident from equity reductions and leverage spikes. Subsequent recovery in reported and adjusted figures points to corrective actions or positive operational performance enhancing financial stability through mid-2025.

The financial data reveals several notable trends in the company's performance over the observed periods. Both net income and stockholders’ equity figures show fluctuations that impact the company's return on equity (ROE) metrics significantly.

Net Income Trends

Reported net income attributable to the company exhibits a general upward trend from 1,216,785 thousand USD in mid-2020 to 4,061,643 thousand USD projected for mid-2025. The increase is marked, especially between mid-2024 and mid-2025, where income improves by approximately 47% after a dip in mid-2024. Adjusted net income closely mirrors this pattern but excludes some factors leading to slightly higher values in 2024 and 2025, indicating adjustments likely related to goodwill or other non-recurring items boosting earnings in those years.

Stockholders’ Equity Dynamics

There is a volatile trend in total stockholders’ equity. The reported equity increases from approximately 2,665,424 thousand USD in 2020 to over 4,692,453 thousand USD projected by 2025, though with a sharp decrease in 2022 to about 1,401,351 thousand USD before recovering. Adjusted equity, which presumably excludes goodwill, is substantially lower than the reported figures and shows even more volatility, turning negative in 2022 (-918,698 thousand USD) and then returning to positive values by 2023. This suggests significant goodwill impairments or write-offs in 2022, reflecting asset revaluations or other adjustments adversely impacting equity.

Return on Equity (ROE) Analysis

The reported ROE is high throughout the years, peaking dramatically in 2022 at 237.04%, which corresponds with the very low reported equity value that year, thus inflating the ratio. The ROE then decreases to more moderate but still elevated levels around 82%–116% in other years, with a slight increase projected in 2025 (86.56%).

Adjusted ROE measures are even more volatile. They start very high at 237.64% in 2020, lower in 2021, lack data in 2022 (possibly due to negative equity making the ratio non-calculable), and then peak at an extraordinary 528.49% in 2023. Subsequently, adjusted ROE declines in the following years but remains above 140%, indicating an extremely high level of profitability relative to the adjusted equity base.

Insights and Implications

The discrepancy between reported and adjusted figures highlights the impact of goodwill and other intangible asset adjustments on the company’s financial structure. The impairment or write-downs in 2022 negatively affect equity and ROE calculations, producing extreme fluctuations. Despite these variations, net income shows resilience and growth, suggesting strong operational performance.

High ROE values, particularly adjusted ROE in years with low or negative equity, should be interpreted cautiously as they may be driven by accounting adjustments rather than purely operational efficiency. The recovery and growth in both net income and equity projections from 2023 onward suggest stabilization and improved financial health going forward.

Net Income Trends

The reported net income attributable to the company shows a general upward trend over the observed periods, increasing from approximately $1.22 billion in mid-2020 to over $4.06 billion by mid-2025. Notably, there is a significant jump between 2021 and 2022, followed by a slight dip in 2024 before rising again in 2025. The adjusted net income follows a similar pattern but with consistently higher values starting from 2024, indicating the impact of goodwill adjustments on reported profitability.

Total Assets Evolution

Reported total assets steadily increase from around $9.28 billion in 2020 to approximately $16.07 billion in 2025, reflecting asset growth over the years. Adjusted total assets, which exclude certain goodwill components, are consistently lower but also show notable growth from about $7.23 billion to $14.28 billion across the same timespan. This suggests that a significant portion of the company's reported assets includes goodwill, which is excluded in the adjusted figures.

Return on Assets (ROA) Patterns

The reported ROA displays an increasing trend from 13.11% in 2020 to a peak of 26.37% in 2022, followed by a moderate decline to 17.9% in 2024, and then a rebound to 25.28% in 2025. The adjusted ROA, calculated on the basis of adjusted net income and assets, consistently exceeds the reported ROA, ranging from 20.37% in 2020 up to 32.32% in 2022, then dipping to 22.54% in 2024 before recovering to 30.07% in 2025. This indicates that goodwill adjustments enhance the perceived efficiency of the company's asset utilization.

Overall Insights

The data reflects ongoing growth in profitability and asset base, with fluctuations in efficiency as measured by ROA. Goodwill adjustments notably affect both net income and asset values, resulting in higher adjusted profitability ratios. The trends suggest effective asset management and profitability improvement over time, despite some year-to-year variability.