Analysis of Investments
Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
KLA Corp., adjustment to net income attributable to KLA
US$ in thousands
Based on: 10-K (reporting date: 2026-06-30), 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).
An analysis of the financial performance from June 30, 2021, to June 30, 2026, reveals a general upward trajectory in profitability, characterized by significant growth in both reported and adjusted net income. Despite a temporary contraction in 2024, the overall trend indicates a robust expansion of earnings over the six-year period.
- Net Income Growth Trends
- Reported net income attributable to the company grew from approximately 2.08 billion USD in 2021 to a peak of 4.83 billion USD in 2026. A notable volatility is observed in 2024, where net income declined to 2.76 billion USD before recovering sharply in 2025 and 2026. Adjusted net income mirrors this trajectory closely, suggesting that the primary drivers of profitability are operational rather than resulting from non-recurring adjustments.
- Mark-to-Market Adjustment Analysis
- The variance between reported and adjusted net income represents the impact of mark-to-market adjustments for available-for-sale securities. The direction of these adjustments shifted over the observed period. In 2021 and 2022, reported net income exceeded adjusted net income, indicating the presence of unrealized gains. Conversely, from 2023 through 2025, adjusted net income was higher than reported figures, signifying that mark-to-market losses were excluded to reach the adjusted total. In 2026, the trend reverted, with reported net income again exceeding adjusted net income.
- Materiality of Investment Adjustments
- The magnitude of the mark-to-market adjustments remains immaterial relative to the total net income. The largest variance occurred in 2022, with a difference of approximately 16 million USD, which represents a negligible fraction of the 3.32 billion USD reported net income for that year. This indicates that the volatility associated with available-for-sale securities has minimal impact on the overall financial stability and earnings quality of the organization.
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Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
KLA Corp., adjusted profitability ratios
Based on: 10-K (reporting date: 2026-06-30), 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).
An analysis of profitability and efficiency metrics from 2021 through 2026 reveals a cyclical trend characterized by a significant peak in 2022, a trough in 2024, and a subsequent recovery. The high degree of correlation between reported and adjusted figures across all metrics indicates that mark-to-market adjustments for available-for-sale securities have a minimal impact on the overall financial profile.
- Net Profit Margin
- The reported net profit margin exhibited notable volatility, increasing from 30.04% in 2021 to a peak of 36.06% in 2022. A contraction followed, with the margin reaching a low of 28.15% in 2024, before returning to an upward trajectory toward a projected 35.57% by 2026. Adjusted margins mirror this trajectory almost exactly, confirming that non-operational security valuations did not materially distort profitability.
- Return on Equity (ROE)
- ROE showed the most extreme fluctuations, surging from 61.53% in 2021 to 237.04% in 2022. Following this peak, a downward trend is observed, with the ratio stabilizing between 75.88% and 86.76% from 2024 through 2026. The adjusted ROE remains closely aligned with reported figures, suggesting that the volatility was driven by fundamental capital structure or earnings changes rather than available-for-sale security adjustments.
- Return on Assets (ROA)
- ROA followed a trajectory similar to the net profit margin, rising to 26.37% in 2022 and dipping to 17.90% in 2024. A recovery phase is evident in the final two years of the period, with reported ROA reaching 26.91% by 2026. The adjusted ROA figures consistently reflect this pattern with negligible variance from the reported totals.
- Comparative Analysis of Adjustments
- The variance between reported and adjusted ratios is consistently marginal across all three metrics. This suggests that the effects of mark-to-market adjustments on available-for-sale securities are immaterial to the company's reported profitability and efficiency, leaving the underlying operational performance as the primary driver of financial results.
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KLA Corp., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2026-06-30), 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).
2026 Calculations
1 Net profit margin = 100 × Net income attributable to KLA ÷ Revenues
= 100 × 4,830,771 ÷ 13,579,476 = 35.57%
2 Adjusted net profit margin = 100 × Adjusted net income attributable to KLA ÷ Revenues
= 100 × 4,818,145 ÷ 13,579,476 = 35.48%
The financial trajectory from 2021 to 2026 is characterized by overall growth in profitability, interrupted by a temporary contraction in 2024, followed by a robust recovery in the final two periods.
- Net Income Trends
- Reported net income attributable to KLA grew from 2,078,292 thousand US$ in 2021 to a peak of 4,830,771 thousand US$ by 2026. A significant increase was observed between 2021 and 2022, where income rose by approximately 60%. A subsequent decline occurred in 2024, with income dropping to 2,761,896 thousand US$, before rebounding sharply in 2025 and 2026.
- Adjusted Net Profit Margin Analysis
- The adjusted net profit margin exhibited volatility throughout the period. The margin peaked in 2022 at 35.89% before entering a downward trend that reached a low of 28.24% in 2024. This decline represents a 7.65 percentage point contraction from the 2022 high. However, a strong recovery followed, with margins expanding to 33.49% in 2025 and reaching 35.48% in 2026, nearly returning to the 2022 peak.
- Variance Between Reported and Adjusted Metrics
- A minimal delta is observed between reported and adjusted net income and profit margins across all periods. The proximity of these figures suggests that non-recurring items, adjustments, or one-time financial impacts have had a negligible influence on the company's overall profitability profile.
- Profitability Correlation
- A strong positive correlation exists between net income levels and profit margins. The dip in net income observed in 2024 corresponds directly with the period's lowest profit margin, indicating that the decrease in earnings was driven by a reduction in operational efficiency or an increase in relative costs rather than a simple decline in absolute volume.
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Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2026-06-30), 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).
2026 Calculations
1 ROE = 100 × Net income attributable to KLA ÷ Total KLA stockholders’ equity
= 100 × 4,830,771 ÷ 6,349,820 = 76.08%
2 Adjusted ROE = 100 × Adjusted net income attributable to KLA ÷ Total KLA stockholders’ equity
= 100 × 4,818,145 ÷ 6,349,820 = 75.88%
The financial performance from 2021 to 2026 is characterized by significant growth in absolute profitability alongside extreme volatility in equity efficiency. While net income demonstrates a long-term upward trajectory, the return on equity indicates a period of sharp escalation followed by a gradual normalization.
- Adjusted Net Income Trends
- Adjusted net income grew from US$ 2.075 billion in 2021 to a peak of US$ 4.818 billion by 2026. This growth was non-linear, featuring a period of stability between 2022 and 2023, followed by a contraction in 2024 to US$ 2.771 billion. A strong recovery occurred in 2025, with income rising to US$ 4.071 billion and continuing its ascent into 2026.
- Adjusted Return on Equity (ROE) Dynamics
- The Adjusted ROE experienced a dramatic spike in 2022, reaching 235.90%, before entering a general downward trend. Following the 2022 peak, the ROE declined to 116.10% in 2023 and 82.27% in 2024. Despite a brief increase to 86.76% in 2025, the ratio settled at 75.88% in 2026. The trend of declining ROE occurring simultaneously with rising net income suggests a substantial expansion of the equity base, which diluted the return percentage despite higher absolute earnings.
- Comparison of Reported and Adjusted Metrics
- A high level of convergence is observed between reported and adjusted figures throughout the period. The variance in both net income and ROE is minimal, indicating that one-time adjustments or non-recurring items have exerted negligible influence on the organization's overall financial results and return profiles.
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Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2026-06-30), 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).
2026 Calculations
1 ROA = 100 × Net income attributable to KLA ÷ Total assets
= 100 × 4,830,771 ÷ 17,951,535 = 26.91%
2 Adjusted ROA = 100 × Adjusted net income attributable to KLA ÷ Total assets
= 100 × 4,818,145 ÷ 17,951,535 = 26.84%
The financial performance from June 2021 through June 2026 is characterized by a cyclical but overall upward trajectory in both absolute profitability and asset utilization efficiency.
- Adjusted Net Income Trends
- Adjusted net income experienced significant growth between 2021 and 2023, rising from US$ 2,075,204 thousand to US$ 3,389,966 thousand. A notable contraction occurred in 2024, where income declined to US$ 2,771,039 thousand. This downturn was followed by a strong recovery and expansion phase, with projected figures reaching US$ 4,071,089 thousand in 2025 and peaking at US$ 4,818,145 thousand by 2026.
- Adjusted Return on Assets (ROA) Performance
- The Adjusted ROA exhibits a pattern closely aligned with net income fluctuations. After an initial increase from 20.20% in 2021 to 26.24% in 2022, the ratio trended downward to a period low of 17.95% in 2024. A subsequent sharp recovery is observed, with the ratio increasing to 25.34% in 2025 and reaching a projected high of 26.84% by 2026, indicating an enhanced ability to generate profit relative to the total asset base.
- Analysis of Reported versus Adjusted Metrics
- A high level of convergence is observed between reported and adjusted financial metrics throughout the entire period. The variance between Reported ROA and Adjusted ROA is marginal, typically fluctuating by only a few basis points. This indicates that non-recurring items, gains, or losses have had a negligible impact on the overall assessment of asset efficiency and earnings quality.
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