KLA Corp. (NASDAQ:KLAC)

The financial data over the examined periods reveals several notable trends in key performance indicators related to profitability and capital efficiency.

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibited a consistent upward trajectory from 2020 through 2025, increasing from approximately 1.31 billion USD to 3.85 billion USD. This growth indicates a significant enhancement in the company's operating profitability after accounting for taxes, reflecting effective management of operations and potential growth in revenue or operational efficiency.

Cost of Capital

The cost of capital showed a gradual increase over the six-year span, rising from 16.02% in 2020 to 17.05% in 2025. This upward trend suggests a slightly increasing cost associated with financing the company’s capital structure, which could be influenced by market factors such as increased interest rates, changes in risk profile, or shifts in capital mix.

Invested Capital

Invested capital steadily expanded from approximately 6.59 billion USD in 2020 to 9.24 billion USD in 2025. This consistent rise indicates ongoing capital deployment into business operations, which may include investments in assets, acquisitions, or working capital increases supporting growth initiatives.

Economic Profit

Economic profit experienced substantial growth from around 255 million USD in 2020 to a peak exceeding 2.12 billion USD in 2022, followed by a slight decline in 2023 and 2024, before rising again in 2025 to approximately 2.28 billion USD. Despite minor fluctuations, the economic profit reflects a strong value creation trend, indicating that the company’s returns have generally outpaced the cost of capital by an increasing margin, with temporary dips possibly due to elevated capital costs or operational challenges.

In summary, the company demonstrates robust growth in operating profitability and invested capital over the period, with a corresponding increase in economic profit signaling sustained value creation. The slight rise in the cost of capital warrants attention but has not yet offset the gains in profitability and economic profit. The data suggests effective capital utilization and improving financial performance with short-term variations in value generation efficiency.

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 has exhibited a strong upward trajectory overall from 2020 to 2025, beginning at approximately 255 million US dollars and reaching over 2.27 billion US dollars by 2025. A notable acceleration occurred between 2020 and 2022, where economic profit more than tripled. Although there was a slight decline observed in 2023 and 2024, the figure rebounded significantly in 2025, approaching its highest recorded value in the period.

Invested Capital

The invested capital has steadily increased throughout the entire period, starting at about 6.59 billion US dollars in 2020 and rising to nearly 9.24 billion US dollars by 2025. The growth in invested capital has been consistent year over year, with gradual increments indicating ongoing capital deployment or asset growth.

Economic Spread Ratio

The economic spread ratio demonstrates an improving trend, rising from a modest 3.86% in 2020 to a peak of 26.34% in 2022. Following this peak, there was a moderate decline over the next two years, with ratios of 24.06% in 2023 and 20.19% in 2024, before rebounding to 24.62% in 2025. Despite fluctuations, the overall level of the economic spread ratio remains substantially higher than the initial value, suggesting enhanced returns on invested capital relative to its cost.

Summary

Collectively, the data reflects a robust performance characterized by strong growth in economic profit, consistent increases in invested capital, and improved economic returns over the six years. The transient declines in economic spread and economic profit during the mid-period suggest possible external or operational challenges, but recovery by 2025 indicates resilience and effective management of capital efficiency.

Economic Profit

The economic profit exhibited significant growth from 2020 through 2025, starting at approximately 255 million USD in 2020 and reaching over 2.27 billion USD by 2025. Notably, there was a substantial increase between 2020 and 2021, where economic profit quadrupled. Following this, it continued to rise sharply up to 2022, after which fluctuations occurred. A peak was observed in 2022, followed by a slight decline during 2023 and 2024, before rebounding strongly in 2025. This pattern suggests a generally positive trend in value creation, despite some intermediate variability.

Adjusted Revenues

Adjusted revenues showed consistent growth throughout the period analyzed. Starting at approximately 5.88 billion USD in 2020, revenues rose steadily each year, peaking at almost 12.1 billion USD in 2025. The most notable acceleration occurred between 2021 and 2023, where revenue growth rates increased markedly. A minor dip occurred in 2024, but this was reversed with growth resuming in 2025. The overall trajectory indicates robust revenue expansion over the years observed.

Economic Profit Margin

The economic profit margin demonstrated an upward trend from 4.33% in 2020 to a high of 22.27% in 2022, reflecting improving profitability relative to revenues. After peaking in 2022, the margin declined to 19.11% in 2023 and continued to decrease slightly to 17.33% in 2024. By 2025, a modest recovery to 18.83% was evident. This pattern indicates that, despite growing revenues, the economic profit margin experienced compression after 2022, suggesting changes in cost structures, competitive pressures, or investment returns that impacted profitability efficiency.

Summary

Overall, the financial data reveals strong growth in both economic profit and adjusted revenues over the six-year span. The surge in economic profit during the initial years reflects effective value generation, although some volatility occurred after the peak in 2022. Revenue growth remained relatively stable with minor fluctuations. The economic profit margin’s peak followed by decline and partial recovery suggests that while the company’s scale expanded, maintaining the same level of profitability relative to revenues became more challenging. These trends provide insights into the company's operational and financial performance dynamics during the period.