KLA Corp. (NASDAQ:KLAC)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes demonstrated an overall upward trend from 2019 to 2024, increasing from approximately 1.39 billion US dollars in 2019 to around 3.28 billion US dollars in 2024. However, there was a slight decline observed in the final year, dropping from about 3.46 billion in 2023 to 3.28 billion in 2024. This indicates strong profitability growth over the period with a minor regression in the latest year.

Invested Capital

Invested capital steadily increased each year, growing from about 6.61 billion US dollars in 2019 to nearly 8.88 billion US dollars in 2024. This consistent rise suggests ongoing expansion of capital resources committed to the company’s operations, indicative of strategic investment or asset accumulation over the years.

Return on Invested Capital (ROIC)

The return on invested capital reflected significant improvement from 2019 through 2022, rising sharply from approximately 21.0% in 2019 to a peak of 42.51% in 2022. After this peak, ROIC experienced a moderate decline over the next two years, settling at 36.99% in 2024. Despite the recent decrease, the ROIC in 2024 remains substantially higher than the levels observed in 2019 and 2020. This pattern highlights enhanced efficiency and profitability in utilizing invested capital until 2022, followed by a correction while maintaining a strong return relative to earlier years.

The analysis of the financial metrics over the six-year period reveals notable trends and fluctuations in the company's operational efficiency and profitability.

Operating Profit Margin (OPM)

The operating profit margin demonstrates a generally positive trend, starting at 32.8% in mid-2019 and dipping to its lowest point at 26.09% in mid-2020. Subsequently, it shows a significant upward trajectory, peaking at 41.73% in mid-2022. Although there is a slight decline post-2022, the margin remains strong at 37.54% by mid-2024, indicating sustained profitability despite some recent compression.

Turnover of Capital (TO)

The turnover of capital ratio exhibits increasing efficiency in asset utilization from 0.72 in 2019 to a peak of 1.26 in 2023. This steady rise points toward better management of capital assets to generate revenue. A minor decline to 1.17 in 2024 suggests a moderate decrease in efficiency, yet the level remains considerably higher than the initial values.

Effective Cash Tax Rate (1 – CTR)

The adjusted cash tax rate remains relatively stable, fluctuating between approximately 81% and 89%. The highest value is recorded in 2019 at 89.3%, with a low in 2023 at 81.14%. This variability indicates some changes in tax planning or statutory tax environments but without a clear directional trend.

Return on Invested Capital (ROIC)

Return on invested capital shows marked improvement from 20.98% in 2019 to a peak of 42.51% in 2022, highlighting enhanced capital efficiency and profitability. Although there is a decline after 2022 down to 36.99% in 2024, the value remains significantly higher than earlier periods, reflecting effective investment and profit generation capabilities over the medium term.

Overall, the data indicates a period of recovery and growth starting around 2020, with improvements in profitability, capital utilization, and returns on investments. Despite some moderation in the most recent years, the company maintains strong operational and financial performance metrics compared to the initial period analyzed.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes showed a steady upward trend from June 30, 2019, to June 30, 2023, increasing significantly from approximately 1.55 billion USD to about 4.27 billion USD. However, in the latest period ending June 30, 2024, there was a noticeable decline to approximately 3.89 billion USD, indicating a contraction after several years of growth.

Adjusted Revenues

Revenues displayed consistent growth over the span of the data, rising from around 4.74 billion USD in mid-2019 to a peak of approximately 10.73 billion USD in mid-2023. Following this peak, a slight decrease is observed in the most recent period, with revenues falling to about 10.35 billion USD as of June 30, 2024.

Operating Profit Margin (OPM)

The operating profit margin experienced fluctuations over the years. Beginning at a relatively high margin of 32.8% in mid-2019, it declined to 26.09% by mid-2020. Afterwards, the margin improved substantially, reaching a peak of 41.73% in mid-2022. Subsequent periods showed marginal decreases to 39.78% in mid-2023 and further to 37.54% in mid-2024, although remaining above the levels seen in 2019 and 2020.

Summary of Trends

The data reveals a strong growth phase from 2019 to 2023, both in revenue and profitability, highlighted by a peak operating profit margin in 2022. The decrease in both revenues and net operating profit in the latest period suggests emerging pressures or challenges impacting financial performance. Despite recent declines, the operating profit margin remains relatively robust compared to earlier years, indicating maintained operational efficiency.

The financial data reveals several notable trends over the six-year period under review.

Adjusted Revenues

There is a clear upward trend in adjusted revenues from 2019 to 2023, increasing from approximately $4.74 billion to about $10.73 billion. This represents more than a twofold increase over four years. However, in 2024, a slight decline is observed, with revenues falling to roughly $10.35 billion, indicating a marginal decrease of about 3.5% compared to the previous year.

Invested Capital

Invested capital figures show a gradual increase through the years, starting at around $6.61 billion in 2019 and reaching approximately $8.88 billion by 2024. The growth in invested capital appears steadier and less volatile compared to revenue changes, with no decreases observed in any given year, suggesting a consistent investment or asset base expansion.

Turnover of Capital (TO)

This ratio shows an improving trend from 2019 through 2023, rising from 0.72 to 1.26, indicating more efficient use of invested capital to generate revenues. However, in 2024, the turnover ratio declines slightly to 1.17, reflecting a minor reduction in capital efficiency in generating sales compared to the preceding year. Despite this, the ratio remains above the levels seen in the initial years, signifying overall enhanced asset utilization over the period.

Overall, the data indicate robust revenue growth aligned with steady increases in invested capital, culminating in improved capital turnover until 2023. The slight downturns in revenue and turnover metrics in 2024 warrant attention, suggesting potential short-term operational or market challenges affecting sales performance and capital efficiency.

Cash Operating Taxes

The cash operating taxes exhibited a consistent upward trajectory from 2019 to 2023, rising from $166,222 thousand in 2019 to a peak of $805,213 thousand in 2023. However, in 2024, there was a notable decrease in cash operating taxes to $600,366 thousand, indicating a downward adjustment after several years of continuous growth.

Net Operating Profit Before Taxes (NOPBT)

Net operating profit before taxes showed fluctuations over the years. It started at $1,553,183 thousand in 2019, slightly decreased in 2020 to $1,535,117 thousand, then increased significantly in 2021 and 2022, reaching $2,518,152 thousand and $3,985,879 thousand respectively. The highest profit was recorded in 2023 at $4,269,498 thousand. However, similar to cash operating taxes, a decline occurred in 2024, with NOPBT falling to $3,885,234 thousand.

Effective Cash Tax Rate (CTR)

The effective cash tax rate demonstrated some variability throughout the period. It increased from 10.7% in 2019 to 14.62% in 2020, followed by a slight decrease in 2021 to 14.3%, and a further reduction to 13.88% in 2022. In 2023, the tax rate rose sharply to 18.86%, the highest point during the observed years, before declining to 15.45% in 2024. This pattern indicates a fluctuating tax burden relative to operating profits.