Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
Return on Invested Capital (ROIC)
KLA Corp., ROIC calculation, comparison to benchmarks
| Jun 30, 2026 | Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 5,068,432) | 3,852,307) | 3,284,868) | 3,464,285) | 3,432,493) | 2,157,964) | |
| Invested capital2 | 10,301,582) | 9,244,891) | 8,881,599) | 8,526,100) | 8,075,406) | 6,820,696) | |
| Performance Ratio | |||||||
| ROIC3 | 49.20% | 41.67% | 36.99% | 40.63% | 42.51% | 31.64% | |
| Benchmarks | |||||||
| ROIC, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | 7.33% | 1.07% | -0.35% | -0.24% | 56.77% | |
| Analog Devices Inc. | — | 5.20% | 3.09% | 7.11% | 5.76% | 2.37% | |
| Applied Materials Inc. | — | 40.78% | 33.64% | 36.75% | 46.34% | 41.96% | |
| Broadcom Inc. | — | 15.57% | 7.86% | 23.04% | 20.75% | 10.98% | |
| Intel Corp. | — | 0.49% | -14.19% | -1.60% | 4.14% | 22.03% | |
| Lam Research Corp. | 37.66% | 37.32% | 21.94% | 27.10% | 41.68% | 37.13% | |
| Marvell Technology Inc. | 14.85% | -3.07% | -3.14% | 0.17% | -1.91% | -2.75% | |
| Micron Technology Inc. | — | 14.24% | 1.61% | -11.01% | 17.20% | 12.88% | |
| NVIDIA Corp. | 113.77% | 144.85% | 89.32% | 10.91% | 53.12% | 33.44% | |
| Qualcomm Inc. | — | 31.60% | 26.75% | 18.69% | 45.12% | 42.56% | |
| Texas Instruments Inc. | — | 19.02% | 19.20% | 28.83% | 49.74% | 48.28% | |
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).
1 NOPAT. See details »
2 Invested capital. See details »
3 2026 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × 5,068,432 ÷ 10,301,582 = 49.20%
4 Click competitor name to see calculations.
The financial performance between June 30, 2021, and June 30, 2026, is characterized by a substantial increase in capital efficiency and operating profitability. While the period exhibits some volatility in returns, the overall trajectory indicates a strong capacity to generate increasing value from the invested capital base.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT demonstrates significant growth, increasing from 2,157,964 thousand USD in 2021 to 5,068,432 thousand USD by 2026. A sharp increase is noted between 2021 and 2022, followed by a period of relative stability and a slight contraction in 2024. However, a strong acceleration in profit generation is observed in the final two years of the period, suggesting enhanced operational leverage.
- Invested Capital
- A consistent upward trend in invested capital is observed, rising steadily from 6,820,696 thousand USD in 2021 to 10,301,582 thousand USD in 2026. This sustained growth indicates continuous investment in the company's asset base to support operational expansion.
- Return on Invested Capital (ROIC)
- ROIC remains high throughout the period, starting at 31.64% in 2021 and ending at a peak of 49.20% in 2026. A period of decline occurred between 2022 and 2024, with the ratio falling from 42.51% to 36.99%, coinciding with a phase where invested capital grew more rapidly than NOPAT. The subsequent recovery to 49.20% indicates that recent capital expenditures have yielded high incremental returns, significantly improving the overall efficiency of the capital deployed.
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Decomposition of ROIC
KLA Corp., decomposition of ROIC
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).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
The Return on Invested Capital (ROIC) exhibits a general upward trajectory over the analyzed period, increasing from 31.64% in June 2021 to a projected 49.20% by June 2026. While the growth is not linear, characterized by a notable decline in June 2024 to 36.99%, the overall trend indicates a substantial strengthening of capital productivity and value creation.
- Operating Profit Margin (OPM)
- Profitability margins have remained robust, fluctuating between a low of 36.39% in 2021 and a projected high of 42.38% in 2026. A peak occurred in 2022 at 41.73%, followed by a period of contraction through 2024. The subsequent recovery and projected expansion suggest an improvement in operational efficiency and pricing power in the latter years of the period.
- Turnover of Capital (TO)
- Capital efficiency has shown steady improvement, rising from 1.01 in 2021 to a projected 1.32 in 2026. Aside from a temporary dip to 1.17 in 2024, the consistent rise in turnover indicates that the company is generating more revenue per unit of invested capital, reflecting optimized asset utilization.
- Effective Cash Tax Rate Impact (1 - CTR)
- The after-tax retention component remains the most stable element of the ROIC decomposition. The value has fluctuated within a narrow range between 81.14% and 87.67%. While this factor does not drive the primary volatility in returns, the projected increase to 87.67% in 2026 provides a marginal tailwind to the overall ROIC.
- ROIC Decomposition and Drivers
- The expansion of ROIC is primarily driven by the simultaneous improvement of operational margins and capital turnover. The significant surge in ROIC between 2021 and 2022 was fueled by a combined increase in both OPM and TO. Conversely, the contraction observed in 2024 resulted from a simultaneous decline in both margin and turnover, highlighting a high sensitivity to operational performance and asset efficiency. The projected peak in 2026 is the result of all three components—margin, turnover, and tax efficiency—reaching their highest levels in the analyzed sequence.
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Operating Profit Margin (OPM)
KLA Corp., OPM calculation, comparison to benchmarks
| Jun 30, 2026 | Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 5,068,432) | 3,852,307) | 3,284,868) | 3,464,285) | 3,432,493) | 2,157,964) | |
| Add: Cash operating taxes2 | 712,640) | 854,935) | 600,366) | 805,213) | 553,387) | 360,189) | |
| Net operating profit before taxes (NOPBT) | 5,781,073) | 4,707,242) | 3,885,234) | 4,269,498) | 3,985,879) | 2,518,152) | |
| Revenues | 13,579,476) | 12,156,162) | 9,812,247) | 10,496,056) | 9,211,883) | 6,918,734) | |
| Add: Increase (decrease) in deferred system and service revenue | 61,450) | (68,553) | 537,235) | 237,683) | 339,621) | 1,648) | |
| Adjusted revenues | 13,640,926) | 12,087,609) | 10,349,482) | 10,733,739) | 9,551,504) | 6,920,382) | |
| Profitability Ratio | |||||||
| OPM3 | 42.38% | 38.94% | 37.54% | 39.78% | 41.73% | 36.39% | |
| Benchmarks | |||||||
| OPM, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | 12.01% | 8.35% | 2.02% | 5.31% | 22.70% | |
| Analog Devices Inc. | — | 26.56% | 20.23% | 32.00% | 27.59% | 20.52% | |
| Applied Materials Inc. | — | 32.79% | 29.32% | 29.22% | 30.32% | 30.54% | |
| Broadcom Inc. | — | 40.10% | 26.40% | 45.19% | 42.94% | 30.96% | |
| Intel Corp. | — | 3.41% | -21.05% | -0.86% | 13.58% | 28.05% | |
| Lam Research Corp. | 34.88% | 36.08% | 27.18% | 28.38% | 35.59% | 34.25% | |
| Marvell Technology Inc. | 39.11% | -6.98% | -9.58% | 4.55% | -7.16% | -8.08% | |
| Micron Technology Inc. | — | 25.89% | 5.12% | -36.77% | 31.50% | 23.15% | |
| NVIDIA Corp. | 65.44% | 64.15% | 55.52% | 15.97% | 37.99% | 28.45% | |
| Qualcomm Inc. | — | 28.26% | 26.67% | 21.48% | 35.06% | 30.10% | |
| Texas Instruments Inc. | — | 35.56% | 38.37% | 44.51% | 51.22% | 49.60% | |
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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2026 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenues
= 100 × 5,781,073 ÷ 13,640,926 = 42.38%
4 Click competitor name to see calculations.
The operational performance from 2021 to 2026 exhibits a general upward trajectory in both revenue and operating profit, despite a cyclical contraction observed during the 2024 fiscal period.
- Revenue and Profitability Trends
- Adjusted revenues grew from approximately 6.92 billion in 2021 to a projected 13.64 billion by 2026. This growth is mirrored by the Net Operating Profit Before Taxes (NOPBT), which is expected to increase from 2.52 billion in 2021 to 5.78 billion by 2026. A temporary decline occurred in 2024, where NOPBT dropped to 3.89 billion from 4.27 billion in the prior year, correlating with a slight decrease in adjusted revenues to 10.35 billion.
- Operating Profit Margin (OPM) Analysis
- The OPM demonstrates fluctuations within a range of 36.39% to 42.38%. A significant expansion occurred between 2021 and 2022, with the margin rising to 41.73%. This was followed by a gradual compression over the subsequent two years, reaching a period low of 37.54% in 2024. Projections indicate a recovery phase, with the OPM expected to climb to 38.94% in 2025 and reach a peak of 42.38% by June 30, 2026.
- Operational Efficiency and Outlook
- The maintenance of operating margins consistently above 36% suggests strong structural profitability and cost management. The projected growth for 2025 and 2026 indicates an expectation of increased operational leverage, as the forecast suggests that operating profit will expand at a rate that exceeds the growth of adjusted revenues.
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Turnover of Capital (TO)
KLA Corp., TO calculation, comparison to benchmarks
| Jun 30, 2026 | Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Revenues | 13,579,476) | 12,156,162) | 9,812,247) | 10,496,056) | 9,211,883) | 6,918,734) | |
| Add: Increase (decrease) in deferred system and service revenue | 61,450) | (68,553) | 537,235) | 237,683) | 339,621) | 1,648) | |
| Adjusted revenues | 13,640,926) | 12,087,609) | 10,349,482) | 10,733,739) | 9,551,504) | 6,920,382) | |
| Invested capital1 | 10,301,582) | 9,244,891) | 8,881,599) | 8,526,100) | 8,075,406) | 6,820,696) | |
| Efficiency Ratio | |||||||
| TO2 | 1.32 | 1.31 | 1.17 | 1.26 | 1.18 | 1.01 | |
| Benchmarks | |||||||
| TO, Competitors3 | |||||||
| Advanced Micro Devices Inc. | — | 0.56 | 0.44 | 0.39 | 0.40 | 2.65 | |
| Analog Devices Inc. | — | 0.26 | 0.22 | 0.28 | 0.27 | 0.16 | |
| Applied Materials Inc. | — | 1.41 | 1.44 | 1.49 | 1.73 | 1.57 | |
| Broadcom Inc. | — | 0.43 | 0.37 | 0.57 | 0.53 | 0.42 | |
| Intel Corp. | — | 0.45 | 0.58 | 0.59 | 0.71 | 0.89 | |
| Lam Research Corp. | 1.29 | 1.20 | 0.99 | 1.14 | 1.35 | 1.24 | |
| Marvell Technology Inc. | 0.43 | 0.32 | 0.29 | 0.30 | 0.22 | 0.33 | |
| Micron Technology Inc. | — | 0.61 | 0.47 | 0.29 | 0.58 | 0.60 | |
| NVIDIA Corp. | 2.06 | 2.76 | 1.98 | 1.26 | 1.49 | 1.28 | |
| Qualcomm Inc. | — | 1.42 | 1.26 | 1.14 | 1.50 | 1.66 | |
| Texas Instruments Inc. | — | 0.62 | 0.60 | 0.78 | 1.14 | 1.12 | |
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).
1 Invested capital. See details »
2 2026 Calculation
TO = Adjusted revenues ÷ Invested capital
= 13,640,926 ÷ 10,301,582 = 1.32
3 Click competitor name to see calculations.
An analysis of capital efficiency from June 30, 2021, through June 30, 2026, reveals a general upward trajectory in asset utilization, characterized by significant growth in adjusted revenues relative to the expanded capital base.
- Revenue and Capital Expansion
- Adjusted revenues increased from US$ 6.92 billion in 2021 to a projected US$ 13.64 billion by 2026. This growth was supported by a steady rise in invested capital, which expanded from US$ 6.82 billion to US$ 10.30 billion over the same period. A marginal contraction in revenues occurred in 2024, decreasing to US$ 10.35 billion from US$ 10.73 billion in the prior year, while invested capital continued its consistent growth.
- Turnover of Capital Trends
- The turnover of capital ratio improved from 1.01 in 2021 to a projected 1.32 by 2026, indicating enhanced efficiency in generating sales per unit of invested capital. A temporary decline in this efficiency is observed in 2024, where the ratio dropped to 1.17. This dip is directly correlated with the decline in adjusted revenues occurring while the invested capital base continued to grow.
- Operational Efficiency Outlook
- Following the 2024 volatility, a recovery in efficiency is projected for 2025 and 2026, with the turnover ratio reaching 1.31 and 1.32, respectively. This trend suggests a forecast of strengthened operational leverage and a more effective deployment of invested resources in the final two years of the analyzed period.
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Effective Cash Tax Rate (CTR)
KLA Corp., CTR calculation, comparison to benchmarks
| Jun 30, 2026 | Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net operating profit after taxes (NOPAT)1 | 5,068,432) | 3,852,307) | 3,284,868) | 3,464,285) | 3,432,493) | 2,157,964) | |
| Add: Cash operating taxes2 | 712,640) | 854,935) | 600,366) | 805,213) | 553,387) | 360,189) | |
| Net operating profit before taxes (NOPBT) | 5,781,073) | 4,707,242) | 3,885,234) | 4,269,498) | 3,985,879) | 2,518,152) | |
| Tax Rate | |||||||
| CTR3 | 12.33% | 18.16% | 15.45% | 18.86% | 13.88% | 14.30% | |
| Benchmarks | |||||||
| CTR, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | -8.77% | 71.15% | 143.92% | 111.01% | 5.73% | |
| Analog Devices Inc. | — | 25.25% | 29.57% | 20.23% | 21.73% | 25.70% | |
| Applied Materials Inc. | — | 11.78% | 20.15% | 15.68% | 11.76% | 12.33% | |
| Broadcom Inc. | — | 8.80% | 18.61% | 10.78% | 9.59% | 16.50% | |
| Intel Corp. | — | 67.96% | — | — | 57.13% | 12.07% | |
| Lam Research Corp. | 15.98% | 13.52% | 18.07% | 16.15% | 13.55% | 12.57% | |
| Marvell Technology Inc. | 11.83% | — | — | 87.58% | — | — | |
| Micron Technology Inc. | — | 9.95% | 33.29% | — | 6.38% | 6.96% | |
| NVIDIA Corp. | 15.80% | 18.23% | 18.77% | 45.94% | 6.28% | 8.10% | |
| Qualcomm Inc. | — | 21.01% | 20.47% | 23.51% | 14.27% | 14.84% | |
| Texas Instruments Inc. | — | 13.50% | 16.30% | 16.49% | 14.83% | 12.93% | |
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).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2026 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × 712,640 ÷ 5,781,073 = 12.33%
4 Click competitor name to see calculations.
An analysis of the financial results from June 30, 2021, to June 30, 2026, reveals a general upward trajectory in profitability accompanied by significant volatility in the effective cash tax rate. While operational earnings expanded over the period, the actual cash outflows for taxes did not scale proportionally, indicating fluctuations in tax efficiency or the utilization of tax credits.
- Net Operating Profit Before Taxes (NOPBT)
- Operational profitability demonstrated a strong growth trend, increasing from 2,518,152 thousand dollars in 2021 to 5,781,073 thousand dollars by 2026. A brief contraction occurred in 2024, where profit dipped to 3,885,234 thousand dollars, before recovering sharply in 2025 and 2026. This represents a substantial overall expansion of the pre-tax operating base.
- Cash Operating Taxes
- Cash tax expenditures exhibited non-linear growth. Outflows rose steadily from 360,189 thousand dollars in 2021 to a peak of 854,935 thousand dollars in 2025. Notably, despite the record high NOPBT achieved in 2026, cash operating taxes decreased to 712,640 thousand dollars, suggesting a decoupling of taxable income and actual cash tax payments in the final year of the period.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate remained volatile throughout the six-year period, fluctuating between a high of 18.86% in 2023 and a low of 12.33% in 2026. A period of relative stability was observed between 2021 and 2022, followed by a sharp increase in 2023. The most significant shift occurred in 2026, where the CTR dropped to its lowest point despite the highest level of operating profit, indicating an improvement in cash tax efficiency.
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