KLA Corp. (NASDAQ:KLAC)

Debt to Equity Ratio

The debt to equity ratio exhibits significant fluctuations over the analyzed period. Initially, it shows a moderate decline from 1.30 in 2020 to 1.02 in 2021, followed by a sharp increase peaking at 4.75 in 2022. Subsequently, the ratio decreases steadily to 1.25 by 2025. Including operating lease liabilities follows a similar trend but with slightly higher values at each point.

Debt to Capital Ratio

This ratio demonstrates a general upward trend from 0.57 in 2020 to a peak of 0.83 in 2022, indicating increased reliance on debt within the company’s capital structure. Following 2022, the ratio declines gradually to 0.56 by 2025. Incorporating operating lease liabilities yields nearly identical figures.

Debt to Assets Ratio

A similar pattern is evident in the debt to assets ratio, moving from a low of 0.34 in 2021 to a high of approximately 0.54 in 2022, then declining back to roughly the initial levels by 2025. Including operating lease liabilities slightly increases the ratio values but maintains the same shape over time.

Financial Leverage

Financial leverage follows a pattern akin to the debt to equity ratio. It remains relatively stable between 2020 and 2021, spikes dramatically to 8.99 in 2022, and then retreats toward the 3.42 mark by 2025. This suggests a period of significantly increased leverage around 2022, with a return to more moderate leverage subsequently.

Interest Coverage Ratio

The interest coverage ratio improves significantly from 9.22 in 2020 to a peak of 22.76 in 2022, reflecting enhanced ability to cover interest expenses despite the increased leverage observed. Following 2022, the ratio declines but remains at healthier levels, standing at 16.37 in 2025.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio shows a comparable trajectory, increasing from 7.74 in 2020 to 18.72 in 2022, then decreasing to 14.13 by 2025. This mirrors the changes observed in interest coverage, indicating consistent trends in the company’s capacity to cover fixed charges over time.

Summary

Overall, the financial data reveals a pronounced increase in leverage measures across 2021-2022, marked by spikes in debt-related ratios and financial leverage. This period coincides with the highest coverage ratios, indicating strong earnings or cash flow relative to fixed financial obligations despite elevated debt levels. After 2022, leverage decreases steadily, trending toward more conservative capital structures, while coverage ratios decline but remain at levels that suggest solid financial stability. The inclusion of operating lease liabilities slightly elevates debt ratios but does not alter the overall pattern or conclusions.

Total Debt

Total debt exhibited significant fluctuations over the observed periods. There was a relatively stable amount around 3.46 million US$ thousands in 2020 and 3.44 million US$ thousands in 2021. However, in 2022, total debt nearly doubled to approximately 6.66 million US$ thousands. This elevated level declined moderately in 2023 to around 5.89 million US$ thousands, followed by a slight increase in 2024 to about 6.63 million US$ thousands, and then a decrease again in 2025 to approximately 5.88 million US$ thousands.

Total KLA Stockholders' Equity

Stockholders’ equity showed considerable variability across the years. Starting at 2.67 million US$ thousands in 2020, equity rose substantially to 3.38 million in 2021. This was followed by a notable decline in 2022 to roughly 1.40 million US$ thousands. Subsequently, equity recovered sharply, increasing to approximately 2.92 million US$ thousands in 2023, 3.37 million in 2024, and peaking at 4.69 million US$ thousands by 2025.

Debt to Equity Ratio

The debt to equity ratio reflects a pronounced volatility that corresponds with the changes in debt and equity levels. Initially, the ratio showed a downward trend from 1.3 in 2020 to 1.02 in 2021, indicating a strengthening equity base relative to debt. A sharp increase occurred in 2022, with the ratio climbing steeply to 4.75, suggesting a substantial rise in debt relative to equity. This was followed by a marked reduction to 2.02 in 2023 and slight declines to 1.97 in 2024 and 1.25 in 2025, indicating an improving balance between debt and equity, with equity gaining relative strength over this period.

Summary of Trends

The overall trend indicates that while the company experienced a significant spike in leverage in 2022, driven by a sharp increase in total debt coupled with a drop in equity, there has been a notable recovery phase since then. By 2025, both debt and equity levels suggest a more balanced capital structure, with the debt to equity ratio returning closer to levels observed in the earlier part of the decade. The fluctuations in equity especially underline periods of potential financial restructuring or changes in retained earnings and other equity components.

The analysis of the financial data reveals several significant trends regarding the company's debt levels, equity, and leverage ratios over the analyzed periods.

Total Debt (Including Operating Lease Liability)

The total debt showed a relatively stable level between 2020 and 2021, with a slight decrease from approximately $3.57 billion to $3.55 billion. However, there was a sharp increase in 2022, where total debt nearly doubled to about $6.77 billion. Following this peak, debt decreased moderately in 2023 to approximately $6.06 billion, then increased again in 2024 to about $6.82 billion before falling to $6.09 billion in 2025. Overall, the debt levels exhibit considerable volatility with significant increases during the mid-period followed by partial reductions.

Total Stockholders’ Equity

Stockholders' equity increased significantly from 2020 to 2021, rising from roughly $2.67 billion to $3.38 billion. In 2022, equity sharply decreased to about $1.40 billion, indicating a notable decline in shareholder value or retained earnings. Subsequently, equity rebounded in 2023 to nearly $2.92 billion and continued increasing in 2024 and 2025, reaching approximately $3.37 billion and $4.69 billion respectively. This pattern suggests a recovery and strengthening of the equity base in the latter years after the substantial dip in 2022.

Debt to Equity Ratio (Including Operating Lease Liability)

The leverage ratio declined from 1.34 in 2020 to 1.05 in 2021, indicating reduced financial leverage and relatively higher equity compared to debt. In 2022, this ratio escalated sharply to 4.83, reflecting the large increase in debt coupled with the decrease in equity, signaling significantly higher financial risk during that period. From 2023 onward, the ratio decreased steadily, dropping to 2.08 in 2023, then slightly lowering in 2024 to 2.02, and further improving to 1.3 in 2025. This trend demonstrates a reduction in leverage and improved financial stability after the elevated risk in 2022.

In summary, the data reveals a period of increased financial risk and leverage in 2022, driven by a large rise in total debt and a simultaneous decline in equity. Following this, there is a clear trend toward deleveraging and equity strengthening in subsequent years, resulting in a more balanced capital structure by 2025. The improvements in the debt-to-equity ratio in the final years suggest a strategic focus on reducing financial risk and enhancing shareholder value.

Total Debt

The total debt exhibits notable fluctuations over the reviewed periods. Initially, the debt decreased marginally from approximately 3.47 billion in mid-2020 to 3.44 billion in mid-2021. This was followed by a sharp increase reaching over 6.66 billion by mid-2022. Subsequently, it reduced to about 5.89 billion in mid-2023, rose again to 6.63 billion in mid-2024, and then declined to approximately 5.88 billion in mid-2025. Overall, the debt level demonstrates volatility with significant peaks occurring in 2022 and 2024.

Total Capital

Total capital shows a consistent upward trend throughout the entire period analyzed. Starting at roughly 6.14 billion in mid-2020, capital increased steadily each year, reaching approximately 10.58 billion by mid-2025. This indicates progressive growth in the company’s capital base over the years.

Debt to Capital Ratio

The debt to capital ratio reflects the changes noted in both debt and capital. It began at 0.57 in mid-2020, decreased to a low of 0.50 in mid-2021, then rose sharply to 0.83 by mid-2022, signaling a significant increase in leverage during that year. After this peak, the ratio declined steadily to 0.67 in mid-2023, remained relatively stable at 0.66 in mid-2024, and further dropped to 0.56 by mid-2025. This pattern suggests that leverage was highest in 2022 but has generally decreased thereafter, aligning with the company's growth in total capital.

The financial data reveals notable variability in the levels of total debt and total capital over the observed periods, impacting the debt-to-capital ratio.

Total Debt (Including Operating Lease Liability)

The total debt exhibited moderate fluctuations, beginning at approximately 3.57 billion US dollars in mid-2020 and declining slightly in mid-2021. It then sharply increased to over 6.77 billion in mid-2022, followed by a decrease in mid-2023. Subsequently, the debt rose again to around 6.82 billion in mid-2024 and decreased to approximately 6.09 billion in mid-2025. This pattern indicates periods of increased borrowing or lease obligations, followed by partial reductions.

Total Capital (Including Operating Lease Liability)

Total capital showed a consistent growth trend throughout the period. Starting from 6.23 billion in mid-2020, it increased each year, reaching about 10.78 billion by mid-2025. The steady upward trajectory suggests strengthening capitalization or an accumulation of equity and debt capital.

Debt to Capital Ratio (Including Operating Lease Liability)

The debt-to-capital ratio began at a relatively high level of 0.57 in mid-2020 but decreased to 0.51 in mid-2021, reflecting an improvement in capital structure with relatively less leverage. However, the ratio spiked significantly to 0.83 in mid-2022, corresponding with the marked increase in total debt in that period. Following this peak, the ratio improved, declining to 0.67 in both mid-2023 and mid-2024, and further decreasing to 0.56 in mid-2025. This trend indicates a reduction in leverage risk after the 2022 spike, moving towards a more balanced capital structure.

In summary, the data reflects a company that has experienced fluctuations in its debt levels, with a pronounced increase in debt relative to capital in mid-2022. Despite these fluctuations, there is a prevailing long-term growth in total capital. The debt-to-capital ratio trends suggest an initial improvement in leverage management, followed by a temporary increase in risk, and a subsequent return to more conservative leverage levels by mid-2025.

Total Debt

The total debt experienced notable fluctuations over the analyzed periods. Initially, it remained relatively stable with an amount around $3.46 billion in 2020 and a slight decrease to approximately $3.44 billion in 2021. However, in 2022, there was a sharp increase, nearly doubling to about $6.66 billion. Subsequently, total debt decreased to $5.89 billion in 2023, increased again to $6.63 billion in 2024, and finally decreased to $5.88 billion in 2025. This pattern indicates a period of significant leverage adjustment followed by attempts to manage or reduce debt levels after peaks.

Total Assets

Total assets displayed a consistent upward trend throughout all periods. Beginning at approximately $9.28 billion in 2020, the asset base expanded steadily each year, reaching around $16.07 billion by 2025. This steady increase suggests continuous investment or growth in asset holdings, which likely contributes to the company's operational scaling or enhancement of its resource base.

Debt to Assets Ratio

The debt to assets ratio varied significantly over the periods, reflecting the interplay between fluctuations in total debt and the steady increase in total assets. The ratio decreased slightly from 0.37 in 2020 to 0.34 in 2021, indicating a relative reduction in leverage. It then surged to 0.53 in 2022, the highest point in the timeline, aligning with the sharp debt increase and substantial but comparatively slower asset growth. After 2022, the ratio decreased to 0.42 in 2023, then marginally rose to 0.43 in 2024 before declining again to 0.37 in 2025. Overall, despite debt spikes, leverage levels were brought under control in the latest periods, trending back to initial levels seen in 2020.

Total Debt (Including Operating Lease Liability)

The total debt exhibited fluctuations over the analyzed period. Initially, it remained relatively stable around the range of approximately $3.55 billion between 2020 and 2021. Subsequently, there was a significant increase in 2022, with the debt almost doubling to approximately $6.77 billion. Following this peak, total debt decreased in 2023 to approximately $6.06 billion, increased again in 2024 to nearly $6.82 billion, and then declined in 2025 to about $6.09 billion. This pattern indicates episodes of increased leverage with intermittent reductions, suggesting active debt management or refinancing.

Total Assets

Total assets demonstrated a consistent upward trend throughout the period, increasing steadily from approximately $9.28 billion in 2020 to around $16.07 billion by 2025. This continuous growth suggests ongoing asset acquisition and expansion, reflecting possibly favorable investment or operational growth strategies.

Debt to Assets Ratio (Including Operating Lease Liability)

The debt to assets ratio showed notable variability. It started at 0.38 in 2020, decreased slightly to 0.35 in 2021, which indicates a relatively lower leverage position relative to asset size during this period. The ratio then rose sharply to 0.54 in 2022, corresponding with the notable increase in debt, which signals increased leverage and potentially higher financial risk. Following 2022, the ratio declined to 0.43 in 2023, stabilized near 0.44 in 2024, and further dropped to 0.38 in 2025. This trend suggests an improvement in the company’s leverage position in the last two years, aligning with a reduction in the relative burden of debt on assets.

Total assets

The total assets of the company have shown a consistent upward trend over the reported periods, increasing from approximately 9.28 billion USD in mid-2020 to around 16.07 billion USD by mid-2025. This steady growth indicates ongoing expansion and asset accumulation.

Total KLA stockholders’ equity

Stockholders' equity increased substantially from 2.67 billion USD in 2020 to a peak of around 3.38 billion USD in 2021. However, there was a marked decline in 2022 to about 1.40 billion USD, followed by a recovery beginning in 2023 and reaching a significantly higher level of approximately 4.69 billion USD by 2025. This pattern suggests volatility in equity possibly driven by either changes in retained earnings, share repurchases, or other equity adjustments during the period.

Financial leverage

The financial leverage ratio shows notable variability. It began at a relatively high level of 3.48 in 2020, decreased to 3.04 in 2021, then sharply increased to 8.99 in 2022. Subsequently, leverage decreased steadily over the following years, down to 3.42 by 2025. These fluctuations imply shifts in the proportion of debt to equity, with a particularly leveraged position in 2022 that was later reduced, possibly reflecting management actions to deleverage or restructure capital.

Earnings before interest and tax (EBIT)

The EBIT showed a significant upward trend from 2020 to 2023, increasing from approximately 1.48 billion USD to over 4.08 billion USD. This represents a near threefold increase over the three-year period. However, in 2024 there was a decline to roughly 3.5 billion USD, followed by a strong recovery in 2025, reaching nearly 4.95 billion USD, indicating volatility but overall growth in operating profitability over the six-year span.

Interest expense

The interest expense remained relatively stable around 160 million USD during 2020 to 2022, before experiencing a notable increase in 2023 to approximately 297 million USD. This elevated level continued through 2024 and 2025, hovering slightly above 300 million USD. This pattern suggests increased borrowing or higher interest rates impacting the company’s financing costs in the latter years of the period under review.

Interest coverage ratio

The interest coverage ratio, indicative of the company's ability to meet interest obligations from EBIT, improved markedly from 9.22 in 2020 to a peak of 22.76 in 2022, reflecting strong earnings growth compared to interest costs. Subsequently, the ratio declined in 2023 and 2024 to 13.76 and 11.25 respectively, coinciding with both increased interest expense and a temporary EBIT decline. The ratio rebounded to 16.37 in 2025, suggesting restored capacity to cover interest expenses comfortably, although not reaching prior peak levels.

Earnings before Fixed Charges and Tax

The earnings before fixed charges and tax exhibit a generally increasing trend over the examined years. Starting at approximately 1.51 billion US dollars in mid-2020, the figure rose substantially to about 2.56 billion in 2021 and continued a strong upward trajectory to reach around 4.13 billion by mid-2023. A decline is observed in mid-2024, where earnings decreased to approximately 3.56 billion; however, this was followed by a notable recovery in mid-2025, reaching nearly 5.00 billion, the highest in the observed period.

Fixed Charges

Fixed charges remained relatively stable from mid-2020 through mid-2022, hovering close to the 195-197 million US dollars range. Beginning mid-2023, there was a significant increase to approximately 339 million, which further increased slightly to about 366 million in mid-2024 before marginally declining to around 354 million in mid-2025. This indicates a marked rise in fixed obligations starting in 2023 compared to previous years.

Fixed Charge Coverage Ratio

The fixed charge coverage ratio experienced considerable fluctuations throughout the period. The ratio improved markedly from 7.74 in mid-2020 to a peak of 18.72 in mid-2022, reflecting a strong ability to cover fixed charges with earnings. This was followed by a decline to 12.19 in mid-2023 and a continued decrease to 9.72 in mid-2024, suggesting that increased fixed charges and the dip in earnings affected coverage. By mid-2025, the ratio rebounded to 14.13, indicating an improvement but not reaching prior peak levels.