Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
KLA Corp., profitability ratios
Based on: 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), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
The financial ratios exhibit distinct trends over the six-year period ending June 30, 2024. The gross profit margin remains relatively stable, fluctuating slightly but hovering close to 60%, indicating consistent production or service profitability relative to sales.
The operating profit margin shows more pronounced variability. After a decrease from 30.41% in 2019 to 25.87% in 2020, it improves substantially, reaching a peak of 39.67% in 2022 before gradually declining to 34.1% in 2024. This suggests fluctuations in operating efficiency or changes in operating expenses impacting profit generation before interest and taxes.
The net profit margin mirrors the trend observed in operating profit margin, with an initial drop from 25.73% in 2019 to 20.96% in 2020, then a marked increase peaking at 36.06% in 2022, followed by a steady decline to 28.15% by 2024. This pattern reflects the combined influence of operational performance and other elements such as taxes and financing costs on the bottom line.
Return on equity (ROE) shows significant volatility. It slightly increases from 44.21% in 2019 to 45.65% in 2020, then dramatically jumps to 61.53% in 2021 and peaks at an exceptionally high 237.04% in 2022. Following this peak, it declines sharply but remains substantial at 82% in 2024. This fluctuation may result from large variations in net income or changes in shareholders' equity, possibly due to leverage or one-time events impacting equity.
Return on assets (ROA) steadily increases from 13.05% in 2019 to a high of 26.37% in 2022, indicating improved efficiency in asset utilization to generate earnings. However, it falls to 17.9% by 2024, suggesting a reduction in asset profitability after the 2022 peak.
Overall, the data indicate that while gross profitability remains stable, operating and net profit margins exhibit notable improvement around 2021-2022 followed by moderation. Both ROE and ROA show significant increases culminating in 2022, with subsequent declines, pointing to fluctuating performance dynamics possibly influenced by operational factors, asset management, and capital structure changes during the period.
Return on Sales
Return on Investment
Gross Profit Margin
KLA Corp., gross profit margin calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Gross margin | 5,884,174) | 6,277,749) | 5,619,442) | 4,146,569) | 3,356,863) | 2,699,527) | |
| Revenues | 9,812,247) | 10,496,056) | 9,211,883) | 6,918,734) | 5,806,424) | 4,568,904) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 59.97% | 59.81% | 61.00% | 59.93% | 57.81% | 59.08% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Advanced Micro Devices Inc. | 49.35% | 46.12% | 44.93% | 48.25% | 44.53% | — | |
| Analog Devices Inc. | 57.08% | 64.01% | 62.70% | 61.83% | 65.87% | 67.00% | |
| Applied Materials Inc. | 47.46% | 46.70% | 46.51% | 47.32% | 44.72% | 43.72% | |
| Broadcom Inc. | 63.03% | 68.93% | 66.55% | 61.36% | 56.58% | 55.24% | |
| Intel Corp. | 32.66% | 40.04% | 42.61% | 55.45% | 56.01% | — | |
| Lam Research Corp. | 47.32% | 44.62% | 45.69% | 46.53% | 45.88% | 45.15% | |
| Micron Technology Inc. | 22.35% | -9.11% | 45.18% | 37.62% | 30.57% | 45.72% | |
| NVIDIA Corp. | 72.72% | 56.93% | 64.93% | 62.34% | 61.99% | — | |
| Qualcomm Inc. | 56.21% | 55.70% | 57.84% | 57.51% | 60.67% | 64.57% | |
| Texas Instruments Inc. | 58.14% | 62.90% | 68.76% | 67.47% | 64.10% | — | |
Based on: 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), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Gross profit margin = 100 × Gross margin ÷ Revenues
= 100 × 5,884,174 ÷ 9,812,247 = 59.97%
2 Click competitor name to see calculations.
The financial data demonstrates a general upward trend in both revenues and gross margin over the review period from June 2019 to June 2024. Revenues increased significantly from approximately 4.57 billion USD in 2019 to a peak of around 10.50 billion USD in 2023, followed by a slight decline to approximately 9.81 billion USD in 2024. This indicates a strong growth phase with a minor downturn in the most recent year.
Gross margin exhibited a similar growth pattern, rising steadily from approximately 2.70 billion USD in 2019 to a high of about 6.28 billion USD in 2023. However, the gross margin decreased to about 5.88 billion USD in 2024, aligning with the revenue contraction observed in the same year.
The gross profit margin percentage reveals relative stability throughout the period, fluctuating moderately between 57.81% and 61%. The margin increased from 59.08% in 2019 to a peak of 61.00% in 2022, then slightly declined to around 59.97% in 2024. This stability indicates consistent profitability levels relative to revenues, despite variations in absolute values.
- Revenue Trends
- Strong revenue growth was observed from 2019 to 2023, exceeding a 130% increase. The slight decrease in 2024 suggests potential market challenges or operational factors affecting sales.
- Gross Margin Trends
- The gross margin closely tracks revenue changes, reflecting effective cost management during the growth phase. The decline in 2024 gross margin corresponds with the revenue decrease, indicating proportional impact on profitability.
- Gross Profit Margin Percentage
- The relatively stable gross profit margin percentage points to maintained operational efficiency and pricing strategy, even amid fluctuating sales volumes.
Operating Profit Margin
KLA Corp., operating profit margin calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Income from operations | 3,346,210) | 3,994,696) | 3,654,181) | 2,488,480) | 1,502,201) | 1,389,373) | |
| Revenues | 9,812,247) | 10,496,056) | 9,211,883) | 6,918,734) | 5,806,424) | 4,568,904) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 34.10% | 38.06% | 39.67% | 35.97% | 25.87% | 30.41% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Advanced Micro Devices Inc. | 7.37% | 1.77% | 5.36% | 22.20% | 14.02% | — | |
| Analog Devices Inc. | 21.56% | 31.07% | 27.29% | 23.12% | 26.74% | 28.55% | |
| Applied Materials Inc. | 28.95% | 28.86% | 30.20% | 29.87% | 25.37% | 22.93% | |
| Broadcom Inc. | 26.10% | 45.25% | 42.84% | 31.03% | 16.80% | 15.24% | |
| Intel Corp. | -21.99% | 0.17% | 3.70% | 24.62% | 30.41% | — | |
| Lam Research Corp. | 28.61% | 29.69% | 31.24% | 30.64% | 26.62% | 25.53% | |
| Micron Technology Inc. | 5.19% | -36.97% | 31.54% | 22.68% | 14.01% | 31.51% | |
| NVIDIA Corp. | 54.12% | 15.66% | 37.31% | 27.18% | 26.07% | — | |
| Qualcomm Inc. | 25.85% | 21.74% | 35.88% | 29.16% | 26.58% | 31.59% | |
| Texas Instruments Inc. | 34.94% | 41.85% | 50.63% | 48.84% | 40.76% | — | |
| Operating Profit Margin, Sector | |||||||
| Semiconductors & Semiconductor Equipment | 21.36% | 18.50% | 27.34% | 28.30% | 25.89% | — | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | 26.62% | 24.49% | 26.43% | 26.73% | 22.69% | — | |
Based on: 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), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Operating profit margin = 100 × Income from operations ÷ Revenues
= 100 × 3,346,210 ÷ 9,812,247 = 34.10%
2 Click competitor name to see calculations.
- Income from Operations
- The income from operations displayed a consistent upward trajectory from June 30, 2019, through June 30, 2023. It rose from approximately 1.39 billion USD in 2019 to nearly 4 billion USD in 2023, indicating strong operational growth over the five-year period. However, in the fiscal year ending June 30, 2024, there was a notable decline to approximately 3.35 billion USD, representing a reduction of around 16% compared to the previous year. This decrease may suggest challenges in operational efficiency or market conditions affecting profitability in the most recent period.
- Revenues
- Revenues showed a steady and substantial increase from 2019 to 2023, growing from roughly 4.57 billion USD to nearly 10.5 billion USD, more than doubling over four years. This trend reflects robust top-line expansion. Nevertheless, the revenue for the fiscal year ending June 30, 2024, declined to about 9.81 billion USD, showing a contraction of approximately 6.5% from the previous year. This decline coincides with the drop in income from operations, suggesting the company faced broader market headwinds affecting both sales volume and operational income.
- Operating Profit Margin
- The operating profit margin exhibited some volatility but generally indicated strong profitability. It started at 30.41% in 2019, dipped to 25.87% in 2020, and then increased sharply to a peak of 39.67% in 2022. The margin slightly decreased to 38.06% in 2023 and further declined to 34.1% in 2024. Despite this recent downward trend, the margin remains above the 2019 level, demonstrating the company's ability to maintain a relatively high level of operational profitability throughout the period, albeit with some pressure in the most recent year.
- Overall Insights
- Over the six-year period analyzed, the company experienced significant growth in both revenues and income from operations, accompanied by strong operating profit margins. The peak operational performance occurred around 2022 and 2023, followed by a noticeable decline in both revenue and income from operations in 2024. The operating margin, while reduced in the latest year, remains considerably strong. These patterns suggest that while the company has demonstrated resilience and robust profitability historically, recent data points to potential challenges or shifts in market conditions that have impacted financial results in the last fiscal year.
Net Profit Margin
KLA Corp., net profit margin calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income attributable to KLA | 2,761,896) | 3,387,277) | 3,321,807) | 2,078,292) | 1,216,785) | 1,175,617) | |
| Revenues | 9,812,247) | 10,496,056) | 9,211,883) | 6,918,734) | 5,806,424) | 4,568,904) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 28.15% | 32.27% | 36.06% | 30.04% | 20.96% | 25.73% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Advanced Micro Devices Inc. | 6.36% | 3.77% | 5.59% | 19.24% | 25.50% | — | |
| Analog Devices Inc. | 17.35% | 26.94% | 22.88% | 19.00% | 21.79% | 22.75% | |
| Applied Materials Inc. | 26.41% | 25.86% | 25.31% | 25.53% | 21.04% | 18.52% | |
| Broadcom Inc. | 11.43% | 39.31% | 34.62% | 24.54% | 12.39% | 12.05% | |
| Intel Corp. | -35.32% | 3.11% | 12.71% | 25.14% | 26.84% | — | |
| Lam Research Corp. | 25.68% | 25.88% | 26.73% | 26.72% | 22.42% | 22.70% | |
| Micron Technology Inc. | 3.10% | -37.54% | 28.24% | 21.16% | 12.54% | 26.97% | |
| NVIDIA Corp. | 48.85% | 16.19% | 36.23% | 25.98% | 25.61% | — | |
| Qualcomm Inc. | 26.03% | 20.19% | 29.27% | 26.94% | 22.09% | 18.07% | |
| Texas Instruments Inc. | 30.68% | 37.16% | 43.68% | 42.35% | 38.69% | — | |
| Net Profit Margin, Sector | |||||||
| Semiconductors & Semiconductor Equipment | 14.94% | 17.06% | 25.54% | 25.83% | 23.10% | — | |
| Net Profit Margin, Industry | |||||||
| Information Technology | 20.64% | 20.39% | 22.45% | 23.62% | 19.67% | — | |
Based on: 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), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
Net profit margin = 100 × Net income attributable to KLA ÷ Revenues
= 100 × 2,761,896 ÷ 9,812,247 = 28.15%
2 Click competitor name to see calculations.
- Net Income Attributable to KLA
- The net income demonstrated an overall upward trajectory from 2019 through 2023, increasing from approximately 1.18 billion US dollars in 2019 to a peak of about 3.39 billion US dollars in 2023. However, a noticeable decline occurred in 2024, with net income dropping to around 2.76 billion US dollars. This suggests strong profitability growth over most of the period with some weakening in the latest year.
- Revenues
- Revenues showed consistent growth over the six-year period, rising from roughly 4.57 billion US dollars in 2019 to a high of approximately 10.50 billion US dollars in 2023. In 2024, revenues decreased slightly to about 9.81 billion US dollars. The overall trend indicates significant top-line expansion with a slight contraction in the final year.
- Net Profit Margin
- The net profit margin fluctuated during the period but generally remained strong. It started at about 25.73% in 2019, dropped to 20.96% in 2020, then climbed to a peak of 36.06% in 2022. Afterward, it declined to 28.15% by 2024. This pattern indicates variations in profitability efficiency relative to revenues, with the highest margin occurring in 2022 followed by a decrease in subsequent years.
- Overall Analysis
- The company experienced substantial growth in both revenue and net income between 2019 and 2023, reflecting favorable business conditions and operational performance. The peak in profitability margin in 2022 suggests especially efficient operations or cost management during that year. The reduction in both net income and revenue in 2024, alongside a decline in net profit margin, may point to emerging challenges or market conditions adversely affecting financial performance.
Return on Equity (ROE)
KLA Corp., ROE calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income attributable to KLA | 2,761,896) | 3,387,277) | 3,321,807) | 2,078,292) | 1,216,785) | 1,175,617) | |
| Total KLA stockholders’ equity | 3,368,328) | 2,919,753) | 1,401,351) | 3,377,554) | 2,665,424) | 2,659,108) | |
| Profitability Ratio | |||||||
| ROE1 | 82.00% | 116.01% | 237.04% | 61.53% | 45.65% | 44.21% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Advanced Micro Devices Inc. | 2.85% | 1.53% | 2.41% | 42.18% | 42.66% | — | |
| Analog Devices Inc. | 4.65% | 9.32% | 7.54% | 3.66% | 10.17% | 11.64% | |
| Applied Materials Inc. | 37.77% | 41.94% | 53.51% | 48.08% | 34.21% | 32.94% | |
| Broadcom Inc. | 8.71% | 58.70% | 50.62% | 26.99% | 12.40% | 10.92% | |
| Intel Corp. | -18.89% | 1.60% | 7.90% | 20.83% | 25.79% | — | |
| Lam Research Corp. | 44.82% | 54.94% | 73.35% | 64.85% | 43.53% | 46.89% | |
| Micron Technology Inc. | 1.72% | -13.22% | 17.41% | 13.34% | 6.89% | 17.59% | |
| NVIDIA Corp. | 69.24% | 19.76% | 36.65% | 25.64% | 22.91% | — | |
| Qualcomm Inc. | 38.60% | 33.51% | 71.81% | 90.88% | 85.54% | 89.35% | |
| Texas Instruments Inc. | 28.39% | 38.53% | 60.02% | 58.27% | 60.90% | — | |
| ROE, Sector | |||||||
| Semiconductors & Semiconductor Equipment | 11.77% | 13.30% | 22.70% | 25.79% | 24.53% | — | |
| ROE, Industry | |||||||
| Information Technology | 29.37% | 32.00% | 39.15% | 42.48% | 35.75% | — | |
Based on: 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), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
ROE = 100 × Net income attributable to KLA ÷ Total KLA stockholders’ equity
= 100 × 2,761,896 ÷ 3,368,328 = 82.00%
2 Click competitor name to see calculations.
- Net Income
- The net income attributable shows a generally increasing trend from 2019 to 2023, rising from approximately 1.18 billion to 3.39 billion US dollars. However, in 2024 there is a noticeable decrease to about 2.76 billion US dollars. This indicates a peak in profitability in 2023 followed by a decline in the subsequent year, suggesting potential challenges or changes in operational performance or market conditions during the latest period.
- Total Stockholders’ Equity
- The total stockholders’ equity remains relatively stable around 2.66 to 3.38 billion US dollars, with an exception in 2022 where equity sharply declines to about 1.40 billion US dollars. This significant drop in 2022 deviates from the otherwise consistent trend, which then recovers fully in 2023 and continues to increase in 2024. The dip in 2022 could reflect a one-time event, restructuring, or substantial financial transaction impacting equity.
- Return on Equity (ROE)
- ROE exhibits a strong upward trajectory from 44.21% in 2019 to an exceptionally high 237.04% in 2022. This peak corresponds with the year of the steep equity decline, suggesting the ROE spike is influenced by the reduction in equity rather than a proportional increase in net income. After 2022, ROE declines to 116.01% in 2023 and further to 82% in 2024, reflecting normalization as equity levels recover and net income reduces somewhat. Despite this decline, the ROE in 2024 remains substantially higher compared to the earlier years, indicating robust profitability relative to equity.
Return on Assets (ROA)
KLA Corp., ROA calculation, comparison to benchmarks
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income attributable to KLA | 2,761,896) | 3,387,277) | 3,321,807) | 2,078,292) | 1,216,785) | 1,175,617) | |
| Total assets | 15,433,566) | 14,072,357) | 12,597,088) | 10,271,124) | 9,279,960) | 9,008,516) | |
| Profitability Ratio | |||||||
| ROA1 | 17.90% | 24.07% | 26.37% | 20.23% | 13.11% | 13.05% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Advanced Micro Devices Inc. | 2.37% | 1.26% | 1.95% | 25.46% | 27.78% | — | |
| Analog Devices Inc. | 3.39% | 6.79% | 5.46% | 2.66% | 5.69% | 6.37% | |
| Applied Materials Inc. | 20.86% | 22.31% | 24.41% | 22.80% | 16.19% | 14.22% | |
| Broadcom Inc. | 3.56% | 19.33% | 15.69% | 8.91% | 3.90% | 4.04% | |
| Intel Corp. | -9.55% | 0.88% | 4.40% | 11.80% | 13.65% | — | |
| Lam Research Corp. | 20.42% | 24.02% | 26.78% | 24.59% | 15.47% | 18.26% | |
| Micron Technology Inc. | 1.12% | -9.08% | 13.11% | 9.96% | 5.01% | 12.91% | |
| NVIDIA Corp. | 45.28% | 10.61% | 22.07% | 15.05% | 16.15% | — | |
| Qualcomm Inc. | 18.39% | 14.17% | 26.39% | 21.93% | 14.60% | 13.31% | |
| Texas Instruments Inc. | 13.51% | 20.12% | 32.16% | 31.48% | 28.91% | — | |
| ROA, Sector | |||||||
| Semiconductors & Semiconductor Equipment | 6.42% | 7.41% | 12.68% | 13.62% | 11.80% | — | |
| ROA, Industry | |||||||
| Information Technology | 11.95% | 12.52% | 14.57% | 14.67% | 11.45% | — | |
Based on: 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), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).
1 2024 Calculation
ROA = 100 × Net income attributable to KLA ÷ Total assets
= 100 × 2,761,896 ÷ 15,433,566 = 17.90%
2 Click competitor name to see calculations.
- Net Income Attributable to KLA
- From June 2019 to June 2023, net income showed a consistent upward trajectory, increasing from approximately 1.18 billion to 3.39 billion US dollars. This indicates strong profitability growth over the four-year period. However, in the latest period ending June 2024, there was a noticeable decline in net income to about 2.76 billion, representing a significant reduction compared to the previous year.
- Total Assets
- Total assets exhibited a steady and continuous increase throughout the entire period from June 2019 to June 2024. The asset base grew from approximately 9.01 billion US dollars to over 15.43 billion US dollars, indicating ongoing expansion and investment in the company's asset holdings.
- Return on Assets (ROA)
- ROA demonstrated an improving trend from 13.05% in June 2019 to a peak of 26.37% in June 2022, reflecting enhanced efficiency in asset utilization to generate earnings. Following this peak, ROA declined to 24.07% in June 2023 and further to 17.9% in June 2024, suggesting a reduction in asset profitability despite the continued growth in total assets.
- Summary of Financial Trends
- The data reflects strong growth in both net income and total assets over most of the observed periods, with net income reaching a high point in mid-2023 before contracting substantially in the following year. Meanwhile, asset expansion has been continuous and uninterrupted. The ROA trend aligns with net income patterns, showing improved asset efficiency until 2022, but recent declines indicate challenges in maintaining the same level of profitability relative to asset size. This could suggest either increasing costs, diminished returns on investments, or external economic factors impacting profitability.