KLA Corp. (NASDAQ:KLAC)

Inventory Turnover

The inventory turnover ratio exhibits a gradual downward trend over the observed periods, declining from 1.77 to a low near 1.28 before slightly recovering to around 1.47. This indicates a slowing in the rate at which inventory is sold or used, suggesting potentially higher inventory levels or slower sales activity in more recent quarters.

Receivables Turnover

Receivables turnover shows moderate fluctuations without a clear long-term upward or downward trend. Values fluctuate between a low near 4.59 and a high of approximately 6.24, indicating varying efficiency in collecting receivables over time, with some quarters reflecting quicker collections and others slower.

Payables Turnover

Payables turnover demonstrates some volatility but an overall increase in recent quarters, moving from a range around 7.7 to peaks above 11. This suggests a trend toward faster payment to suppliers or a reduction in accounts payable outstanding relative to cost of goods sold.

Working Capital Turnover

Working capital turnover ratio fluctuates modestly, initially increasing from about 1.9 to over 2.3, followed by a decline toward around 1.83 in later periods. This pattern indicates varying efficiency in utilizing working capital to generate sales, with some periods of stronger capital efficiency and others showing a relative decline.

Average Inventory Processing Period

The average inventory processing period tends to lengthen over the time horizon, rising from approximately 206 days to a peak near 285 days before modestly decreasing to about 248 days. This confirms the observation of slower inventory movement, possibly reflecting inventory accumulation or demand shifts.

Average Receivable Collection Period

The average period for collecting receivables is somewhat variable but generally oscillates within a range of about 59 to 79 days. This slight inconsistency signals fluctuating customer payment behaviors or changes in credit terms, without a distinct long-term deterioration or improvement.

Operating Cycle

The operating cycle lengthens gradually from around 269 days to a high near 355 days before retracting slightly to approximately 314 days. The extended operating cycle in latter periods suggests an overall slowdown in the cash-to-cash conversion process, aligning with the increasing inventory and receivables periods.

Average Payables Payment Period

The average payables payment period generally remains within 32 to 47 days but shows a slight decreasing tendency in more recent periods, moving from high 40s down to mid-30s. This may reflect a strategic decision to reduce payment delays or improve supplier relations.

Cash Conversion Cycle

The cash conversion cycle shows a clear upward trajectory, rising from near 231 days to a peak of around 320 days before a recent decline to about 282 days. This indicates an elongation in the time the company’s cash is tied up in the production and sales process, which could potentially impact liquidity and working capital efficiency.

The financial data reveals several noteworthy trends concerning the company's costs of revenues, inventories, and inventory turnover ratios over the analyzed periods.

Costs of Revenues

Costs of revenues have exhibited an overall upward trend from September 2020 through September 2025, increasing from approximately $620.6 million to about $1.24 billion. There are some fluctuations within this long-term increase. For instance, after rising steadily until December 2022, costs saw a temporary decline in early 2023 before resuming an upward trajectory through 2025. This pattern suggests periodic fluctuations in expenses against a background of growth, potentially reflecting changes in production volume, pricing, or input costs.

Inventories

Inventories have consistently increased over the entire period, growing from around $1.39 billion at the beginning of the period to nearly $3.30 billion by September 2025. This near doubling over five years indicates significant accumulation of stock, which might result from anticipations of increased future demand, longer production cycles, or strategic stockpiling. The steady growth in inventories contrasts with more variable cost patterns, which may affect working capital and liquidity management.

Inventory Turnover Ratio

The inventory turnover ratio shows a declining trend initially, dropping from 1.77 in late 2020 to a low point of approximately 1.28 by December 2023 and June 2024. This decline implies that inventory is being sold and replaced less frequently, indicating slower inventory movement relative to stock levels. However, from mid-2024 onwards, the ratio begins to recover slightly, reaching about 1.47 by September 2025. This partial rebound may indicate some improvement in inventory management efficiency or sales growth catching up with inventory levels.

In summary, the company’s financial data depicts growing costs and inventories, with the latter increasing at a notably rapid pace. The initial decline and subsequent partial recovery in inventory turnover suggest a dynamic interplay between inventory accumulation and sales volume. Careful attention to inventory management and cost control will likely be critical in maintaining operational efficiency and financial stability going forward.

Revenue Trends

Revenues showed an overall upward trajectory from September 2020 through December 2025. Starting at approximately $1.54 billion, revenues steadily increased, reaching peaks above $3.2 billion in the final quarters. There were occasional declines after peak quarters, notably after December 2022 and December 2023, but the general trend remained positive with substantial growth over the period analyzed.

Accounts Receivable, Net

The net accounts receivable balances also increased significantly from around $1.03 billion in September 2020 to values surpassing $2.27 billion by September 2025. This increase generally mirrors the revenue growth, though the receivables level showed some volatility. For example, after peaking in December 2022, the balance dropped notably in subsequent quarters before rising again towards the end of the period. This fluctuation may suggest changes in credit terms, collection efficiency, or seasonal effects.

Receivables Turnover Ratio

The receivables turnover ratio, which measures how efficiently the company collects its receivables, displayed moderate variability. It started at 5.77 times in September 2020, dipped to around 4.59 times in December 2022, and then generally stabilized between 5.0 and 6.2 times during later periods. Higher turnover ratios in mid-2023 indicate periods of improved collection efficiency, while lower points suggest slower collection cycles. The fluctuations highlight varying credit management effectiveness relative to sales throughout the timeline.

Summary Insights

The financial data indicate substantial revenue growth alongside increasing accounts receivable balances, suggesting expansion but also increased credit exposure. The variability in receivables turnover suggests changing collection dynamics, with phases of both effective and less efficient receivables management. The company appears to manage receivables reasonably well given the growth context, but the lower turnover periods warrant attention to credit and collections policies to maintain liquidity and reduce credit risk.

Costs of Revenues

The costs of revenues have shown a general upward trend from September 2020 through September 2025, increasing from approximately $620.6 million to over $1.24 billion. This represents a doubling over the period analyzed. However, there are some fluctuations within this overall increase. For instance, after peaking around December 2022 at nearly $1.21 billion, costs slightly decreased during the first half of 2023 before resuming the upward trajectory. The increase is fairly steady, with notable jumps occurring around December 2021 and again from mid-2023 onward, suggesting growth in operational expenses or sales volume.

Accounts Payable

Accounts payable also exhibit an increasing trend over the analyzed timeframe, growing from about $254.5 million in September 2020 to roughly $430 million by September 2025. The progression, however, includes some periods of decline, particularly in early 2023 when payables dropped from approximately $530.4 million in December 2022 to about $363.7 million by March 2023. Following this reduction, accounts payable increased gradually but did not return to the previous peak levels. The fluctuations in accounts payable suggest variations in short-term supplier obligations and possibly reflect changes in purchasing patterns or payment cycles.

Payables Turnover Ratio

The payables turnover ratio, indicating how frequently the company pays off its suppliers, shows considerable variability across the quarters. Starting at 9.69 in September 2020, the ratio declined to a low of 7.77 in December 2022, signaling a slower turnover of payables during that period. However, from early 2023 onwards, there is a marked increase, reaching levels above 11.0 in several quarters, with the highest being 11.37 in December 2022 and again around 11.28 by September 2025. This suggests an improvement in payment efficiency or a change in credit terms, implying the company is settling its payables more rapidly in recent years despite the overall growth in accounts payable value.

Summary of Trends and Insights

Overall, the financial data indicate expanding operational scale, with costs of revenues and accounts payable both rising significantly over the five-year period. Despite this growth, the company has improved its payables turnover ratio from lower levels around 7.7-8.0 to consistently above 10.0 in the latter years. This combination points to a scenario where the company manages to accelerate payments to suppliers even as it handles larger volumes, potentially strengthening supplier relationships or taking advantage of favorable credit terms. The temporary dip in accounts payable during early 2023 alongside a quick rebound suggests a short-term adjustment in payment or purchasing timing. The trends reflect dynamic financial management amid growth and operational complexity.

Working Capital

The working capital shows a general upward trend over the periods analyzed, starting at approximately 3.01 billion USD and increasing to about 6.85 billion USD by the last recorded period. There are intermittent fluctuations, including a notable decrease around the end of 2023 where working capital dropped to roughly 4.18 billion USD before rising sharply again. This overall increase indicates the company’s expanding short-term liquidity and operational funding capacity over time.

Revenues

Revenues have demonstrated a growth trend from about 1.54 billion USD to over 3.2 billion USD across the reported quarters, but with some variability. Significant revenue growth is observed through most periods, especially between late 2020 and late 2022. However, there is a period of decline or stagnation in early 2023, where revenues decreased from around 2.98 billion USD to approximately 2.36 billion USD and remained relatively flat before climbing again. The revenue pattern suggests cyclical performance possibly linked to market conditions or seasonality.

Working Capital Turnover

The working capital turnover ratio generally hovers between 1.8 and 2.3, indicating the efficiency with which the company utilizes its working capital to generate revenues. The ratio peaked at around 2.31 in early 2022 and mid-2023, showing the highest efficiency in those periods. Notably, this ratio declines toward the later periods, reaching approximately 1.83 towards the end of the latest data series, which suggests a relative reduction in operational efficiency despite increasing working capital and revenues.

Overall Analysis

The company shows considerable growth in both working capital and revenues over the period examined, reflecting expansion and increased operational scale. However, the decrease in working capital turnover toward the end of the timeline may indicate that the growth in working capital is not being matched proportionally by revenue growth, possibly signaling less efficient use of current assets in revenue generation. The fluctuations observed in revenues and working capital emphasize the importance of ongoing monitoring of operational efficiency and liquidity management.

Inventory Turnover Ratio

The inventory turnover ratio exhibits a gradual decline from 1.77 at the end of September 2020 to a low of 1.28 by December 2023. This represents a consistent downward trend over the course of approximately three years. Following this period, a modest recovery is observed, with the ratio increasing to 1.48 by June 2025. Despite this partial rebound, the turnover ratio remains below the initial level recorded in 2020.

Average Inventory Processing Period (Days)

The average inventory processing period closely mirrors the inverse pattern of the turnover ratio. Starting at 206 days in September 2020, the processing period extends progressively, reaching a peak of 285 days by December 2023. This indicates a lengthening time to process inventory items. Subsequent to this peak, the processing period shortens gradually, stabilizing around 247–253 days by mid-2025. Nonetheless, the processing period remains notably elevated compared to the initial data point from 2020.

Overall Analysis

The data suggests a deterioration in inventory management efficiency over the initial period analyzed, as evidenced by the decreasing turnover ratio and increasing days to process inventory. This could imply challenges in moving inventory promptly or changes in inventory strategy resulting in slower turnover. The later partial reversal of these trends indicates some improvement, but efficiency has not returned to earlier levels within the observed timeframe. Such patterns may warrant further investigation into operational or market factors influencing inventory dynamics during these periods.

Receivables Turnover Ratio

The receivables turnover ratio demonstrates a fluctuating trend over the observed periods. Initially, the ratio decreased from 5.77 to 4.72 between September 2020 and December 2021, indicating a slower turnover of receivables. Following this decline, the ratio increased again, peaking at 6.24 in September 2023, which suggests an improvement in the efficiency of collecting receivables during that period. After this peak, the ratio experienced a moderate decline, stabilizing around the mid-5 range toward September 2025. Overall, the pattern signifies periods of strengthening and weakening receivables management efficiency within the examined timeline.

Average Receivable Collection Period

The average receivable collection period inversely mirrors the receivables turnover ratio and ranged between 59 and 79 days across the periods. Initially, the collection period increased from 63 days in September 2020 to a high of 79 days in December 2022, indicating a lengthening of the time required to collect receivables. Thereafter, it shortened noticeably, reaching as low as 59 days in September 2023, reflecting improved collections efficiency. Toward the end of the timeline, the collection period increased again to approximately 68-79 days, suggesting some challenges or changes in collection dynamics. This variability indicates fluctuations in the company’s credit and collection practices or changes in customer payment behavior.

Overall Insights

The analysis of both key ratios shows cyclical movements in receivables management efficiency. The periods of improved turnover and reduced collection days alternate with phases where these efficiencies diminish. Such patterns may result from changing external conditions, seasonal business cycles, or adjustments in credit policies. The recent stabilization in the mid-range for turnover and collection periods implies that the company maintains a relatively steady performance in managing receivables, though it faces intermittent fluctuations that warrant monitoring to sustain optimal cash flow.

Average Inventory Processing Period

The average inventory processing period exhibited a gradual upward trend over the observed timeline. Starting from 206 days at the end of September 2020, it generally increased, reaching a peak of 285 days by December 2023. Following this peak, a moderate decline was observed, with the period falling to 247-248 days by September 2025. This indicates a lengthening in the time inventory remains within the company, suggesting potential challenges in inventory turnover or changes in inventory management practices.

Average Receivable Collection Period

The average receivable collection period showed moderate variability, fluctuating within a range of approximately 59 to 79 days throughout the period. Initial periods saw values around 63 to 73 days, with occasional peaks such as 79 days in December 2022 and again in March 2025. Notably, there was a reduction in collection days around March to June 2023, with values dropping to the high 50s and low 60s, indicating improved efficiency in receivables collection at that time. Overall, the receivable collection period did not display a clear sustained trend but oscillated around the 65-70 day mark.

Operating Cycle

The operating cycle demonstrated a consistent upward trend from 269 days in September 2020 to a high of 355 days by December 2023, indicating an overall lengthening of the combined inventory processing and receivables collection period. After this peak, the operating cycle progressively shortened to approximately 314 days by September 2025. The lengthening until late 2023 suggests increasing capital tied up in operations, while the subsequent decrease hints at potential improvements in operational or financial efficiency, possibly driven by shortened inventory processing or improved receivables management.

Summary

Overall, the company experienced a lengthening of its inventory processing and operating cycle periods up to late 2023, indicating slower turnover and a larger investment in working capital tied to inventory and receivables. Post-2023 data shows signs of operational improvement, with reductions in these periods, signaling efforts to enhance working capital management. The receivables collection period remained relatively volatile but stable around its historical average, contributing variably to the length of the operating cycle.

Payables Turnover Ratio

The payables turnover ratio demonstrates a fluctuating trend over the reported periods. Initially, the ratio declined from 9.69 at the end of September 2020 to a low of 7.77 by December 2022, indicating a slower rate of paying off suppliers during this timeframe. After December 2022, the ratio increased significantly, peaking at 11.37 in December 2023, which shows an acceleration in payment frequency. Subsequently, the ratio slightly decreased but remained relatively high, fluctuating between 10.1 and 11.28 from mid-2024 through September 2025.

Average Payables Payment Period

The average payables payment period, measured in number of days, inversely mirrors the trend observed in the payables turnover ratio. From 38 days in September 2020, the payment period increased steadily, reaching a peak of 47 days in September and December 2022, suggesting that the company was taking longer to settle its payables. Following this peak, the period shortened markedly to around 32-35 days during 2023 and remained relatively stable through September 2025, indicating a return to quicker payments to suppliers.

General Insights

The inverse relationship between the payables turnover ratio and the average payment period is apparent, reflecting consistent accounting since faster turnovers correspond to shorter payment durations. The initial increase in the payment period alongside a declining turnover ratio suggests a strategic extension of payment terms or cash flow management constraints. The subsequent reversal towards quicker payments from late 2022 onwards may indicate improved liquidity, a shift in supplier negotiation policies, or operational changes aimed at optimizing working capital management.

Overall, the recent trend points toward a stabilization in payables management, with payment cycles normalized to a range closer to that at the start of the observed periods, but with an enhanced turnover efficiency compared to the mid-period lows.

Inventory Processing Period

The average inventory processing period exhibited a generally increasing trend over the analyzed timeframe. Starting from 206 days at the end of September 2020, the period extended progressively, reaching a peak of 285 days in December 2023. Following this peak, a gradual decline was observed, with the period reducing to 247 days by September 2025. This suggests a lengthening in the time inventory remained before being processed, potentially indicating slower turnover or extended holding times, before a partial improvement in more recent periods.

Receivable Collection Period

The average receivable collection period displayed fluctuations without a clear linear trend. It began at 63 days in September 2020 and reached several peaks and troughs throughout the periods, with notable highs of 79 days in December 2022 and again in March 2025. The lowest values were seen around the middle of 2023, where it decreased to below 60 days. This volatility implies variability in the company’s effectiveness in collecting receivables, possibly reflecting changes in credit policies or customer payment behaviors.

Payables Payment Period

The average payables payment period showed moderate fluctuations but remained relatively stable compared to other periods. It started at 38 days in September 2020, climbed to a high of 47 days by September 2021, then experienced a downward adjustment to a range between 32 to 36 days from early 2023 onward. The shortening of the payment period in recent years could indicate improved payment discipline or stronger vendor relationships requiring quicker settlements.

Cash Conversion Cycle

The cash conversion cycle (CCC) generally trended upward during the period, starting at 231 days in September 2020 and peaking at 320 days in December 2023. Thereafter, it demonstrated a modest decline, settling at approximately 282 days by September 2025. The increase in CCC corresponds with the lengthening inventory processing and fluctuations in receivables collection, indicating an overall longer time to convert investments in inventory and receivables into cash. The recent decrease suggests efforts to enhance working capital efficiency, although the cycle duration remains considerably extended.