Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
KLA Corp., FCFF calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2020-06-30).
The financial data reflects the cash generation and free cash flow trends for the company over a six-year period ending June 30, 2025. The analysis focuses on two primary indicators: net cash provided by operating activities and free cash flow to the firm (FCFF).
- Net Cash Provided by Operating Activities
-
This metric shows a consistent upward trajectory from 2020 to 2025, indicating strengthening operational cash inflows. The net cash provided increased from approximately $1.78 billion in 2020 to around $4.08 billion in 2025.
Notably, there was a significant year-over-year increase between 2021 and 2022, where net cash rose by more than 50%, from $2.19 billion to $3.31 billion. The growth continued with a moderate increase in 2023, followed by a slight dip in 2024 before reaching the highest level in 2025.
- Free Cash Flow to the Firm (FCFF)
-
FCFF trends closely mirror operating cash flows, confirming effective conversion of operating cash into free cash after capital expenditures. The FCFF increased steadily from approximately $1.77 billion in 2020 to about $4 billion in 2025.
Similar to operating cash flows, the growth between 2021 and 2022 was substantial, exceeding 50%. Subsequent years experienced steady gains with a minor decline in 2024, which was then followed by a notable recovery in 2025.
Overall, the data reflects robust cash generation capabilities that strengthen over the years. The fluctuations observed in 2024 suggest a temporary downturn, but the recovery in 2025 indicates resilience and effective cash flow management. The parallel movement between operating cash flows and free cash flow suggests consistent operational efficiency and capital expenditure discipline across the periods analyzed.
Interest Paid, Net of Tax
KLA Corp., interest paid, net of tax calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2020-06-30).
2 2025 Calculation
Interest paid, net of capitalized interest, tax = Interest paid, net of capitalized interest × EITR
= 292,771 × 12.50% = 36,596
- Effective Income Tax Rate (EITR) Trends
- The effective income tax rate exhibits fluctuation over the six-year period. Beginning at 7.7% on June 30, 2020, it increased markedly to 12% by June 30, 2021. A notable decline occurs the following year, reaching a low of 4.8% on June 30, 2022. Subsequently, the rate rises again to 10.6% in 2023 and continues a gentle upward trend to peak at 13.4% by June 30, 2024, before slightly declining to 12.5% in the latest period ending June 30, 2025. This pattern suggests variability in the company's tax positioning or adjustments in tax liabilities, possibly due to changes in profitability, tax laws, or accounting practices.
- Interest Paid, Net of Capitalized Interest and Tax
- Interest expenses demonstrate a consistent upward trajectory throughout the examined timeline. The interest paid amounted to $140,897 thousand on June 30, 2020, showing a mild decrease to $135,692 thousand in 2021. From this point, a steady and significant increase is observed — rising to $147,249 thousand in 2022, accelerating more sharply to $200,216 thousand by mid-2023. The upward trend persists, reaching $239,533 thousand in 2024 and further increasing to $256,175 thousand by June 30, 2025. This steady rise may reflect increased borrowing, higher interest rates, or both, indicating a greater financial cost burden over time.
- Summary of Observations
- Overall, the effective income tax rate displays volatility without a clear long-term directional trend, suggesting fluctuations in taxable income or possible tax strategy revisions. Conversely, interest expenses have consistently escalated, reflecting growing financing costs that could impact net income and cash flow. Stakeholders should monitor these trends closely to assess their implications on financial health and operational efficiency.
Enterprise Value to FCFF Ratio, Current
KLA Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 117,962,991) |
| Free cash flow to the firm (FCFF) | 3,997,869) |
| Valuation Ratio | |
| EV/FCFF | 29.51 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Advanced Micro Devices Inc. | 114.65 |
| Analog Devices Inc. | 35.66 |
| Applied Materials Inc. | 16.70 |
| Broadcom Inc. | 69.81 |
| Intel Corp. | — |
| Lam Research Corp. | 30.04 |
| Micron Technology Inc. | 245.82 |
| NVIDIA Corp. | 72.16 |
| Qualcomm Inc. | 14.51 |
| Texas Instruments Inc. | 94.57 |
| EV/FCFF, Sector | |
| Semiconductors & Semiconductor Equipment | 104.63 |
| EV/FCFF, Industry | |
| Information Technology | 52.12 |
Based on: 10-K (reporting date: 2025-06-30).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
KLA Corp., historical EV/FCFF calculation, comparison to benchmarks
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Enterprise value (EV)1 | 122,107,895) | 96,691,454) | 70,524,992) | 60,067,875) | 54,916,007) | 33,040,138) | |
| Free cash flow to the firm (FCFF)2 | 3,997,869) | 3,270,724) | 3,528,430) | 3,152,631) | 2,089,090) | 1,767,072) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 30.54 | 29.56 | 19.99 | 19.05 | 26.29 | 18.70 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | 72.30 | 225.41 | 38.82 | 43.41 | 126.98 | |
| Analog Devices Inc. | — | 33.82 | 25.61 | 23.12 | 39.16 | 27.12 | |
| Applied Materials Inc. | — | 17.55 | 17.40 | 19.06 | 26.22 | 22.52 | |
| Broadcom Inc. | — | 51.00 | 28.53 | 14.74 | 19.47 | 16.54 | |
| Intel Corp. | — | — | — | — | 16.94 | 11.08 | |
| Lam Research Corp. | — | 24.56 | 17.99 | 24.08 | 24.40 | 26.78 | |
| Micron Technology Inc. | — | 203.18 | — | 16.58 | 28.79 | 188.88 | |
| NVIDIA Corp. | 51.89 | 61.32 | 142.92 | 78.06 | 69.50 | 41.66 | |
| Qualcomm Inc. | — | 16.26 | 11.61 | 18.18 | 17.47 | 30.89 | |
| Texas Instruments Inc. | — | 89.36 | 89.85 | 27.02 | 24.20 | 27.67 | |
| EV/FCFF, Sector | |||||||
| Semiconductors & Semiconductor Equipment | — | 56.97 | 60.28 | 34.98 | 26.15 | 21.95 | |
| EV/FCFF, Industry | |||||||
| Information Technology | — | 39.09 | 34.07 | 26.35 | 27.35 | 23.73 | |
Based on: 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), 10-K (reporting date: 2020-06-30).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 122,107,895 ÷ 3,997,869 = 30.54
4 Click competitor name to see calculations.
The financial performance over the periods under review reveals several notable trends related to the enterprise value (EV), free cash flow to the firm (FCFF), and their valuation multiple (EV/FCFF).
- Enterprise Value (EV)
- The enterprise value has shown a consistent upward trajectory from June 30, 2020, through June 30, 2025. Starting at approximately $33 billion, EV more than tripled, reaching around $122 billion by the last period. This significant increase indicates growing market capitalization and possibly increasing debt or equity investments, reflecting expansion or enhanced valuation by investors.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm has also exhibited an overall increasing trend, starting at roughly $1.77 billion in 2020 and expanding to about $4.0 billion by 2025. This upward movement suggests improving operational efficiency and better cash generation capabilities. However, it is worth noting a peak in 2023 at approximately $3.53 billion followed by a slight dip in 2024 to $3.27 billion before rising again, indicating some variability in cash flow generation.
- EV/FCFF Ratio
- The EV to FCFF ratio reflects varying investor sentiment or changes in valuation multiples over the years. Initially, the ratio was 18.7 in 2020, rising sharply to a peak of 26.29 in 2021. It then declined to around 19.05 in 2022 and slightly increased to 19.99 in 2023. Subsequently, the ratio climbed significantly in the last two periods, reaching 29.56 in 2024 and further increasing to 30.54 in 2025. This volatility and the higher ratio in later years may suggest growing market expectations of future growth or an increasingly premium valuation placed on the firm’s cash flows despite fluctuating free cash flow figures.