KLA CORPKLAC
KLA CORP Fair Value Disclosure
FAIR VALUE MEASUREMENTS
Our financial assets and liabilities are measured and recorded at fair value, except for our debt and certain equity investments in privately held companies. Equity investments without a readily available fair value are accounted for using the measurement alternative. The measurement alternative is calculated as cost minus impairment, if any, plus or minus changes resulting from observable price changes. See Note 8 “Debt” for disclosure of the fair value of our Senior Notes, as defined in that Note.
Our non-financial assets, such as goodwill, intangible assets, and land, property and equipment, are assessed for impairment when an event or circumstance indicates that an other-than-temporary decline in value may have occurred and, for goodwill, also annually.
Fair Value of Financial Instruments. We have evaluated the estimated fair value of financial instruments using available market information and valuations as provided by third-party sources. The use of different market assumptions and/or estimation methodologies could have a significant effect on the estimated fair value amounts. The fair value of our cash equivalents, accounts receivable, accounts payable and other current assets and liabilities approximate their carrying amounts due to the relatively short maturity of these items.
Fair Value Hierarchy. The authoritative guidance for fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:
| Level 1 | Valuations based on quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. | |||||||
| Level 2 | Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. | |||||||
| Level 3 | Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |||||||
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The types of instruments valued based on quoted market prices in active markets include money market funds, certain U.S. Treasury securities, U.S. Government agency securities and equity securities. Such instruments are generally classified within Level 1 of the fair value hierarchy.
The types of instruments valued based on other observable inputs include corporate debt securities, municipal securities and certain U.S. Treasury securities. The market inputs used to value these instruments generally consist of market yields, reported trades and broker/dealer quotes. Such instruments are generally classified within Level 2 of the fair value hierarchy.
The principal market in which we execute our foreign currency contracts is the institutional market in an over-the-counter environment with a relatively high level of price transparency. The market participants generally are large financial institutions. Our foreign currency contracts’ valuation inputs are based on quoted prices and quoted pricing intervals from public data sources and do not involve management judgment. These contracts are typically classified within Level 2 of the fair value hierarchy.
Financial assets (excluding cash held in operating accounts and time deposits) and liabilities measured at fair value on a recurring basis as of the dates indicated below were presented on our Consolidated Balance Sheets as follows:
| As of June 30, 2025 (In thousands) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||||||
| Assets | |||||||||||||||||
| Cash equivalents: | |||||||||||||||||
| Municipal securities | $ | 6,120 | $ | — | $ | 6,120 | |||||||||||
| Corporate debt securities | 1,498 | — | 1,498 | ||||||||||||||
| Money market funds and other | 1,531,022 | 1,531,022 | — | ||||||||||||||
| U.S. Government agency securities | 9,955 | — | 9,955 | ||||||||||||||
| U.S. Treasury securities | 9,981 | — | 9,981 | ||||||||||||||
| Marketable securities: | |||||||||||||||||
| Corporate debt securities | 960,148 | — | 960,148 | ||||||||||||||
| Municipal securities | 51,453 | — | 51,453 | ||||||||||||||
| U.S. Government agency securities | 106,881 | 106,881 | — | ||||||||||||||
| U.S. Treasury securities | 877,578 | 802,682 | 74,896 | ||||||||||||||
Equity securities | 23,962 | 23,962 | — | ||||||||||||||
Total cash equivalents and marketable securities(1) | 3,578,598 | 2,464,547 | 1,114,051 | ||||||||||||||
| Other current assets: | |||||||||||||||||
| Derivative assets | 59,503 | — | 59,503 | ||||||||||||||
| Other non-current assets: | |||||||||||||||||
| EDSP | 349,530 | 336,090 | 13,440 | ||||||||||||||
Total financial assets(1) | $ | 3,987,631 | $ | 2,800,637 | $ | 1,186,994 | |||||||||||
| Liabilities | |||||||||||||||||
| Derivative liabilities | $ | (28,615) | $ | — | $ | (28,615) | |||||||||||
| Total financial liabilities | $ | (28,615) | $ | — | $ | (28,615) | |||||||||||
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(1)Excludes cash of $437.8 million held in operating accounts and time deposits of $478.2 million (of which $82.5 million were cash equivalents) as of June 30, 2025.
| As of June 30, 2024 (In thousands) | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||||||
| Assets | |||||||||||||||||
| Cash equivalents: | |||||||||||||||||
| Corporate debt securities | $ | 2,312 | $ | — | $ | 2,312 | |||||||||||
| Money market funds and other | 1,585,832 | 1,585,832 | — | ||||||||||||||
| U.S. Treasury securities | 35,158 | — | 35,158 | ||||||||||||||
| Marketable securities: | |||||||||||||||||
| Corporate debt securities | 771,920 | — | 771,920 | ||||||||||||||
| Municipal securities | 41,159 | — | 41,159 | ||||||||||||||
| U.S. Government agency securities | 105,874 | 105,874 | — | ||||||||||||||
| U.S. Treasury securities | 716,148 | 476,230 | 239,918 | ||||||||||||||
Equity securities | 25,566 | 25,566 | — | ||||||||||||||
Total cash equivalents and marketable securities(1) | 3,283,969 | 2,193,502 | 1,090,467 | ||||||||||||||
| Other current assets: | |||||||||||||||||
| Derivative assets | 36,503 | — | 36,503 | ||||||||||||||
| Other non-current assets: | |||||||||||||||||
| EDSP | 303,365 | 272,816 | 30,549 | ||||||||||||||
Total financial assets(1) | $ | 3,623,837 | $ | 2,466,318 | $ | 1,157,519 | |||||||||||
| Liabilities | |||||||||||||||||
| Derivative liabilities | $ | (15,683) | $ | — | $ | (15,683) | |||||||||||
| Total financial liabilities | $ | (15,683) | $ | — | $ | (15,683) | |||||||||||
__________________
(1)Excludes cash of $287.6 million held in operating accounts and time deposits of $932.4 million (of which $66.2 million were cash equivalents) as of June 30, 2024.
We did not have any financial assets or liabilities measured at fair value on a recurring basis within Level 3 fair value measurements as of June 30, 2025 or June 30, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 8, 2025 | Showing above |
| 2024 | Aug 5, 2024 | |
| 2023 | Aug 4, 2023 | |
| 2022 | Aug 5, 2022 | |
| 2021 | Aug 6, 2021 | |
| 2020 | Aug 7, 2020 | |
| 2019 | Aug 16, 2019 | |
| 2018 | Aug 6, 2018 | |
| 2017 | Aug 4, 2017 | |
| 2016 | Aug 5, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.