Autodesk Inc. (NASDAQ:ADSK)

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Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).

Autodesk Inc., effective income tax rate (EITR) reconciliation

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020	Jan 31, 2019
	U.S. statutory tax rate	21.00%	21.00%	21.00%	21.00%	21.00%	21.00%
	Effective income tax rate	20.25%	13.00%	11.99%	-121.00%	27.24%	-89.23%

The effective income tax rate (EITR) exhibited extreme volatility between 2019 and 2021 before entering a period of stabilization and gradual convergence toward the U.S. statutory rate through 2024.

Volatility and Tax Benefits (2019–2021): The initial period was characterized by significant fluctuations, with the EITR recording deep negative values in 2019 (-89.23%) and 2021 (-121.00%). These negative rates indicate the realization of substantial tax benefits or credits that exceeded the tax expense for those fiscal years. A brief reversal occurred in 2020, where the EITR rose to 27.24%, exceeding the statutory benchmark.
Stabilization and Trend Analysis (2022–2024): From 2022 onward, a clear trend of normalization is observed. The EITR stabilized at 11.99% in 2022 and grew steadily to 13.00% in 2023 and 20.25% in 2024. This consistent upward movement suggests a transition away from irregular tax benefits toward a more standardized tax expense profile.
Relationship to Statutory Rate: While the U.S. statutory tax rate remained constant at 21.00% throughout the entire analysis period, the EITR showed wide variance from this baseline in earlier years. By the end of the period in 2024, the EITR of 20.25% nearly converged with the statutory rate, indicating that the primary drivers of prior tax anomalies have largely diminished.

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Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).

Autodesk Inc., components of deferred tax assets and liabilities

US$ in millions

	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020	Jan 31, 2019
Stock-based compensation	53)	54)	56)	39)	33)	26)
Research and development tax credit carryforwards	118)	103)	250)	220)	263)	239)
Foreign tax credit carryforwards	4)	—)	56)	70)	254)	199)
Accrued compensation and benefits	11)	7)	6)	3)	3)	7)
Other accruals not currently deductible for tax	15)	26)	23)	14)	28)	19)
Capitalized research and development	514)	340)	88)	48)	38)	33)
Fixed assets	21)	22)	25)	8)	12)	15)
Lease liability	80)	92)	106)	114)	106)	—)
Tax loss carryforwards	10)	38)	53)	66)	241)	237)
Deferred revenue	538)	653)	390)	502)	29)	49)
Purchased technology	33)	—)	—)	—)	—)	—)
Other	31)	23)	23)	40)	28)	28)
Deferred tax assets	1,428)	1,358)	1,075)	1,125)	1,036)	851)
Valuation allowance	(149)	(148)	(188)	(187)	(883)	(798)
Net deferred tax assets	1,279)	1,210)	886)	938)	153)	53)
Indefinite lived intangibles	(128)	(109)	(95)	(83)	(77)	(68)
Purchased technology	—)	(26)	—)	—)	—)	—)
Right-of-use assets	(52)	(58)	(74)	(102)	(101)	—)
Unremitted earnings of foreign subsidiaries	—)	(2)	(6)	(2)	(1)	—)
Deferred taxes on foreign earnings	(29)	(33)	—)	—)	—)	—)
Deferred tax liabilities	(209)	(228)	(175)	(186)	(179)	(68)
Net deferred tax assets (liabilities)	1,070)	982)	712)	752)	(26)	(15)

The financial trajectory of the deferred tax position reveals a significant shift from a net liability position in early 2019 to a substantial net asset position by 2024. Total deferred tax assets grew from 851 million USD in 2019 to 1,428 million USD in 2024, while the net deferred tax asset (liability) position improved from negative 15 million USD to positive 1,070 million USD over the same period.

Primary Drivers of Deferred Tax Asset Growth: The increase in gross deferred tax assets is primarily attributed to a substantial rise in capitalized research and development, which grew from 33 million USD in 2019 to 514 million USD in 2024. Additionally, deferred revenue emerged as a major component, increasing from 49 million USD in 2019 to 538 million USD in 2024, despite some volatility in the intervening years.
Asset Realizability and Valuation Allowance: A critical factor in the increase of net deferred tax assets is the sharp reduction in the valuation allowance. The allowance decreased from 798 million USD in 2019 to 149 million USD in 2024. This trend indicates a significant increase in the expectation that the recognized deferred tax assets will be realized in future periods.
Utilization of Tax Carryforwards: There is a clear pattern of utilization regarding tax carryforwards. Tax loss carryforwards declined steadily from 237 million USD in 2019 to 10 million USD in 2024. Similarly, foreign tax credit carryforwards saw a precipitous decline from 199 million USD in 2019 to 4 million USD in 2024, suggesting these credits were applied against tax liabilities over the period.
Composition of Deferred Tax Liabilities: Deferred tax liabilities remained relatively stable compared to assets, moving from 68 million USD in 2019 to 209 million USD in 2024. This growth was largely driven by indefinite lived intangibles, which increased from 68 million USD to 128 million USD. Conversely, liabilities related to right-of-use assets peaked in 2021 at 102 million USD before declining to 52 million USD by 2024.
Net Financial Position Trend: The convergence of increasing gross assets, a diminishing valuation allowance, and the strategic utilization of carryforwards resulted in a dramatic expansion of net deferred tax assets. The net position moved from a deficit of 26 million USD in 2020 to a surplus of 1,070 million USD by 2024, reflecting a stronger balance sheet position regarding future tax benefits.

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Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).

Autodesk Inc., deferred tax assets and liabilities, classification

US$ in millions

		Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020	Jan 31, 2019
	Long-term deferred tax assets	1,093)	1,014)	741)	763)	56)	65)
	Long-term deferred tax liabilities	25)	32)	29)	11)	83)	80)

The analysis of long-term deferred tax accounts reveals a fundamental shift in the company's tax position between 2019 and 2024. There is a pronounced transition from a relatively balanced asset-liability profile to one characterized by substantial deferred tax assets and minimal deferred tax liabilities.

Long-term Deferred Tax Assets: A significant growth trajectory is observed in deferred tax assets. After remaining relatively stable between 2019 and 2020 at $65 million and $56 million respectively, assets experienced a sharp increase to $763 million by January 31, 2021. This upward trend continued through 2024, reaching $1,093 million. This represents a total increase of approximately 1,581% over the six-year period, indicating a substantial accumulation of future tax benefits.
Long-term Deferred Tax Liabilities: Deferred tax liabilities exhibited an inverse pattern to the assets. Liabilities remained steady at $80 million in 2019 and $83 million in 2020, followed by a precipitous decline to $11 million in 2021. While there was a slight recovery to $32 million by 2023, the balance decreased again to $25 million by January 31, 2024. The overall trend reflects a meaningful reduction in future tax obligations.
Net Deferred Tax Position: The net position shifted from a net liability status in 2019 and 2020 to a dominant net asset position starting in 2021. In 2019, the net position was a liability of $15 million; however, by 2024, the net deferred tax asset reached $1,068 million. The divergence between the growth of assets and the contraction of liabilities indicates a strategic or structural change in the tax base that significantly enhances the company's long-term financial position regarding future tax offsets.

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Autodesk Inc., Financial Data: Reported vs. Adjusted

Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).

Autodesk Inc., adjustments to financial statements

US$ in millions

	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020	Jan 31, 2019
Adjustment to Total Assets
Total assets (as reported)	9,912)	9,438)	8,607)	7,280)	6,179)	4,729)
Less: Noncurrent deferred tax assets, net	1,093)	1,014)	741)	763)	56)	65)
Total assets (adjusted)	8,819)	8,424)	7,866)	6,517)	6,123)	4,664)
Adjustment to Total Liabilities
Total liabilities (as reported)	8,057)	8,293)	7,758)	6,314)	6,318)	4,940)
Less: Noncurrent deferred tax liabilities, net	25)	32)	29)	11)	83)	80)
Total liabilities (adjusted)	8,032)	8,261)	7,728)	6,303)	6,236)	4,860)
Adjustment to Stockholders’ Equity (deficit)
Stockholders’ equity (deficit) (as reported)	1,855)	1,145)	849)	966)	(139)	(211)
Less: Net deferred tax assets (liabilities)	1,070)	982)	712)	752)	(26)	(15)
Stockholders’ equity (deficit) (adjusted)	785)	163)	137)	214)	(113)	(196)
Adjustment to Net Income (loss)
Net income (loss) (as reported)	906)	823)	497)	1,208)	215)	(81)
Add: Deferred income tax expense (benefit)	(83)	(275)	(17)	(778)	13)	(12)
Net income (loss) (adjusted)	823)	548)	480)	430)	228)	(93)

A comprehensive analysis of the financial adjustments reveals a systematic divergence between reported and adjusted values resulting from the removal of deferred taxes. While total assets and net income exhibit an overall upward trajectory from 2019 to 2024, the adjustments consistently reduce the valuation of assets, equity, and profitability, highlighting the significant impact of deferred tax accounting on the reported financial position.

Asset and Liability Valuation: Reported total assets grew from 4,729 million US$ in 2019 to 9,912 million US$ in 2024. The adjusted figures consistently track lower, with the variance widening over time. By 2024, adjusted total assets were 8,819 million US$, representing a reduction of approximately 11% from the reported value. Similarly, adjusted total liabilities remained marginally lower than reported liabilities throughout the period, indicating that the primary weight of deferred tax adjustments resides within the asset accounts.
Stockholders' Equity Impact: The removal of deferred taxes significantly alters the equity profile. While reported stockholders' equity shifted from a deficit of 211 million US$ in 2019 to a surplus of 1,855 million US$ in 2024, the adjusted equity shows a much more conservative growth pattern. In 2024, adjusted stockholders' equity was 785 million US$, which is less than half of the reported figure. This suggests that a substantial portion of the reported equity growth is attributable to deferred tax assets rather than operational capital accumulation.
Net Income Volatility and Adjustments: Net income exhibited significant fluctuations, most notably in 2021, where reported net income reached 1,208 million US$. However, the adjusted net income for the same period was only 430 million US$, revealing a stark discrepancy. This indicates that a significant non-cash tax benefit inflated the reported earnings for that fiscal year. Following 2021, the gap between reported and adjusted net income narrowed, though reported figures remained consistently higher than adjusted figures from 2022 through 2024.

The cumulative effect of these adjustments demonstrates that the reported financial statements present a more optimistic view of the company's solvency and profitability than the adjusted figures. The increasing gap between reported and adjusted equity indicates a growing reliance on deferred tax assets to bolster the reported balance sheet.

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Autodesk Inc., Financial Ratios: Reported vs. Adjusted

Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).

Autodesk Inc., adjusted financial ratios

	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020	Jan 31, 2019
Net Profit Margin
Reported net profit margin	16.48%	16.44%	11.33%	31.88%	6.55%	-3.14%
Adjusted net profit margin	14.97%	10.95%	10.95%	11.35%	6.96%	-3.62%
Total Asset Turnover
Reported total asset turnover	0.55	0.53	0.51	0.52	0.53	0.54
Adjusted total asset turnover	0.62	0.59	0.56	0.58	0.53	0.55
Financial Leverage
Reported financial leverage	5.34	8.24	10.14	7.54	—	—
Adjusted financial leverage	11.23	51.68	57.25	30.48	—	—
Return on Equity (ROE)
Reported ROE	48.84%	71.88%	58.53%	125.14%	—	—
Adjusted ROE	104.84%	336.20%	349.49%	201.26%	—	—
Return on Assets (ROA)
Reported ROA	9.14%	8.72%	5.77%	16.60%	3.47%	-1.71%
Adjusted ROA	9.33%	6.51%	6.10%	6.60%	3.72%	-1.99%

An analysis of the financial ratios reveals a significant divergence between reported and adjusted figures, primarily driven by the removal of deferred taxes. The impact is most pronounced in leverage and equity-based returns, where the exclusion of deferred tax accounts substantially alters the perceived risk and performance profile of the organization.

Net Profit Margin: Reported margins exhibit high volatility, characterized by a sharp spike to 31.88% in 2021 before stabilizing around 16% in 2023 and 2024. In contrast, the adjusted net profit margin remains more consistent, typically ranging between 10% and 15% after 2020. The substantial gap in 2021 suggests that deferred tax benefits significantly inflated the reported profitability for that period.
Total Asset Turnover: Both reported and adjusted asset turnover ratios remain relatively stable, though the adjusted ratio consistently outperforms the reported figure. While the reported ratio fluctuated minimally between 0.51 and 0.55, the adjusted ratio shows a steady upward trend, increasing from 0.55 in 2019 to 0.62 by 2024, indicating improved asset efficiency when deferred tax impacts are removed.
Financial Leverage: A stark contrast is observed in financial leverage. Reported leverage peaked at 10.14 in 2022 and decreased to 5.34 by 2024. However, the adjusted leverage ratios are exponentially higher, reaching a peak of 57.25 in 2022. This discrepancy indicates that deferred tax liabilities constitute a significant portion of the equity base; removing them drastically reduces the denominator, thereby magnifying the leverage ratio.
Return on Equity (ROE): The reported ROE shows extreme values, peaking at 125.14% in 2021. The adjusted ROE is even more aggressive, with values exceeding 300% between 2022 and 2023. The massive inflation of the adjusted ROE is a direct consequence of the reduced equity base following the removal of deferred taxes, resulting in a highly magnified return percentage relative to the adjusted capital.
Return on Assets (ROA): ROA demonstrates the least variance between reported and adjusted figures. Both metrics trended upward from negative territory in 2019 to approximately 9% by 2024. The close alignment between reported and adjusted ROA suggests that deferred tax adjustments have a far more significant impact on equity-related metrics than on overall asset-based profitability.

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Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).

	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020	Jan 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss)	906)	823)	497)	1,208)	215)	(81)
Net revenue	5,497)	5,005)	4,386)	3,790)	3,274)	2,570)
Profitability Ratio
Net profit margin¹	16.48%	16.44%	11.33%	31.88%	6.55%	-3.14%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss)	823)	548)	480)	430)	228)	(93)
Net revenue	5,497)	5,005)	4,386)	3,790)	3,274)	2,570)
Profitability Ratio
Adjusted net profit margin²	14.97%	10.95%	10.95%	11.35%	6.96%	-3.62%

2024 Calculations

¹ Net profit margin = 100 × Net income (loss) ÷ Net revenue
= 100 × 906 ÷ 5,497 = 16.48%

² Adjusted net profit margin = 100 × Adjusted net income (loss) ÷ Net revenue
= 100 × 823 ÷ 5,497 = 14.97%

A comprehensive analysis of the financial performance from January 31, 2019, to January 31, 2024, reveals a transition from net losses to sustained profitability. While reported figures exhibit significant volatility, the adjusted metrics demonstrate a more consistent and linear growth trajectory in both absolute net income and profit margins.

Reported Net Profit Margin Volatility: The reported net profit margin shows extreme fluctuations, characterized by a recovery from -3.14% in 2019 to a peak of 31.88% in 2021. This spike represents a substantial deviation from the general trend, followed by a correction to 11.33% in 2022. In the subsequent two years, the margin stabilized and slightly increased, closing at 16.48% in 2024.
Adjusted Net Profit Margin Trends: The adjusted net profit margin provides a more stabilized view of operational performance. After starting at -3.62% in 2019, the margin rose to 6.96% in 2020 and reached 11.35% in 2021. A period of stagnation occurred between 2022 and 2023, where the margin remained flat at 10.95%, before experiencing a notable expansion to 14.97% in 2024.
Divergence Between Reported and Adjusted Income: A significant variance between reported and adjusted net income is observed, most notably in 2021, where reported net income reached 1,208 million US$, nearly triple the adjusted net income of 430 million US$. This divergence suggests the presence of substantial non-recurring gains or one-time tax benefits that inflated the reported figures. Conversely, the adjusted net income has grown steadily every year from 2019 to 2024, increasing from a loss of 93 million US$ to a profit of 823 million US$, indicating a consistent improvement in core earnings power.

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Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).

	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020	Jan 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net revenue	5,497)	5,005)	4,386)	3,790)	3,274)	2,570)
Total assets	9,912)	9,438)	8,607)	7,280)	6,179)	4,729)
Activity Ratio
Total asset turnover¹	0.55	0.53	0.51	0.52	0.53	0.54
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Net revenue	5,497)	5,005)	4,386)	3,790)	3,274)	2,570)
Adjusted total assets	8,819)	8,424)	7,866)	6,517)	6,123)	4,664)
Activity Ratio
Adjusted total asset turnover²	0.62	0.59	0.56	0.58	0.53	0.55

2024 Calculations

¹ Total asset turnover = Net revenue ÷ Total assets
= 5,497 ÷ 9,912 = 0.55

² Adjusted total asset turnover = Net revenue ÷ Adjusted total assets
= 5,497 ÷ 8,819 = 0.62

An analysis of asset utilization from 2019 to 2024 reveals a consistent expansion of the balance sheet alongside a progressive improvement in adjusted operational efficiency. While total assets have more than doubled over the period, the capacity to generate revenue from those assets has shown a positive trajectory when viewed through an adjusted lens.

Asset Base Expansion: Reported total assets grew steadily from 4,729 million US dollars in 2019 to 9,912 million US dollars in 2024. Adjusted total assets followed a similar growth trajectory, increasing from 4,664 million US dollars to 8,819 million US dollars. The widening variance between reported and adjusted asset figures indicates that the adjustments have a more significant impact on the balance sheet in the later years of the analyzed period.
Reported Total Asset Turnover: The reported turnover ratio remained relatively stable, exhibiting minimal volatility over the six-year span. The ratio began at 0.54 in 2019, dipped to a low of 0.51 in 2022, and concluded at 0.55 in 2024. This stability suggests that revenue growth has largely scaled in proportion to the increase in reported total assets.
Adjusted Total Asset Turnover: A distinct upward trend is observable in the adjusted total asset turnover, which rose from 0.55 in 2019 to 0.62 in 2024. This indicates that once specific adjustments are applied to the asset base, the efficiency of asset utilization has improved. A notable increase occurred between 2020 and 2021, where the ratio shifted from 0.53 to 0.58, marking a period of enhanced productivity relative to adjusted assets.

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Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).

	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020	Jan 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets	9,912)	9,438)	8,607)	7,280)	6,179)	4,729)
Stockholders’ equity (deficit)	1,855)	1,145)	849)	966)	(139)	(211)
Solvency Ratio
Financial leverage¹	5.34	8.24	10.14	7.54	—	—
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	8,819)	8,424)	7,866)	6,517)	6,123)	4,664)
Adjusted stockholders’ equity (deficit)	785)	163)	137)	214)	(113)	(196)
Solvency Ratio
Adjusted financial leverage²	11.23	51.68	57.25	30.48	—	—

2024 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity (deficit)
= 9,912 ÷ 1,855 = 5.34

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity (deficit)
= 8,819 ÷ 785 = 11.23

The financial position demonstrates a transition from a deficit in stockholders' equity to a positive capital base, accompanied by consistent growth in total assets. Between January 31, 2019, and January 31, 2024, reported total assets increased from 4,729 million USD to 9,912 million USD, while adjusted total assets grew from 4,664 million USD to 8,819 million USD.

Equity Transition and Adjustment Impact: A significant shift is observed in the equity structure. Reported stockholders' equity moved from a deficit of 211 million USD in 2019 to 1,855 million USD in 2024. Adjusted stockholders' equity followed a similar recovery trajectory, transitioning from a 196 million USD deficit in 2019 to 785 million USD in 2024. The divergence between reported and adjusted equity increased over the period, suggesting that the adjustments have a material downward impact on the net asset valuation.
Reported Financial Leverage Trends: Reported financial leverage peaked in January 31, 2022, at a ratio of 10.14. Following this peak, the ratio declined to 5.34 by January 31, 2024, indicating a reduction in the reliance on debt relative to reported equity.
Adjusted Financial Leverage Analysis: Adjusted financial leverage exhibits substantially higher volatility and magnitude compared to reported figures. The adjusted ratio reached a peak of 57.25 in January 31, 2022, before experiencing a sharp decline to 11.23 by January 31, 2024. The extreme variance between reported and adjusted leverage, particularly between 2021 and 2023, underscores how the removal of specific balance sheet items amplifies the perceived financial risk and leverage during periods of lower adjusted equity.

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Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).

	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020	Jan 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss)	906)	823)	497)	1,208)	215)	(81)
Stockholders’ equity (deficit)	1,855)	1,145)	849)	966)	(139)	(211)
Profitability Ratio
ROE¹	48.84%	71.88%	58.53%	125.14%	—	—
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss)	823)	548)	480)	430)	228)	(93)
Adjusted stockholders’ equity (deficit)	785)	163)	137)	214)	(113)	(196)
Profitability Ratio
Adjusted ROE²	104.84%	336.20%	349.49%	201.26%	—	—

2024 Calculations

¹ ROE = 100 × Net income (loss) ÷ Stockholders’ equity (deficit)
= 100 × 906 ÷ 1,855 = 48.84%

² Adjusted ROE = 100 × Adjusted net income (loss) ÷ Adjusted stockholders’ equity (deficit)
= 100 × 823 ÷ 785 = 104.84%

Financial performance transitioned from a period of deficits in 2019 and 2020 to consistent profitability and positive equity starting in 2021. A significant divergence is observed between reported and adjusted figures, particularly concerning the equity base and the resulting return on equity metrics.

Net Income Trends: Both reported and adjusted net income moved from negative values in 2019 to positive growth through 2024. While reported net income exhibited high volatility, including a peak of 1,208 million in 2021, adjusted net income demonstrated a more stable and linear upward trajectory, increasing from 430 million in 2021 to 823 million by January 31, 2024.
Equity Position Analysis: The entity moved from a stockholders' deficit position in 2019 and 2020 to a positive equity stance by 2021. A substantial gap exists between reported and adjusted equity; reported equity grew aggressively to 1,855 million by 2024, whereas adjusted equity remained considerably lower, ending the period at 785 million.
Adjusted Return on Equity (ROE) Dynamics: Adjusted ROE significantly exceeded reported ROE between 2021 and 2023, reaching a peak of 349.49% in 2022. This disparity is primarily attributed to the smaller adjusted equity base relative to the adjusted net income. However, a sharp contraction occurred in 2024, with Adjusted ROE declining to 104.84%, indicating that the growth in adjusted equity began to outpace the growth in adjusted net income during the final fiscal year.

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Based on: 10-K (reporting date: 2024-01-31), 10-K (reporting date: 2023-01-31), 10-K (reporting date: 2022-01-31), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-01-31).

	Jan 31, 2024	Jan 31, 2023	Jan 31, 2022	Jan 31, 2021	Jan 31, 2020	Jan 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss)	906)	823)	497)	1,208)	215)	(81)
Total assets	9,912)	9,438)	8,607)	7,280)	6,179)	4,729)
Profitability Ratio
ROA¹	9.14%	8.72%	5.77%	16.60%	3.47%	-1.71%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss)	823)	548)	480)	430)	228)	(93)
Adjusted total assets	8,819)	8,424)	7,866)	6,517)	6,123)	4,664)
Profitability Ratio
Adjusted ROA²	9.33%	6.51%	6.10%	6.60%	3.72%	-1.99%

2024 Calculations

¹ ROA = 100 × Net income (loss) ÷ Total assets
= 100 × 906 ÷ 9,912 = 9.14%

² Adjusted ROA = 100 × Adjusted net income (loss) ÷ Adjusted total assets
= 100 × 823 ÷ 8,819 = 9.33%

The financial performance from 2019 to 2024 is characterized by a transition from initial losses to sustained profitability, accompanied by a consistent expansion of the asset base. While reported figures exhibit significant volatility, the adjusted metrics reveal a more stable and progressive improvement in operational efficiency.

Net Income Trends: Reported net income experienced substantial fluctuations, notably peaking in 2021 at 1,208 million USD before normalizing in subsequent years. In contrast, adjusted net income demonstrates a more linear growth trajectory, rising steadily from a loss of 93 million USD in 2019 to 823 million USD by 2024. The divergence in 2021 suggests the impact of one-time gains or tax adjustments that inflated reported earnings relative to adjusted operational performance.
Asset Base Expansion: A strong and continuous upward trend is observed in total assets. Reported total assets grew from 4,729 million USD in 2019 to 9,912 million USD in 2024, representing more than a twofold increase. Adjusted total assets followed a similar path, increasing from 4,664 million USD to 8,819 million USD over the same period, indicating an aggressive scale-up of the company's resource base.
Return on Assets (ROA) Analysis: The reported ROA shows extreme volatility, shifting from -1.71% in 2019 to a peak of 16.60% in 2021, followed by a sharp decline to 5.77% in 2022 and a subsequent recovery to 9.14% in 2024. The adjusted ROA provides a more normalized view of productivity, recovering from -1.99% in 2019 to 9.33% in 2024. This stability indicates that the underlying asset utilization has improved incrementally, independent of the non-recurring items that skewed reported results.
Comparative Efficiency: By 2024, the convergence of reported ROA (9.14%) and adjusted ROA (9.33%) suggests a period of stabilization where reported earnings more closely align with adjusted operational expectations. The steady climb in adjusted ROA from 2020 onward reflects an increasing ability to generate profit from the expanding asset base, despite the significant increase in total asset volume.

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