Autodesk Inc. (NASDAQ:ADSK)

Net Operating Profit After Taxes (NOPAT)

The NOPAT showed significant fluctuation over the observed period. Starting at 41 million US dollars in 2019, there was a sharp increase to 1,197 million by 2020. This was followed by a decrease to 833 million in 2021, a subsequent rise to 970 million in 2022, a more pronounced increase to 1,402 million in 2023, and then a steep decline to 493 million in 2024. The overall trend indicates volatility with periods of strong profitability interspersed with notable declines.

Cost of Capital

The cost of capital remained relatively stable throughout the period, fluctuating narrowly between 18.49% and 19.12%. The lowest recorded value was in 2020 at 18.49%, and the highest was in 2021 at 19.12%. The marginal rise to 18.92% in 2024 suggests a slight increase in capital costs towards the end of the period.

Invested Capital

Invested capital demonstrated a consistent upward trajectory from 2019 to 2023, increasing from 4,412 million US dollars to 7,372 million. In 2024, there was a slight decrease to 7,325 million but overall, the invested capital nearly doubled over the six-year span. This indicates substantial reinvestment and expansion activities within the company.

Economic Profit

The economic profit fluctuated considerably and largely remained negative throughout the period, suggesting challenges in generating returns above the cost of capital. Beginning at a negative 791 million in 2019, economic profit improved to a positive 173 million in 2020, but then declined again to negative values of -262 million in 2021 and -298 million in 2022. A small positive economic profit of 14 million was achieved in 2023, but this was followed by a sharp fall to negative 893 million in 2024, the lowest point recorded. This pattern underscores difficulties in value creation relative to invested capital.

Net Income (Loss)

The net income demonstrates significant fluctuations over the observed periods. Starting from a loss of US$81 million in January 2019, the company experienced a substantial turnaround, achieving a positive net income of US$215 million in January 2020. This upward trend accelerated noticeably in January 2021, reaching a peak of US$1,208 million. Subsequently, net income declined to US$497 million in January 2022 but rebounded to US$823 million in January 2023 and further increased to US$906 million by January 2024. The data suggests a period of recovery and growth following an initial loss, followed by some volatility, with the most recent figures indicating a strengthening profit position.

Net Operating Profit After Taxes (NOPAT)

NOPAT shows a rising trend from January 2019 through January 2023, starting at US$41 million and climbing consistently to a peak of US$1,402 million in January 2023. After a low base in 2019, there was a rapid increase to US$1,197 million in 2020, followed by a decrease to US$833 million in January 2021. NOPAT then resumed growth with US$970 million in January 2022 and peaked notably in January 2023. However, in January 2024, NOPAT declined sharply to US$493 million. This pattern indicates periods of strong operational profitability, especially between 2020 and 2023, though the most recent year shows a significant reduction.

The financial data indicates notable fluctuations in both the income tax provision (benefit) and cash operating taxes over the analyzed periods.

Income Tax Provision (Benefit)

The income tax provision demonstrates considerable volatility throughout the periods. Initially, it increased from 38 million USD in 2019 to 80 million USD in 2020, indicating a rising tax expense. However, in 2021, there is a significant benefit recorded, reflected by a negative provision of -662 million USD, which represents a tax benefit rather than an expense. This sharp reversal may suggest extraordinary tax adjustments or recognition of deferred tax assets during that period. Subsequent years show a return to positive provisions, rising from 68 million USD in 2022 to 123 million USD in 2023, and reaching 230 million USD in 2024, indicating increased tax expenses once again. Overall, the income tax provision reflects uneven tax charges with an exceptional benefit in 2021 followed by increasing tax liabilities.

Cash Operating Taxes

Cash operating taxes display a generally upward trend across the years, with some variation in magnitude. Starting at 64 million USD in 2019, cash taxes increased slightly to 82 million USD in 2020. A more substantial rise is seen in 2021 with 130 million USD, despite the negative income tax provision in the same year, suggesting a divergence between cash taxes paid and accounting tax charges. Cash taxes decreased to 100 million USD in 2022 but then surged significantly to 415 million USD in 2023 before declining to 310 million USD in 2024. This pattern indicates increasing cash tax outflows, peaking in 2023, which might reflect higher taxable income or changes in tax payment schedules.

In summary, the data reveal inconsistencies between accounting tax provisions and cash tax payments, particularly highlighted by the negative income tax provision in 2021 juxtaposed with rising cash operating taxes. The overall trend suggests increasing tax-related cash outflows in recent years, and significant fluctuations in tax accounting entries, which could be attributable to changes in tax regulations, one-time adjustments, or differences in timing between tax accruals and payments.

The financial data presents a mixed set of trends over the six-year period ending in January 2024. The following analysis focuses on the reported debt and leases, stockholders’ equity, and invested capital, highlighting significant movements and potential implications.

Total Reported Debt & Leases

The debt and lease obligations experienced fluctuations over the period. Starting at 2,445 million USD in early 2019, the total increased slightly to 2,545 million USD by 2020, followed by a noticeable reduction to 2,105 million USD in 2021. However, debt levels surged again in 2022, reaching 3,060 million USD, which is the highest in the provided timeframe. Subsequently, it declined to 2,666 million USD in 2023 and further to 2,626 million USD in early 2024. The pattern suggests an overall cyclical adjustment in financing strategy, with a peak possibly reflecting increased borrowing or lease arrangements in 2022, and partial deleveraging thereafter.

Stockholders’ Equity (Deficit)

The stockholders’ equity profile shows a significant transformation from a deficit position to a positive equity base. At the start of 2019, equity was negative at -211 million USD, indicating liabilities exceeded assets. This deficit narrowed to -139 million USD in 2020 before turning positive at 966 million USD in 2021. Although there was a slight decrease to 849 million USD in 2022, the trend reversed with equity rising substantially to 1,145 million USD in 2023 and 1,855 million USD in 2024. This improvement demonstrates strengthening financial health, reflecting either retained earnings growth, capital injections, or asset revaluation effectively reducing the deficit and building shareholder value.

Invested Capital

Invested capital steadily increased over the analyzed periods. Commencing at 4,412 million USD in 2019, it rose to 5,535 million USD in 2020, and 5,723 million USD in 2021. Growth accelerated in the following years, reaching 6,835 million USD in 2022, peaking at 7,372 million USD in 2023, and slightly declining to 7,325 million USD in 2024. The general upward movement of invested capital suggests ongoing investments in operations, fixed assets, or other long-term assets, supporting expansion or optimization strategies. The marginal drop in 2024 may reflect asset disposals or adjustments but does not significantly reverse the growth trend.

In summary, the company's financial structure demonstrates evolving leverage with a notable peak in debt in 2022, followed by partial reduction. Simultaneously, a transition from equity deficit to a positive and growing equity base indicates improving solvency and capital adequacy. Continuous increases in invested capital highlight sustained investment activity, supporting business growth and operational capacity enhancement.

Economic Profit

The economic profit demonstrates significant volatility over the analyzed periods. Starting from a negative value of -$791 million in early 2019, it improved sharply to a positive $173 million in 2020. However, it reverted to negative territory in 2021 and 2022 with values of -$262 million and -$298 million respectively. A brief positive recovery to $14 million was observed in 2023, followed by a substantial decline to -$893 million in early 2024. This pattern illustrates considerable fluctuations indicating challenges in consistently generating returns above the cost of capital.

Invested Capital

Invested capital exhibited a persistent upward trend throughout the period, increasing from $4,412 million in 2019 to $7,372 million in 2023. A slight decrease to $7,325 million occurred in 2024, but overall the invested capital nearly doubled over five years. This growth suggests ongoing investments in assets or expansion initiatives, reflecting a long-term commitment to capital expansion despite variability in economic returns.

Economic Spread Ratio

The economic spread ratio follows a pattern similar to economic profit, with variation between negative and positive values. It started at -17.93% in 2019, turned positive at 3.13% in 2020, then declined to negative percentages in 2021 (-4.57%) and 2022 (-4.36%). A marginal positive spread of 0.19% occurred in 2023, followed by a sharp decline to -12.19% in 2024. This indicates fluctuations in the firm’s ability to generate returns exceeding its cost of capital, with significant negative spreads dominating most of the observed periods.

Summary Insights

The data reveals a company experiencing substantial fluctuations in economic profit and economic spread ratio, reflecting inconsistency in creating shareholder value. Despite steady growth in invested capital, the company has struggled to maintain a positive economic spread, indicating that the returns on new investments may not consistently cover the associated costs. The pronounced downturn in economic profit and spread ratio in early 2024 suggests increasing challenges or costs impacting profitability. This pattern highlights the need for close monitoring of investment efficiency and cost management to enhance sustainable value creation.

Adjusted Net Revenue

The adjusted net revenue demonstrated overall growth from 2019 to 2023, increasing from 2,706 million US dollars to 5,795 million US dollars. This indicates an upward trend in the company’s revenue generation capability over this period. However, in 2024, there was a decline to 5,181 million US dollars, suggesting a reversal or slowdown in revenue growth for the latest period.

Economic Profit

Economic profit showed considerable volatility across the years. In 2019, the value was significantly negative at -791 million US dollars, indicating losses beyond the cost of capital. In 2020, the company reported a strong positive economic profit of 173 million US dollars, reflecting improved profitability. Subsequently, from 2021 to 2022, economic profit returned to negative territory (-262 and -298 million US dollars), indicating deteriorating economic returns. In 2023, a slight positive economic profit of 14 million US dollars was observed, suggesting marginal improvement. However, the value sharply declined again in 2024 to -893 million US dollars, reaching the lowest point in the six-year span, highlighting substantial economic losses.

Economic Profit Margin

The economic profit margin mirrored the economic profit trend, with significant fluctuations over the analyzed periods. It was heavily negative at -29.22% in 2019, improved markedly to 4.13% in 2020, and then slipped back into negative range in 2021 and 2022 (-6.31% and -6.18%). A marginally positive margin of 0.24% was reported in 2023, indicating breakeven-like conditions. However, in 2024, the margin declined sharply to -17.23%, reflecting decreased efficiency in generating economic profit relative to revenue.

Summary Insights

The data reveals a cyclical pattern of profitability and economic returns, with the company experiencing periods of both gains and losses. Revenue growth was strong through 2023 but showed signs of contraction in 2024. Despite revenue increases over most years, economic profit and margin did not consistently improve, highlighting challenges in translating revenue growth into sustained economic profit. The substantial downturn in economic profit and margin in 2024 represents a key concern and suggests that the latest year incurred costs or inefficiencies that outweighed revenue gains.