Autodesk Inc. (NASDAQ:ADSK)

Net operating profit after taxes (NOPAT)

The NOPAT demonstrated significant fluctuations over the reviewed period. Beginning at a modest level in early 2019, it surged dramatically in 2020 before experiencing a decline in 2021. The profit rebounded in 2022 and peaked in 2023, indicating a period of enhanced operational efficiency or market conditions. However, in 2024 there was a sharp reduction, suggesting challenges impacting profitability during that year.

Cost of capital

The cost of capital remained relatively stable throughout the periods, fluctuating narrowly around 18.5% to 19%. These minor changes suggest consistent market and risk conditions influencing the company's capital expenses, without any major shifts that would significantly affect investment decisions.

Invested capital

The invested capital showed a consistent upward trend from 2019 through 2023, reflecting ongoing investment in company assets or operations. The increase each year indicates expansion or reinvestment strategies. In 2024, the invested capital marginally decreased but remained close to the previous level, suggesting a stabilization or slight reduction in asset base.

Economic profit

Economic profit exhibited substantial volatility across the timeline. Negative economic profit was recorded in 2019, followed by a positive spike in 2020. Subsequently, the figure returned to negative values in 2021 and 2022, and approached zero in 2023, indicating near break-even performance. However, 2024 showed a significant negative value once again, pointing to decreased value generation relative to the cost of capital during that year.

Overall insights

The analysis reveals a pattern of inconsistency in profitability and value creation metrics despite relatively stable cost of capital and generally increasing invested capital. While there were periods of strong operational profits and positive economic returns, these were not sustained, as evidenced by recurring negative economic profits. The sharp decline in NOPAT and economic profit in 2024 raises concerns about recent operational or market challenges affecting financial performance.

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 exhibited significant fluctuations over the periods. Initially, there was a negative value of -$790 million in early 2019, which improved sharply to a positive $174 million by early 2020. However, the profit declined again in subsequent years, turning negative with -$260 million and -$296 million in 2021 and 2022, respectively. A marginal positive figure of $15 million was recorded in early 2023, followed by a substantial drop to -$891 million in early 2024. This pattern indicates instability in generating economic profit, with recurrent periods of losses and gains.

Invested Capital

Invested capital showed a generally increasing trend over the years. Starting from $4,412 million in early 2019, it rose steadily through the years, reaching $7,372 million by early 2023. Although there was a slight dip to $7,325 million in early 2024, the overall upward trajectory suggests progressive investment or asset growth during the period under review.

Economic Spread Ratio

The economic spread ratio similarly displayed considerable variation. It began at a negative -17.91% in early 2019, improved to a positive 3.14% in early 2020, then declined into negative territory again with values of -4.55% in 2021 and -4.34% in 2022. A minor positive spread of 0.21% was noted in early 2023, followed by a sharp downturn to -12.17% in early 2024. This volatility in the spread ratio reflects inconsistent returns relative to the cost of capital over the years.

Overall Insights

The data collectively indicates uncertainty and volatility in the firm’s economic profitability. Despite increasing invested capital, the company struggled to consistently generate positive economic profit, as reflected by the fluctuating economic profit figures and economic spread ratios. The notable downturns in early 2024 suggest possible challenges in value creation relative to invested resources during that period.

Adjusted Net Revenue

The adjusted net revenue demonstrated a general upward trend from 2019 to 2023, increasing from 2,706 million USD in 2019 to a peak of 5,795 million USD in 2023. However, a decline to 5,181 million USD was observed in 2024, indicating a potential slowdown or reversal in revenue growth after a multi-year expansion.

Economic Profit

The economic profit figures fluctuated significantly over the analyzed period. The company recorded negative economic profit in most years, with a loss of 790 million USD in 2019 improving to a positive 174 million USD in 2020. Following this, economic profit again turned negative for 2021 and 2022, remaining near -260 and -296 million USD respectively, then marginally positive at 15 million USD in 2023 before sharply declining to -891 million USD in 2024. This variability points to inconsistent profitability when considering capital costs.

Economic Profit Margin

The economic profit margin mirrored the volatility seen in economic profit. Starting at a low -29.19% in 2019, it improved to a positive 4.15% in 2020, signaling a brief period of economic value creation. However, margins reverted to negative in the subsequent years (-6.29% in 2021 and -6.15% in 2022), nearly breaking even at 0.26% in 2023, before falling substantially to -17.21% in 2024. This pattern suggests challenges in maintaining profitability relative to invested capital, especially in the latest period.

Overall Analysis

While the company's revenue growth trajectory was positive from 2019 to 2023, the inconsistent and frequently negative economic profit and economic profit margin reveal ongoing issues with profitability efficiency. The marked decline in economic profit and margin in 2024, alongside a drop in revenue, indicates a deteriorating financial performance that may warrant further investigation into cost management and business strategy effectiveness.