CrowdStrike Holdings Inc. (NASDAQ:CRWD)

The analysis of the financial metrics over the reported periods reveals several notable trends and developments.

Net Operating Profit After Taxes (NOPAT)

NOPAT shows a consistent growth trend from 2020 through 2024, increasing from approximately $139 million to nearly $691 million. However, in 2025, there is a significant decline to around $516 million. This indicates a strong improvement in operating profitability over the first five years, followed by a substantial decrease in the most recent year.

Cost of Capital

The cost of capital remains relatively stable throughout the six-year period, fluctuating slightly between 16.15% and 16.4%. This stability suggests consistent investor expectations regarding the company's risk and return profile.

Invested Capital

Invested capital rises sharply from about $670 million in 2020 to over $7.6 billion by 2025. This indicates significant capital deployment and increasing asset base or investment activities. The steady increase points to aggressive growth or expansion strategies during the period.

Economic Profit

Economic profit presents a contrasting pattern to NOPAT. While initially positive in 2020 (approximately $29 million), it turns negative and progressively worsens through the subsequent years, reaching a substantial deficit of over $728 million in 2025. Despite increasing operating profits, the rise in invested capital and stable cost of capital lead to negative economic profits, reflecting that the returns generated are insufficient to cover the cost of capital.

Overall, the company demonstrates growth in operating profit and asset base, but the persistent negative economic profit highlights challenges in value creation relative to invested capital and cost of capital. The sharp decline in NOPAT in the latest year, combined with increasing invested capital and negative economic profits, suggests the need for a review of investment efficiency and profitability strategies.

Net Income (Loss) Attributable to CrowdStrike

The net income figures demonstrate significant variability over the periods. Starting with a net loss of approximately $141.8 million in the year ending January 2020, the loss decreased to about $92.6 million in January 2021. However, this was followed by an increased loss to roughly $234.8 million in January 2022. Thereafter, the loss narrowed to $183.2 million in 2023. Notably, in 2024, there was a reversal to a positive net income of $89.3 million, indicating a substantial recovery. In the following year, 2025, the figure returned to a loss, though much smaller than previous years, at approximately $19.3 million.

Net Operating Profit After Taxes (NOPAT)

The NOPAT values exhibit a consistent and strong upward trend over the years observed. Starting at $139.1 million in 2020, there was a steep increase to $246.0 million in 2021. The upward momentum continued in 2022 with $389.9 million, then sharply increased to $625.9 million in 2023. In 2024, NOPAT further grew to $690.7 million before experiencing a decline to $516.4 million in 2025. Despite the decrease in the final year, the overall trend across the period indicates strong growth in operational profitability after taxes.

Summary of Trends and Insights

The financial data reveals a divergence between net income and NOPAT trends. While net income shows volatility with alternating losses and positive results, NOPAT consistently increased until 2024 before slightly declining in 2025. This suggests that operational efficiency and profitability improvements were achieved, but other factors such as non-operating expenses, taxes, or one-time items might have adversely impacted the net income figures. The significant positive net income in 2024 stands out as an anomaly compared to other years with net losses. The decreasing net loss in 2025 alongside a decline in NOPAT might indicate emerging challenges or increased costs affecting overall profitability despite strong operational earnings.

Provision for Income Taxes

The provision for income taxes shows significant fluctuation over the observed periods. From 2020 to 2021, there is a noticeable increase from approximately 2 million to nearly 4.8 million US dollars. This upward trend continues sharply into 2022, reaching over 72 million US dollars. However, in 2023, the provision declines substantially to around 22 million US dollars before increasing again in the subsequent years, rising to about 32 million and then further to approximately 71 million US dollars by 2025. This pattern indicates periods of considerable variability in tax provisioning, suggesting changes in taxable income or adjustments in tax strategy during these years.

Cash Operating Taxes

Cash operating taxes follow a somewhat similar but less volatile pattern compared to the provision for income taxes. Starting at close to 2.8 million US dollars in 2020, the cash taxes increase to around 6 million US dollars in 2021. There is a significant spike in 2022 reaching over 91 million US dollars, which is a marked increase from previous years. Following this peak, the cash tax payments decrease sharply to approximately 15.8 million US dollars in 2023, then decline further to just over 10 million in 2024, before increasing again to about 45.9 million US dollars in 2025. The fluctuations in cash taxes suggest variability in actual tax payments that may reflect changes in cash flows or timing differences relative to the provision for income taxes.

Comparison and Insights

Both provision for income taxes and cash operating taxes exhibit significant fluctuations, with peaks around 2022, followed by declines and then increases toward 2025. The provision generally exceeds the cash taxes in some years, particularly noticeable in 2022, indicating potential deferred tax liabilities or adjustments in tax accounting treatments. The volatile nature of both metrics implies an underlying variability in taxable income or strategic tax management, possibly linked to changes in operating performance or tax regulations during the analyzed periods.

The financial data indicates significant changes in the capital structure and equity position over the observed periods.

Total Reported Debt & Leases

The reported debt and leases showed a substantial increase from approximately $50.7 million in early 2020 to around $779.0 million in early 2021. From 2021 through 2025, the value of reported debt and leases remained relatively stable, fluctuating slightly around the $780 million mark. This suggests that after a sharp rise in debt, the company maintained a consistent level of liabilities related to debt and leases.

Total Stockholders’ Equity

Stockholders’ equity consistently increased throughout the period, starting from approximately $742.1 million at the beginning of 2020 and rising to nearly $3.28 billion by January 2025. The growth trend appears to accelerate over time, with a remarkable increase especially after 2022, indicating a significant strengthening of the company's equity base and potentially reflecting retained earnings growth, capital raises, or other equity improvements.

Invested Capital

Invested capital experienced a dramatic increase, jumping from about $669.5 million in 2020 to roughly $2.52 billion in 2021. This upward trend continued steadily, reaching over $7.61 billion by early 2025. The data reflects substantial investments and growth in company assets financed by both debt and equity over these years, underscoring rapid expansion or capital deployment activities.

Overall, the data reveals a period of rapid growth in invested capital accompanied by a stable level of debt and a strong expansion of stockholders’ equity. The company's capital structure appears to have shifted towards greater equity financing while maintaining a steady debt position. This trend suggests increased financial strength and capacity to support ongoing operations and growth initiatives.

Over the analyzed period, economic profit exhibits a pronounced declining trend. Initially, there is a positive economic profit of approximately 29.3 million USD at the beginning of 2020, followed by a substantial decline resulting in negative economic profits throughout the subsequent years. This downward trajectory intensifies, culminating in a significant loss exceeding 728 million USD by early 2025. This pattern indicates persistent challenges in generating returns above the cost of capital over time.

Invested capital demonstrates a consistent and marked increase across the same timeframe. Beginning at approximately 670 million USD in early 2020, invested capital expands steadily each year, reaching over 7.6 billion USD by early 2025. This growth reflects ongoing investment and capital allocation into the business, potentially aimed at supporting expansion or operational needs.

The economic spread ratio, which measures the spread between return on invested capital and the cost of capital, mirrors the economic profit trend with initially positive figures that quickly shift into negative territory. Starting at 4.37% in early 2020, the ratio declines sharply, turning negative by 2021 and remaining below zero thereafter. The spread narrows slightly in early 2023 but then worsens again, reaching a low of -9.56% by early 2025. This persistent negative spread signifies that the company is consistently earning returns below its cost of capital during most of the observed period.

Economic Profit

Starts positive in 2020 and subsequently turns negative, with losses deepening significantly by 2025.

Invested Capital

Shows robust and continuous growth throughout the period, increasing more than tenfold from 2020 to 2025.

Economic Spread Ratio

Shifted from positive to consistently negative, indicating a failure to generate adequate returns relative to capital costs.

In summary, despite substantial increases in invested capital, the company has struggled to generate positive economic profit and maintain a favorable economic spread. This suggests challenges in achieving profitable growth or efficiently utilizing the capital invested during the period under review.

Adjusted Revenue

The adjusted revenue shows a consistent and significant upward trend throughout the periods analyzed. Starting from approximately 762.5 million USD in 2020, it grows steadily each year, reaching over 4.6 billion USD by 2025. This represents a more than sixfold increase over the six-year span, indicating strong sales growth and potentially expanding market presence.

Economic Profit

The economic profit exhibits considerable volatility and a generally negative trajectory after 2020. In 2020, economic profit was positive at roughly 29.3 million USD, but it turned negative in 2021 and remains negative in all following periods. Although the negative economic profit values fluctuate, the overall trend deepens considerably, culminating in a substantial loss of over 728 million USD by 2025. This suggests that the company's incremental returns over its cost of capital have deteriorated significantly despite increasing revenues.

Economic Profit Margin

The economic profit margin parallels the economic profit trend, showing a sharp decline from a positive margin of 3.84% in 2020 to heavily negative margins in subsequent years. The margin decreases to -13.46% in 2021, improves slightly in 2023 to -1.27%, but then declines further to -15.74% by 2025. This pattern indicates increasing inefficiencies or higher costs relative to revenue over time, reflecting challenges in generating returns above capital costs despite revenue growth.

Overall Analysis

While revenue growth is robust and consistent, the company is experiencing significant economic losses and declining profitability margins. The increasing adjusted revenue suggests successful top-line expansion, yet the dramatic negative economic profit indicates that growth is not translating into value creation after accounting for capital costs. This disparity may be due to rising operational expenses, investments, or other cost factors outpacing revenue gains. The firm may need to focus on improving cost management or operational efficiency to reverse the negative economic profit trend.