Intel Corp. (NASDAQ:INTC)

The provision for taxes exhibits significant fluctuations over the five-year period. A notable shift occurred between 2021 and 2022, followed by continued volatility through 2025. The components of the total provision, namely the current and deferred portions, demonstrate contrasting behaviors that contribute to the overall pattern.

Current Provision for Taxes

The current provision for taxes began at US$2,577 million in 2021, increased substantially to US$4,909 million in 2022, then decreased significantly to US$1,096 million in 2023. A subsequent rise to US$1,956 million occurred in 2024, followed by a further decrease to US$1,202 million in 2025. This indicates a considerable degree of variability, potentially linked to changes in taxable income.

Deferred Provision for (Benefit from) Taxes

The deferred provision demonstrates an even more pronounced pattern of change. Starting at a benefit of US$-742 million in 2021, it transitioned to a substantial benefit of US$-5,158 million in 2022. This was followed by a benefit of US$-2,009 million in 2023, a dramatic shift to an expense of US$6,067 million in 2024, and finally a smaller benefit of US$329 million in 2025. These fluctuations suggest significant changes in deferred tax assets and liabilities, potentially driven by alterations in tax laws, changes in net operating loss carryforwards, or adjustments to valuation allowances.

Total Provision for (Benefit from) Taxes

The total provision for taxes reflects the combined effect of the current and deferred components. A provision of US$1,835 million was recorded in 2021, followed by a net benefit of US$-249 million in 2022. The following year saw a net benefit of US$-913 million. A substantial provision of US$8,023 million was recorded in 2024, and this decreased to a provision of US$1,531 million in 2025. The large benefit in 2022 and 2023, and the large provision in 2024, highlight the significant impact of deferred tax items on the overall tax expense.

The considerable swings in both the current and deferred tax provisions suggest that the company’s effective tax rate is likely to have experienced substantial volatility during this period. Further investigation into the underlying causes of these fluctuations, such as changes in tax legislation, jurisdictional mix of earnings, and the utilization of tax credits and loss carryforwards, would be necessary to fully understand the drivers of these trends.

The effective income tax rate exhibits substantial volatility over the observed period. While the U.S. federal statutory tax rate remained constant at 21.00%, the effective tax rate fluctuated significantly, indicating considerable influence from non-taxable income or expenses, tax credits, or jurisdictional mix shifts.

Effective Tax Rate Trend

In 2021, the effective tax rate was 8.50%, substantially below the statutory rate. This suggests the presence of factors reducing the company’s tax burden. A negative effective tax rate was recorded in 2022 at -3.20%, and this trend intensified in 2023, reaching -119.80%. The negative rate in 2023 is particularly noteworthy, potentially stemming from significant losses in certain jurisdictions, one-time tax benefits, or substantial research and development tax credits. The rate remained negative in 2024, though less pronounced at -71.60%. A dramatic shift occurred in 2025, with the effective tax rate rising to 98.30%, exceeding the statutory rate by a considerable margin. This suggests a reversal of the conditions driving the negative rates in prior years, potentially due to increased taxable income or the expiration of prior tax benefits.

The large swings in the effective tax rate warrant further investigation. The negative rates observed in 2022, 2023, and 2024 could indicate substantial tax planning strategies or operational losses impacting the overall tax liability. The substantial positive rate in 2025 requires examination to understand the underlying drivers of this change and its sustainability.

Comparison to Statutory Rate

The consistent disparity between the effective tax rate and the statutory rate highlights the importance of factors beyond the standard corporate tax rate in determining the company’s actual tax expense. These factors could include international operations, state taxes, tax credits, and deferred tax assets/liabilities. The magnitude of the difference varied considerably, suggesting dynamic changes in the company’s tax profile.

Continued monitoring of the effective tax rate is recommended, along with a detailed analysis of the components contributing to these fluctuations. Understanding the drivers behind these changes is crucial for accurate financial forecasting and risk assessment.

The composition of deferred tax assets and liabilities exhibits significant fluctuations over the five-year period. A notable trend is the increasing capitalization of research and development expenditures, alongside growth in state credits and net operating losses, contributing to a rise in gross deferred tax assets. However, this increase is offset by a substantial and accelerating growth in the valuation allowance against these assets.

Research and Development Capitalization

Capitalized R&D expenditures demonstrate a consistent upward trajectory, increasing from $519 million in 2021 to $12,203 million in 2025. This suggests an increasing investment in long-term innovation and potentially a shift in accounting practices related to R&D costs.

State Credits and Net Operating Losses

State credits and net operating losses also show a steady increase, moving from $2,010 million in 2021 to $3,165 million in 2025. This indicates the company is utilizing tax benefits related to state incentives and potentially experiencing periods of taxable losses.

Inventory and Other Current Assets

The value attributed to inventory as a component of deferred tax assets decreased significantly from $914 million in 2021 to $628 million in 2025. Accrued compensation and other benefits remained relatively stable, fluctuating between $931 million and $1,031 million. Share-based compensation also showed modest growth, increasing from $477 million to $481 million over the period. Litigation charges experienced some volatility, but generally decreased from $467 million to $320 million.

Valuation Allowance

The valuation allowance against deferred tax assets experienced dramatic growth, escalating from -$2,259 million in 2021 to -$16,402 million in 2025. This substantial increase suggests a growing uncertainty regarding the realization of deferred tax assets, potentially due to concerns about future profitability or changes in tax laws. The significant jump in 2024, increasing the allowance by over $11 billion, is particularly noteworthy.

Deferred Tax Liabilities

Deferred tax liabilities, primarily driven by property, plant, and equipment, decreased from -$5,759 million in 2021 to -$3,979 million in 2025. The decline in property, plant, and equipment related deferred tax liabilities is consistent throughout the period. Licenses and intangibles also contributed to the liabilities, with a smaller decrease over time. Unrealized gains on investments and derivatives also contributed to deferred tax liabilities, showing a consistent decline.

Net Deferred Tax Position

The net deferred tax position transitioned from a net liability of -$1,793 million in 2021 to a net asset of $3,248 million in 2022, then to $5,273 million in 2023. However, it reverted to a net liability of -$859 million in 2024 and further deteriorated to -$1,116 million in 2025. This volatility highlights the significant impact of the valuation allowance on the overall deferred tax position.

In summary, while gross deferred tax assets increased due to rising R&D capitalization and state credits, the substantial growth in the valuation allowance significantly impacted the net deferred tax position, ultimately resulting in a net liability by the end of the period. The increasing valuation allowance suggests a cautious outlook regarding the future realization of these tax benefits.

The deferred tax asset balance exhibited a significant increase from 2021 to 2023, followed by substantial declines in 2024 and 2025. Conversely, the deferred tax liability balance decreased markedly from 2021 to 2022, then remained relatively stable before increasing in 2024 and 2025.

Deferred Tax Assets

The deferred tax asset position increased from US$874 million in 2021 to US$3,450 million in 2022, representing a considerable rise. This growth continued into 2023, reaching US$5,459 million. However, a significant decrease occurred in 2024, with the balance falling to US$603 million. This downward trend persisted into 2025, with the deferred tax asset position further decreasing to US$570 million. The substantial fluctuations suggest potential changes in the company’s ability to utilize future tax benefits, or adjustments to temporary differences giving rise to these assets.

Deferred Tax Liabilities

The deferred tax liability balance decreased substantially from US$2,667 million in 2021 to US$202 million in 2022. The balance remained relatively consistent at US$186 million in 2023. A notable increase was observed in 2024, rising to US$1,462 million, and continued to increase in 2025, reaching US$1,686 million. This pattern indicates a potential shift in the nature or magnitude of temporary differences creating these liabilities, or changes in applicable tax rates.

Net Deferred Tax Position

In 2021, the net deferred tax liability was US$1,793 million (US$2,667 million liabilities - US$874 million assets). By 2022, this shifted to a net deferred tax asset of US$3,248 million (US$202 million liabilities - US$3,450 million assets). This trend reversed in subsequent years. In 2023, the net deferred tax asset was US$5,273 million (US$186 million liabilities - US$5,459 million assets). However, by 2024, the position became a net deferred tax liability of US$859 million (US$1,462 million liabilities - US$603 million assets). This trend continued into 2025, with a net deferred tax liability of US$1,116 million (US$1,686 million liabilities - US$570 million assets). The swing from a net asset to a net liability suggests a significant change in the overall tax position.

The financial information reveals adjustments made to reported figures, specifically concerning the removal of deferred tax assets and liabilities. These adjustments impact total assets, total liabilities, stockholders’ equity, and net income over the five-year period. A consistent pattern emerges where the adjusted figures differ from the reported figures, suggesting a material impact from deferred tax accounting.

Total Assets

Reported total assets demonstrate an increasing trend from 2021 to 2024, reaching 196,485 US$ in millions, before increasing significantly to 211,429 US$ in millions in 2025. The adjusted total assets follow a similar trajectory, consistently lower than the reported values. The difference between reported and adjusted assets remains relatively stable in the earlier years, but narrows in 2025. This suggests a decreasing deferred tax impact on total assets in the most recent year.

Total Liabilities

Reported total liabilities generally increased from 2021 to 2024, peaking at 91,453 US$ in millions, then decreased to 85,069 US$ in millions in 2025. Adjusted total liabilities exhibit a similar pattern, consistently below the reported amounts. The gap between reported and adjusted liabilities remains relatively consistent throughout the period, indicating a stable deferred tax impact on liabilities.

Total Stockholders’ Equity

Reported total stockholders’ equity increased from 2021 to 2023, then decreased in 2024 before a substantial increase in 2025 to 114,281 US$ in millions. The adjusted stockholders’ equity is consistently higher than the reported equity. The difference between the two values is relatively stable until 2025, where the adjusted equity shows a more pronounced increase compared to the reported equity, suggesting a larger positive adjustment related to deferred taxes in that year.

Net Income

Reported net income attributable to the company shows a significant decline from 2021 to 2024, culminating in a substantial loss of -18,756 US$ in millions in 2024, followed by a smaller loss of -267 US$ in millions in 2025. The adjusted net income mirrors this trend, but the magnitude of the decline and loss is less pronounced. The adjustments consistently result in a higher net income figure than what is reported, particularly in 2022, 2023, and 2024. The difference is most significant in 2024, where the adjusted net loss is considerably less severe than the reported loss. In 2025, the adjusted net income becomes positive, while the reported net income remains negative.

The consistent adjustments to net income suggest that deferred tax effects are significantly influencing the reported profitability of the company. The increasing difference in net income between reported and adjusted figures in recent years warrants further investigation into the nature and magnitude of these deferred tax adjustments.

Overall, the removal of deferred tax effects results in a more favorable presentation of the company’s financial position and performance, particularly regarding net income. The trends indicate a growing impact of deferred taxes on reported results, especially in the later years of the period.

The financial performance, as indicated by a set of key ratios, exhibits notable shifts over the five-year period. Adjusting for deferred tax impacts reveals alterations in profitability, asset utilization, and financial leverage, which subsequently influence returns on equity and assets. Generally, the adjusted ratios demonstrate a more conservative financial picture than those reported, particularly in later years.

Profitability

Reported net profit margin experienced a substantial decline from 25.14% in 2021 to -35.32% in 2024, followed by a slight recovery to -0.51% in 2025. The adjusted net profit margin mirrors this trend, though the magnitude of the decline is less pronounced, moving from 24.20% to -23.90% over the same period, and recovering to 0.12% in 2025. The difference between reported and adjusted margins widens in years with significant losses, suggesting deferred taxes are having a material impact on reported earnings.

Asset Turnover

Both reported and adjusted total asset turnover ratios show a consistent downward trend, decreasing from 0.47 in 2021 to 0.25 in 2025. The adjusted ratio remains very close to the reported ratio throughout the period, indicating that deferred taxes have a minimal effect on the assessment of how efficiently assets are used to generate sales.

Financial Leverage

Reported financial leverage increased from 1.77 in 2021 to 1.98 in 2024, before decreasing slightly to 1.85 in 2025. The adjusted financial leverage follows a similar pattern, though the values are consistently lower. The adjustment reduces the leverage ratio, suggesting deferred tax liabilities contribute to the reported leverage position.

Return on Equity (ROE)

Reported ROE declined dramatically from 20.83% in 2021 to -18.89% in 2024, with a minimal recovery to -0.23% in 2025. The adjusted ROE exhibits a similar trajectory, falling from 19.68% to -12.67% and then to 0.05%. The adjustments consistently lower the ROE, reflecting the impact of deferred taxes on reported net income. The magnitude of the difference between reported and adjusted ROE increases as profitability declines.

Return on Assets (ROA)

Reported ROA decreased from 11.80% in 2021 to -9.55% in 2024, with a slight recovery to -0.13% in 2025. The adjusted ROA mirrors this decline, moving from 11.42% to -6.48% and then to 0.03%. Similar to ROE, the adjustments consistently reduce ROA, and the difference between reported and adjusted values becomes more significant during periods of lower profitability. This suggests deferred taxes are a key factor influencing the return generated from assets.

In summary, the adjustments related to deferred taxes generally result in a more conservative assessment of financial performance. The impact is most pronounced on profitability ratios (net profit margin, ROE, and ROA) during periods of declining earnings. Asset turnover and financial leverage are less affected by these adjustments.

The reported and adjusted net profit margins demonstrate significant fluctuations over the five-year period. A notable divergence emerges between the reported and adjusted figures, particularly in the later years. Overall, both metrics exhibit a declining trend, though the adjusted net profit margin experiences more pronounced volatility.

Reported Net Profit Margin

The reported net profit margin began at 25.14% in 2021, decreasing to 12.71% in 2022. A further decline to 3.11% occurred in 2023, followed by a substantial loss in 2024, resulting in a negative margin of -35.32%. This negative trend continued into 2025, with the margin reaching -0.51%. The consistent decline suggests increasing costs or decreasing revenues impacting reported profitability.

Adjusted Net Profit Margin

The adjusted net profit margin started at 24.20% in 2021, falling to 4.53% in 2022. In 2023, the adjusted margin turned negative at -0.59%, indicating that adjustments were necessary to arrive at this figure. The most significant decrease occurred in 2024, with a margin of -23.90%. A slight recovery was observed in 2025, with the margin increasing to 0.12%, though remaining near zero. The substantial difference between the reported and adjusted margins in 2024 and 2025 suggests the presence of significant non-recurring items or accounting adjustments impacting the reported net income.

Comparison of Reported and Adjusted Margins

While both margins generally trend downward, the adjusted net profit margin exhibits greater volatility. The gap between the reported and adjusted margins widens considerably in 2024 and 2025. This divergence implies that adjustments are having a more substantial impact on the overall profitability picture in these years. The negative adjusted margin in 2023, 2024, and a near-zero value in 2025, despite positive reported net income in 2025, warrants further investigation into the nature of these adjustments.

Overall Trend

A consistent downward trend is observed in both reported and adjusted net profit margins. The increasing magnitude of losses, particularly as reflected in the adjusted figures, suggests a deteriorating profitability position. The substantial fluctuations and the widening gap between reported and adjusted results indicate potential underlying issues requiring detailed scrutiny.

The information presents a five-year trend of total asset figures and associated turnover ratios. Both reported and adjusted total assets demonstrate a consistent increase over the period from 2021 to 2025. However, the total asset turnover ratios, both reported and adjusted, exhibit a distinct downward trend during the same timeframe.

Total Assets

Reported total assets increased from US$168,406 million in 2021 to US$211,429 million in 2025, representing a cumulative growth of approximately 25.5%. Adjusted total assets followed a similar pattern, rising from US$167,532 million to US$210,859 million, a growth of roughly 25.9% over the five-year period. The difference between reported and adjusted assets remains relatively consistent across the years, suggesting a systematic adjustment is being applied.

Total Asset Turnover

The reported total asset turnover ratio declined from 0.47 in 2021 to 0.25 in 2025. The adjusted total asset turnover ratio mirrored this decline, moving from 0.47 to 0.25 over the same period. This indicates that, despite the growth in total assets, the company is generating less revenue for each dollar of assets held. The adjusted and reported ratios remain identical each year, indicating the adjustment to total assets does not impact the turnover calculation.

The consistent decrease in the total asset turnover ratio, despite increasing asset levels, warrants further investigation. Potential factors contributing to this trend could include decreased sales efficiency, increased investment in less liquid assets, or a shift in business strategy towards lower-margin products. The sustained decline suggests this is not a temporary fluctuation but a developing pattern.

Relationship between Asset Growth and Turnover

The simultaneous increase in assets and decrease in turnover suggests the company is not effectively utilizing its growing asset base to generate revenue. While asset growth can be positive, it must be accompanied by a comparable or greater increase in revenue to maintain or improve asset efficiency. The observed trend indicates a potential inefficiency in asset management.

An examination of the financial information reveals trends in both reported and adjusted financial leverage over a five-year period. Both total assets and total stockholders’ equity generally increased during the period, though with some fluctuations in equity. The adjusted figures consistently differ from the reported figures, impacting the calculated leverage ratios.

Total Assets

Reported total assets exhibited a consistent upward trend, increasing from US$168,406 million in 2021 to US$196,485 million in 2023, and further to US$211,429 million in 2025. Adjusted total assets mirrored this trend, starting at US$167,532 million in 2021 and reaching US$210,859 million in 2025. The difference between reported and adjusted assets remained relatively stable across the years.

Total Stockholders’ Equity

Reported total stockholders’ equity increased from US$95,391 million in 2021 to US$105,590 million in 2023, before decreasing to US$99,270 million in 2024, and then increasing significantly to US$114,281 million in 2025. Adjusted total stockholders’ equity also showed an overall increase, moving from US$97,184 million in 2021 to US$115,397 million in 2025, with a similar dip in 2024. The adjusted equity values were consistently higher than the reported equity values.

Reported Financial Leverage

Reported financial leverage showed a slight increase from 1.77 in 2021 to 1.81 in 2023. A more substantial increase was observed in 2024, reaching 1.98, before decreasing slightly to 1.85 in 2025. This suggests a period of increased reliance on financial leverage, followed by a modest reduction.

Adjusted Financial Leverage

Adjusted financial leverage followed a similar pattern to the reported leverage, increasing from 1.72 in 2021 to 1.86 in 2023. It peaked at 1.96 in 2024 and then decreased to 1.83 in 2025. The adjusted leverage ratios were consistently lower than the reported ratios, indicating that the adjustments reduce the calculated leverage. The magnitude of the difference between the reported and adjusted leverage remained relatively consistent throughout the period.

The observed fluctuations in both reported and adjusted financial leverage warrant further investigation to understand the underlying drivers. The consistent difference between the reported and adjusted figures suggests that the adjustments made have a material impact on the assessment of the company’s financial risk profile.

The period under review demonstrates significant volatility in reported and adjusted net income, impacting return on equity calculations. Stockholders’ equity exhibits a generally increasing trend, though with some fluctuation. A detailed examination of the reported and adjusted ROE, alongside the underlying income and equity figures, reveals key insights into the company’s performance.

Reported Return on Equity (ROE)

Reported ROE experienced a substantial decline over the observed period. Beginning at 20.83% in 2021, it decreased to 7.90% in 2022 and further to 1.60% in 2023. A significant loss in 2024 resulted in a negative ROE of -18.89%, followed by a further decrease to -0.23% in 2025. This pattern closely mirrors the fluctuations in reported net income, indicating a strong correlation between profitability and ROE.

Adjusted Return on Equity (ROE)

Adjusted ROE also shows a declining trend, though less dramatic than the reported ROE. Starting at 19.68% in 2021, it decreased to 2.91% in 2022 and became negative at -0.32% in 2023. The substantial adjusted net loss in 2024 led to a significantly negative adjusted ROE of -12.67%, which slightly improved to 0.05% in 2025. The adjusted ROE generally tracks the adjusted net income, but the magnitude of the fluctuations is smaller than those observed in the reported figures.

Net Income Trends

Reported net income decreased significantly from US$19,868 million in 2021 to US$8,014 million in 2022, then to US$1,689 million in 2023. A substantial loss of US$-18,756 million was recorded in 2024, followed by a smaller loss of US$-267 million in 2025. Adjusted net income demonstrates a similar pattern, declining from US$19,126 million in 2021 to US$2,856 million in 2022, a loss of US$-320 million in 2023, a larger loss of US$-12,689 million in 2024, and a slight profit of US$62 million in 2025. The divergence between reported and adjusted net income suggests the presence of items impacting reported earnings that are excluded from the adjusted figures.

Stockholders’ Equity Trends

Reported total stockholders’ equity increased from US$95,391 million in 2021 to US$101,423 million in 2022 and US$105,590 million in 2023. It then decreased to US$99,270 million in 2024 before increasing again to US$114,281 million in 2025. Adjusted total stockholders’ equity follows a similar pattern, increasing from US$97,184 million in 2021 to US$98,175 million in 2022, US$100,317 million in 2023, US$100,129 million in 2024, and US$115,397 million in 2025. The consistent growth in equity, despite income volatility, suggests factors such as retained earnings or other equity contributions are at play.

The substantial decline in both reported and adjusted ROE, particularly the negative values in 2024, warrants further investigation into the underlying causes of the net losses. While stockholders’ equity generally increased, the impact of declining profitability significantly reduced the return generated on that equity. The difference between reported and adjusted ROE highlights the importance of understanding the nature of the adjustments made to net income.

The reported and adjusted return on assets (ROA) experienced significant fluctuations over the five-year period. A general decline in profitability is evident, particularly when considering the shift from positive to negative net income in later years. The analysis below details the trends observed in both reported and adjusted ROA, alongside their underlying components.

Reported ROA

Reported ROA began at 11.80% in 2021, decreasing to 4.40% in 2022, and continuing to fall to 0.88% in 2023. A substantial decline occurred in 2024, resulting in a negative ROA of -9.55%. This negative trend persisted into 2025, with ROA reaching -0.13%. The decrease in reported ROA correlates with a decline in reported net income, culminating in a significant loss in 2024.

Adjusted ROA

Adjusted ROA followed a similar pattern, starting at 11.42% in 2021 and decreasing to 1.60% in 2022. It then became negative in 2023 at -0.17%, and further decreased to -6.48% in 2024. A slight recovery was observed in 2025, with adjusted ROA reaching 0.03%. The adjusted ROA trend mirrors the reported ROA trend, though the magnitude of the decline appears somewhat less pronounced, likely due to the adjustments made to net income and total assets.

Net Income Impact

Reported net income attributable to the company decreased substantially from US$19,868 million in 2021 to a loss of US$18,756 million in 2024, before slightly improving to a loss of US$267 million in 2025. Adjusted net income exhibited a similar pattern, declining from US$19,126 million in 2021 to a loss of US$12,689 million in 2024, and then increasing to a profit of US$62 million in 2025. This significant volatility in net income is a primary driver of the observed ROA fluctuations.

Asset Base

Reported total assets increased steadily from US$168,406 million in 2021 to US$196,485 million in 2024, and further to US$211,429 million in 2025. Adjusted total assets followed a similar upward trend, increasing from US$167,532 million in 2021 to US$210,859 million in 2025. The consistent growth in the asset base, while not directly causing the ROA decline, partially offsets the impact of decreasing net income, moderating the severity of the ROA decreases.

In summary, the company experienced a marked decline in both reported and adjusted ROA over the period, primarily driven by decreasing net income. While the asset base continued to grow, it was insufficient to offset the impact of the declining profitability. The slight recovery in adjusted ROA in 2025 suggests a potential stabilization, but further monitoring is necessary to confirm a sustained positive trend.