Intuit Inc. (NASDAQ:INTU)

The examination of the annual current and deferred income tax expenses over the given periods reveals notable fluctuations and trends in the financial data.

Current Income Tax Expense

The current tax expense demonstrates a general upward trend from 2020 through the projection in 2025. Starting at 472 million USD in 2020, it increased to 537 million USD in 2021 but then declined to 377 million USD in 2022. Subsequently, there was a substantial increase to 1264 million USD in 2023, followed by a slight decrease to 1222 million USD in 2024, and finally, a rise to 1481 million USD in 2025. This pattern suggests variability possibly influenced by changes in taxable income or tax regulations, with a sharp increase beginning in 2023 indicating higher tax liabilities in recent years.

Deferred Income Tax Expense

The deferred tax expense exhibits considerable volatility and a shifting pattern over the period. It started as a negative figure of -100 million USD in 2020, which decreased to -43 million USD in 2021, indicating a reduction in deferred tax benefit or an increase in deferred tax expense. In 2022, this value reversed to 99 million USD, signaling a deferred tax expense rather than a benefit. From 2023 onward, sizable negative values recur, with -659 million USD in 2023, -635 million USD in 2024, and -516 million USD in 2025, revealing significant deferred tax benefits being recognized in these years. These swings may reflect changes in timing differences of income recognition or adjustments in tax rate estimates.

Provision for Income Taxes

The overall provision for income taxes, which combines current and deferred components, rose from 372 million USD in 2020 to 494 million USD in 2021, then remained somewhat stable at 476 million USD in 2022. The provision again increased to 605 million USD in 2023, dropped slightly to 587 million USD in 2024, and is projected to markedly increase to 965 million USD in 2025. This trajectory indicates growing tax obligations over the medium term, influenced primarily by the rise in current tax expenses despite the offsetting effects of deferred tax benefits.

Summary

Overall, the data reflect increasing current tax liabilities, especially from 2023 onward, alongside highly variable deferred tax expenses that transition from smaller benefits to significant deferred tax benefits starting in 2023. The interplay of these factors results in a provision for income taxes that generally expands over the period, with meaningful growth projected in the near future. These trends suggest an evolving tax position with increasing taxable income or changes in tax rules, as well as dynamic timing differences affecting deferred taxes.

The analysis of the annual financial data reveals the following trends and insights regarding the tax rates over the periods in question.

U.S. Federal Statutory Income Tax Rate

The statutory income tax rate for the U.S. remained constant at 21% throughout all the periods from July 31, 2020, to July 31, 2025. This stability suggests no changes in the federal tax legislation affecting the statutory rate applicable to the entity during these years.

Annual Effective Tax Rate

The annual effective tax rate exhibited some variability over the same periods. It started at 16.92% in July 31, 2020, increased to a peak of 20.24% by July 31, 2023, and then fluctuated downward to 16.54% in July 31, 2024, before rising again to 19.96% by July 31, 2025. This pattern indicates that, despite the constant statutory rate, the effective tax burden experienced changes, likely due to shifts in non-taxable income, deductions, credits, or other tax planning strategies.

Comparison and Implications

The annual effective tax rate consistently remained below the statutory rate of 21%, which suggests effective tax management practices or the impact of favorable tax treatments over the periods analyzed. The fluctuations in the effective rate imply varying influences on tax expense recognition, which may warrant further investigation to understand the underlying causes such as changes in income composition or one-time tax adjustments.

The financial data reveals several notable trends in the deferred tax-related accounts and other associated balance sheet items over a six-year period. These observations focus on changes in amounts, fluctuations, and implications of the figures presented.

Accruals and reserves not currently deductible

Values showed fluctuations, initially increasing from 23 million in 2020 to 84 million in 2022, but then declining to 31 million in 2023 before rising again to 72 million by 2025. This variability may reflect changes in timing differences or adjustments in reserves over time.

Capitalized research and development

This item was absent from 2020 to 2022 but appeared substantially from 2023 onwards, with a marked increase from 667 million in 2023 to 1,895 million in 2025. This indicates a growing investment in internally developed intangible assets, likely recognizing increased capitalization of R&D costs.

Operating lease liabilities

Operating lease liabilities increased consistently from 64 million in 2020 to a peak of 168 million in 2022, decreased slightly in 2023 and 2024, then rose again to 173 million in 2025. This suggests changes in lease agreements or the addition of new leases affecting the company's obligations.

Accrued and deferred compensation

Compensation accruals varied, beginning at 112 million in 2020, peaking at 132 million in 2021 and again in 2024, with a low of 84 million in 2022. The fluctuations might correlate with company performance, employee compensation policies, or timing of payments.

Loss and tax credit carryforwards

The data reflects an overall upward trend with some variability, from 114 million in 2020 to 277 million in 2025, peaking and dipping intermittently. This suggests ongoing utilization and accumulation of tax attributes, potentially providing future tax benefits.

Intangible assets

Reported amounts were minor and somewhat inconsistent, with figures present only in early years (26 to 33 million) and missing subsequently, possibly reflecting reclassification or impairment activities.

Share-based compensation

There was a steady upward trend in share-based compensation expense from 44 million in 2020 to 117 million in 2024, slightly decreasing to 113 million in 2025, indicating an increasing use of equity incentives.

Other, net (assets side)

This item demonstrated a gradual increase from 13 million in 2020 to values around 20-27 million in later years, evidencing minor but steady adjustments in miscellaneous deferred tax assets or related items.

Gross deferred tax assets

A strong upward trajectory is evident, more than doubling from 396 million in 2020 to 2,670 million in 2025, aligning with increased capitalized assets and tax loss carryforwards, which contribute to the recognition of deferred tax assets.

Valuation allowance

The valuation allowance also grew in magnitude (in negative terms) from -132 million to -290 million over the period, indicating a conservative approach to unrecognized deferred tax assets due to uncertainty in future tax benefit realization.

Deferred tax assets (net of valuation allowance)

This balance rose significantly from 264 million to 2,380 million, reinforcing the trend of expanding deferred tax assets, reflecting expectations for future tax benefits despite the increase in valuation allowance.

Operating lease right-of-use assets

These negative values increased in absolute size from -55 million in 2020 to around -140 million in 2025, signaling the recognition of leased assets in accordance with lease accounting standards alongside the liabilities.

Intangibles (liability side)

Large negative balances from -45 million in 2020 intensifying to -950 million by 2025 indicate substantial deferred tax liabilities related to intangible assets, consistent with the increasing capitalization of development and other intangible assets.

Property and equipment (liability side)

The balances here remained relatively small and fluctuated, with larger negative values noted in 2024 and 2025, possibly reflecting changes in tax basis differences or accelerated depreciation benefits.

Other, net (liabilities side)

Negative values gradually increased from -79 million in 2020 to -56 million in 2025, showing minor adjustments in other deferred tax liabilities over time.

Deferred tax liabilities

This category showed a substantial increase in negative balances starting from -201 million in 2020 to nearly -1,178 million by 2025, driven primarily by intangible assets and other timing differences.

Net deferred tax assets (liabilities)

This reconciliation fluctuated widely: a modest positive 63 million in 2020 turned into a negative position in 2021 and 2022 (-517 million and -608 million respectively), before improving dramatically to reach 1,202 million in 2025. The improvement reflects growing deferred tax assets exceeding deferred tax liabilities in recent years, indicating a positive net tax position.

In summary, the data reveals that the company has increased its investment in capitalized research and development, thereby growing its deferred tax assets substantially. At the same time, deferred tax liabilities also increased, particularly related to intangibles. Volatility in net deferred tax assets underscores intermittent shifts in tax planning, valuation allowances, and the balance of timing differences. The overall movement suggests strengthening future tax benefit prospects, tempered by conservative allowances and ongoing lease accounting impacts.

Long-term deferred income tax assets

The long-term deferred income tax assets exhibited considerable volatility over the periods analyzed. Starting at 65 million US dollars in July 2020, there was a significant drop to 8 million in July 2021, followed by a slight increase to 11 million in July 2022. Subsequently, there was a sharp rise to 64 million in July 2023, continuing to surge dramatically to 698 million by July 2024, and further increasing to 1,222 million in July 2025. This upward trend in the later years indicates a substantial growth in deferred tax assets, suggesting changes in the company's tax timings or anticipated tax benefits in the long term during this period.

Long-term deferred income tax liabilities

The long-term deferred income tax liabilities showed a general decreasing pattern followed by a slight increase. Beginning at 2,525 million US dollars in July 2020, the liabilities sharply declined to 619 million in July 2021 and dropped further to 4 million in July 2022. A minor decrease to 3 million was noted in July 2023, with a notable increase to 20 million by July 2025. This sharp initial decrease suggests a significant reduction in future tax obligations recognized as liabilities, with the small upward movement in the final period potentially reflecting new deferred tax liabilities arising.

Total Assets

There is a consistent upward trend in both reported and adjusted total assets from 2020 through 2025. Reported total assets increased from approximately 10.9 billion USD in 2020 to about 37.0 billion USD in 2025, while adjusted total assets showed a similar pattern, growing from around 10.9 billion USD to 35.7 billion USD. The growth rate was particularly strong between 2021 and 2022, nearly doubling in that period, followed by steady increases in subsequent years.

Total Liabilities

Reported total liabilities exhibited significant growth over the period, rising from 5.8 billion USD in 2020 to 17.2 billion USD in 2025. Adjusted liabilities followed a similar path, starting slightly lower than reported figures but converging closely over time. After a slight decline or stagnation between 2020 and 2021, liabilities increased sharply from 2021 to 2022 and have generally trended upward thereafter, suggesting increased leverage or higher debt levels.

Stockholders’ Equity

Stockholders’ equity increased significantly throughout the analyzed years. Reported equity nearly quadrupled from 5.1 billion USD in 2020 to 19.7 billion USD in 2025. Adjusted equity values were slightly higher than reported figures in most years except 2023 onward, where reported and adjusted values converged more closely. The equity growth was steady, indicating accumulation of retained earnings and potentially other equity components over time.

Net Income

Reported net income showed a clear upward trajectory, increasing from 1.8 billion USD in 2020 to 3.9 billion USD in 2025. Adjusted net income generally followed this positive trend but exhibited more fluctuations. Notably, adjusted net income decreased sharply in 2023 before rising again in 2024 and 2025, suggesting possible one-time adjustments or deferred tax effects impacting earnings. Despite these fluctuations, the overall trend in adjusted net income remains positive.

Overall Analysis

The financial data indicate strong growth in assets, liabilities, and equity over the six-year period, reflecting expansion and increased financial scale. The close alignment between reported and adjusted figures in most categories denotes consistency in financial reporting with some adjustments likely related to deferred tax items. Net income growth, while robust in reported terms, exhibits more volatility when adjusted, highlighting the impact of tax adjustments on profitability measures.

Net Profit Margin Trends

The reported net profit margin shows a declining trend from 23.78% in 2020 to 16.23% in 2022, followed by a modest recovery to 20.55% by 2025. The adjusted net profit margin follows a similar pattern, decreasing from 22.48% in 2020 to 17.01% in 2022, then declining further to 12.01% in 2023 before gradually improving to 17.81% in 2025. This indicates some short-term margin pressure, with a gradual return to stronger profitability thereafter.

Total Asset Turnover Movements

Both reported and adjusted total asset turnover ratios decline from 0.70-0.71 in 2020 to a low of 0.46 in 2022. Post-2022, turnover stabilizes and slightly increases to around 0.51-0.53 by 2025. This suggests that asset utilization efficiency decreased significantly through 2022 but improved modestly and stabilized in subsequent years.

Financial Leverage Developments

Reported financial leverage declines sharply from 2.14 in 2020 to 1.57 in 2021, then fluctuates between 1.61 and 1.88 through 2025. Adjusted leverage shows a similar initial drop from 2.15 in 2020 to 1.49 in 2021, followed by a gradual increase to 1.93 in 2025. This reflects an initial deleveraging phase with gradual re-leveraging in later years, potentially indicating changes in capital structure strategy or debt management.

Return on Equity (ROE) Patterns

Both reported and adjusted ROE experience marked declines from 2020 to 2022, with reported ROE falling from 35.76% to 12.57% and adjusted ROE dropping from 34.23% to 12.7%. Post-2022, ROE shows a recovery trend, with reported ROE rising to 19.63% and adjusted ROE to 18.12% by 2025. This pattern aligns with the trends observed in profitability and leverage, indicating challenges in profitability followed by gradual improvement.

Return on Assets (ROA) Evolution

Reported ROA decreases steadily from 16.7% in 2020 to 7.45% in 2022, then improves slightly to 10.47% by 2025. Adjusted ROA follows a similar trajectory but shows a sharper dip in 2023 to 6.22%, recovering thereafter to 9.38% in 2025. The ROA trends confirm a reduction in asset profitability during the initial years with partial recovery in later periods.

General Observations

Overall, the financial data reflects a period of declining profitability, asset efficiency, and returns through 2022, likely indicating operational or market challenges during these years. Subsequently, most metrics show a gradual improvement towards 2025, suggesting successful adjustments or recovery. The adjustments for reported versus adjusted figures consistently show similar trends, with adjusted margins and returns generally slightly lower, indicating the impact of income tax and other adjustments on financial performance metrics.

The financial data reveals notable trends in both reported and adjusted net income figures over the observed periods. Reported net income demonstrates a consistent upward trajectory from 1,826 million US dollars in 2020 to 3,869 million US dollars projected for 2025. This growth indicates strong income performance, with the most significant year-over-year increases occurring between 2023 and 2025.

Adjusted net income also follows a general increasing trend, rising from 1,726 million US dollars in 2020 to an estimated 3,353 million US dollars in 2025. However, an anomaly appears in 2023, when adjusted net income declines to 1,725 million US dollars from 2,165 million US dollars in 2022, before recovering and surpassing previous levels in subsequent years. This dip may reflect non-recurring or exceptional items impacting adjusted results specifically.

In terms of profitability ratios, the reported net profit margin decreases from 23.78% in 2020 to 16.23% in 2022, followed by a gradual recovery to 20.55% by 2025. This pattern suggests some margin compression occurring in the early years, with a return toward healthier profitability margins in the later periods.

The adjusted net profit margin follows a similar yet more pronounced pattern. It declines from 22.48% in 2020 to 12.01% in 2023, marking a more significant reduction than the reported margin. Following this low point, the adjusted margin improves steadily to 17.81% by 2025. The sharper margin contraction and recovery in the adjusted figures might indicate the impact of adjustments related to income tax timing or other deferred items on underlying profitability.

Summary of trends:

- Reported net income shows steady growth throughout the period.

- Adjusted net income generally grows but experiences a transient decline in 2023.

- Reported net profit margins decrease initially then recover, indicating fluctuating profitability pressures.

- Adjusted net profit margins display a deeper dip and later recovery, reflecting the effects of adjustments.

- Overall, the company demonstrates improving profitability and income levels towards the end of the period despite mid-term margin challenges.

Total Assets

The reported total assets show a significant upward trend over the period analyzed. Starting at approximately 10.9 billion US dollars in 2020, the assets increased steadily to nearly 37.0 billion US dollars by 2025, indicating substantial growth. The adjusted total assets closely mirror this pattern, moving from about 10.9 billion to 35.7 billion US dollars over the same period, with minor deviations at certain points, particularly in 2024 and 2025 where the adjusted values are slightly lower than the reported ones.

Total Asset Turnover

The reported total asset turnover ratio declines from 0.7 in 2020 to 0.46 in 2022, suggesting a reduction in the efficiency with which assets generate revenue during these years. However, from 2022 onward, the ratio starts to stabilize and slightly improves, reaching around 0.51 by 2025. The adjusted total asset turnover follows a very similar pattern, with a minor divergence in the last two years where it demonstrates a marginally higher turnover ratio compared to the reported figures. This indicates a small adjustment effect that slightly improves the perceived efficiency in asset use.

Overall Insights

The company exhibits strong asset growth over the period analyzed, which is accompanied by an initial decrease in asset turnover efficiency, with some recovery in the later years. The adjustments related to deferred income taxes do not materially alter the trend of asset growth or turnover ratios but slightly affect the levels of these metrics in the later years. The stabilization of the asset turnover ratio after 2022 suggests improved management or operational efficiency or a shift in asset utilization strategies.

The financial data demonstrates a consistent upward trajectory in both total assets and stockholders' equity over the six-year period under review. This growth is evident in both reported and adjusted figures, indicating an overall expansion of the company's financial base.

Total Assets

Reported total assets have increased substantially from 10,931 million US dollars in 2020 to 36,958 million US dollars in 2025. Similarly, adjusted total assets have followed a comparable trend, rising from 10,866 million US dollars to 35,736 million US dollars over the same period. The growth momentum is particularly strong between 2021 and 2023, although it somewhat moderates in the final years.

Stockholders' Equity

Stockholders’ equity also exhibits robust growth, with reported equity increasing from 5,106 million US dollars in 2020 to 19,710 million US dollars in 2025. Adjusted stockholders’ equity shows a similar enhancement from 5,043 million US dollars to 18,508 million US dollars. Notably, the adjusted equity figures slightly exceed the reported figures in intermediate years such as 2021 and 2022, before aligning more closely again towards 2025.

Financial Leverage

Financial leverage ratios indicate a trend towards a moderate increase in leverage after an initial decline. Reported financial leverage decreased from 2.14 in 2020 to a low of 1.57 in 2021, reflecting a possible deleveraging or equity growth outpacing liabilities. However, from 2021 onwards, the ratio rises gradually to 1.88 by 2025, suggesting an incremental rise in the use of debt or other liabilities relative to equity. Adjusted financial leverage follows a slightly different path, initially dropping more sharply to 1.49 in 2021 before increasing steadily to 1.93 in 2025, indicating adjustments affect leverage calculation but do not alter the general trend.

Overall, the data suggest a company experiencing substantial asset and equity growth, with financial leverage being actively managed but tending towards higher leverage in recent years. The close alignment of adjusted figures with reported figures implies that deferred income tax adjustments have a minimal impact on the overall financial position and leverage trends.

The financial data reveals several noteworthy trends over the six-year period examined, focusing on both reported and adjusted figures for net income, stockholders’ equity, and return on equity (ROE).

Net Income

Reported net income demonstrates a generally upward trajectory, beginning at 1,826 million US dollars in 2020 and rising steadily to 3,869 million US dollars by 2025. The largest incremental increases occur in the final two periods, indicating accelerated growth. Adjusted net income also increases over time, starting at 1,726 million US dollars in 2020 and reaching 3,353 million US dollars in 2025. However, adjusted net income displays more variability, including a notable dip in 2023 where it falls from 2,165 to 1,725 million US dollars before rebounding. This suggests some adjustments related to deferred income tax or other factors that impact the adjusted figures differently from the reported ones.

Stockholders’ Equity

Both reported and adjusted stockholders’ equity exhibit consistent growth throughout the period. Reported equity rises sharply from 5,106 million US dollars in 2020 to 19,710 million US dollars in 2025. Adjusted equity follows a similar pattern, with slightly higher values compared to reported figures in most years, increasing from 5,043 to 18,508 million US dollars. The steady increase in equity indicates a strengthening capital base and retained earnings accumulation over time.

Return on Equity (ROE)

Reported ROE starts at a high level of 35.76% in 2020 but declines significantly in subsequent years to a low of 12.57% in 2022 before gradually recovering to 19.63% in 2025. Adjusted ROE mirrors this downward and then upward trend, beginning at 34.23% in 2020, dipping to 10.02% in 2023 — the lowest point across the periods — and climbing to 18.12% by 2025. The decline in ROE during the middle years suggests that increases in equity outpaced net income growth, reducing profitability measures relative to shareholder investment. The recovery in later years indicates improved efficiency or profitability relative to equity.

Overall, the data reflects continuous growth in net income and equity, with fluctuations in profitability ratios suggesting periods of varying operational efficiency or impacts from adjustments related to deferred income taxes. The divergence between reported and adjusted figures particularly in net income and ROE highlights the importance of considering both perspectives for a comprehensive understanding of financial performance.

Net Income Trends

The reported net income demonstrates an overall upward trajectory, increasing from $1,826 million in July 2020 to a projected $3,869 million in July 2025. There is a noticeable steady rise each year, with the most significant jump occurring between July 2023 and July 2024.

The adjusted net income follows a similar upward trend but exhibits more volatility. It increased from $1,726 million in July 2020 to $2,165 million in July 2022, then dropped sharply to $1,725 million in July 2023 before rebounding to an estimated $3,353 million by July 2025. This suggests that adjustments, possibly for deferred taxes or one-time items, have a material impact on reported earnings, particularly around 2023.

Asset Base Trends

The reported total assets have grown significantly, more than tripling from $10,931 million in July 2020 to an estimated $36,958 million in July 2025. The most rapid increase occurred between July 2021 and July 2022, where assets surged by nearly $12 billion.

Adjusted total assets closely mirror reported totals but are slightly lower in later years, reaching $35,736 million in July 2025 compared to reported $36,958 million. This consistent close alignment indicates that adjustments do not substantially alter the asset base but may reflect technical or valuation differences.

Return on Assets (ROA) Analysis

Reported ROA shows a declining trend from 16.7% in July 2020 to 7.45% in July 2022, followed by a gradual recovery to 10.47% in July 2025. This pattern aligns with the rapid asset growth seen during the same period, suggesting that asset expansion may have outpaced income growth initially, resulting in lower ROA.

Adjusted ROA also declines from 15.88% to a low of 6.22% in July 2023, before recovering to 9.38% in July 2025. The adjusted ROA is consistently lower than the reported ROA, particularly in the years 2022 to 2024, indicating that adjustments reduce profitability measures possibly due to deferred tax effects or other financial adjustments.

Overall Insights

Both reported and adjusted financial data signal strong growth in net income and total assets over the analyzed period, with adjustments impacting income figures and profitability ratios more noticeably than asset values. The sharp dip in adjusted net income and ROA around 2023 suggests an anomalous or non-recurring event affecting the adjusted results. The gradual recovery post-2023 indicates a return to growth stability.

The asset growth outstripping net income growth, especially between 2021 and 2023, leads to lower ROA figures, although the improving trends in later years may reflect enhanced operational efficiency or margin improvements.