Intuit Inc. (NASDAQ:INTU)

The analysis of the annual current and deferred income tax expenses over the six-year period reveals distinct trends and fluctuations which offer insight into the company's tax-related financial dynamics.

Current Income Tax Expense

The current income tax expense exhibited a general upward trend from 2019 to 2024. Starting at $352 million in 2019, it increased steadily to $472 million in 2020 and further to $537 million in 2021. However, there was a notable decrease in 2022 to $377 million, followed by a significant surge to $1,264 million in 2023. The amount slightly decreased to $1,222 million in 2024 but remained substantially higher than in earlier years. This pattern reflects variability year-over-year with a pronounced peak in 2023 and 2024.

Deferred Income Tax Expense

The deferred income tax expense displayed considerably more volatility compared to the current tax expense. Initially, the deferred tax expense was negative, indicating deferred tax benefits rather than costs, with values of -$28 million in 2019 and a larger benefit of -$100 million in 2020. In 2021, the benefit decreased to -$43 million before reversing to a positive expense of $99 million in 2022. Subsequently, there was a sharp shift back to large deferred tax benefits in 2023 and 2024, with values of -$659 million and -$635 million, respectively. This fluctuation suggests significant timing differences and tax planning elements impacting deferred taxes.

Provision for Income Taxes

The provision for income taxes, representing the sum of current and deferred expenses, generally increased across the period but with less variability than the individual components. The provision rose from $324 million in 2019 to $372 million in 2020 and $494 million in 2021. It remained relatively stable at $476 million in 2022 before increasing to $605 million in 2023 and slightly decreasing to $587 million in 2024. The steadiness of this figure, despite swings in deferred taxes, indicates balancing effects between current and deferred tax components.

In summary, the current income tax expense showed significant growth especially in the last two years, indicating higher taxable income or changes in tax rates or regulations. The deferred income tax expense experienced major fluctuations with periods of both benefits and expenses, reflecting complex tax timing differences. The overall provision for income taxes increased moderately across the years but remained relatively stable compared to the individual tax components, evidencing the interplay between current and deferred tax calculations.

U.S. Federal Statutory Income Tax Rate

The U.S. federal statutory income tax rate remained constant at 21% over the entire period from 2019 to 2024. This indicates no changes in the statutory tax framework affecting the company during these years.

Annual Effective Tax Rate

The annual effective tax rate exhibited some variability during the analyzed period. Starting at 17.22% in 2019, it slightly decreased to 16.92% in 2020. Subsequently, it rose to 19.33% in 2021 and then experienced a minor decline to 18.73% in 2022. In 2023, the effective tax rate increased again to 20.24%, followed by a notable decrease to 16.54% in 2024.

Overall, the effective tax rate trend shows fluctuations around a level generally lower than the statutory rate, suggesting the presence of tax planning strategies, credits, or other factors influencing the company's tax burden. The variability also points to changing tax dynamics, potentially related to operational or jurisdictional factors across the years.

The analysis of the presented financial data reveals several noteworthy trends and patterns over the examined periods.

Accruals and Reserves Not Currently Deductible

These liabilities have fluctuated significantly, starting at 13 million USD in 2019, peaking at 84 million USD in 2022, and then decreasing to 47 million USD in 2024, indicating variability in timing differences or uncertain tax positions.

Capitalized Research and Development

Data is available only for the last two periods, showing a marked increase from 667 million USD in 2023 to 1321 million USD in 2024, implying substantial investment in development activities or changes in capitalization policy.

Operating Lease Liabilities

After the initial value of 64 million USD in 2020, liabilities increased to 168 million USD in 2022, followed by a moderate decline to 137 million USD by 2024, potentially indicating lease expirations or renegotiations.

Accrued and Deferred Compensation

The amount rose sharply from 48 million USD in 2019 to a high of 132 million USD in 2021, declined to 84 million USD in 2022, and again climbed back to 132 million USD in 2024, reflecting possible changes in employee compensation structures or timing.

Loss and Tax Credit Carryforwards

Starting at 117 million USD in 2019, carryforwards increased to 282 million USD in 2021, then exhibited a decrease and fluctuations, ending at 204 million USD in 2024, showing variable utilization or generation of tax attributes.

Intangible Assets

Reported only for the early periods, intangible assets grew modestly from 26 million USD in 2020 to 33 million USD in 2021, then declined to 25 million USD in 2022, with no subsequent data available.

Share-Based Compensation

This expense showed a general upward trend, increasing from 47 million USD in 2019 to 117 million USD in 2024, indicative of growing equity-based remuneration or expanded employee incentives.

Other, Net (Assets)

Values rose gradually from 11 million USD in 2019 to a peak of 27 million USD in 2023, then decreased slightly to 20 million USD by 2024, suggesting minor fluctuations in miscellaneous asset categories.

Gross Deferred Tax Assets

A significant increase occurred over the period, from 236 million USD in 2019 to 1978 million USD in 2024, reflecting growing temporary differences or tax loss carryforwards expected to provide future tax benefits.

Valuation Allowance

The valuation allowance, which offsets deferred tax assets when realization is uncertain, mildly increased in absolute terms from -107 million USD in 2019 to -227 million USD in 2024, with some fluctuation but remaining relatively stable overall.

Deferred Tax Assets (Net of Valuation Allowance)

These assets increased substantially, from 129 million USD in 2019 to 1751 million USD in 2024, indicating improved prospects for realization of deferred tax benefits despite the presence of valuation allowances.

Operating Lease Right-of-Use Assets

Initially reported as negative values beginning in 2020, these assets grew in magnitude from -55 million USD to a peak of -149 million USD in 2022, then decreased to -105 million USD in 2024, likely linked to lease accounting and terminations.

Intangibles (Liabilities or Amortization)

The values here are consistently negative and large in magnitude, from -71 million USD in 2019 to approximately -864 million USD in 2024, indicating significant amortization or impairment charges related to intangible assets over time.

Property and Equipment

These negative values fluctuated modestly from -20 million USD in 2019 to -38 million USD in 2024, possibly relating to depreciation or asset disposals.

Other, Net (Liabilities)

Values were consistently negative and relatively stable around -45 to -79 million USD during the period, showing minor changes in other miscellaneous liabilities.

Deferred Tax Liabilities

These liabilities increased significantly from -165 million USD in 2019 to a peak of around -1069 million USD in 2022, then slightly decreased to -1056 million USD in 2024, reflecting growing taxable temporary differences or recognition of deferred taxes on intangible assets or leases.

Net Deferred Tax Assets (Liabilities)

This key indicator fluctuated, starting as a net liability of -36 million USD in 2019, shifting to a net asset position of 63 million USD in 2020, then again moving toward a deficit up to -608 million USD by 2022, before reversing sharply to positive 695 million USD in 2024. These swings reveal varying expectations about the timing and realization of tax benefits and obligations.

Overall, the data portrays a company experiencing growth in deferred tax assets and capitalized development costs, combined with fluctuating lease-related balances and persistent intangible asset amortization. The large increase in capitalized R&D and deferred tax assets suggests substantial investment and optimistic future tax benefit realization, while variable lease and compensation balances reflect operationally-driven fluctuations.

Long-term deferred income tax assets

The value of long-term deferred income tax assets exhibited significant fluctuations over the analysis period. Starting from a minimal amount of US$1 million in 2019, there was a marked increase to US$65 million in 2020. This was followed by a sharp decline to US$8 million in 2021, then a moderate rise to US$11 million in 2022. Subsequently, there was a substantial jump to US$64 million in 2023, culminating in an extremely large increase to US$698 million in 2024. This pattern suggests considerable variability, with an overall strong upward trend emerging in the last two years, potentially reflecting changes in tax positions or the recognition of deferred tax assets.

Long-term deferred income tax liabilities (included in Other long-term obligations)

The long-term deferred income tax liabilities demonstrated a highly volatile trend across the periods. Initially recorded at US$37 million in 2019, this dropped dramatically to US$2 million in 2020. It then surged impressively to US$525 million in 2021, followed by a significant decrease to US$619 million in 2022. Values sharply fell again to US$4 million in 2023 and further to US$3 million in 2024. The data indicate erratic movements with no clear trend, suggesting considerable adjustments or accounting policy changes impacting the recognition of these liabilities during the period.

The financial data reveals significant growth in both assets and equity over the analyzed periods. Total assets, both reported and adjusted, exhibited a strong upward trend, increasing from approximately $6.3 billion in 2019 to over $31 billion by 2024. The most pronounced growth occurred between 2021 and 2022, where assets nearly doubled, suggesting major expansion or acquisitions during this time frame. Adjusted total assets closely mirror the reported values, indicating minimal impact from income tax adjustments on asset valuation.

Liabilities also increased substantially, rising from roughly $2.5 billion in 2019 to nearly $13.7 billion in 2024. The adjusted liabilities show a similar upward trajectory but remain consistently lower than reported liabilities, which may reflect reductions due to deferred tax considerations. Notably, liabilities more than doubled between 2020 and 2022, aligning with the surge in total assets and pointing to increased leverage or financing needs accompanying asset growth.

Stockholders’ equity displays a consistent and robust increase over the years, both in reported and adjusted figures, rising from approximately $3.7 billion to between $17.7 billion and $18.4 billion by 2024. Adjusted equity figures generally exceed reported values, potentially indicating the recognition of deferred tax assets or adjustments that enhance equity. The growth in equity alongside liabilities suggests a balanced approach to financing expansion with both debt and equity components.

Net income shows a mostly upward trend from 2019 to 2024, although there is a noticeable dip in adjusted net income for the year 2023. The reported net income increased steadily, peaking at $2.96 billion in 2024, reflecting ongoing profitability improvements. However, adjusted net income presents a more variable pattern, with a decline from 2022 to 2023 before recovering in 2024. This fluctuation implies that adjustments related to reported and deferred income taxes have had a substantive impact on net income recognition in certain years, particularly in 2023.

Overall, the data indicates consistent asset and equity growth, supported by increasing liabilities. The firm appears to maintain profitability gains despite some volatility in tax adjustments affecting net income. The close alignment of adjusted and reported values across most metrics suggests relatively stable deferred income tax effects, except for occasional significant impacts on net income adjustment in specific years.

The financial metrics reveal several noteworthy trends over the six-year period analyzed. The net profit margins, both reported and adjusted, show a declining trajectory after peaking in 2020. Specifically, the reported net profit margin decreases steadily from 23.78% in 2020 to 18.19% in 2024, while the adjusted margin declines more sharply from 22.48% to 14.3% over the same interval. This indicates a reduction in profitability relative to revenue, with the adjusted figures suggesting more conservative profitability estimates when accounting for deferred income tax adjustments.

Total asset turnover ratios, which measure efficiency in utilizing assets to generate revenue, exhibit a consistent downward trend after 2019. Both reported and adjusted ratios diminish from about 1.08 in 2019 to approximately 0.51–0.52 in 2023 and 2024. This decline implies reduced asset utilization efficiency over time, reflecting a potential increase in asset base or slower revenue growth relative to assets.

Financial leverage ratios fluctuate but maintain moderate levels throughout the period. The reported financial leverage climbs to a high of 2.14 in 2020, indicating increased reliance on debt or other liabilities, before retreating to around 1.74 by 2024. The adjusted leverage follows a similar pattern, peaking slightly higher and ending at 1.77. Overall, leverage remains somewhat elevated in the middle years but appears to stabilize toward the end of the timeline.

Return on equity (ROE) and return on assets (ROA), key indicators of profitability for shareholders and asset efficiency respectively, exhibit pronounced declines initially, followed by partial recoveries. Reported ROE falls sharply from 41.53% in 2019 to 12.57% in 2022, then recovers to 16.07% by 2024. Adjusted ROE follows the same trend with a more pronounced dip, underscoring the impact of tax and accounting adjustments on shareholder returns. Reported ROA declines from 24.78% to a low of 7.45% in 2022, then edges upward to 9.22% in 2024, while adjusted ROA trends slightly lower with a similar shape, ending at 7.41%. These trends suggest that profitability and asset efficiency were significantly compressed during the period, probably reflecting operational or market challenges, with some improvement evident in the most recent years.

In summary, the financial data suggest a period of declining profitability and asset efficiency, coupled with fluctuating but moderate financial leverage. The adjusted figures consistently show a somewhat more conservative financial position than reported numbers, reflecting the effects of tax-related adjustments. The slight rebounds observed in ROE, ROA, and net profit margins toward the latter years may indicate the beginning of operational recovery or strategic adjustments aimed at stabilizing financial performance.

Net Profit Margins

Steady decline from peak levels in 2020, with adjusted margins decreasing more sharply than reported ones.

Total Asset Turnover

Marked decline from 2019, showing reduced efficiency in asset utilization across all years.

Financial Leverage

Peaked around 2020, followed by stabilization at moderate levels through 2024.

Return on Equity (ROE)

Substantial drop from a high in 2019 to a nadir in 2022, with partial recovery underway by 2024; adjusted ROE shows a similar but more pronounced pattern.

Return on Assets (ROA)

Decreasing trend culminating in mid-period lows, followed by modest recovery, with adjusted ROA lagging behind reported figures.

Over the analyzed periods, reported net income demonstrated a general upward trend, increasing from 1,557 million US dollars in July 2019 to 2,963 million US dollars in July 2024. This represents a near doubling of net income over the five-year span. Although there were steady increments each year, the increase from 2023 to 2024 was notably significant.

Adjusted net income also showed growth, rising from 1,529 million US dollars in 2019 to 2,328 million US dollars in 2024, but with some fluctuations. Notably, there was a decline in adjusted net income between 2022 and 2023, dropping from 2,165 million to 1,725 million US dollars, followed by a resurgence in 2024. This pattern suggests the presence of factors affecting the adjusted figures differently compared to the reported net income.

Regarding profitability margins, the reported net profit margin peaked at 23.78% in 2020 before declining to 16.23% by 2022. It then slightly recovered to 18.19% in 2024. This trajectory indicates some pressure on profitability as a percentage of revenue during the middle years but partial recovery in the latest period.

Adjusted net profit margins mirrored a similar pattern but with more pronounced variations. They started at 22.54% in 2019, declined to a low of 12.01% in 2023, and then increased to 14.3% in 2024. The sharper decline and lower margins in the adjusted figures highlight the impact of adjustments on the profitability ratio, especially during the years 2022 and 2023.

Overall, while both reported and adjusted net incomes increased over the period, adjusted net income exhibited greater volatility. Profit margins for both reported and adjusted incomes indicate pressure on profitability around 2022 and 2023, followed by some recovery. The divergence between reported and adjusted figures suggests that adjustments, such as deferred taxes or other income tax considerations, influenced the net income figures and margins, affecting comparability across years.

Total Assets

The reported total assets exhibit a substantial increase from 6,283 million USD in 2019 to 32,132 million USD in 2024. This reflects consistent growth across the years, with the most pronounced jump occurring between 2021 and 2022, where assets nearly doubled from approximately 15,516 million USD to 27,734 million USD. From 2022 onward, the asset base remains relatively stable with a slight increase in 2024.

Adjusted Total Assets

The adjusted total assets closely follow the trend seen in reported total assets, beginning at 6,282 million USD in 2019 and increasing to 31,434 million USD in 2024. The adjustment has minimal effect on the asset values, indicating that deferred income tax adjustments do not significantly alter the asset base. Similar to reported figures, the largest increase occurs between 2021 and 2022.

Reported Total Asset Turnover

Total asset turnover shows a declining trend over the analyzed period. Starting at 1.08 in 2019, it decreases sharply to 0.7 in 2020 and continues to reduce to 0.46 in 2022. There is a minor recovery to 0.52 in 2023, but turnover slightly declines again to 0.51 in 2024. This downward trend suggests that the company is generating less revenue per dollar of assets over time, potentially due to rapid asset growth outpacing revenue growth.

Adjusted Total Asset Turnover

The adjusted total asset turnover mirrors the reported figures very closely, with only slight differences. It starts at 1.08 in 2019, dips to 0.71 in 2020, and declines to 0.46 in 2022. A small rebound to 0.52 is observed in 2023 and remains at 0.52 in 2024. This alignment indicates that tax-related adjustments do not materially affect asset efficiency metrics.

Total Assets

The reported total assets exhibited a consistent upward trend over the entire period, increasing from approximately 6.3 billion US dollars in 2019 to over 32 billion US dollars by 2024. The adjusted total assets closely mirror this pattern, showing a similar increase from about 6.3 billion to around 31.4 billion US dollars, indicating that adjustments for reported and deferred income taxes have a minimal impact on total asset measurement. The most significant growth occurred between 2020 and 2022, where total assets nearly doubled, suggesting substantial asset accumulation or acquisition activity during that period.

Stockholders’ Equity

Reported stockholders’ equity also showed a strong increasing trend, rising from roughly 3.7 billion US dollars in 2019 to over 18.4 billion US dollars by 2024. The adjusted stockholders' equity data follow a similar pattern, with values slightly higher than reported figures in most years except 2024, where reported equity is higher. Notably, there was sharp equity growth from 2020 to 2022, indicating strong retained earnings or equity issuance. The gap between reported and adjusted equity widens notably in 2021 and 2022, suggesting deferred tax adjustments impacted equity more significantly during these years.

Financial Leverage

Reported financial leverage, calculated as the ratio of total assets to equity, fluctuated over the period but remained within a moderate range from approximately 1.57 to 2.14. Initially, leverage increased sharply in 2020, from 1.68 to 2.14, then decreased in 2021 to 1.57 before gradually rising again to 1.74 in 2024. Adjusted financial leverage presents a similar trend, though slightly lower in 2021 and 2022 due to higher adjusted equity values. The leverage trend indicates periods of increased reliance on liabilities relative to equity, especially in 2020, followed by a strengthening equity base that temporarily reduced leverage, before it rose again slightly towards 2024.

General Insights

The data suggest robust growth in both the asset base and shareholders' equity, indicative of a growing company with increasing financial resources and retained value. Adjustments for deferred and reported income taxes have a noticeable but generally limited effect on total assets and equity figures. The fluctuations in financial leverage imply strategic changes in financing mix, with potential periods of debt increases or equity financing impacting capital structure. Overall, the financial position displays increasing scale and somewhat fluctuating but controlled leverage ratios.

The financial data exhibits significant growth in reported net income over the six-year period, increasing from $1,557 million in 2019 to $2,963 million in 2024. Adjusted net income follows a similar upward trajectory, although the increase is less consistent, peaking in 2022 at $2,165 million before declining to $1,725 million in 2023, and then rising again to $2,328 million in 2024.

Stockholders’ equity shows a strong upward trend across both reported and adjusted figures. Reported stockholders’ equity more than quadruples from $3,749 million in 2019 to $18,436 million in 2024, with notable growth acceleration from 2020 through 2022. Adjusted equity closely mirrors this pattern, beginning at $3,785 million and rising to $17,741 million over the same period, indicating consistent equity value when adjustments are considered.

Return on equity (ROE) demonstrates a declining trend despite the increase in absolute net income and equity. Reported ROE decreases substantially from 41.53% in 2019 to 16.07% in 2024, indicating that while profitability in dollar terms has expanded, relative efficiency in generating returns on equity has diminished. Adjusted ROE aligns with this pattern, dropping from 40.4% to 13.12% over the same timeframe. The adjusted ROE is consistently lower than reported ROE, especially noticeable from 2022 onward, suggesting the adjustments have a dampening effect on the calculated returns.

The divergence between reported and adjusted net income in the later years, notably 2023 and 2024, may point to significant deferred tax or non-recurring items impacting the adjusted results. Similarly, the gradual convergence of reported and adjusted equity values over the years indicates that the adjustments are becoming proportionally less significant relative to the total equity.

Overall, the data reflects robust growth in income and equity, but a declining return on equity, implying increased capital base and earnings but reduced efficiency in capital utilization. The adjustments applied to net income and equity notably influence profitability metrics, especially the ROE, underscoring the importance of considering both reported and adjusted figures for a comprehensive financial performance assessment.

Net Income Trends

Steady increase in reported net income with fluctuations in adjusted net income, especially a dip in 2023.

Stockholders' Equity Growth

Strong growth over the years in both reported and adjusted measures, with alignment between the two.

Return on Equity Patterns

Marked decline in ROE for both reported and adjusted measures, with adjusted ROE consistently lower.

Impact of Adjustments

Adjustments lead to lower adjusted earnings and returns compared to reported figures, highlighting deferred tax or other adjustment effects.

Overall Financial Insight

Growth in capital and income coupled with declining capital efficiency; adjusted data provides a more conservative view of profitability.

Net Income Trends

Reported net income demonstrates a consistent upward trajectory from 2019 to 2024, increasing from $1,557 million to $2,963 million. Adjusted net income follows a similar pattern, generally rising but with some volatility, reaching $2,328 million in 2024. Notably, adjusted net income in 2023 decreased significantly to $1,725 million from the prior year's $2,165 million, before recovering in 2024.

Asset Growth

Both reported and adjusted total assets exhibit substantial growth over the six-year period. Reported total assets surged from $6,283 million in 2019 to $32,132 million in 2024, while adjusted total assets showed similar trends, increasing from $6,282 million to $31,434 million. The growth was especially pronounced between 2020 and 2022, where total assets nearly tripled.

Return on Assets (ROA) Patterns

Reported ROA reveals a downward trend from 24.78% in 2019 to 7.45% in 2022, followed by a slight recovery to 9.22% by 2024. Adjusted ROA mirrors this trend, decreasing from 24.34% to 7.81% across the same period, then declining further to 6.22% in 2023 before experiencing a modest rise to 7.41% in 2024. The general decline in ROA indicates reduced efficiency in generating returns on assets amidst significant asset growth.

Comparison of Reported versus Adjusted Figures

The reported and adjusted figures are closely aligned in total assets, with only minimal discrepancies throughout the years. However, net income values show greater variance, particularly in 2023, where reported net income increased while adjusted net income fell noticeably. This suggests that deferred income tax adjustments had a material impact on net income in that year. The adjusted ROA is consistently lower than reported ROA, reflecting the effect of these adjustments on profitability metrics.

Overall Insights

The company has experienced robust asset accumulation paired with increasing absolute net income over the period analyzed. However, the declining ROA, even as income rises, implies that asset growth has outpaced income generation efficiency. The deferred tax adjustments exert a notable influence on income and profitability metrics, particularly evident in the 2023 data. These dynamics may warrant closer examination of investment strategy and tax planning implications going forward.