Intuit Inc. (NASDAQ:INTU)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes shows an overall increasing trend from 2020 to 2025, beginning at $1,795 million in 2020 and reaching $3,531 million by 2025. There is a slight dip in 2023 to $2,022 million, but the subsequent years exhibit a strong recovery and significant growth.

Cost of Capital

The cost of capital remains relatively stable over the six-year period, fluctuating slightly between 16.29% and 16.98%. The small variations suggest consistent financing costs and risk profile during the timeframe.

Invested Capital

Invested capital has shown considerable growth from $8,690 million in 2020 to a peak of $24,948 million in 2024, before a minor decline to $24,521 million in 2025. The growth between 2020 and 2024 is especially pronounced, indicating substantial capital investment or asset accumulation over the period.

Economic Profit

Economic profit demonstrates a declining trend, starting positively at $352 million in 2020 but turning negative from 2022 onwards. The largest negative economic profit is recorded in 2023 with -$1,918 million, followed by slight improvements but remaining significantly negative through 2025. This negative economic profit despite rising NOPAT suggests that the returns on invested capital are below the company's cost of capital, pointing towards value destruction in recent years.

Summary

Although operational profitability measured by NOPAT increases over time, the substantial rise in invested capital and stable high cost of capital have resulted in persistent negative economic profit from 2022 onward. This implies that the incremental investments made are not yielding returns that exceed the company's capital costs, raising concerns regarding capital allocation efficiency and the potential need for strategic reassessment to improve value creation.

Net income

The net income shows an overall upward trend from 2020 to 2025. Starting at 1,826 million USD in 2020, it increases steadily each year, reaching 3,869 million USD in 2025. The yearly increments indicate consistent growth, with a notable acceleration from 2023 to 2025 where the net income rises by approximately 577 million USD between 2023 and 2024, and by 906 million USD between 2024 and 2025.

Net operating profit after taxes (NOPAT)

NOPAT also follows an increasing trajectory over the period, starting at 1,795 million USD in 2020 and rising to 3,531 million USD in 2025. However, the trend is less smooth compared to net income. After an increase from 2020 to 2022, there is a dip in 2023 to 2,022 million USD. Following this dip, the figures recover and grow substantially in 2024 and 2025. The increase from 2023 to 2025 is significant, indicating enhanced operational efficiency or profitability after taxes during the later years.

Comparison and insights

Both net income and NOPAT demonstrate growth over the six-year period, with net income growing slightly more consistently. The dip in NOPAT in 2023 suggests possible operational challenges or non-recurring expenses that affected operating profits during that year. The recovery and strong growth in subsequent years for both metrics imply successful strategic adjustments or improved market conditions. Overall, the data suggests increasing profitability and operational effectiveness over time, with particularly strong momentum in the last two years.

Provision for income taxes

The provision for income taxes showed a fluctuating trend over the analyzed periods. Starting at 372 million US dollars in July 2020, it increased to 494 million in July 2021. This was followed by a slight decrease to 476 million in July 2022. Subsequently, the provision rose again to 605 million in July 2023, then decreased slightly to 587 million in July 2024. A significant increase was observed in July 2025, reaching 965 million. Overall, the provision demonstrated an upward trajectory with occasional declines, suggesting variability in taxable income or tax rates but a general rise in tax expenses over time.

Cash operating taxes

The cash operating taxes exhibited considerable volatility throughout the period. Beginning at 477 million US dollars in July 2020, it increased moderately to 545 million in July 2021. However, a sharp decline occurred in July 2022, with the value dropping to 398 million. This was followed by a dramatic increase in July 2023 to 1,320 million and a further slight decrease to 1,276 million in July 2024. The upward movement continued into July 2025, reaching 1,538 million. This pattern indicates significant fluctuations in actual cash tax payments, possibly driven by changes in profitability, tax planning strategies, or timing differences in tax payments.

The financial data presents a multi-year view of key financial metrics, namely total reported debt and leases, stockholders’ equity, and invested capital, spanning from fiscal years ending July 31, 2020 through July 31, 2025.

Total Reported Debt & Leases

This liability measure showed a decline from 3,636 million USD in 2020 to 2,480 million USD in 2021, indicating a reduction in debt obligations or lease liabilities during that period. However, it then rose sharply to 7,540 million USD by 2022, suggesting a significant incurrence of additional liabilities. After 2022, the value decreased slightly to 6,689 million USD in 2023 and then remained relatively stable, hovering around 6,500 to 6,600 million USD through the forecasted years 2024 and 2025. This pattern reveals an initial debt reduction, followed by a rapid increase and subsequent stabilization at a higher level than the starting point.

Stockholders’ Equity

Stockholders’ equity exhibited a consistent and significant upward trajectory throughout the period. Starting from 5,106 million USD in 2020, equity nearly doubled to 9,869 million USD by 2021, then continued to increase sharply to 16,441 million USD in 2022. The growth persisted through 2023 and into the projections for 2024 and 2025, reaching a forecasted 19,710 million USD. This steady increase reflects improvements in net assets attributable to shareholders, potentially driven by retained earnings growth, capital infusion, or favorable market valuations.

Invested Capital

Invested capital rose from 8,690 million USD in 2020 to 12,248 million USD in 2021, aligning with the growth trend seen in equity. A pronounced jump occurred in 2022 to 24,726 million USD, more than doubling the prior year, which parallels the spike in total reported debt and leases, indicating significant new capital investment potentially funded by increased liabilities. There was a marginal decline to 23,712 million USD in 2023, followed by a moderate increase to 24,948 million USD in 2024, before a slight reduction to 24,521 million USD in the final forecast year. Overall, invested capital has more than doubled from the start to the end of the period, reflecting substantial asset base growth likely supporting operational expansion or strategic acquisitions.

In summary, the data points to a period marked by substantial balance sheet expansion, with stockholders’ equity and invested capital growing robustly. The pattern of debt indicates strategic leveraging after an initial reduction, stabilizing at higher levels consistent with increased invested capital. Together, these trends suggest an aggressive growth phase involving capital acquisition and financing moves to support organizational objectives.

Economic Profit

The economic profit experienced a notable decline over the observed period. Starting at a positive figure of 352 million USD in 2020, it sharply decreased to 82 million USD in 2021. The trend then turned negative from 2022 onward, reaching -1,729 million USD in 2022 and deepening further to -1,918 million USD in 2023. Although there is a slight improvement in 2024 and 2025, with losses reducing to -1,506 million USD and -579 million USD respectively, the values remain significantly negative.

Invested Capital

The invested capital showed a consistent upward trend from 2020 to 2025. Beginning at 8,690 million USD in 2020, it increased substantially to 12,248 million USD in 2021 and nearly doubled to 24,726 million USD in 2022. After a slight decrease to 23,712 million USD in 2023, it again rose to 24,948 million USD in 2024 and slightly declined to 24,521 million USD in 2025. Overall, the invested capital nearly tripled over the six-year period, indicating significant capital commitment.

Economic Spread Ratio

The economic spread ratio followed a declining trajectory. It started at a positive 4.05% in 2020 before sharply falling to 0.67% in 2021. From 2022 onwards, the ratio became negative, dropping to -6.99% in 2022 and further to -8.09% in 2023. Subsequent years saw some recovery as the ratio improved to -6.04% in 2024 and -2.36% in 2025, but it remained below zero, indicating returns below the cost of capital.

Revenue Growth

The adjusted net revenue exhibits a consistent and notable upward trend over the periods analyzed. Starting from $7,721 million in the first year, revenue increased steadily each year, reaching $18,978 million by the last reported period. This represents more than a doubling of revenue within the timeframe, indicating strong sales growth and expansion of the company’s market or product offerings.

Economic Profit Development

Economic profit shows a markedly different pattern compared to revenue. Initially, there was positive economic profit of $352 million, followed by a sharp decline to $82 million in the subsequent year. Beginning in the third year, economic profit turned negative, reaching substantial losses and peaking in deficit at -$1,918 million. Although the losses remain negative in the final two years, they exhibit a recovery trend, decreasing in magnitude from -$1,506 million to -$579 million. This indicates that while the company is generating higher revenues, it is still struggling to produce economic profits but is improving its profitability relative to the peak negative periods.

Economic Profit Margin Trends

The economic profit margin parallels the economic profit values, moving from a positive 4.56% to a sharp decline with negative margins starting in the third year. The margins hit low points near -13.45% and -13.24% in the middle of the timeline, reflecting significant inefficiencies or high costs relative to profits. However, similar to economic profit, the margin improves in the latter years, reducing negative impact to -9.28% and then further to -3.05%. This margin trend suggests that despite the earlier profitability challenges, cost management or other operational improvements may be contributing to a gradual margin recovery.

Summary of Overall Financial Position

The company is achieving strong revenue growth but facing ongoing challenges in translating this growth into positive economic profit. The pattern suggests initial profitability struggles possibly due to increased investments, higher operating expenses, or competitive pressures impacting margins. The gradual improvement in economic profit and margin in recent years is a positive sign, indicating a potential move toward restoring profitability and more efficient use of capital. The persistent negative economic profit, however, calls for continued focus on cost control and operational efficiency to leverage the strong revenue gains into sustainable profits.