Intuit Inc. (NASDAQ:INTU)

Net operating profit after taxes (NOPAT)

The net operating profit after taxes experienced overall growth from 2020 to 2025. It increased from $1,795 million in 2020 to $2,161 million in 2021 and further rose to $2,300 million in 2022. There was a slight decline in 2023 to $2,022 million, followed by a significant increase to $2,668 million in 2024 and a substantial rise to $3,531 million in 2025, indicating a strong positive trend in profitability over the longer term.

Cost of capital

The cost of capital remained relatively stable throughout the period, ranging between 16.25% and 16.93%. It started at 16.56% in 2020, increased slightly to 16.93% in 2021, then decreased to 16.25% in 2022. From 2023 onward, it exhibited a gradual upward movement again, reaching 16.72% by 2025. This stability suggests consistent funding costs with minor fluctuations.

Invested capital

Invested capital demonstrated significant growth and volatility over the years. The value rose sharply from $8,690 million in 2020 to $12,248 million in 2021. This was followed by a substantial increase to $24,726 million in 2022. However, it slightly declined to $23,712 million in 2023, then marginally increased again to $24,948 million in 2024, and decreased slightly to $24,521 million in 2025. Overall, there was a large expansion in capital expenditures or investments, nearly tripling within five years, indicating aggressive asset or project growth.

Economic profit

Economic profit displayed a downward trend, turning negative starting in 2022. Initially, it was positive at $356 million in 2020 and declined sharply to $87 million in 2021. In 2022, it became negative at -$1,719 million and further decreased to -$1,908 million in 2023. Although there was a slight improvement in 2024 (-$1,496 million) and a more notable reduction in losses in 2025 (-$569 million), the company continued to generate negative economic profit over the last four years. This suggests the returns on invested capital did not exceed the cost of capital during this period, raising concerns regarding value creation despite growing operating profits.

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 demonstrated a significant decline over the observed periods. Initially, in 2020, the economic profit was positive at $356 million but dropped sharply to $87 million in 2021. From 2022 onward, the economic profit turned negative and continued to deteriorate, reaching its lowest point at -$1,908 million in 2023 before slightly improving to -$569 million by 2025. This trend indicates increasing challenges in generating returns above the cost of capital.

Invested Capital

Invested capital exhibited a substantial upward trend initially, more than doubling from $8,690 million in 2020 to $24,726 million in 2022. Following this peak, invested capital fluctuated moderately but remained relatively stable around the $24,000 to $25,000 million range through 2025. The growth in invested capital suggests substantial investments or asset increases during the early years, stabilizing in the latter years.

Economic Spread Ratio

The economic spread ratio, representing the difference between return on invested capital and cost of capital, showed a clear downward trajectory. Starting at a healthy 4.09% in 2020, it sharply declined to 0.71% in 2021 and turned negative from 2022 through 2025. Despite a slight improvement in 2025 to -2.32%, the persistently negative economic spread ratio highlights ongoing inefficiencies in generating returns sufficient to cover capital costs during these years.

Overall Analysis

The data indicates a concerning trend of declining profitability and efficiency in the use of capital. While invested capital expanded considerably by 2022, this did not translate into positive economic profit or spread. Instead, the company faced increasing negative economic profit and spread ratios, signaling that the capital investments were not generating adequate returns. The slight recovery in economic profit and spread in 2025, although still negative, may suggest early signs of improvement or stabilization after a period of significant underperformance.

Adjusted Net Revenue

The adjusted net revenue exhibited a consistent upward trend over the observed periods. Starting at 7,721 million US dollars in 2020, the revenue increased steadily each year, reaching 18,978 million US dollars by 2025. This indicates a strong growth trajectory in the company's revenue-generating capacity.

Economic Profit

Economic profit showed a significant decline over the timeline analyzed. Beginning with a positive figure of 356 million US dollars in 2020, it sharply decreased to 87 million in 2021 and then plunged into negative territory from 2022 onward, reaching -1,719 million US dollars in 2022. The negative trend deepened in 2023, worsening to -1,908 million, followed by an improvement trend toward -569 million by 2025. Despite this recovery, the economic profit remained negative in the latter years.

Economic Profit Margin

The economic profit margin mirrored the pattern observed in economic profit. Initially positive at 4.61% in 2020, it fell sharply to 0.9% in 2021. The margin then turned negative, reflecting losses, dropping to -13.38% in 2022 and remaining substantially negative through 2023 and 2024, before improving to -3% in 2025. This pattern suggests that while revenue increased, the company faced challenges in converting revenue growth into economic profit.

Overall Insights

The company demonstrated robust top-line growth as indicated by the rising adjusted net revenue. However, this growth did not translate into economic profitability, with results showing significant negative economic profits and profit margins after 2021. The gradual improvement in economic profit and margin by 2025 may indicate initial signs of recovery or increased efficiency but does not fully offset the earlier substantial losses. Such trends suggest operational or cost management issues needing attention despite positive revenue dynamics.