Intuit Inc. (NASDAQ:INTU)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes exhibits an overall upward trend with some fluctuations over the examined periods. Beginning at 1,578 million USD in 2019, NOPAT increased steadily to reach a peak of 2,300 million USD in 2022. A slight decline occurred in 2023, where NOPAT dropped to 2,022 million USD, followed by a notable recovery to 2,668 million USD in 2024. This pattern suggests improved operational profitability in most years, with the latest period showing a strong rebound.

Invested Capital

Invested capital shows a significant growth trajectory over the period analyzed. Starting from 4,546 million USD in 2019, it nearly doubled to 8,690 million USD in 2020 and increased further to 12,248 million USD in 2021. A marked jump is observed in 2022 when invested capital more than doubled again to 24,726 million USD. Following that, it slightly decreased to 23,712 million USD in 2023 but reversed the dip in 2024 with an increase to 24,948 million USD. This indicates consistent expansion in the capital base driving the business.

Return on Invested Capital (ROIC)

The return on invested capital reveals a declining trend initially, dropping from a high 34.71% in 2019 to a low of 8.53% in 2023. The decrease appears pronounced especially from 2020 onward as invested capital expanded sharply while net operating profit grew at a slower pace. Despite this decline, there is a modest recovery in ROIC to 10.69% in 2024. This suggests that although the company has increased its capital investments substantially, the efficiency of these investments in generating operating profit has weakened but shows signs of improvement in the latest period.

Over the analyzed periods, the operating profit margin (OPM) exhibits a fluctuating but overall declining trend. Initially, the margin increases slightly from 28.33% in 2019 to 29.42% in 2020, followed by a moderate decrease to 28.02% in 2021. A significant drop occurs in 2022, reaching a low of 21%, before it partially recovers in the subsequent years, moving to 23.08% in 2023 and 24.3% in 2024. This suggests challenges in maintaining profitability at earlier levels, though recent improvements may indicate some operational adjustments or changes in cost structure.

Turnover of capital (TO) reveals a steady decline from 1.5 in 2019 to 0.52 in 2022, with modest increases afterward to 0.61 in 2023 and 0.65 in 2024. This significant drop and slow recovery point to a decreasing efficiency in utilizing capital to generate revenue over much of the period, possibly reflecting increased capital investment without proportional revenue growth or diminished asset utilization efficiency.

The metric "1 – Effective cash tax rate (CTR)" remains high throughout the period but decreases notably in 2023, dropping from above 79% in earlier years to 60.51%, before rising again to 67.64% in 2024. This indicates fluctuations in effective tax payments relative to cash flows, suggesting changes possibly due to tax planning, legislative impacts, or one-time adjustments affecting tax expense recognition.

Return on invested capital (ROIC) follows a pronounced downward trend from 34.71% in 2019 to a low of 8.53% in 2023, with a slight rebound to 10.69% in 2024. This decline signals worsening returns on the capital invested in the business, reflecting either reduced operational profitability or increased invested capital that is not yet generating proportionate returns. The modest recovery in the last year suggests potential early signs of improved capital efficiency or profitability.

Operating profit margin (OPM)

Fluctuated with an overall decline from above 28% to mid-20% range, indicating some operational pressures but partial recent recovery.

Turnover of capital (TO)

Declined sharply over the first four years, signifying decreasing capital use efficiency, with slow improvement in the final years.

1 – Effective cash tax rate (CTR)

Generally high but variable, reflecting significant changes in tax-related cash flow impacts, especially in 2023.

Return on invested capital (ROIC)

Marked decline from strong double digits to under 11%, highlighting reduced returns on investment with slight recovery in the latest period.

Analysis of the financial data over the six-year period reveals several notable trends in profitability, revenue growth, and operating efficiency.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT exhibited a consistent upward trajectory, increasing each year from 1933 million US dollars in 2019 to 3944 million US dollars in 2024. This represents more than a doubling of pre-tax operating profit over the six-year horizon, indicating significant improvements in operational profitability and potentially successful cost management or higher-margin activities.

Adjusted Net Revenue

Adjusted net revenue also demonstrated robust growth, rising steadily from 6823 million US dollars in 2019 to 16235 million US dollars in 2024. The revenue nearly 2.4 times during this period, reflecting strong demand, effective market strategies, or expansion of product or service offerings. The growth rate accelerated notably starting in 2021, with a marked jump from 9660 million to 12848 million US dollars in 2022, continuing at a healthy pace thereafter.

Operating Profit Margin (OPM)

The operating profit margin experienced fluctuations over the years. The margin was relatively stable around the high 20% range from 2019 to 2021, with a peak of 29.42% in 2020. However, a noticeable decline occurred in 2022, when the margin dropped sharply to 21%. Although some recovery is visible in the following years, reaching 24.3% in 2024, the margin remains below the earlier peak levels. This decline amidst strong revenue growth suggests increased operating expenses or investments that may be diluting margin percentages temporarily.

Overall, the company’s financial trends indicate strong revenue expansion supported by increasing operating profits, albeit with some pressure on operating margins in recent years. The recovery trend in margins alongside revenue and profit growth may indicate strategic adjustments or efficiency improvements gaining traction after a period of margin compression.

The analysis of the financial data for the periods from July 31, 2019, to July 31, 2024, reveals several noteworthy trends in the examined financial metrics.

Adjusted Net Revenue

The adjusted net revenue has shown a consistent upward trajectory over the six-year period. Starting at US$ 6,823 million in 2019, it increased each year, reaching US$ 16,235 million by 2024. This reflects a strong and steady revenue growth, with particularly significant increases observed between 2020 and 2022, indicative of effective revenue generation strategies or favorable market conditions during those years.

Invested Capital

Invested capital has also risen markedly from US$ 4,546 million in 2019 to US$ 24,948 million in 2024. The most significant jump is noticeable between 2021 and 2022, where invested capital approximately doubled from US$ 12,248 million to US$ 24,726 million. Although there was a slight decrease in 2023, invested capital resumed its growth in 2024. This upward trend suggests substantial capital allocation, possibly aimed at supporting expansion or operational capabilities.

Turnover of Capital (TO)

Capital turnover, defined as the ratio of revenue to invested capital, has experienced a declining trend from 1.5 in 2019 to a low of 0.52 in 2022. This decline indicates that, despite increasing revenue, the rate at which invested capital is generating revenue has decreased. However, there is a partial recovery in the subsequent years, with the ratio improving to 0.65 by 2024. The initial decline may suggest heavy investments that have not yet fully translated into proportional revenue gains, while the partial recovery could point to improving efficiency or better utilization of capital resources.

Overall, the data suggests a company in a phase of rapid investment and revenue growth, but with returns on invested capital temporarily compressed before showing signs of improvement. This pattern is consistent with strategic growth initiatives that require substantial initial capital outlay, followed by gradual efficiency gains.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes exhibits a generally increasing trend over the six-year period from 2019 to 2024. Beginning at $1,933 million in 2019, it rose each year, reaching $3,944 million by 2024. This indicates a consistent improvement in operational profitability before tax considerations, with notable steady growth particularly between 2022 and 2024.

Cash Operating Taxes

Cash operating taxes display more variability over the timeframe. Starting at $355 million in 2019, the value increases to a peak of $545 million in 2021 before dropping to $398 million in 2022. Subsequently, there is a sharp increase to $1,320 million in 2023, which slightly declines to $1,276 million in 2024. This volatility suggests fluctuations in tax payments that may be influenced by tax law changes, adjustments in taxable income, or other tax-related items.

Effective Cash Tax Rate (CTR)

The effective cash tax rate shows considerable variation throughout the period. It begins at 18.37% in 2019 and slightly rises to around 21% in 2020. Then, it decreases to approximately 14.74% in 2022, followed by a significant increase to 39.49% in 2023, and a decline to 32.36% in 2024. These fluctuations in the effective tax rate indicate periods of lower and higher tax burdens relative to operating profits, possibly reflecting changes in tax regulations, credits, deductions, or timing differences in tax recognition.

Overall Analysis

There is a clear upward trajectory in operating profitability before taxes over the period, indicating positive operational performance. However, the cash operating taxes and effective cash tax rate show less stability, with significant fluctuations especially in the later years. The spike in cash operating taxes and effective tax rate in 2023 suggests a considerable increase in tax expense relative to profits in that year, which somewhat recedes but remains elevated in 2024. This combination of increasing profitability and volatile tax rates points to the importance of tax planning and management in the overall financial strategy.