Micron Technology Inc. (NASDAQ:MU)

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibited significant fluctuations over the observed periods. From 2020 to 2022, there was a strong upward trend, with values increasing from 2,891 million US dollars to 9,071 million US dollars. However, in 2023, there was a sharp reversal to a negative figure of -5,885 million US dollars. This was followed by a partial recovery in 2024, reaching 857 million US dollars, and a substantial increase in 2025, up to 8,713 million US dollars. Overall, the data reflects volatility with a notable dip in 2023 and recovery thereafter.

Cost of Capital

The cost of capital remained relatively stable but showed a slight upward trend over the period. It started at 16.19% in 2020 and increased marginally to 17.15% by 2025. Minor fluctuations are observed, but the general direction points to a moderate increase in the cost of financing over time, which may impact investment and profitability decisions.

Invested Capital

Invested capital demonstrated a consistent growth trend throughout the years, moving from 42,291 million US dollars in 2020 to 61,173 million US dollars in 2025. This steady increase suggests ongoing investment and asset accumulation, potentially to support expansion or technological advancement.

Economic Profit

The economic profit showed considerable variability and overall negative values in most periods. Starting with a loss of 3,956 million US dollars in 2020, the situation improved somewhat in 2022 when economic profit turned positive at 395 million US dollars. However, there was a substantial decline in 2023 to -14,447 million US dollars, followed by continued losses in 2024 and 2025, albeit less severe. The pattern indicates challenges in generating returns above the cost of capital, particularly marked by the deep losses during 2023 and subsequent years.

Net Income (Loss) Attributable to Micron

The net income exhibited significant fluctuations over the observed periods. Starting from a positive value of 2,687 million USD in 2020, there was a substantial increase to 5,861 million USD in 2021, followed by a further rise to 8,687 million USD in 2022. However, the year 2023 saw a marked reversal with a net loss of 5,833 million USD. Subsequently, the net income rebounded in 2024 to a positive 778 million USD and further increased to 8,539 million USD in 2025. This pattern highlights considerable volatility in profitability, with a notable dip in 2023 amidst an overall upward trajectory in net income.

Net Operating Profit After Taxes (NOPAT)

NOPAT reflected a trend similar to net income, indicating a strong correlation between operating profitability and net earnings. The figure rose steadily from 2,891 million USD in 2020 to 5,967 million USD in 2021 and reached a peak of 9,071 million USD in 2022. A sharp decline occurred in 2023, with NOPAT turning negative at -5,885 million USD. Recovery ensued in 2024 with a modest positive value of 857 million USD and a significant improvement to 8,713 million USD in 2025. This indicates that operating efficiency and after-tax operating profits experienced a disruption in 2023 but resumed a positive and robust recovery in the subsequent years.

Overall Trends and Insights

Both net income and NOPAT demonstrated robust growth through 2022, followed by a critical downturn in 2023. The sharp declines in 2023 suggest an extraordinary or challenging event impacting profitability and operational effectiveness during that year. The recovery in 2024 and strong performance in 2025 reflect resilience and an effective restoration of earnings capacity. The data suggests that despite volatility, the company managed to return to a growth trajectory in profitability in the most recent period.

Income Tax Provision

Over the examined periods, the income tax provision exhibits considerable volatility. Starting at 280 million USD in 2020, it rose significantly to 394 million USD in 2021. The figure then more than doubled to 888 million USD in 2022, indicating a substantial increase in tax expenses or taxable income during that year. However, in 2023, the income tax provision sharply declined to 177 million USD, the lowest in the observed timeframe. It then rebounded to 451 million USD in 2024 and reached a peak of 1,124 million USD in 2025, marking the highest level recorded. This pattern suggests fluctuations in profitability or changes in tax strategy, with a notable upward trend towards the latter periods.

Cash Operating Taxes

Cash operating taxes demonstrate a parallel yet slightly less volatile pattern compared to the income tax provision. Beginning at 189 million USD in 2020, the amount increased to 446 million USD in 2021 and further rose to 618 million USD in 2022. A significant decline occurred in 2023, where the cash operating taxes dropped to 172 million USD, closely mirroring the income tax provision trend. Following this low point, there was a recovery to 428 million USD in 2024, and a substantial increase to 963 million USD in 2025. The overall trajectory shows growth in cash taxes paid, with a notable dip in 2023, suggesting changes in operating income or tax payments timing.

Comparative Analysis

Both income tax provision and cash operating taxes reveal correlated fluctuations across the years, with peaks in 2022 and 2025 and a pronounced trough in 2023. The income tax provision consistently exceeds cash operating taxes, indicating differences likely due to deferred tax adjustments or non-cash tax expenses. The sharp variations imply that fiscal results and tax obligations experienced significant shifts over the period, possibly impacted by changes in earnings, tax legislation, or accounting practices.

Total Reported Debt & Leases

The total reported debt and leases demonstrate a fluctuating upward trend over the analyzed periods. Initially, the amount increased slightly from 7,230 million USD in 2020 to 7,576 million USD in 2022. A significant rise occurred between 2022 and 2023, with the value nearly doubling to 13,999 million USD. This elevated level of debt and leases was sustained through 2024 and increased further to 15,352 million USD in 2025, indicating an increasing reliance on debt financing in recent years.

Shareholders’ Equity

Shareholders’ equity generally exhibited growth over the reported timeframe, rising from 38,996 million USD in 2020 to a peak of 49,907 million USD in 2022. However, in 2023, equity declined to 44,120 million USD before resuming an upward trend, reaching 54,165 million USD in 2025. This pattern suggests some volatility, but a longer-term positive increase in equity base is evident by the end of the period.

Invested Capital

Invested capital shows an overall growth trend, moving from 42,291 million USD in 2020 to 61,173 million USD in 2025. The increase appears steady, with minor fluctuations around 2023 and 2024 when the invested capital plateaued near 53,000 million USD before rising again. This reflects a consistent expansion in the company's total capital commitment over the examined years.

General Insights

The data indicates that the company has been increasing its use of debt and leases substantially since 2022, which has contributed to rising invested capital. Despite some fluctuations in shareholders’ equity, the overall capital structure suggests growth and increased financial leverage. The simultaneous growth in both equity and debt levels points to an expansion strategy that involves utilizing both internal funds and external borrowings.

The financial data over the examined periods reveal notable fluctuations in key performance indicators related to economic profitability and invested capital.

Economic Profit

Economic profit demonstrates a volatile pattern across the years. Initially, it reflects a significant negative value, indicating losses of substantial magnitude. There was an improvement by the second period, with the loss decreasing markedly. The trend peaked positively in the third period, suggesting a period of profitability. However, this improvement was followed by a steep decline again in the fourth period, marking the most substantial loss recorded across all periods. Subsequently, economic profit showed a reduction in losses for the following two periods, although figures remained negative overall.

Invested Capital

Invested capital displays a generally upward trend across the periods. Starting at a relatively moderate base, it increased steadily year over year, except for slight stagnation between the fourth and fifth periods. The latest period shows a pronounced rise, indicating an accumulation of assets or resources invested into the operations.

Economic Spread Ratio

The economic spread ratio follows a pattern consistent with economic profit, showing predominantly negative values throughout most periods. Initially, the ratio is negative but improves over the first three periods, becoming positive briefly in the third period. Afterward, the ratio deteriorates significantly by the fourth period, mirroring the highest economic loss. Although there is some reversal towards less negative values in the final periods, the spread ratio remains below zero, implying returns on invested capital have generally underperformed the cost of that capital.

In summary, the company has experienced substantial variability in economic profitability, with transient positive performance overshadowed by predominantly negative returns. The consistent increase in invested capital suggests ongoing expansion or reinvestment efforts. Nevertheless, the persistent negative economic spread ratio indicates challenges in generating returns sufficient to exceed the cost of capital during most of the observed timeframe.

Revenue

The revenue demonstrated a general upward trend over the analyzed periods, increasing from $21,435 million in 2020 to $37,378 million in 2025. However, there was a notable decline in 2023, where revenue dropped significantly to $15,540 million before rebounding in the subsequent years. This indicates some volatility in revenue generation, possibly reflecting market fluctuations or operational challenges during that year.

Economic Profit

The economic profit figures indicate considerable variability and periods of negative performance. In 2020 and 2021, economic profit was deeply negative at -$3,956 million and -$1,765 million respectively, showing improvements by 2022 with a positive value of $395 million. However, in 2023, economic profit plunged again sharply to -$14,447 million, followed by moderate recovery in the last two periods, but remaining negative at -$7,970 million in 2024 and -$1,775 million in 2025. This pattern suggests significant profitability challenges and inconsistent value creation over the years.

Economic Profit Margin

The economic profit margin aligns with the observed economic profit trends and reveals considerable fluctuations. Starting at -18.46% in 2020, it improved toward a positive margin of 1.28% in 2022, reflecting a temporary enhancement in economic value generation. Subsequently, the margin deteriorated drastically to -92.96% in 2023, before partially recovering to -31.74% and -4.75% in 2024 and 2025 respectively. These fluctuations indicate an unstable efficiency in converting revenue into economic profit, with 2023 standing out as a particularly challenging year.

Overall Insights

Despite an overall increase in revenue across the period, profitability as measured by economic profit and margin has been inconsistent and frequently negative. This suggests that revenue growth was not consistently accompanied by improved economic returns. The sharp decline in both revenue and economic profitability in 2023 is indicative of substantial operational or market difficulties during that year. Although there was some recovery in 2024 and 2025, economic profit remained below zero, highlighting ongoing challenges in achieving sustained economic value creation.