NVIDIA Corp. (NASDAQ:NVDA)

Current income taxes

The current income tax expense demonstrates a consistent and substantial increase over the periods analyzed. Starting at US$156 million in early 2020, the amount rises moderately to US$359 million by early 2021, then nearly doubles again to US$595 million by early 2022. A more marked jump occurs between 2022 and 2023, with the figure climbing to US$1,977 million, followed by a sharp escalation to US$6,547 million in 2024 and further doubling to US$15,623 million by early 2025. This upward trend indicates significantly higher taxable income or changes in tax rates or regulations impacting the company's current tax liabilities.

Deferred income taxes

The deferred income tax figures start positively at US$18 million in 2020 but quickly dive into negative territory in 2021 at -US$282 million, continuing to decline in subsequent years to -US$406 million in 2022, -US$2,164 million in 2023, -US$2,489 million in 2024, and -US$4,477 million in 2025. The increasing negative values reflect rising deferred tax liabilities or diminishing deferred tax assets, suggesting an anticipated higher future tax burden or timing differences becoming more significant over time.

Income tax expense (benefit)

The overall income tax expense, which includes both current and deferred components, shows considerable volatility. It starts at US$174 million in 2020 before dropping sharply to US$77 million in 2021. A moderate increase is observed in 2022 to US$189 million. However, in 2023 there is a notable benefit of -US$187 million, indicating a net tax gain possibly due to deferred tax adjustments or tax credits. After this, the income tax expense surges dramatically to US$4,058 million in 2024 and further to US$11,146 million in 2025, aligning with the marked increase in current tax expenses and indicating a significantly higher consolidated tax burden in recent years.

The analysis of the provided tax-related financial percentages over the time frame from January 26, 2020, to January 26, 2025, reveals several notable trends and fluctuations in the company's effective tax rate components and related items.

U.S. Federal Statutory Income Tax Rate

This rate remained constant at 21% throughout the period, indicating no changes in the federal statutory tax rate applicable to the company over these years.

State Income Taxes, Net of Federal Tax Effect

State income taxes started at an undefined or zero value in 2020 and increased slightly over the years, peaking at 1.2% in 2023 before moderating to 0.7% in 2025. This suggests some variability in state-level tax impacts but generally low relative contribution to the overall tax rate.

Foreign-Derived Intangible Income

This component was not present in 2020 and 2021 but appeared negatively from 2022 onward, with the largest negative impact of -17.7% in 2023, lessening to -3.5% by 2025. The trend indicates a notable increase in tax benefits or reductions from foreign intangible income peaking in 2023, followed by a reduction in benefit magnitude.

Stock-Based Compensation

Starting from no impact in 2020 to a negative percentage from 2021, stock-based compensation increased in negative effect to -7.4% in 2023, then decreased again to levels around -2.5% by 2025. This suggests fluctuating effects of stock compensation on the effective tax burden, with a temporary spike in 2023.

U.S. Federal Research and Development Tax Credit

The tax credit effect was introduced in 2021 at -3.9%, varying over time, peaking in negative effect at -6.6% in 2023, and then decreasing to about -1.2% in 2025. This pattern indicates fluctuating incentives from research and development tax credits, with a significant boost in 2023.

Foreign Tax Rate Differential

This item was significant in 2021 at -12.7%, diminishing steadily to -1.2% by 2025. The declining trend suggests a decreasing discrepancy or benefit derived from foreign tax rate differences over time.

Acquisition Termination Cost

Present only in 2023 with a notable positive 6.2%, this one-time cost indicates a specific event causing an increased tax expense or adjustment during that year.

IP Domestication

Recorded only in 2022 at -2.5%, this effect appears to be a one-off tax benefit associated with intellectual property domestication impacting that year's tax calculations.

Other

This category fluctuated from a negative 15.1% impact in 2020 to positive 0.8% in 2023, then oscillated slightly negative again. The volatility indicates other miscellaneous tax items contributing variably to the overall tax position across years.

Annual Effective Tax Rate

The effective tax rate exhibited substantial fluctuation, starting at 5.9% in 2020, dropping to as low as -4.5% in 2023 (effectively a negative tax rate), before rising sharply to 13.3% by 2025. These changes reflect the combined effects of various tax credits, differing tax rates, and one-off events such as acquisition costs, resulting in a highly dynamic tax landscape over the period analyzed.

In summary, the company experienced a dynamically changing effective tax environment characterized by significant tax credits, incentives, and unique tax events particularly around 2022 and 2023. The consistent federal statutory rate contrasts with the volatility in state taxes, foreign income benefits, and one-time items, collectively influencing the effective tax rate to oscillate widely within the period. The reduction in benefits related to foreign tax differentials and foreign-derived income post-2023 suggests a shift in international tax strategy or external tax policy impacts. Furthermore, the spike and subsequent decrease in stock-based compensation effects and R&D credits indicate fluctuating operational or accounting factors affecting tax liabilities.

Capitalized Research and Development Expenditure

There is a clear upward trend in capitalized R&D expenditure, starting from no recorded value in the early years to a significant increase from 508 million USD in January 2022 to 6,256 million USD in January 2025, indicating increased investment in innovation and technology development.

GILTI Deferred Tax Assets

The GILTI deferred tax assets show a fluctuating but overall increasing pattern, growing from 428 million USD in January 2020 to 2,820 million USD in January 2025, suggesting rising tax benefits related to global intangible low-taxed income.

Accruals and Reserves Not Currently Deductible for Tax Purposes

This item exhibits strong growth, expanding from 39 million USD in January 2020 to 2,058 million USD in January 2025, reflecting increasing timing differences that are expected to become deductible in future periods.

Research and Other Tax Credit Carryforwards

The values remain relatively stable with minor fluctuations, peaking at 951 million USD in January 2023 and slightly declining afterward, indicating some utilization or expiration of tax credits over time.

Net Operating Loss and Capital Loss Carryforwards

There is a moderate upward trend, increasing from 62 million USD in January 2020 to 456 million USD in January 2025, which may represent accumulated losses carried forward to offset future taxable income.

Operating Lease Liabilities

Operating lease liabilities gradually increase from 114 million USD in January 2020 to 299 million USD in January 2025, reflecting ongoing or new lease obligations recognized under accounting standards.

Stock-Based Compensation

Stock-based compensation expenses show steady growth, rising from 28 million USD in January 2020 to 124 million USD in January 2025, indicative of increased employee compensation through equity instruments.

Property, Equipment and Intangible Assets

This category fluctuates without a clear trend, with values varying between lows of 4 million USD and highs of 82 million USD during the analyzed periods, suggesting inconsistency or reclassification in asset capitalization.

Other Deferred Tax Assets

Starting from missing data early on, other deferred tax assets increase substantially from 22 million USD in January 2022 to 360 million USD in January 2025, indicating recognition of additional deferred tax benefits.

Gross Deferred Tax Assets

There is a clear and substantial increase in gross deferred tax assets, rising from 1,288 million USD in January 2020 to 13,214 million USD in January 2025, driven primarily by growth in capitalized R&D and other deferred tax assets.

Valuation Allowance

The valuation allowance deepens in negative value from -621 million USD in January 2020 to -1,610 million USD in January 2025, reflecting increasing reservations against deferred tax assets due to uncertainties in their realizability.

Deferred Tax Assets (Net of Valuation Allowance)

Deferred tax assets after allowance significantly grow from 667 million USD in January 2020 to 11,604 million USD in January 2025, highlighting enhanced expected future tax benefits despite rising valuation allowances.

Unremitted Earnings of Foreign Subsidiaries

This liability increases in magnitude negatively from -40 million USD in January 2020 to -891 million USD in January 2025, indicating growing deferred taxes on earnings that have not been repatriated.

Operating Lease Assets

Operating lease assets show a steady increase in negative value from -107 million USD in January 2020 to -286 million USD in January 2025, corresponding with lease obligations and their accounting under current standards.

Equity Investments

Equity investments data is absent in most early years but present a negative value of -264 million USD in January 2025, possibly signifying impairments or write-downs.

Acquired Intangibles

There is a gradual decrease in negative values from -1 million USD in January 2020 to -70 million USD in January 2025, indicating amortization or partial impairments of acquired intangible assets.

Gross Deferred Tax Liabilities

Gross deferred tax liabilities increase steadily in negative value from -148 million USD in January 2020 to -1,511 million USD in January 2025, reflecting growing future tax obligations.

Net Deferred Tax Asset (Liability)

The net deferred tax asset position improves significantly over the period, rising from 519 million USD in January 2020 to 10,093 million USD in January 2025, indicating a stronger overall deferred tax asset base after netting liabilities.

The financial data reveals a consistent and significant increase in long-term deferred tax assets over the six-year period. Starting at US$548 million in 2020, the assets steadily climbed each year, reaching US$10,979 million by 2025. This represents a nearly twentyfold increase, indicating a substantial growth in deferred tax benefits recognized by the company.

In contrast, long-term deferred tax liabilities, which are included in other long-term liabilities, also increased but at a much slower pace. The liabilities rose from US$29 million in 2020 to US$886 million in 2025, which is a moderate increase relative to the assets.

Key Observations:

The accelerated growth of deferred tax assets compared to liabilities suggests the company is likely benefiting from timing differences or carryforwards that enhance its future tax positions.

The significantly larger scale and growth rate of deferred tax assets may positively influence the company's future tax expense, potentially reducing taxable income in upcoming periods.

The steady but moderate increase in deferred tax liabilities indicates ongoing recognition of future tax obligations, though these remain substantially lower than the assets.

The trend reflects a strengthening tax asset position over time, which could improve the company’s net asset base and financial flexibility.

Overall, the data indicates improving deferred tax asset balances relative to liabilities, highlighting potentially favorable tax planning outcomes or temporary timing differences beneficial to the company’s long-term financial health.

The data reveals significant growth trends in the company's financial position and performance over the six-year period under review. Both reported and adjusted figures indicate substantial increases across key balance sheet and income statement items, albeit with some fluctuations and discrepancies between reported and adjusted values.

Total Assets

Total assets, on both a reported and adjusted basis, show a strong upward trajectory from 2020 through 2025. Reported total assets rose from approximately $17.3 billion in early 2020 to $111.6 billion by early 2025, representing more than a sixfold increase. Adjusted total assets grew in a closely aligned manner, increasing from $16.8 billion to $100.6 billion over the same period. Notably, reported assets peaked in early 2024 at $65.7 billion before jumping further in 2025, while adjusted assets exhibited a slight dip in early 2023 before recovering.

Total Liabilities

Total liabilities also increased markedly, rising from $5.1 billion reported in 2020 to $32.3 billion in 2025. Adjusted liabilities followed a parallel trend, climbing from $5.1 billion to $31.4 billion. The growth in liabilities was steady and less volatile relative to assets, indicating a controlled increase in financial obligations even as the company expanded.

Shareholders’ Equity

Shareholders’ equity demonstrated strong growth, though with some variability between reported and adjusted figures. Reported equity grew from $12.2 billion in 2020 to $79.3 billion in 2025, showing a considerable increase especially from 2023 onward. Adjusted equity followed a similar pattern but consistently remained lower than the reported figures, rising from $11.7 billion to $69.2 billion. The divergence between reported and adjusted equity widened over time, suggesting increasing adjustments impacting equity values.

Net Income

Net income exhibited the most pronounced fluctuations. Reported net income increased from $2.8 billion in 2020 to $72.9 billion in 2025, with a notable drop in 2023 to $4.4 billion followed by a steep rise in subsequent years. Adjusted net income showed a similar pattern but with lower values throughout, falling sharply to $2.2 billion in 2023 before rebounding to $68.4 billion in 2025. The disparity between reported and adjusted net income was significant, particularly in years with extreme fluctuations, indicating considerable tax or other adjustments affecting reported profitability.

Overall, the company's financial data reflects rapid expansion, with assets and equity growing substantially and liabilities increasing at a more moderate pace to support that growth. The disparities between reported and adjusted figures highlight the impact of income tax and other adjustments on the company’s financial statements, especially in net income. The results suggest a strategy focused on leveraging growth through both asset accumulation and equity enhancement, while managing liabilities systematically over the analyzed period.

Net Profit Margin Trends

The reported net profit margin demonstrates variability over the periods, initially rising slightly from 25.61% in 2020 to 25.98% in 2021 and then sharply increasing to 36.23% in 2022. A significant decline follows in 2023 to 16.19%, before surging to 48.85% and 55.85% in 2024 and 2025 respectively. The adjusted net profit margin follows a similar pattern but presents comparatively lower values during the midpoint years, with a notable dip to 8.17% in 2023 before recovering strongly to 44.76% and 52.42% in the last two years.

Total Asset Turnover Patterns

Both reported and adjusted total asset turnover ratios show a general upward trend. Starting from 0.63 (reported) and 0.65 (adjusted) in 2020, values slightly decreased in 2021 but recovered afterward, increasing steadily to 0.93 and 1.02 in 2024, and further to 1.17 and 1.30 in 2025 for reported and adjusted data respectively. This indicates improved efficiency in using assets to generate sales over time, particularly from 2023 onwards.

Financial Leverage Dynamics

Reported financial leverage increased from 1.42 in 2020 to a peak of 1.86 in 2023 before declining to 1.53 in 2024 and further to 1.41 in 2025. The adjusted financial leverage follows a similar pattern with peak leverage of 1.99 in 2023 and subsequent decreases. This trend suggests a rise in debt or other liabilities relative to equity mid-period, followed by a reduction in leverage in recent years.

Return on Equity (ROE) Analysis

The reported ROE increased from 22.91% in 2020 to a peak of 36.65% in 2022, fell to 19.76% in 2023, and then experienced a substantial increase to 69.24% and 91.87% in 2024 and 2025 respectively. The adjusted ROE shows a more pronounced drop in 2023 down to 11.63%, but rebounds strongly to 72.99% and 98.80% in the subsequent years. These fluctuations reflect changes in profitability and leverage, with a remarkable improvement in the later years.

Return on Assets (ROA) Developments

The reported ROA mirrors the trends in net profit margins and turnover, with growth from 16.15% in 2020 to 22.07% in 2022, a dip to 10.61% in 2023, and a sharp increase to 45.28% and 65.30% in 2024 and 2025. The adjusted ROA values show a similar pattern but decline more steeply to 5.83% in 2023 before a strong recovery. These patterns indicate fluctuations in asset profitability, with a significant improvement in recent periods.

Net Income Trends

The reported net income demonstrates considerable volatility, with an initial increase from 2,796 million US dollars in early 2020 to 9,752 million in early 2022, followed by a sharp decrease to 4,368 million in early 2023. This is succeeded by a significant surge, culminating in 72,880 million by early 2025. Adjusted net income follows a broadly similar pattern but consistently remains lower than the reported net income, suggesting adjustments made for income tax impacts reduce the net income figures. A notable divergence occurs in early 2023 when adjusted net income falls substantially to 2,204 million, less than half the reported net income for the same period.

Net Profit Margin Observations

Reported net profit margins exhibit an overall upward trend, beginning at 25.61% in early 2020 and peaking at 55.85% by early 2025. There is a pronounced dip in early 2023 to 16.19%, mirroring the dip in net income for that period. Adjusted net profit margins also show growth over the period but start slightly lower and are more subdued, dropping more significantly to 8.17% in early 2023 before recovering sharply. These lower margins on an adjusted basis suggest that deferred tax adjustments have material effects on profitability measures.

Insights and Implications

The data indicates that the company experienced significant financial fluctuations during this timeframe, particularly notable in the sharp declines seen in early 2023 across all metrics. However, the subsequent recovery and growth to mid-2025 are robust, with record high reported and adjusted incomes and profit margins. The disparity between reported and adjusted figures highlights the impact of deferred income tax adjustments on reported profitability. The adjusted metrics provide a more conservative measure of performance, especially visible during periods of volatility.

The data reveals a consistent growth trajectory in both reported and adjusted total assets over the examined periods, reflecting substantial expansion.

Reported Total Assets

The reported total assets have increased significantly from US$17,315 million in January 2020 to US$111,601 million in January 2025. Notably, a sharp rise is observed between January 2023 and January 2025, indicating accelerated asset accumulation during the latter period.

Adjusted Total Assets

Adjusted total assets follow a similar upward trend, growing from US$16,767 million in January 2020 to US$100,622 million in January 2025. The adjustments account for deferred income taxes, and despite this, the adjusted totals remain closely aligned with reported figures, sustaining the overall asset growth narrative.

Reported Total Asset Turnover

The reported total asset turnover ratio shows a fluctuating yet improving pattern. After a slight decline from 0.63 in January 2020 to 0.58 in January 2021, the ratio gradually increases, reaching 1.17 by January 2025. This improvement suggests enhanced efficiency in the utilization of assets to generate revenue over time, particularly notable from 2023 onwards.

Adjusted Total Asset Turnover

Similarly, the adjusted total asset turnover ratio exhibits growth from 0.65 in January 2020 to 1.30 in January 2025. This consistent upward movement further confirms improved operational efficiency when considering deferred tax adjustments, with a marked acceleration in turnover rates in the last two periods.

In summary, the data indicates robust asset growth accompanied by progressively better asset utilization efficiency. The company appears to be managing its asset base more effectively, especially in recent years, which likely contributes to improved financial performance metrics.

The analysis of the financial data over the indicated periods reveals several important trends related to the company's asset base, equity position, and financial leverage, both on a reported and adjusted basis.

Total Assets

There is a consistent and significant growth trend in total assets from January 2020 to January 2025. Reported total assets increased from approximately $17.3 billion to $111.6 billion, while adjusted total assets showed a similar pattern, rising from about $16.8 billion to $100.6 billion. Although both measures follow the same trajectory, adjusted totals remain slightly lower, reflecting the impact of income tax adjustments. The year 2024 shows a substantial jump in asset values compared to prior years.

Shareholders’ Equity

Shareholders’ equity also exhibits strong growth across the period. Reported equity increased from $12.2 billion in 2020 to $79.3 billion in 2025. Adjusted equity follows a comparable growth path, albeit consistently lower than reported equity, increasing from $11.7 billion to $69.2 billion. The adjustment effect is noticeable, particularly in the latest periods, suggesting deferred tax adjustments have a meaningful impact on the equity base.

Financial Leverage

The financial leverage ratios, defined as the ratio of total assets to equity, show variability over time. Reported financial leverage rose from 1.42 in 2020 to peak at 1.86 in 2023, then declined to 1.41 by 2025. Adjusted leverage mirrors this pattern but with slightly higher values in most periods, peaking at 1.99 in 2023 before falling to 1.45 in 2025. This indicates that the company experienced increasing leverage up to 2023, implying relatively more use of liabilities relative to equity, before deleveraging somewhat in the subsequent years.

General Observations

The data indicate robust growth in both assets and equity, supporting the view of an expanding company. The divergence between reported and adjusted values highlights the significance of income tax considerations on financial positions. The peak in financial leverage ratios around 2023 suggests a period of increased reliance on debt or liabilities, followed by a reduction, pointing to a possible strategic adjustment in capital structure. Overall, the company maintains leverage levels close to or below those seen in 2020 by 2025, despite having substantially higher asset and equity bases.

The data reveals significant fluctuations and growth trends in NVIDIA Corp's financial performance over the six-year period ending January 26, 2025. Both reported and adjusted net income demonstrate generally strong growth, with reported net income increasing from 2,796 million USD in 2020 to 72,880 million USD in 2025, and adjusted net income rising from 2,814 million USD to 68,403 million USD over the same period.

Despite this overall upward trajectory, there is notable volatility in the adjusted net income, particularly in 2023 where adjusted net income falls sharply to 2,204 million USD from 9,346 million USD in 2022 before recovering strongly in subsequent years. This dip contrasts with a less pronounced decline in reported net income in 2023, which decreases to 4,368 million USD from 9,752 million USD in 2022. The data suggests that deferred income tax adjustments had a considerable impact during this period, affecting the adjusted profitability metrics more significantly.

Shareholders’ equity also expands substantially throughout the observed timeframe. Reported shareholders’ equity rises from 12,204 million USD in 2020 to 79,327 million USD in 2025. Adjusted shareholders’ equity similarly grows from 11,685 million USD to 69,234 million USD. However, the adjusted equity figures consistently remain below the reported values, indicating ongoing effects of deferred tax adjustments on equity accounts.

Return on equity (ROE) ratios, both reported and adjusted, exhibit marked variability but an overall strong upward trend. Reported ROE climbs from 22.91% in 2020 to an exceptionally high 91.87% in 2025, with an intermediate dip to 19.76% in 2023. Adjusted ROE follows a similar pattern, starting at 24.08% in 2020, dipping to 11.63% in 2023, and then surging to 98.8% by 2025. The steep increases particularly in the later years reflect considerable improvements in profitability relative to equity, but the wide fluctuations in adjusted ROE underscore the influence of tax-related adjustments on earnings quality and financial returns.

Overall, the patterns suggest rapid growth and profitability enhancement for the firm, albeit accompanied by periods of income and equity adjustment volatility. The differing trajectories between reported and adjusted figures emphasize the impact of deferred income tax accounting on reported financial performance and equity measures, leading to variability in adjusted profitability metrics. This analysis points to the necessity of considering both reported and adjusted metrics to gain a comprehensive understanding of underlying financial health and operational success.

The financial data demonstrates significant growth and variability across the analyzed periods. Both reported and adjusted net income show marked increases overall, with some fluctuations in the intermediate years. The reported net income rose from 2,796 million US dollars in early 2020 to 72,880 million US dollars in early 2025, which signifies a substantial expansion in profitability. Adjusted net income follows a similar trend, increasing from 2,814 million US dollars to 68,403 million US dollars over the same period, though the adjusted figures are consistently slightly lower than the reported ones, indicating the impact of deferred income tax adjustments.

Total assets, on both a reported and adjusted basis, also display strong growth over the years. Reported total assets increased from 17,315 million US dollars in 2020 to 111,601 million US dollars in 2025, while adjusted total assets moved from 16,767 million to 100,622 million US dollars within the same timeframe. The adjusted total assets are marginally less than reported figures, reflecting adjustments made for deferred taxes.

Return on assets (ROA) presents a more varied pattern. The reported ROA started at 16.15% in 2020, dipped slightly to 15.05% in 2021, peaked at 22.07% in 2022, then experienced a notable decline to 10.61% in 2023 before surging dramatically to 45.28% in 2024 and further to 65.3% in 2025. The adjusted ROA mirrors this variability but is consistently lower than the reported ROA from 2020 to 2023, indicating the effect of tax adjustments, before surpassing 45% in 2024 and nearly 68% in 2025. This rise in ROA in the latter periods suggests enhanced efficiency in asset utilization and profitability after accounting for deferred tax effects.

Overall, the trends reveal strong financial growth and increasing profitability, with deferred income tax adjustments causing measurable differences between reported and adjusted figures. The pronounced increases in both net income and ROA in the last two years highlight significant operational improvement or other positive financial developments contributing to enhanced returns.