NVIDIA Corp. (NASDAQ:NVDA)

The financial data reveals significant fluctuations and substantial growth in the company's profitability and economic value generation over the examined periods.

Net Operating Profit After Taxes (NOPAT)

The NOPAT figures exhibit a rising trend with notable volatility. Starting at $2,792 million in early 2020, NOPAT more than tripled to $9,602 million by early 2022. However, there was a sharp decline to $2,334 million in early 2023, followed by an extraordinary surge to $27,819 million in early 2024 and further to $68,707 million in early 2025. This pattern suggests episodic performance variations with a strong upward trajectory in the most recent years.

Cost of Capital

The cost of capital remained relatively stable over the entire period, fluctuating narrowly between 21.8% and 22.23%. This stability implies consistent capital cost management despite the variability in operating profitability and invested capital.

Invested Capital

Invested capital showed a general increasing trend, beginning at $14,224 million in 2020 and progressing steadily to $47,433 million by 2025. The growth was gradual until early 2023, followed by a substantial increase in 2024 and 2025, reflecting considerable investments or asset accumulation during the latter periods.

Economic Profit

Economic profit, which considers the cost of capital, presented significant variability reflecting shifts in both operating profit and invested capital. Initial economic profit was negative at -$337 million in 2020, then rose markedly to $5,640 million in 2022. It slipped back into negative territory at -$2,353 million in 2023, before surging to $20,916 million in 2024 and reaching $58,163 million in 2025. The wide swings suggest fluctuating value creation, with particularly strong value generation in the last two years analyzed.

Overall, the data indicates that the company experienced phases of volatility in profitability and value creation, particularly around 2023. Despite the fluctuations, the most recent years demonstrate remarkable growth in net operating profit and economic profit, supported by increased invested capital while maintaining a steady cost of capital. This pattern may reflect strategic investments or operational changes driving substantial value improvement.

The financial data reveals significant fluctuations and overall growth in key profitability metrics over the observed periods.

Net Income

The net income shows a general upward trend from January 26, 2020, to January 26, 2025, starting at $2,796 million and increasing markedly to $72,880 million. A notable surge occurs between January 29, 2023 ($4,368 million) and January 28, 2024 ($29,760 million), followed by a further sharp increase to $72,880 million in the subsequent period. Despite a dip after January 30, 2022 ($9,752 million) down to $4,368 million by January 29, 2023, the overall trajectory is strongly positive.

Net Operating Profit After Taxes (NOPAT)

NOPAT values follow a similar pattern to net income, starting at $2,792 million in January 26, 2020 and increasing substantially by January 26, 2025 to $68,707 million. This metric also exhibits a decline from $9,602 million in January 30, 2022 to $2,334 million in January 29, 2023, before recovering dramatically to $27,819 million in January 28, 2024 and continuing to grow significantly in the final period.

Overall, the data indicates periods of volatility around early 2023, with decreases in profitability metrics, followed by a strong recovery and exceptional growth leading into 2024 and 2025. This suggests that while the company experienced some operational and financial challenges in the mid-period, it managed to capitalize on conditions or strategic initiatives leading to a substantial increase in profitability towards the end of the analysis window.

Income tax expense (benefit)

Over the analyzed periods, the income tax expense exhibits a volatile trend. Initially, it decreased from 174 million US dollars in early 2020 to 77 million in early 2021, followed by an increase to 189 million in early 2022. The figure then shifted to a negative value (-187 million) in early 2023, indicating a tax benefit during that year. Subsequently, there was a sharp and substantial increase to 4,058 million in early 2024, which further escalated to 11,146 million in early 2025, reflecting significantly rising tax expenses in the most recent years.

Cash operating taxes

Cash operating taxes demonstrate a consistent and pronounced upward trend throughout the period. Starting at 134 million US dollars in early 2020, the cash taxes increased steadily each year, reaching 390 million in 2021, 643 million in 2022, and 1,983 million in 2023. The upward trajectory accelerates substantially in the final years analyzed, with cash operating taxes rising to 6,430 million in early 2024 and then more than doubling to 15,316 million by early 2025. This indicates a growing cash tax outflow from operations over the years under review.

Total Reported Debt & Leases

The total reported debt and leases demonstrated a marked increase from 2,643 million USD in early 2020 to a peak of 12,031 million USD by early 2023, reflecting a significant rise in financial obligations over this period. Subsequently, a downward trend is observed, with the amount decreasing to 11,056 million USD in early 2024 and further to 10,270 million USD by early 2025. Despite this recent reduction, the debt level remains substantially elevated compared to the 2020 baseline.

Shareholders’ Equity

Shareholders’ equity exhibited strong and consistent growth throughout the timeframe. Starting at 12,204 million USD in early 2020, it increased to 16,893 million USD by early 2021, followed by a substantial surge to 26,612 million USD in early 2022. While a slight decline occurred in early 2023, falling to 22,101 million USD, equity then rose sharply to 42,978 million USD in 2024 and reached an impressive 79,327 million USD by early 2025. This upward trajectory indicates a significant accumulation of net assets and possibly improved retained earnings or capital inflows.

Invested Capital

Invested capital showed fluctuation early in the period, declining from 14,224 million USD in early 2020 to 13,232 million USD in early 2021 before ascending steadily to 18,075 million USD in early 2022. This growth continued, reaching 21,396 million USD in early 2023, followed by a notable increase to 31,144 million USD in 2024. The trend culminated with a substantial rise to 47,433 million USD by early 2025. This progression implies increased investment in operational assets or expansion activities over time.

Summary

Overall, the data reveal a strategy characterized by elevated leveraging during the initial years, followed by gradual deleveraging beginning in 2023. Concurrently, both shareholders’ equity and invested capital have grown robustly, with equity growth outpacing that of debt, indicating strengthening financial stability and capital base. The significant rise in invested capital aligns with the reported equity increase, suggesting sustained investment in growth and asset development. These patterns collectively point to an expansion phase supported by increased capital investments alongside active management of debt levels.

Economic Profit

The economic profit shows significant fluctuations over the examined periods. It started with a negative value of -337 million US dollars in early 2020, indicating a loss relative to capital cost. This shifted to a positive 1,541 million in 2021, followed by a substantial increase to 5,640 million in 2022. However, in 2023, economic profit dropped sharply to -2,353 million, representing a reversal to negative performance. Subsequently, it rebounded dramatically to 20,916 million in 2024 and further surged to 58,163 million in early 2025, reflecting strong profitability improvements in the latest years.

Invested Capital

Invested capital has exhibited a consistent upward trend throughout the periods, increasing from 14,224 million US dollars in 2020 to 47,433 million by 2025. The growth was steady, with some acceleration noted in the last two years, particularly between 2023 and 2025. This suggests ongoing capital investment and expansion of the asset base over time.

Economic Spread Ratio

The economic spread ratio, which measures the return above cost of capital, shows a pattern closely aligned with economic profit trends but with more pronounced percentage changes. It began negative at -2.37% in 2020, improved substantially to 11.64% in 2021, and further jumped to 31.21% in 2022. In 2023, it dropped below zero again to -11%, coinciding with the negative economic profit for the same year. Thereafter, the ratio soared to 67.16% in 2024 and then to an exceptionally high 122.62% in 2025, indicating very strong returns relative to capital costs in the most recent periods.

Summary of Trends

The data reflect volatility in economic profitability with a notable dip in 2023, possibly due to operational challenges or increased costs. Despite this, the overall trajectory points to significant growth in both invested capital and economic profitability by 2025. The economic spread ratio's marked increase in the last two years suggests enhanced efficiency in capital utilization or higher profitability margins. The combination of rising invested capital and improved economic profit indicates a phase of robust expansion and value creation in the latest years analyzed.

Economic Profit

The economic profit demonstrates significant volatility over the periods. Initially, there was a negative value of -337 million USD, followed by a marked improvement to 1,541 million USD and then a substantial increase to 5,640 million USD. However, the following year saw a reversal, with the profit turning negative to -2,353 million USD. The subsequent two years exhibit a dramatic recovery and growth, reaching 20,916 million USD and further increasing to 58,163 million USD. This indicates a period of unstable profitability initially, followed by robust and accelerating economic profit growth in the latest years.

Adjusted Revenue

Adjusted revenue shows a persistent and strong upward trajectory. Starting at 10,981 million USD, the figure increased steadily each year, with notable acceleration from 27,044 million USD to 61,687 million USD, and then more than doubling to 130,973 million USD by the final period. This consistent revenue growth likely supports the economic profit improvements observed in the later years.

Economic Profit Margin

The economic profit margin reflects the patterns seen in economic profit. Initially negative at -3.07%, it turned positive at 9.1% and increased significantly to 20.92%. This was followed by another dip to -8.7%, mirroring the negative economic profit period. The margin then experienced a substantial rise, becoming very strong at 33.91% and reaching 44.41% by the last period. This suggests improved efficiency and profitability relative to the company’s revenue base over time.