NVIDIA Corp. (NASDAQ:NVDA)

The financial data over the six-year period reveals significant fluctuations and overall substantial growth in key performance metrics.

Net Operating Profit After Taxes (NOPAT)

NOPAT shows an overall strong upward trend with some volatility. It increased from 2,792 million USD in early 2020 to 9,602 million USD in early 2022, followed by a sharp drop to 2,334 million USD in early 2023. After this decline, there is a pronounced recovery and substantial surge to 27,819 million USD in early 2024, and further to 68,707 million USD in early 2025, indicating exceptional profitability growth in the latter years.

Cost of Capital

The cost of capital remained relatively stable during the entire period, fluctuating narrowly around 21.7% to 22.1%. This stability suggests a consistent required return on invested capital, despite the significant changes in profitability and invested capital.

Invested Capital

Invested capital increased steadily and markedly over the period. Beginning at 14,224 million USD in 2020, it slightly decreased to 13,232 million USD in 2021, then rose consistently each subsequent year to reach 47,433 million USD by early 2025. This expanding investment base indicates significant capital allocation towards growth or operational expansion.

Economic Profit

Economic profit exhibits considerable volatility mirroring trends in profitability and invested capital. Starting with a negative value of -318 million USD in 2020, it improved to a positive 1,559 million USD in 2021 and surged to 5,665 million USD in 2022. However, it turned negative again to -2,324 million USD in 2023 before a dramatic increase to 20,958 million USD in 2024 and further to 58,228 million USD in 2025. The fluctuations indicate periods of underperformance relative to the cost of capital, followed by outstanding value creation in the last two years.

In summary, the data shows that while the company faced some operational challenges around early 2023, it recovered strongly with substantial increases in profitability and economic value added in the subsequent years. The sharp growth in NOPAT and economic profit, alongside a steady rise in invested capital and stable cost of capital, suggests successful utilization of invested resources and an improved return profile.

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.

The financial data reveals significant fluctuations and overall growth trends over the examined periods.

Economic Profit

There is a marked volatility in economic profit figures. Initially, economic profit was negative in January 2020 at -318 million US dollars, indicating a loss situation. It quickly shifted to a positive 1,559 million in January 2021 and then increased substantially to 5,665 million by January 2022. However, this positive trend reversed dramatically to a loss of -2,324 million in January 2023. The subsequent years exhibited a strong recovery and robust growth, with economic profit rising sharply to 20,958 million in January 2024 and further to 58,228 million by January 2025. This pattern indicates variable profitability with periods of both significant losses and exceptional gains.

Invested Capital

Invested capital shows a steady upward trajectory over the observed timeframe. Starting from 14,224 million US dollars in January 2020, there was a slight decrease to 13,232 million in January 2021. From this point onward, invested capital consistently increased, reaching 18,075 million in January 2022, then continuing to 21,396 million in January 2023. The growth accelerated in subsequent periods to 31,144 million in January 2024 and further to 47,433 million by January 2025. This increase suggests considerable expansion in the capital base employed by the company over time.

Economic Spread Ratio

The economic spread ratio, expressed as a percentage, exhibits a pattern similar to economic profit with pronounced fluctuations. Starting from a negative value of -2.24% in January 2020, it emphasizes initial inefficiency or loss in generating economic profit relative to capital. The ratio improved sharply to 11.78% in January 2021, and increased further to 31.34% by January 2022, indicating improved returns on invested capital. However, a substantial decline occurred in January 2023, dropping to -10.86%, reflecting negative performance. Subsequently, the ratio surged dramatically to 67.29% in January 2024 and then to 122.76% by January 2025, representing highly efficient deployment of capital and outstanding economic returns during these periods.

Overall, the data suggests that the company experienced volatility in profitability and returns on capital especially in 2020 and 2023, but it achieved significant growth and strong economic performance in the latest years analyzed. The invested capital base expanded consistently, supporting increased economic profit and improved capital efficiency in the later periods.

Adjusted Revenue Trends

The adjusted revenue demonstrates a consistent and significant upward trajectory over the analyzed periods. Starting at approximately 10.98 billion USD in January 2020, the revenue increased steadily each year, reaching nearly 131 billion USD by January 2025. This represents a more than tenfold increase in adjusted revenue within five years, indicative of substantial business growth or expansion in operations.

Economic Profit Analysis

Economic profit figures reveal pronounced fluctuations throughout the periods. Initially, there is a negative economic profit of 318 million USD in early 2020, which then improves markedly to positive values exceeding 5.6 billion USD by early 2022. However, in early 2023, economic profit declines sharply to -2.3 billion USD, demonstrating a period of diminished profitability or increased costs. Subsequently, economic profit recovers and surges dramatically to over 58 billion USD by early 2025. This volatility suggests that economic profitability is sensitive to certain operational or market factors, yet the overall trend culminates in strong positive economic gains.

Economic Profit Margin Patterns

The economic profit margin mirrors the economic profit pattern and exhibits substantial variation. Starting from a negative margin of -2.9% in 2020, the margin turns positive by 2021 and increases to a peak above 21% in 2022. The margin then falls back to a negative 8.6% in 2023, indicating a contraction in economic efficiency or increased expenses relative to revenue in that period. Following this decline, the margin substantially improves, reaching an impressive 44.5% by 2025, indicating enhanced profitability and effective capital utilization.

Overall Insights

The financial data suggest robust growth in revenue accompanied by considerable volatility in profitability measures. The periods of negative economic profit and margin point to temporary challenges or strategic investments that may have impacted economic returns. Despite these fluctuations, the company achieves significant profitability enhancement by the end of the observed timeframe, as evidenced by record high economic profit and margins. The data indicate effective scaling and improved operational efficiency leading to strong economic value generation in the most recent years.