NVIDIA Corp. (NASDAQ:NVDA)

Net Operating Profit After Taxes (NOPAT)

The NOPAT demonstrates a general upward trend over the analyzed years, beginning at 2,792 million USD in early 2020 and reaching 68,707 million USD by early 2025. Despite a notable decline in 2023, where NOPAT dropped to 2,334 million USD from 9,602 million USD in 2022, the subsequent recovery and significant increase in the following years indicate strong operational profitability growth.

Cost of Capital

The cost of capital remains relatively stable throughout the period, fluctuating slightly around 21.5% to 21.8%. This stability suggests consistent market and risk conditions affecting the company’s financing costs.

Invested Capital

Invested capital shows a steady increase, rising from 14,224 million USD in 2020 to 47,433 million USD in 2025. This upward trend reflects substantial capital investments and asset growth. The largest year-over-year increases appear in the periods leading up to 2025, indicating accelerated investment deployment.

Economic Profit

Economic profit showcases significant variability. Initially negative in 2020 at -283 million USD, it turned positive in 2021 and increased markedly to 5,709 million USD in 2022. However, there was a decline into negative territory again in 2023 (-2,272 million USD), followed by an extraordinary surge to 21,035 million USD in 2024 and further growth to 58,346 million USD in 2025. This pattern indicates fluctuating returns above the cost of capital, with several periods of underperformance, but culminating in substantial value creation in the latest years.

Overall Analysis

The data reflects a company with a considerable expansion in operational results and capital employed over the examined span. Despite intermittent setbacks, particularly evident in 2023, the overall trajectory is positive with escalating profitability and economic value generation by 2025. The consistent cost of capital juxtaposed with rising invested capital and volatile yet strong economic profit suggests effective capital utilization and enhanced competitive positioning toward the end of the period.

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 reviewed over the six-year period reveals significant fluctuations and an overall positive trend in key economic profitability metrics. Analyzing economic profit demonstrates substantial variability, moving from a negative value of -$283 million in early 2020 to a peak of $58,346 million by early 2025. This progression indicates a marked improvement in the company's ability to generate value above its cost of capital.

Invested capital has shown consistent growth, starting from $14,224 million in early 2020 and nearly tripling to $47,433 million by early 2025. This upward trend suggests increased deployment of resources or assets in the business, which may support future growth prospects.

The economic spread ratio, which reflects the difference between the returns on invested capital and the cost of that capital expressed as a percentage, exhibits pronounced variability. Initially negative at -1.99% in early 2020, it improved markedly to 123.01% by early 2025. While there were declines at certain intervals, particularly noticeable in early 2023 when it reached -10.62%, the overall trajectory is strongly positive, indicating enhanced efficiency and profitability in terms of capital utilization over the reviewed period.

Economic profit

Shows high volatility with a general upward trend, reflecting improved profit generation after covering cost of capital.

Invested capital

Displays steady and significant growth, suggesting expanded asset base and investment for growth.

Economic spread ratio

Characterized by initial negative values, mid-period disruptions, and a robust increase towards the end, highlighting improved capital efficiency.

Adjusted Revenue

There is a consistent and substantial upward trend in adjusted revenue over the analyzed periods. Starting from approximately 10.98 billion US dollars in January 2020, revenue increased steadily each year, reaching 130.97 billion US dollars by January 2025. This represents strong growth, with a particularly sharp jump observed between January 2023 and January 2024, where revenue more than doubled. The overall trend indicates significant business expansion and increased sales or service income.

Economic Profit

The economic profit exhibits more volatility compared to adjusted revenue. It starts with a negative value of -283 million US dollars in January 2020, then turns positive in January 2021 at 1.59 billion dollars, followed by a sharp increase to 5.7 billion in January 2022. However, in January 2023, economic profit declines abruptly to a negative 2.27 billion dollars, indicating a setback. Subsequently, there is a dramatic recovery with economic profit rising to 21.04 billion dollars in January 2024 and further to 58.35 billion dollars by January 2025. This fluctuation suggests periods of both operational challenges and strong profitability at different times.

Economic Profit Margin

The economic profit margin similarly exhibits variability and aligns closely with the trend observed in economic profit. The margin was negative at -2.58% in January 2020, improved to positive territory with 9.4% in January 2021, and increased significantly to 21.17% in January 2022. Thereafter, it decreased sharply to -8.4% in January 2023, corresponding with the negative economic profit of that year. Following the trough, margins improved dramatically to 34.1% in January 2024 and escalated further to 44.55% in January 2025, indicating a highly profitable phase and enhanced efficiency in generating economic profit relative to revenue.

Overall Insights

The analysis reveals strong revenue growth alongside a more volatile profit performance. The sharp swings in economic profit and margin, particularly the decline in 2023 followed by rapid recovery, may suggest operational or market challenges followed by effective management responses or favorable market conditions. The significant increases in the most recent periods highlight an improvement in economic profitability and overall financial health relative to revenue size, which may reflect either cost management improvements, pricing power, or product mix enhancements.