Palantir Technologies Inc. (NASDAQ:PLTR)

Net Operating Profit After Taxes (NOPAT)

There is a clear upward trend in net operating profit after taxes over the analyzed periods. Initially, the figure was substantially negative, indicating losses, with the largest loss recorded in 2020. Over subsequent years, the losses decreased sharply, turning positive in the year ending December 31, 2023, and further improving in 2024. This progression reflects a significant turnaround in operating performance and suggests improved operational efficiency or profitability.

Cost of Capital

The cost of capital remained relatively stable across the periods, fluctuating slightly around a consistent average near 34%. This steadiness indicates that the company’s cost structure in terms of financing and required returns has not experienced significant volatility or change over the observed timeframe.

Invested Capital

The invested capital shows a variable pattern with initial growth followed by a marked contraction and then a rebound. From 2020 to 2022, invested capital increased steadily, peaking in 2022. However, a sharp decline is observed in 2023, more than halving the capital base before increasing again in 2024. This fluctuation might suggest strategic changes in asset investments or divestments, or could reflect operational restructuring efforts within the company.

Economic Profit

Economic profit exhibits consistently negative values throughout the entire period, indicating that the company has not generated returns exceeding its cost of capital. Despite the improvement trend observed in NOPAT, economic profit only marginally improved and remained significantly negative in 2023 and 2024. This suggests that while operating profitability has improved, the returns are still insufficient relative to the cost of invested capital, highlighting ongoing challenges in value creation.

The financial data reveals a significant improvement in profitability over the analyzed period.

Net Income (Loss) Attributable to Common Stockholders

A substantial negative net income was reported in 2020, amounting to approximately -1.17 billion US dollars. This loss decreased markedly in 2021 and 2022 to approximately -520 million and -374 million US dollars, respectively. In 2023, the company reversed its financial position with a positive net income of around 210 million US dollars, followed by further growth to approximately 462 million US dollars in 2024. This trend indicates a successful transition from significant losses to sustained profitability.

Net Operating Profit After Taxes (NOPAT)

Consistent with net income trends, NOPAT was markedly negative in 2020 (-1.19 billion US dollars), improving progressively to roughly -378 million in 2021 and -221 million in 2022. From 2023 onward, NOPAT turned positive, reaching about 207 million US dollars and expanding further to approximately 339 million US dollars in 2024. This reflects enhanced operational efficiency and effective tax management contributing to profitability.

Overall, the data demonstrates a clear and robust upward trajectory in both net income and operating profitability. The shift from pronounced losses to solid gains signals improved operational performance and potential stabilization of the company's financial health.

The financial data reveals notable fluctuations in both the provision for income taxes and cash operating taxes over the five-year period examined.

Provision for (benefit from) income taxes

Initially, there was a tax benefit of -$12,636 thousand in 2020. This shifted to a tax provision of $31,885 thousand in 2021, indicating a significant increase in tax expenses. In the following years, the provision decreased to $10,067 thousand in 2022, then rose again to $19,716 thousand in 2023, and slightly increased to $21,255 thousand in 2024. Overall, the provision for income taxes shows variability, with the initial tax benefit transitioning to recurring tax expenses that fluctuate but generally trend at a moderate level after 2021.

Cash operating taxes

Cash operating taxes experienced substantial variation across the period. The value was $13,182 thousand in 2020 and decreased to $7,577 thousand in 2021, showing a reduction in actual cash tax payments. However, there was a dramatic surge to $67,243 thousand in 2022, representing a significant cash outflow for taxes. This was followed by a sharp decrease to $1,246 thousand in 2023 and a negative outflow of -$15,989 thousand in 2024, indicating tax refunds or credits exceeding taxes paid. This irregular pattern suggests variability in the company's taxable income, tax planning strategies, or changes in tax regulations impacting cash taxes paid over time.

In summary, the data indicates a transition from tax benefits to taxable obligations in terms of accounting provision, with visible volatility year-over-year. The cash operating taxes display extreme fluctuations with a peak in 2022 and subsequent negative cash taxes in 2024, signaling potentially significant tax recoveries or adjustments in that year. This combination reflects an unstable tax environment or operational variability affecting the company's tax position during this period.

Total Reported Debt & Leases

There is a clear downward trend in total reported debt and leases from 2020 through 2023, decreasing from approximately 457 million USD to about 229 million USD. This represents a nearly 50% reduction over four years. In 2024, however, the debt level shows a slight increase to approximately 239 million USD, indicating a potential shift in capital structure or financing strategy.

Total Palantir’s Stockholders’ Equity

Stockholders’ equity has exhibited consistent and strong growth over the five-year period. Starting at around 1.52 billion USD in 2020, it increased steadily each year, reaching 5.00 billion USD by 2024. This trend suggests substantial value creation and effective retention of earnings or capital infusion, reflecting robust financial health and increased shareholder wealth.

Invested Capital

Invested capital generally increased from 2020 to 2022, rising from approximately 2.18 billion USD to about 3.07 billion USD, indicating growing deployment of resources in the business. However, there is a notable and sharp decline in 2023 to approximately 1.24 billion USD, followed by a recovery to 2.51 billion USD in 2024. The 2023 dip could signify asset disposals, restructuring, or a strategic shift in investment focus, with a partial rebound in the following year.

Economic Profit

The economic profit showed a significant reduction in losses from 2020 to 2023, improving from approximately -1,926,957 thousand USD to -214,101 thousand USD. However, in 2024, there was a reversal in this trend with economic profit deteriorating again to -516,488 thousand USD. This indicates an overall pattern of initial improvement followed by a worsening in the most recent period.

Invested Capital

Invested capital displayed a generally increasing trend with an initial rise from 2,178,851 thousand USD in 2020 to a peak of 3,071,913 thousand USD in 2022. Notably, there was a sharp decline in 2023 to 1,237,836 thousand USD. By 2024, invested capital nearly doubled again to 2,507,175 thousand USD. This fluctuation suggests changes in capital deployment strategy or asset base adjustments.

Economic Spread Ratio

The economic spread ratio was consistently negative throughout the period, reflecting returns below the cost of invested capital. However, the ratio shows improvement over time, moving from -88.44% in 2020 to a less negative -17.3% in 2023. In 2024, the ratio deteriorated slightly to -20.6%, indicating a minor decline in efficiency compared to the previous year but still much improved relative to earlier years.

Overall, the data reveal a trajectory of gradual improvement in economic profitability and returns on invested capital until 2023, followed by some setbacks in 2024. The fluctuations in invested capital levels suggest adjustments that correspond with the changes in economic profit and spread, highlighting the importance of capital management in influencing performance outcomes.

Adjusted Revenue

The adjusted revenue of the company exhibits a consistent upward trend. Starting from approximately 1.07 billion US dollars at the end of 2020, it increased to nearly 2.89 billion US dollars by the end of 2024. This steady growth indicates successful expansion in sales or services over the period analyzed.

Economic Profit

The economic profit remains negative throughout the years but shows a notable improvement trend. Initially, the loss was about 1.93 billion US dollars in 2020, narrowing to approximately 214 million US dollars by the end of 2023. However, in 2024, the economic loss increased again to around 517 million US dollars, indicating some setbacks or increased costs impacting profitability despite revenue growth.

Economic Profit Margin

The economic profit margin reflects a significant improvement in efficiency or profitability from -180.16% in 2020 to -9.28% in 2023. This narrowing negative margin suggests that the company's operations were moving towards breakeven levels. Nevertheless, the margin deteriorates again in 2024 to -17.87%, pointing to a potential decline in profitability relative to revenue in the most recent year.

Overall Analysis

The company demonstrates strong revenue growth over the five-year horizon, highlighting successful market penetration or product uptake. However, the continued negative economic profit and profit margin indicate that this growth has not yet translated into consistent economic profitability. While there was substantial progress in reducing losses by 2023, the reversal in 2024 suggests emerging challenges that may relate to rising costs, investments, or market conditions. The trend underscores the importance of focusing on cost control and operational efficiency to convert revenue growth into sustainable profitability.