Palantir Technologies Inc. (NASDAQ:PLTR)

The financial data over the five-year period reveals notable trends in the profitability and capital efficiency of the company.

Net Operating Profit After Taxes (NOPAT)

NOPAT shows a clear improvement from a significant loss of approximately -1.19 billion in 2020 to a positive value of around 339 million in 2024. This progression includes a steep reduction in losses in 2021 and 2022, followed by a turnaround to profitability in 2023 and 2024, indicating enhanced operational efficiency or revenue growth.

Cost of Capital

The cost of capital has remained relatively stable across the period, fluctuating slightly between 33.44% and 33.82%. This suggests consistent risk perception by investors and lenders or stable market conditions affecting capital expenses.

Invested Capital

Invested capital grew steadily from 2.18 billion in 2020 to nearly 3.07 billion in 2022, reflecting ongoing investment in business operations or assets. However, a sharp decline occurred in 2023, dropping to approximately 1.24 billion, before rising again to 2.51 billion in 2024. This fluctuation could indicate divestment or restructuring activities followed by renewed investment.

Economic Profit

Despite the improvement in NOPAT, economic profit remains negative throughout the period, though losses have moderated notably from -1.92 billion in 2020 to -509 million in 2024. The economic profit trend mirrors the improvement in operational profitability but highlights that returns have yet to exceed the cost of capital, implying that value creation for shareholders is still a challenge.

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 company experienced negative economic profit throughout the observed periods, indicating consistent economic losses. However, there was a notable improvement from 2020 to 2023, where the loss decreased significantly from approximately -1,920 million USD to about -210 million USD. Despite this positive trend, economic profit worsened again in 2024, rising to nearly -509 million USD, signaling some reversal in economic performance in the most recent year.

Invested Capital

Invested capital showed an overall increasing trend from 2020 to 2022, expanding from around 2,179 million USD to approximately 3,072 million USD. This growth was followed by a sharp reduction in 2023 to approximately 1,238 million USD, before rebounding again in 2024 to roughly 2,507 million USD. This fluctuation suggests periods of capital reallocation or divestment followed by renewed investment activity.

Economic Spread Ratio

The economic spread ratio remained negative through all periods, reflecting that the returns on invested capital did not cover the cost of capital. Nonetheless, there was a consistent improvement in this metric from -88.13% in 2020 to -16.99% in 2023, indicating reduced losses relative to invested capital. This improvement slightly reversed in 2024, with the ratio declining to -20.29%, suggesting a marginal deterioration in value creation compared to the previous year.

Summary

Overall, the analysis indicates that while the company has struggled to generate positive economic profits, it had shown significant progress in reducing losses up until 2023. The invested capital pattern reflects strategic shifts with fluctuating capital deployment. However, the setback in economic profit and spread ratio in 2024 warrants attention, as it signals potential challenges in sustaining the improvements achieved in prior years. Continuous monitoring and strategic adjustments may be necessary to restore and enhance economic value creation.

Economic Profit

The economic profit shows a significant improvement trend over the analyzed periods. Starting from a substantial negative value of -1,920,244 thousand US dollars in 2020, the loss decreases to -1,244,561 thousand in 2021 and remains relatively stable with a slight increase to -1,248,738 thousand in 2022. In 2023, the economic loss notably declines to -210,264 thousand, reflecting a considerable reduction in negative profitability, before slightly worsening to -508,689 thousand in 2024. Despite remaining negative, the trend indicates a movement toward smaller economic losses overall.

Adjusted Revenue

The adjusted revenue exhibits a strong upward trajectory throughout the periods under review. Beginning at 1,069,583 thousand US dollars in 2020, revenue increases steadily each year, reaching 1,569,877 thousand in 2021 and 1,831,153 thousand in 2022. This upward trend continues with revenues of 2,306,645 thousand in 2023 and 2,890,068 thousand in 2024. The data suggests robust growth in revenues, indicating expanding business scale and potentially stronger market positioning.

Economic Profit Margin

The economic profit margin, expressed as a percentage, mirrors the trend observed in economic profit with considerable improvement over the years, albeit remaining negative. It improves from -179.53% in 2020 to -79.28% in 2021 and -68.19% in 2022, demonstrating a narrowing gap between profits and economic costs. In 2023, the margin approaches closer to zero at -9.12%, indicating pronounced operational efficiency gains or cost management improvements. However, in 2024, there is a reversal with the margin slipping back to -17.6%, suggesting some challenges in maintaining the improved profitability levels.

Summary

The financial data reveals a company undergoing significant revenue growth accompanied by a marked reduction in economic losses over the five-year period. While economic profit remains negative, the considerable narrowing of losses and improvement in profit margin by 2023 reflects enhanced operational effectiveness or strategic improvements. The slight regression in economic profit and margin in 2024 indicates potential emerging challenges or increased costs that merit further investigation. Overall, the company shows positive momentum in revenue expansion paired with efforts toward achieving economic profitability.