Palantir Technologies Inc. (NASDAQ:PLTR)

Net Operating Profit After Taxes (NOPAT)

The NOPAT shows a significant improvement over the five-year period. Beginning with a substantial negative figure of -1,189,427 thousand US dollars in 2020, it steadily increases year-over-year. By 2022, the negative value reduces markedly to -221,451 thousand US dollars. Notably, the NOPAT turns positive in 2023 with 207,040 thousand US dollars and continues to grow to 339,176 thousand US dollars in 2024. This trend indicates an overall operational turnaround and enhanced profitability post-taxes.

Cost of Capital

The cost of capital remains relatively stable throughout the years, fluctuating slightly between 32.66% and 33.02%. The minimal variation suggests consistency in the company’s financing costs or risk profile during this period.

Invested Capital

Invested capital shows a rising trajectory initially, increasing from 2,178,851 thousand US dollars in 2020 to 3,071,913 thousand US dollars in 2022. However, in 2023, there is a sharp decline to 1,237,836 thousand US dollars, followed by a rebound to 2,507,175 thousand US dollars in 2024. This pattern indicates significant capital adjustments, possibly due to asset sales, divestitures, or restructuring activities during 2023, with recovery or reinvestment occurring in the following year.

Economic Profit

Economic profit remains negative throughout all periods, reflecting that the company’s returns do not exceed its cost of capital overall. While starting at a large negative value of -1,903,092 thousand US dollars in 2020, it improves gradually to -1,224,213 thousand US dollars by 2021 and remains relatively stable in 2022. A notable improvement is observed in 2023, where economic loss decreases significantly to -200,461 thousand US dollars. However, in 2024, the economic loss increases slightly again to -488,762 thousand US dollars. Despite improvements, the persistent negative economic profit suggests challenges in generating value above capital costs.

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 demonstrated a significant improvement from 2020 through 2023, moving from a substantial loss of approximately -1.9 billion US dollars in 2020 to a much smaller loss of around -200 million US dollars in 2023. However, in 2024 there is a reversal in this trend, with economic profit worsening again to a loss of nearly -489 million US dollars. Despite this setback, the losses in recent years remain considerably lower than those in the initial years.

Invested Capital

The invested capital showed a general upward trend from 2020 to 2022, increasing from around 2.2 billion US dollars to over 3 billion US dollars. However, there is a sharp decline in 2023 to approximately 1.2 billion US dollars, followed by a recovery in 2024 to roughly 2.5 billion US dollars. This pattern indicates a possible divestiture or revaluation in 2023 and subsequent reinvestment or asset growth in the following year.

Economic Spread Ratio

The economic spread ratio, a measure of the return on invested capital relative to the cost of capital, improved consistently over the years 2020 to 2023, moving from a very negative -87.34% in 2020 to a less negative -16.19% in 2023. Nevertheless, this metric deteriorated slightly in 2024 to -19.49%, indicating a small decline in economic efficiency although still maintaining a better position compared to the early years.

Overall Trends and Insights

The data reveals an overall effort to enhance economic profitability and capital efficiency, with marked improvement from 2020 to 2023. The reduction in economic losses and improvement in economic spread suggest more effective use of capital and better operating performance. However, the reversal in 2024 with increased losses and a drop in economic spread ratio signals emerging challenges or strategic shifts that may require further analysis. Additionally, fluctuations in invested capital indicate potential structural changes in asset management or capital allocation strategies. Continuous monitoring of these financial indicators is essential to assess the sustainability of the recent positive trends and to identify underlying factors affecting the 2024 performance.

Revenue Trends

The adjusted revenue of the company has exhibited consistent growth over the analyzed periods. Starting from approximately 1.07 billion US dollars in 2020, revenue increased steadily each year, reaching an estimated 2.89 billion US dollars by the end of 2024. This upward trend indicates successful business expansion or increased sales performance.

Economic Profit Trends

Economic profit, a measure of the company's profitability after accounting for the opportunity cost of capital, has remained negative throughout the period but shows significant improvement. Beginning at a substantial loss of about -1.9 billion US dollars in 2020, the negative economic profit narrowed considerably by 2023 to around -200 million US dollars, demonstrating enhanced operational efficiency or strategic adjustments. However, in 2024, there is a slight reversal with economic profit moving back to approximately -489 million US dollars, indicating potential challenges or increased costs during that year.

Economic Profit Margin Trends

The economic profit margin, which reflects economic profit as a percentage of revenue, follows a similar pattern to economic profit. Initially, it was extremely negative at nearly -178% in 2020, then progressively improved to around -17% by 2024. The margin reached its least negative point at approximately -8.7% in 2023, suggesting that the company was approaching breakeven on an economic profit basis but faced some setback in 2024.

Summary of Insights

The company has demonstrated strong revenue growth over the five-year period, indicating expanding business operations or increased market penetration. Despite considerable losses in economic profit in the initial years, there has been marked progress toward reducing these losses, with the company approaching a near breakeven economic profit margin by 2023. The marginal regression in economic profit and margin in 2024 requires further investigation but could be attributed to increased expenses, investment in growth, or market conditions. Overall, the financial data suggest improving operational performance amid increasing revenue, although profitability remains a challenge.