Palantir Technologies Inc. (NASDAQ:PLTR)

Net Operating Profit After Taxes (NOPAT)

The NOPAT shows a significant improvement over the five-year period. It started with a substantial negative value of -1,189,427 thousand USD in 2020, which improved to -377,568 thousand USD in 2021 and further to -221,451 thousand USD in 2022. By 2023, the NOPAT turned positive, reaching 207,040 thousand USD, and continued to grow to 339,176 thousand USD in 2024. This trend indicates a strong turnaround in operational profitability after taxes.

Cost of Capital

The cost of capital remained relatively stable throughout the period, fluctuating slightly between 32.74% and 33.11%. There is no significant upward or downward trend, which suggests that the company’s capital cost environment has been consistent over the years analyzed.

Invested Capital

Invested capital rose steadily from 2,178,851 thousand USD in 2020 to a peak of 3,071,913 thousand USD in 2022. However, there is a noticeable drop in 2023 to 1,237,836 thousand USD, followed by a recovery to 2,507,175 thousand USD in 2024. This volatility in invested capital in the last two years may reflect changes in company strategy, asset disposals, or capital restructuring.

Economic Profit

The economic profit has been negative throughout the entire period, indicating that the company has not been generating returns above its cost of capital. Although the loss narrowed from -1,904,929 thousand USD in 2020 to -1,226,391 thousand USD in 2021, the economic profit remained largely stable in 2022 at -1,227,220 thousand USD. There is a significant improvement in 2023, where the loss decreased to -201,510 thousand USD, yet it increased again in 2024 to -490,895 thousand USD. Despite operational improvements in NOPAT, the negative economic profit suggests that the company’s returns still do not fully cover its cost of capital, particularly when considering fluctuations in invested capital.

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 shows a general trend of improvement from 2020 to 2023, moving from a significant negative value of -1,904,929 thousand US dollars in 2020 to -201,510 thousand US dollars in 2023. However, in 2024, there is a decline as the economic profit decreases again to -490,895 thousand US dollars. This pattern indicates fluctuating profitability, with a notable reduction in losses by 2023 followed by a setback in 2024.

Invested Capital

Invested capital demonstrates variability over the period, initially increasing steadily from 2,178,851 thousand US dollars in 2020 to 3,071,913 thousand US dollars in 2022. A sharp decline occurs in 2023, dropping to 1,237,836 thousand US dollars, followed by a recovery to 2,507,175 thousand US dollars in 2024. This fluctuation may reflect strategic capital deployment or divestment activities within the company over these years.

Economic Spread Ratio

The economic spread ratio, which indicates the return spread relative to the cost of capital, remains negative throughout the period, although it shows signs of improvement. It improves from -87.43% in 2020 to -16.28% in 2023, indicating narrowing losses on invested capital. However, it worsens slightly to -19.58% in 2024, suggesting a slight decrease in capital efficiency or profitability relative to cost in the most recent year.

Overall Insights

Collectively, the data reveals a company struggling to generate positive economic profit with persistent negative economic spread ratios, albeit showing some recovery trends until 2023. The volatility in invested capital and the setback in 2024 suggest a possible period of restructuring or changes in operational efficiency that impacted profitability. Continuous monitoring of capital allocation and efforts to enhance returns will be critical to achieving positive economic value in future periods.

Adjusted revenue

The adjusted revenue shows a consistent upward trend over the five-year period. Starting at approximately $1.07 billion in 2020, it increased to nearly $2.89 billion by 2024. This represents a substantial growth in revenue, with the largest year-over-year increase observed between 2023 and 2024.

Economic profit

The economic profit has remained negative throughout the period, indicating that the company consistently operated at a loss on an economic profit basis. However, the losses have reduced significantly over time, moving from about -$1.9 billion in 2020 to approximately -$490.9 million in 2024. The decline in economic losses was particularly pronounced between 2022 and 2023 but saw a slight uptick again in 2024.

Economic profit margin

The economic profit margin has also improved notably, moving from -178.1% in 2020 to -16.99% in 2024. This indicates that the company has been narrowing its losses relative to its revenue. The margin showed steady improvement each year until 2023, reaching its lowest negative value at -8.74%, before reflecting a marginal deterioration in 2024.

Overall analysis

Despite ongoing economic losses, the company's financial performance demonstrates clear progress in reducing negative economic profit both in absolute terms and relative to revenue. The consistent increase in adjusted revenue coupled with the shrinking negative economic profit margin suggests enhancing operational efficiency or improved cost management. Nevertheless, the persistent negative economic profit and slight regression in the economic profit margin in the last year warrant attention to sustain positive momentum and potentially achieve profitability in the future.