Return on Capital (ROC)
Return on capital (ROC) is after tax rate of return on net business assets. ROIC is unaffected by changes in interest rates or company debt and equity structure. It measures business productivity performance.
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Return on Invested Capital (ROIC)
Palantir Technologies Inc., ROIC calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| ROIC3 | ||||||
| Benchmarks | ||||||
| ROIC, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Invested capital. See details »
3 2024 Calculation
ROIC = 100 × NOPAT ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes shows a significant improvement over the analyzed period. Starting from a substantial negative value of approximately -1.19 million USD at the end of 2020, it experiences a consistent decrease in losses through 2021 and 2022. By the end of 2023, NOPAT turns positive at around 207 thousand USD and continues to increase, reaching 339 thousand USD by the end of 2024. This indicates a clear transition from operating losses to profitability.
- Invested Capital
- The invested capital exhibits a fluctuating trend over the years. It increases steadily from about 2.18 million USD at the end of 2020 to a peak of approximately 3.07 million USD by the end of 2022. Following this peak, invested capital sharply declines to 1.24 million USD by the end of 2023, then recovers partially to 2.51 million USD in 2024. This pattern suggests fluctuations in asset deployment or changes in capital structure during the period.
- Return on Invested Capital (ROIC)
- The return on invested capital mirrors the improvement in profitability. Initially, ROIC is deeply negative at -54.59% in 2020, indicating inefficient use of capital. It improves steadily to -14.6% in 2021 and -7.21% in 2022, approaching breakeven levels. In 2023, ROIC becomes positive at 16.73%, signaling effective capital utilization and generation of returns above the cost of capital. Although it slightly declines to 13.53% in 2024, it remains positive, confirming a sustained improvement in operational efficiency and capital deployment.
Decomposition of ROIC
Palantir Technologies Inc., decomposition of ROIC
| ROIC | = | OPM1 | × | TO2 | × | 1 – CTR3 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Operating profit margin (OPM). See calculations »
2 Turnover of capital (TO). See calculations »
3 Effective cash tax rate (CTR). See calculations »
- Operating profit margin (OPM)
- The operating profit margin has shown a marked improvement over the analyzed period. Starting at a deeply negative value of -109.97% in 2020, it improved significantly to -23.57% in 2021 and further to -8.42% in 2022. By 2023, the margin turned positive at 9.03%, continuing to increase to 11.18% in 2024. This trend indicates a substantial recovery and enhancement in operational efficiency and profitability.
- Turnover of capital (TO)
- The turnover of capital ratio exhibited moderate fluctuations. It increased from 0.49 in 2020 to 0.61 in 2021, then slightly decreased to 0.6 in 2022. In 2023, there was a pronounced increase to 1.86, suggesting a more effective utilization of capital that year. However, in 2024, the ratio declined to 1.15, albeit remaining above the earlier period levels, indicating a somewhat reduced but still improved capital turnover compared to initial years.
- 1 – Effective cash tax rate (CTR)
- The effective cash tax rate metric, expressed here as 1 minus the tax rate, remained consistently high. It was exactly 100% for the years 2020 through 2022, indicating that the company effectively paid no cash taxes. In 2023, the value slightly decreased to 99.4%, and interestingly, in 2024, it rose above 100% to 104.95%. The values above 100% might reflect cash tax benefits or refunds that exceeded taxable income, signifying a highly favorable tax position.
- Return on invested capital (ROIC)
- Return on invested capital followed a trend similar to operating profit margin. It started with a substantially negative return of -54.59% in 2020, improving to -14.6% in 2021 and -7.21% in 2022. By 2023, the ROIC turned positive at 16.73%, subsequently settling slightly lower at 13.53% in 2024. This progression demonstrates enhanced efficiency in generating returns from invested capital, transitioning from heavy losses toward sustainable positive performance.
Operating Profit Margin (OPM)
Palantir Technologies Inc., OPM calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Profitability Ratio | ||||||
| OPM3 | ||||||
| Benchmarks | ||||||
| OPM, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
OPM = 100 × NOPBT ÷ Adjusted revenue
= 100 × ÷ =
4 Click competitor name to see calculations.
- Net Operating Profit Before Taxes (NOPBT)
- The net operating profit before taxes exhibited a significant improvement over the analyzed periods. Starting from a substantial negative value of -1,176,245 thousand US dollars in 2020, the loss narrowed sharply to -369,991 thousand in 2021 and further reduced to -154,208 thousand in 2022. The company transitioned to profitability in 2023 with a positive NOPBT of 208,286 thousand US dollars, which further increased to 323,187 thousand in 2024. This trend indicates a strong recovery and enhanced operational efficiency.
- Adjusted Revenue
- Adjusted revenue demonstrated consistent growth throughout the timeframe. From 1,069,583 thousand US dollars in 2020, revenue increased by approximately 46.7% to 1,569,877 thousand in 2021. The upward trajectory continued with revenues reaching 1,831,153 thousand in 2022, then growing further to 2,306,645 thousand in 2023, and finally achieving 2,890,068 thousand in 2024. This steady increase reflects expanding sales or service activities and successful market penetration or product adoption.
- Operating Profit Margin (OPM)
- The operating profit margin shifted from deeply negative levels to positive territory over the five-year period. In 2020, the margin was -109.97%, indicating operating losses exceeding the revenue base. A substantial improvement occurred in 2021, with the margin improving to -23.57%, and it continued to recover to -8.42% in 2022. The company reached profitability in terms of operating margin in 2023, achieving 9.03%, and increased the margin to 11.18% in 2024. This progression signals enhanced cost management and operational leverage alongside revenue growth.
Turnover of Capital (TO)
Palantir Technologies Inc., TO calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Invested capital1 | ||||||
| Efficiency Ratio | ||||||
| TO2 | ||||||
| Benchmarks | ||||||
| TO, Competitors3 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 Invested capital. See details »
2 2024 Calculation
TO = Adjusted revenue ÷ Invested capital
= ÷ =
3 Click competitor name to see calculations.
- Adjusted Revenue
- The adjusted revenue has exhibited a consistent upward trajectory over the five-year period. Starting from approximately 1.07 billion USD in 2020, it increased to nearly 1.57 billion USD in 2021 and further rose to about 1.83 billion USD in 2022. The upward trend accelerated in subsequent years, reaching approximately 2.31 billion USD in 2023 and culminating at around 2.89 billion USD by the end of 2024. This growth indicates a strong and steady expansion in the company’s revenue-generating capabilities.
- Invested Capital
- Invested capital showed a general increase from 2020 to 2022, rising from approximately 2.18 billion USD to over 3.07 billion USD. However, a notable decline occurred in 2023, where invested capital dropped significantly to roughly 1.24 billion USD. This sharp reduction contrasts with the previous growth trend but was partly reversed in 2024 when the invested capital increased again to about 2.51 billion USD. These fluctuations suggest changes in the company’s capital deployment strategy or possible divestitures during the period of decline.
- Turnover of Capital (TO)
- The turnover of capital ratio started at 0.49 in 2020, illustrating relatively low efficiency in capital utilization initially. This ratio improved to 0.61 in 2021 and remained relatively stable at 0.60 in 2022. A significant increase occurred in 2023, rising sharply to 1.86, indicating a much higher efficiency in generating revenue from the invested capital during that year. However, the ratio declined in 2024 to 1.15, still above earlier years but reflecting a retreat from the peak efficiency observed in 2023. The spike in 2023 corresponds with the sharp reduction in invested capital, suggesting the company optimized capital use during that period, possibly through improved operational efficiency or asset reallocation.
Effective Cash Tax Rate (CTR)
Palantir Technologies Inc., CTR calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net operating profit after taxes (NOPAT)1 | ||||||
| Add: Cash operating taxes2 | ||||||
| Net operating profit before taxes (NOPBT) | ||||||
| Tax Rate | ||||||
| CTR3 | ||||||
| Benchmarks | ||||||
| CTR, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Cash operating taxes. See details »
3 2024 Calculation
CTR = 100 × Cash operating taxes ÷ NOPBT
= 100 × ÷ =
4 Click competitor name to see calculations.
- Cash Operating Taxes
- The cash operating taxes show a highly variable trend over the period. After starting at a positive value of 13,182 thousand US dollars in 2020, the figure dropped significantly to 7,577 thousand US dollars in 2021. It then spiked sharply to 67,243 thousand US dollars in 2022, before plunging to 1,246 thousand US dollars in 2023 and turning negative to -15,989 thousand US dollars in 2024. This fluctuation suggests volatility in tax payments, possibly influenced by changing taxable income or tax adjustments.
- Net Operating Profit Before Taxes (NOPBT)
- The NOPBT shows a clear upward trajectory over the five years analyzed. Initially, the company experienced substantial losses, with a negative figure of -1,176,245 thousand US dollars in 2020, which improved to -369,991 thousand US dollars in 2021 and further to -154,208 thousand US dollars in 2022. Notably, 2023 marked a turning point with a positive NOPBT of 208,286 thousand US dollars, which increased further to 323,187 thousand US dollars in 2024. This trend indicates a significant improvement in operational profitability over time.
- Effective Cash Tax Rate (CTR)
- The effective cash tax rate data is only available for the last two years. In 2023, it was low but positive at 0.6%, indicating minimal tax relative to operating profit before taxes. In 2024, the rate turned negative to -4.95%, which suggests the company may have utilized tax credits, refunds, or encountered tax benefits exceeding its tax obligations. This negative rate aligns with the negative cash operating taxes observed in 2024, highlighting a tax advantage in that period.