DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
Two-Component Disaggregation of ROE
Palantir Technologies Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
- Return on Assets (ROA)
- The return on assets exhibited a significant positive trend over the observed periods. Initially, ROA was strongly negative, starting at -15.01% and worsening slightly in subsequent quarters, reaching a low of -16.9%. However, from the end of 2022 onward, the return on assets improved steadily, turning positive by September 2023 with 3.51%. This upward trajectory continued, culminating in a substantial ROA of 13.5% by September 2025. The gradual improvement suggests enhanced asset efficiency and profitability in asset utilization over time.
- Financial Leverage
- Financial leverage remained relatively stable throughout the periods, with minor decreases indicating a slow reduction in leverage. Starting at a ratio of 1.4, the leverage ratio gradually decreased to about 1.23 by September 2025. This decline implies a slight reduction in reliance on debt financing or an increase in equity financing, contributing to a more conservative capital structure over time.
- Return on Equity (ROE)
- Return on equity followed a pattern similar to that of ROA but with more pronounced variations. Initially, ROE was deeply negative, beginning at -21.07% and reaching -23.5% during mid-2022. From late 2022, ROE experienced a strong recovery, turning positive by September 2023 with 4.62%. This positive momentum persisted, leading to a peak of 16.62% by September 2025. The improvement in ROE reflects increased profitability relative to shareholder equity, likely influenced by the improving asset returns and the moderate decrease in financial leverage.
Three-Component Disaggregation of ROE
Palantir Technologies Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
- Net Profit Margin
- The net profit margin demonstrates a significant improvement over the observed periods. Initially, the margin was deeply negative, around -30%, indicating substantial losses. Starting from the end of 2022, there is a clear upward trend, moving into positive territory by mid-2023. This positive momentum continues, reaching a peak of 28.11% by the last reported quarter. The transition from negative to positive margins reflects enhanced profitability and operational efficiency.
- Asset Turnover
- The asset turnover ratio shows a slight declining trend throughout the timeline. It begins at 0.5 and experiences minor fluctuations, generally decreasing to around 0.46 by late 2024, followed by a slight improvement to 0.48 at the end of the period. This suggests a moderate decrease in the efficiency with which the company utilizes its assets to generate revenue, although the changes are relatively small and somewhat stabilizing towards the end.
- Financial Leverage
- Financial leverage exhibits a gradual reduction from 1.4 down to approximately 1.23 over the reporting periods. This downward trend indicates a reduction in the company’s debt relative to equity, suggesting a cautious approach to leveraging and potentially a strengthening equity base. Lower financial leverage might imply reduced financial risk.
- Return on Equity (ROE)
- ROE mirrors the pattern observed in net profit margin, starting from a markedly negative position of around -21%. The ratio improves steadily over time, crossing into positive values by mid-2023 and continuing to rise to 16.62% by the final quarter. This trajectory indicates growing effectiveness in generating profit from shareholders' equity and reflects strengthening overall profitability and return to investors.
Five-Component Disaggregation of ROE
Palantir Technologies Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
- Tax Burden
- The tax burden exhibits a consistent upward trend starting from the period ending December 31, 2023, with a ratio of 0.91, gradually increasing to 0.99 by the period ending March 31, 2025. This indicates an improving ability to retain earnings after taxes over time.
- Interest Burden
- The interest burden ratio stabilizes at 0.97 from December 31, 2023, and reaches a value of 1.00 from March 31, 2024, onwards. This suggests a diminishing impact of interest expenses on earnings, potentially reflecting reduced debt interest costs or improved financial management.
- EBIT Margin
- The EBIT margin shows a marked improvement throughout the periods. It starts at a significant negative level in early 2022 (-28.24%) and gradually recovers, turning positive from September 30, 2023 (7.86%). The margin continues to rise, reaching 28.54% by March 31, 2025, indicating increasing operational profitability over time.
- Asset Turnover
- Asset turnover remains relatively stable but shows a slight downward trend over time. It decreases from 0.55 at the end of 2022 to around 0.46–0.48 in the later periods of 2024 and early 2025, suggesting a modest decline in the efficiency with which the company generates sales from its assets.
- Financial Leverage
- The financial leverage ratio steadily declines from 1.40 at the beginning of 2022 to 1.23 by the end of the observed periods in 2025. This indicates a gradual reduction in reliance on debt financing or a contraction in the equity multiplier, potentially lowering financial risk.
- Return on Equity (ROE)
- The ROE improves significantly, beginning at a negative figure (-21.07%) in early 2022 and moving into positive territory by September 30, 2023 (4.62%). It continues to rise steadily, reaching 16.62% by March 31, 2025. This reflects improved overall profitability and more effective use of shareholders' equity.
Two-Component Disaggregation of ROA
Palantir Technologies Inc., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
- Net Profit Margin
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The net profit margin displayed a marked improvement over the analyzed periods. Initially, it was deeply negative, around -30%, indicating that losses significantly exceeded revenues. However, starting from the end of 2022, the margin steadily improved, crossing into positive territory by mid-2023. This rising trend continued robustly, reaching over 28% by the third quarter of 2025. Such a transformation suggests effective cost management and/or improved revenue generation, culminating in sustained profitability growth.
- Asset Turnover
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The asset turnover ratio exhibited a gradual decline throughout the timeframe. Beginning at 0.50, the ratio slightly increased to a peak of 0.55 by the end of 2022, but then trended downward to approximately 0.45–0.48 in the later quarters of 2024 and 2025. This indicates a slight reduction in the efficiency with which assets are being utilized to generate sales. While changes are modest, the declining trend may reflect incremental asset base growth outpacing sales or diminishing utilization efficiency.
- Return on Assets (ROA)
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Return on assets mirrored the progress seen in net profit margin, starting with negative results near -15% to -17% in early 2022 quarters. A significant recovery began at the end of 2022, with the ratio improving steadily into positive figures by mid-2023. ROA continued to strengthen through 2024 and 2025, achieving a value of approximately 13.5% in the third quarter of 2025. This improvement reflects better overall profitability relative to the asset base and aligns with the observed enhancement in profit margins despite the modest decline in asset turnover.
Four-Component Disaggregation of ROA
Palantir Technologies Inc., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
- Tax Burden
- The tax burden exhibits a progressively increasing trend from 0.91 in late 2023 to 0.99 in the first quarter of 2025. This suggests that the effective tax rate has risen, implying the company is retaining a smaller proportion of its earnings after taxes over time.
- Interest Burden
- The interest burden ratio remains very stable and close to 1 from late 2023 through early 2025. This stability indicates minimal interest expense relative to earnings before interest and taxes, contributing positively to overall profitability.
- EBIT Margin
- The EBIT margin shows a marked improvement across the observed period. Starting from a significant negative margin of -28.24% in early 2022, it steadily rises toward positive territory. From early 2023 onwards, EBIT margin turns positive and continues to increase, reaching a peak of 28.54% by the third quarter of 2025. This trend signifies a substantial enhancement in operational efficiency and profitability.
- Asset Turnover
- Asset turnover displays a slight declining trend from 0.5 in early 2022 to a low of 0.45 in late 2024, followed by a modest recovery nearing 0.48 by the third quarter of 2025. This indicates that the company's efficiency in generating revenue from its assets dipped somewhat but began to stabilize and improve in recent quarters.
- Return on Assets (ROA)
- The ROA follows a pronounced improving trajectory, shifting from deeply negative values around -15% to -17% in early periods to positive figures by mid-2023. The ratio continues to grow and reaches 13.5% by the third quarter of 2025. This improvement reflects enhanced operational profitability and effective asset utilization over time.
Disaggregation of Net Profit Margin
Palantir Technologies Inc., decomposition of net profit margin ratio (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31).
- Profitability Trends
- The company displays a clear improvement in profitability margins over the analyzed quarters. The EBIT margin shows a steady progression from significant negative values around -28% in early 2022 towards positive territory, reaching a peak of 28.54% by the third quarter of 2025. This trend indicates enhanced operational efficiency and better control over expenses relative to earnings before interest and taxes.
- Similarly, the net profit margin follows a comparable pattern, improving from approximately -30% in the first quarter of 2022 to a positive 28.11% in the third quarter of 2025. This reflects growing bottom-line profitability and suggests that the company is successfully converting revenue into net earnings.
- Tax and Interest Burdens
- From the fourth quarter of 2023 onward, there is available data on tax and interest burdens. The tax burden ratio exhibits a gradual increase from 0.91 to 0.99 by the first quarter of 2025, implying a rising effective tax rate or a greater proportion of pre-tax earnings being paid as tax over time.
- The interest burden ratio remains consistently high and stable, improving from 0.97 to a perfect ratio of 1 by the beginning of 2024 and maintaining that level thereafter. This stability indicates that interest expenses have become negligible relative to earnings before tax, or that the company has effectively managed or reduced its interest costs.
- Overall Financial Health Insights
- The financial data suggest a transitioning phase from loss-making operations to profitability, supported by the strong improvements in both EBIT and net profit margins. The increased tax burden ratio may reflect higher taxable income, correlating with the company's improved earnings performance. The negligible interest burden ratio points to a favorable financing structure, reducing financial expenses and contributing to stronger net margins.