Palantir Technologies Inc. (NASDAQ:PLTR)

Return on Assets (ROA)

The Return on Assets demonstrated a notable upward trend over the analyzed periods. Initially, the ROA was deeply negative, starting around -15%, and it deteriorated slightly more, reaching approximately -17% in the third quarter of 2022. From the fourth quarter of 2022 onwards, there was a marked recovery, with ROA moving steadily toward positive territory. By the end of the most recent quarter, ROA had improved significantly, reaching double-digit positive returns around 10%, indicating enhanced efficiency in asset utilization and profitability.

Financial Leverage

Financial Leverage showed a gradual but consistent decline across the periods under review. Starting at a ratio of approximately 1.4, it steadily decreased to about 1.24 in the last reported quarter. This reduction signals a slow but deliberate decrease in reliance on debt relative to equity, suggesting a strengthening equity base or a cautious approach to financial structuring.

Return on Equity (ROE)

Return on Equity followed a trajectory closely aligned with the trends in ROA, albeit with greater volatility at the outset. The initial ROE values were substantially negative, hovering around -21% to -23% in early 2022. From late 2022 through the most recent quarters, ROE showed robust improvement, crossing into positive territory by early 2023 and continuing an upward trend. By the last recorded quarter, ROE rose to nearly 13%, reflecting increasing profitability and greater returns to shareholders, likely facilitated by improved operational performance and manageable financial leverage.

Summary of Trends

Over the examined timeframe, both profitability metrics—ROA and ROE—transitioned from significantly negative levels to positive and improving returns, highlighting a successful turnaround in financial performance. Concurrently, a gradual decrease in financial leverage indicates prudent financial management and potentially reduced risk. The combination of these trends suggests strengthening fundamentals and an improved capacity to generate shareholder value.

Net Profit Margin

The net profit margin exhibits a pronounced improvement over the analyzed periods. Starting from a significantly negative margin near -30% in early 2022, it steadily rises throughout the timeframe. By the end of 2023, it moves into positive territory, reaching approximately 9.43%, and continues an upward trajectory to exceed 22% by mid-2025. This pattern indicates enhanced efficiency in converting revenue into profit and suggests successful cost management or revenue growth strategies.

Asset Turnover

Asset turnover shows a gradual decline from 0.5 to about 0.47 across the observed intervals. The ratio starts near 0.55 in late 2022 and trends downward with minor fluctuations, reflecting a reduced efficiency in utilizing assets to generate sales revenue. This decrease may signal either asset base expansion without proportional sales growth or a deceleration in revenue relative to asset investments.

Financial Leverage

Financial leverage demonstrates a slight but consistent decrease, moving from approximately 1.4 down to 1.24 by mid-2025. This decline suggests a modest reduction in the use of debt or other liabilities relative to equity. The downward trend may indicate an effort to strengthen the capital structure or reduce financial risk.

Return on Equity (ROE)

ROE follows a trajectory similar to the net profit margin, beginning with a substantial negative return around -21% and gradually improving to positive values by late 2023. It reaches near 13% by mid-2025. The improvement in ROE reflects better profitability and effective use of equity capital, aligning with the trends observed in net profit margin and financial leverage.

Tax Burden

The tax burden ratio demonstrates a consistent upward trend starting from the third quarter of 2023 through the second quarter of 2025. It rises steadily from 0.91 to 0.97, indicating an increasing proportion of earnings retained after taxes over this period.

Interest Burden

From the third quarter of 2023 onward, the interest burden shows improvement, approaching and then maintaining a ratio of 1. This suggests a reduction in interest expenses relative to earnings before interest and taxes, leading to a more favorable impact on profitability.

EBIT Margin

The earnings before interest and taxes (EBIT) margin undergoes a significant transformation. Initially negative and deepening up to approximately -28%, the margin improves steadily after the fourth quarter of 2022, crossing into positive territory by the third quarter of 2023 and attaining a peak of 22.78% by the second quarter of 2025. This reflects enhanced operational efficiency and profitability over time.

Asset Turnover

Asset turnover remains relatively stable but exhibits a gradual declining trend. Starting at 0.5 in the first quarter of 2022, it decreases slightly to 0.47 by the second quarter of 2025. This decline indicates a modest reduction in revenue generated per unit of assets employed.

Financial Leverage

Financial leverage experiences a slight downward movement from 1.4 in early 2022 to around 1.24 in mid-2025. This reduction implies a modest decrease in reliance on debt financing relative to equity, potentially signaling a more conservative capital structure.

Return on Equity (ROE)

Return on equity reflects a trajectory from negative values in early 2022 to gradual improvement post-2022. Initially registering losses below -20%, ROE approaches breakeven around mid-2023 and continues to strengthen, reaching a positive 12.87% by the second quarter of 2025. This upward trend aligns with the improvements seen in EBIT margin and reduced burdens from taxes and interest, contributing to enhanced shareholder returns.

The analysis of the quarterly financial data reveals notable trends in profitability and efficiency metrics over the observed periods.

Net Profit Margin

The net profit margin demonstrates a consistent and significant improvement from a negative position exceeding -30% in early 2022 to positive figures starting mid-2023. Specifically, it transitions from -30.25% in March 2022 to a peak of 22.18% in June 2025. This upward trend indicates increasing profitability and effective cost management or revenue growth during the latter periods.

Asset Turnover

The asset turnover ratio shows a gradual but steady decline across the timeline. Starting at 0.5 in March 2022, it decreases to 0.47 by June 2025. This suggests a slight reduction in the efficiency with which the company is using its assets to generate revenue, indicating either asset base expansion or slower revenue growth relative to assets.

Return on Assets (ROA)

Return on assets follows a pattern similar to the net profit margin, moving from negative values to positive territory. Beginning at -15.01% in the first quarter of 2022, ROA improves steadily to reach 10.36% by the second quarter of 2025. This reflects enhanced overall profitability relative to the company's asset base, combining the effects of improved net profit margins and managed asset utilization.

Overall, the data depict a company transitioning from losses to sustainable profitability, with improving returns on assets. However, the declining asset turnover highlights a potential area for operational review to ensure assets are utilized more effectively in relation to revenue generation.

The analysis of the quarterly financial data reveals several important trends over the observed periods. The data indicate a marked improvement in profitability metrics, while operational efficiency demonstrates slight declines.

Tax Burden

The tax burden ratio shows a consistent and steady increase starting from the period ending December 31, 2023, rising from 0.91 to 0.97 by June 30, 2025. This suggests that the company is experiencing an increasing share of earnings being paid as taxes, reflecting either higher taxable income or changes in tax rates or policies.

Interest Burden

The interest burden remains stable and close to 1 from December 31, 2023, through June 30, 2025, after a slight increase from 0.97 to 1 between December 31, 2023, and March 31, 2024. This implies that interest expenses have become less impactful on earnings, indicating better control or reduction of interest costs relative to earnings before interest and taxes.

EBIT Margin

There is a substantial positive trend in EBIT margin, starting with negative margins from March 31, 2022, through June 30, 2023, moving from -28.24% to -1.63%. From September 30, 2023, the margin turns positive and grows steadily, peaking at 22.78% by June 30, 2025. This reflects improved operational profitability, possibly caused by revenue growth, cost reductions, or both.

Asset Turnover

Asset turnover shows a gradual decline from 0.5 at March 31, 2022, to a low point of 0.45 around December 31, 2024, before slightly rebounding to 0.47 by June 30, 2025. This suggests that asset utilization efficiency has slightly weakened over the span, potentially indicating slower asset turnover or asset base expansion outpacing revenue growth.

Return on Assets (ROA)

ROA has shown significant improvement, moving from negative values (-15.01% at March 31, 2022) to positive figures starting September 30, 2023 (3.51%), and culminating at over 10% by June 30, 2025 (10.36%). The increase in ROA aligns with the improvements in EBIT margin, indicating overall enhanced profitability relative to asset base despite the slight decline in asset turnover.

Tax Burden

The tax burden ratio exhibits a clear upward trend starting from the period ending December 31, 2023, increasing steadily from 0.91 to 0.97 by June 30, 2025. This gradual rise indicates a higher proportion of pre-tax income being retained after taxes over these periods.

Interest Burden

The interest burden ratio shows improvement and stabilization over time. Beginning at 0.97 at the end of 2023, it quickly rises to 1.00 by the end of 2024 and remains at 1.00 through mid-2025. This suggests that interest expenses have been minimized relative to EBIT in recent quarters.

EBIT Margin

The EBIT margin exhibits a significant recovery trend. Initially negative and substantial at the start of 2022 (around -28%), it progressively improves through the following periods, crossing into positive territory around the third quarter of 2023 (7.86%). This positive momentum continues into 2025, reaching a peak of 22.78% by June 30, 2025, signaling enhanced operational profitability.

Net Profit Margin

The net profit margin mirrors the pattern of the EBIT margin, moving from deeply negative values in 2022 (around -30%) towards positive figures by late 2023 (6.93% in September). The margin continues to strengthen, reaching 22.18% by mid-2025. The narrowing gap between EBIT and net profit margins suggests effective management of non-operational costs and taxes over time.