Qualcomm Inc. (NASDAQ:QCOM)

The analysis of the financial data over the six-year period reveals several key trends related to goodwill and intangible assets.

Goodwill

The value of goodwill shows a steady upward trend, increasing from $6,282 million in 2019 to $10,799 million in 2024. This indicates consistent growth in acquired assets or business combinations over the years.

Technology-based Intangible Assets

Technology-based intangible assets display a clear declining pattern, decreasing significantly from $5,958 million in 2019 to $2,498 million in 2024. This reduction suggests amortization or disposals exceeding new capitalizations in this category.

Other Intangible Assets

The other intangible assets category also declines steadily but at a smaller scale, from $134 million in 2019 down to $69 million in 2024. This modest decrease may reflect ongoing amortization and limited additions.

Other Intangible Assets, Gross Carrying Amount

The gross carrying amount of other intangible assets decreases from $6,092 million in 2019 to $2,567 million in 2024, aligning with the drop in technology-based and other intangible assets. This drop indicates that the company has not been substantially reinvesting in these assets during this period.

Accumulated Amortization

Accumulated amortization figures exhibit a notable trend, initially increasing slightly from -$3,920 million in 2019 to -$4,020 million in 2021, then decreasing significantly to -$1,323 million in 2024. This sharp reduction in accumulated amortization could indicate reclassification, impairment, or changes in amortization policy affecting intangible assets.

Other Intangible Assets, Net

The net value of other intangible assets follows a fluctuating pattern, decreasing from $2,172 million in 2019 to $1,244 million in 2024, with a temporary increase in 2022. This volatility reflects the combined effect of changes in gross carrying amounts and accumulated amortization.

Goodwill and Other Intangible Assets Combined

The combined total of goodwill and other intangible assets grows from $8,454 million in 2019 to a peak of $12,390 million in 2022, followed by a slight decrease to approximately $12,043 million in 2024. This suggests that despite the decline in certain intangible asset categories, significant goodwill growth offsets these decreases, maintaining relatively stable total intangible assets in recent years.

Overall, the data reflects a strategic increase in goodwill possibly through acquisitions, accompanied by a notable decline in technology-based intangible assets. The trends in accumulated amortization suggest potential adjustments in accounting treatments or asset management strategies impacting intangible asset values. The net effect is a stable combined intangible asset base in the most recent periods despite underlying compositional shifts.

The analysis of the financial data reveals several notable trends in asset levels, equity positions, and profitability over the six-year period.

Total Assets

Reported total assets exhibit a consistent upward trajectory, increasing from US$32,957 million in 2019 to US$55,154 million in 2024. This represents an overall growth of approximately 67%, indicating expansion in the company's asset base. Adjusted total assets, which account for goodwill adjustments, follow a similar pattern but reflect lower values, growing from US$26,675 million to US$44,355 million in the same period. This suggests that goodwill accounts for a significant portion of assets and that the company's tangible asset base has expanded steadily.

Stockholders’ Equity

The reported stockholders’ equity increased markedly, from US$4,909 million in 2019 to US$26,274 million in 2024, showing robust growth, especially between 2020 and 2022, where equity nearly doubled from US$6,077 million to US$18,013 million. Adjusted stockholders’ equity, after removing goodwill, starts with negative values (-US$1,373 million in 2019 and -US$246 million in 2020) which suggests that intangible assets heavily influenced equity figures early in the period. By 2021, adjusted equity turns positive at US$2,704 million and continues to rise to US$15,475 million in 2024, indicating improved tangible equity strength over time.

Net Income

Reported net income shows strong variability but generally positive momentum, starting at US$4,386 million in 2019 and peaking at US$12,936 million in 2022. However, there is a significant decrease in 2023 to US$7,232 million, followed by a rebound to US$10,142 million in 2024. Adjusted net income aligns precisely with the reported figures, indicating goodwill adjustments did not affect net income calculations during this timeframe.

In summary, the company has expanded its asset and equity base considerably over the period, with adjusted figures indicating a gradual strengthening of tangible equity. Profitability experienced strong growth through 2022 but saw a setback in 2023 before recovering. The adjustments for goodwill reveal its substantial impact on asset and equity valuations, particularly in the earlier years, while income figures remain unaffected by such adjustments.

Over the analyzed periods, the net profit margin exhibited an overall upward trend with some fluctuations. From 2019 to 2022, both the reported and adjusted net profit margins increased steadily, reaching a peak around 29.27% in 2022. However, there was a decline in 2023 to approximately 20.19%, followed by a partial recovery in 2024 to about 26.03%. The similarity between reported and adjusted margins suggests limited impact from goodwill adjustments in this metric.

Total asset turnover ratios show contrasting patterns between reported and adjusted figures. The reported total asset turnover decreased from 0.74 in 2019 to 0.66 in 2020, then increased significantly to 0.9 in 2022, before declining again to around 0.7 in 2023 and 0.71 in 2024. Adjusted total asset turnover consistently outperformed the reported ratio, displaying higher values throughout all periods and peaking at 1.15 in 2022. Post-2022, the adjusted turnover also decreased but remained above the reported ratios, indicating that excluding goodwill assets underscores a more efficient asset use.

Financial leverage ratios show a marked downward trend over time. Reported financial leverage dropped progressively from 6.71 in 2019 to 2.1 in 2024, indicating a significant reduction in the company’s reliance on debt or other liabilities relative to equity. Adjusted financial leverage data is partially missing before 2021; however, from available values, it decreased sharply from 12.57 in 2021 to 2.87 in 2024. The higher adjusted ratios in early periods suggest that goodwill adjustments inflate the leverage ratio, and over time, the company's leverage has been effectively reduced on both a reported and adjusted basis.

Return on equity (ROE) showed a declining trend throughout the period. Reported ROE started extremely high at 89.35% in 2019, fluctuated slightly but maintained a general downward trajectory to 38.6% in 2024. Adjusted ROE values, available from 2021 onward, were significantly higher than reported figures, peaking at 334.43% in 2021, then dropping sharply to around 65% by 2024. This discrepancy implies that goodwill adjustments have a considerable influence on ROE calculation, exaggerating returns in earlier years before normalizing more recently.

Return on assets (ROA) increased steadily from 2019 to 2022, with reported ROA moving from 13.31% to 26.39%, then declined to 14.17% in 2023 before moderately recovering to 18.39% in 2024. Adjusted ROA mirrored this trend with values consistently higher than reported ROA, indicating that asset base adjustments excluding goodwill lead to a higher measure of asset profitability. The peak adjusted ROA of 33.59% in 2022 followed by a decrease reflects the same performance cycle observed in reported figures.

In summary, the financial data reflects a phase of growth and improving profitability metrics till around 2022, followed by a period of decline or stabilization toward 2023 and 2024. Asset utilization, profitability, and leverage all improved substantially through 2022 but then moderated. Goodwill adjustments reveal more conservative asset and leverage measures but tend to magnify equity returns, especially in earlier years, highlighting their significant impact on financial ratio interpretation.

The net income values exhibit notable fluctuations over the observed periods. Initially, there is a steady increase from 2019 through 2022, peaking at a substantial value in 2022. However, this is followed by a marked decrease in 2023, before experiencing a recovery in 2024, though it does not reach the previous peak in 2022.

The adjusted net income closely mirrors the reported net income throughout the periods, indicating minimal adjustments related to goodwill or other factors impacting net income reporting.

Regarding profitability, the net profit margin shows a general upward trend from 2019 to 2022, with a peak margin achieved in 2022. This suggests increasing efficiency or profitability relative to revenues during these years. However, there is a decline in the margin in 2023, which aligns with the reduced net income observed for that year. In 2024, there is a partial recovery in the profit margin, although it remains below the 2022 high.

Both reported and adjusted profit margins follow the same trajectory, reinforcing the conclusion that adjustments did not materially affect the profitability ratios.

Summary of key observations:

1. A consistent growth in net income and profit margins from 2019 to 2022.

2. A significant decline in both net income and profit margin in 2023.

3. Recovery signs in 2024, though not yet restoring the previous peak levels.

4. Minimal difference between reported and adjusted figures, indicating stable accounting treatments of goodwill or other adjustments during the time frame.

The analysis of the reported and goodwill adjusted financial data reveals several notable trends over the six-year period ending in 2024.

Asset Growth

Reported total assets exhibit a consistent upward trajectory, increasing from approximately $32.96 billion in 2019 to about $55.15 billion in 2024. This represents substantial asset growth, with the most significant annual increases observed between 2020 and 2022.

Adjusted total assets, which exclude goodwill, display a similar ascending pattern, rising from $26.68 billion in 2019 to $44.36 billion in 2024. The growth rate in adjusted assets is also robust but slightly lower in absolute terms than reported assets, indicating goodwill comprises a material portion of total assets.

Asset Turnover Trends

The reported total asset turnover ratio fluctuates over the period but does not show a clear consistent trend. It begins at 0.74 in 2019, declines to 0.66 in 2020, then rises to a peak of 0.9 by 2022, before dropping again to approximately 0.7 in the last two years. This volatility suggests variable efficiency in utilizing reported assets to generate revenue.

In contrast, the adjusted total asset turnover shows a generally higher level than reported asset turnover and a more pronounced upward trend until 2022. It starts at 0.91 in 2019, dips slightly in 2020, then climbs to a peak of 1.15 in 2022, followed by a decrease to around 0.89–0.88 in the subsequent years. This indicates that, when goodwill is excluded, the company’s asset utilization efficiency improved significantly until 2022, though it slightly tapered off afterward.

Comparison Between Reported and Adjusted Ratios

The adjusted total asset turnover ratios consistently exceed the reported ratios, reflecting the dilutive effect of goodwill on total asset efficiency measures. The adjusted figures provide a perspective emphasizing operational asset use, possibly giving a clearer view of core business performance.

Overall, the data indicates robust asset base expansion over the six-year period, coupled with fluctuating but relatively strong asset utilization, especially when goodwill is excluded. The peak performance in asset turnover ratios around 2022 followed by a decline merits further analysis to understand underlying operational changes or economic factors influencing asset productivity.

The data reveals a consistent increase in both reported and adjusted total assets over the six-year period. Reported total assets rose from $32,957 million in 2019 to $55,154 million in 2024, indicating sustained asset growth. Similarly, adjusted total assets, which exclude goodwill, grew from $26,675 million to $44,355 million during the same timeframe. This parallel upward trend in both metrics suggests the company has been expanding its asset base continuously, with the difference between reported and adjusted values potentially reflecting changes in intangible assets like goodwill.

Stockholders’ equity, on a reported basis, showed a significant increase, more than quintupling from $4,909 million in 2019 to $26,274 million in 2024. The adjusted stockholders’ equity started from a negative value of -$1,373 million in 2019, indicating a deficit when excluding goodwill, but improved dramatically to reach $15,475 million by 2024. This shift from negative to positive adjusted equity signifies considerable strengthening of the company’s net asset position after accounting for goodwill, which may be attributed to retained earnings growth or equity injections.

Financial leverage ratios indicate notable deleveraging over the period. The reported financial leverage ratio declined steadily from 6.71 in 2019 to 2.1 in 2024, reflecting a reduction in debt relative to equity. The adjusted financial leverage, available beginning in 2021, started at a high 12.57 and decreased to 2.87 by 2024. The larger initial adjusted leverage compared to reported suggests that excluding goodwill reveals a higher reliance on debt financing, but the rapid decrease highlights improved financial stability and lower leverage risk over time.

Overall, the data exhibits a positive trajectory of asset growth and equity strengthening, accompanied by meaningful reductions in leverage. The adjustment for goodwill exposes a more conservative view of the financial position, with initial challenges in adjusted equity and leverage ratios that have been addressed progressively, underscoring the company’s enhanced financial health and risk profile over the six years.

Net Income

The reported net income demonstrated a general upward trajectory from 2019 to 2022, increasing significantly from $4,386 million to $12,936 million. This was followed by a notable decline in 2023 to $7,232 million, but the figure rebounded to $10,142 million in 2024. Adjusted net income mirrored this trend exactly, indicating that adjustments had minimal impact on net income figures.

Stockholders’ Equity

The reported stockholders’ equity showed steady growth throughout the entire span, increasing nearly fivefold from $4,909 million in 2019 to $26,274 million in 2024. In contrast, adjusted stockholders’ equity started with negative values in 2019 and 2020 (-$1,373 million and -$246 million respectively), transitioning to positive territory in 2021 and continuing to rise substantially to $15,475 million by 2024. This suggests that goodwill and related adjustments significantly reduced equity in earlier years but the adjusted equity base grew strongly thereafter.

Return on Equity (ROE)

The reported ROE was exceptionally high in early years, peaking near 91% in 2021 and then decreasing markedly to 33.51% in 2023 before a slight recovery to 38.6% in 2024. The adjusted ROE data is incomplete for 2019 and 2020 but shows extraordinarily high values afterward, with a peak of 334.43% in 2021, followed by a decline to 172.37% in 2022 and further down to about 66% in 2023 and 2024. The substantial differences between reported and adjusted ROE in the latter years indicate that after accounting for goodwill and other adjustments, the underlying equity base was much smaller initially, inflating the ROE figures, but gradually normalized over time.

Overall Trends and Insights

Overall, net income trends suggest strong profitability growth with some volatility in the last two years. The divergence between reported and adjusted equity highlights the impact of goodwill and related accounting adjustments on financial position, with adjustments having a substantial dampening effect on equity in earlier years but diminishing by 2024. The ROE analysis reveals that reported returns were generally high but potentially overstated relative to the adjusted, more conservative measure. The convergence of reported and adjusted net income contrasts with the large gaps in equity and return figures, illustrating the significant balance sheet effects of non-cash adjustments rather than income statement differences.

The analysis of the financial data over the six-year period reveals several notable trends and changes relating to profitability, asset base, and return metrics.

Net Income

Reported net income exhibited a generally upward trajectory from 2019, rising from $4,386 million to a peak of $12,936 million in 2022. However, this was followed by a significant decline in 2023 to $7,232 million, before recovering to $10,142 million in 2024. The adjusted net income mirrored the reported figures exactly, indicating no significant adjustments in this metric during the analyzed period.

Total Assets

The reported total assets showed a consistent increase each year, growing from $32,957 million in 2019 to $55,154 million in 2024. Adjusted total assets, which exclude goodwill and other adjustments, followed the same upward trend but at lower absolute levels, increasing from $26,675 million to $44,355 million over the same period. This suggests steady growth in the asset base with goodwill and related items accounting for a meaningful portion of total assets.

Return on Assets (ROA)

Both reported and adjusted ROA demonstrated generally strong profitability relative to assets but with considerable fluctuation. Reported ROA improved from 13.31% in 2019 to a high of 26.39% in 2022, then declined sharply to 14.17% in 2023 before recovering somewhat to 18.39% in 2024. Adjusted ROA showed a similar but slightly higher and more volatile pattern, rising from 16.99% in 2019 to 33.59% in 2022, dropping to 17.9% in 2023, and increasing again to 22.87% in 2024. The divergence between reported and adjusted ROA highlights the impact of goodwill and other adjustments on asset profitability metrics.

Overall, the data indicates robust growth and profitability until 2022, followed by a notable decline in 2023 across net income and ROA measures, with partial recovery in 2024. Asset growth remained consistent throughout, with adjusted metrics revealing the underlying operational performance separate from intangible asset effects.