Qualcomm Inc. (NASDAQ:QCOM)

Net Operating Profit After Taxes (NOPAT)

The NOPAT experienced a significant rise from 4,798 million US dollars in 2020 to a peak of 13,145 million US dollars in 2022. However, there was a sharp decline to 5,865 million US dollars in 2023, followed by a recovery trend reaching 9,896 million US dollars by 2025. Overall, the NOPAT shows cyclical variation with a noticeable dip in 2023 but demonstrates growth potential in subsequent years.

Cost of Capital

The cost of capital remained relatively stable over the observed period, fluctuating narrowly between 15.73% and 16.37%. There was a slight upward trend starting from 15.73% in 2020 and increasing to 16.37% by 2025, indicating a gradual increase in the required return on invested capital throughout these years.

Invested Capital

Invested capital rose steadily from 17,459 million US dollars in 2020 to 31,317 million US dollars in 2025, representing a continued investment expansion. There was a marked increase in 2022 and 2023, though it plateaued somewhat in 2024 and 2025, indicating that the company maintained a high level of capital investment with some stabilization in recent years.

Economic Profit

Economic profit showed strong growth from 2,051 million US dollars in 2020 to a peak of 8,535 million US dollars in 2022. This was followed by a substantial drop to 897 million US dollars in 2023, mirroring the decrease seen in NOPAT. A recovery phase ensued with economic profit increasing to 4,770 million US dollars by 2025. Despite fluctuations, the company has maintained positive economic profit, reflecting value creation above the cost of capital.

The financial data reveals notable fluctuations in key profitability metrics over the examined periods.

Net Income

Net income exhibited a strong upward trend from 2020 through 2022, increasing from $5,198 million to a peak of $12,936 million. However, this was followed by a sharp decline in 2023, dropping to $7,232 million. The figure partially recovered in 2024 to $10,142 million before decreasing again in 2025 to $5,541 million, indicating considerable volatility and inconsistency in net profit generation during the latter years.

Net Operating Profit After Taxes (NOPAT)

NOPAT followed a somewhat similar pattern but with distinct deviations. Starting at $4,798 million in 2020, it increased steadily to $13,145 million in 2022, slightly surpassing the net income peak. A significant decrease occurred in 2023, bringing NOPAT down to $5,865 million, which is a more pronounced drop compared to net income. In 2024, NOPAT rebounded to $8,262 million and further increased to $9,896 million in 2025. This partial recovery suggests improved operating efficiency or tax management despite the fluctuating net income.

Overall, the data reflects a period of strong profitability growth until 2022, followed by notable declines and subsequent recovery attempts. The divergence between net income and NOPAT trends in recent years could be indicative of changes in non-operating items, tax rates, or extraordinary gains or losses impacting net income figures more heavily than operating profits.

Income Tax Provision from Continuing Operations

The income tax provision demonstrates notable volatility over the analyzed periods. Initially, there is a substantial increase from 521 million US dollars in 2020 to a peak of 2012 million US dollars in 2022. This is followed by a sharp decrease to 104 million US dollars in 2023, indicating a significant reduction in tax expense or possibly tax strategies implemented during that fiscal year. Subsequently, the provision rises moderately to 226 million US dollars in 2024 and then exhibits a pronounced surge to 7122 million US dollars by 2025, suggesting a notable increase in taxable income or changes in tax regulations impacting the latest period.

Cash Operating Taxes

Cash operating taxes exhibit a generally increasing trend throughout the periods analyzed. Starting at 793 million US dollars in 2020, there is a consistent upward movement reaching 2632 million US dollars by 2025. Despite a smaller growth pace observed between 2022 and 2023, the overall trend reflects growing cash tax obligations, potentially linked to increased profitability, changes in tax payment timing, or alterations in operational cash flows influencing tax payments.

Summary of Taxation Trends

The overall taxation metrics show a divergence between accounting-based tax provisions and actual cash tax payments. While cash operating taxes increase steadily, the income tax provision is characterized by substantial fluctuations, pointing to possible temporary differences between accounting profit and taxable income or significant tax planning activities. The sharp increase in the income tax provision in 2025 compared to prior years warrants further examination to understand underlying causes such as changes in tax legislation, adjustments in deferred tax assets or liabilities, or extraordinary items affecting the tax expense.

Total Reported Debt & Leases

There is a relatively stable trend in total reported debt and leases over the observed period. The values fluctuate slightly around the range of approximately 15,400 to 16,300 million US dollars, with no significant upward or downward movement. This indicates a consistent level of indebtedness maintained by the company with minor reductions noted in the mid-term followed by a small increase towards the end.

Stockholders’ Equity

The stockholders’ equity shows a substantial and continuous growth over the majority of the periods reviewed, starting from about 6,077 million US dollars and reaching up to a peak of 26,274 million US dollars. After this peak, a notable decline occurs, dropping equity to approximately 21,206 million US dollars by the last period. This pattern suggests significant capital appreciation followed by some degree of capital reduction or loss retention in the most recent term.

Invested Capital

Invested capital demonstrates a clear upward trajectory from 17,459 million US dollars to over 31,000 million US dollars. The growth is pronounced particularly between the second and third periods, with a slight plateau and minor fluctuations observed between the later periods. Overall, this indicates ongoing capital investment or accumulation of net assets supporting the company’s operations.

Summary Insights

The company has maintained a steady level of debt, suggesting a controlled approach to leveraging. The marked increase in stockholders’ equity over four years reflects strong growth in net assets or retained earnings, though the subsequent decline may warrant investigation into recent operational or financial challenges. The consistent rise in invested capital points to sustained commitment to asset growth and operational capacity. The combined trends imply that while the company has generally expanded its capital base and maintained stable debt levels, recent fluctuations in equity highlight potential volatility in financial performance or market valuation.

Economic Profit

The economic profit demonstrates significant fluctuations over the periods analyzed. It increased markedly from 2,051 million US dollars in 2020 to a peak of 8,535 million in 2022. However, there was a sharp decline in 2023 to 897 million. Subsequently, it showed a recovery trend, reaching 3,223 million in 2024 and further increasing to 4,770 million in 2025. This pattern indicates a volatile profit performance with a notable recovery after the downturn in 2023.

Invested Capital

The invested capital generally exhibits an upward trend across the periods. It rose steadily from 17,459 million US dollars in 2020 to 31,383 million in 2023. Although there is a slight decrease to 30,887 million in 2024, the value increases again to 31,317 million in 2025. This suggests continued investments and asset growth with minor fluctuations but overall expansion over time.

Economic Spread Ratio

The economic spread ratio shows considerable variation. It started at 11.75% in 2020 and improved significantly to a peak of 29.3% in 2022. A steep decline followed in 2023 to 2.86%, indicating diminished value creation relative to invested capital at that time. Recovery began in 2024 with the ratio increasing to 10.43%, and further improving to 15.23% in 2025. This trend mirrors the volatility seen in economic profit and indicates a partial rebound in the company’s efficiency in generating returns above its cost of capital.

Overall Analysis

Over the six-year period, the company experienced growth in invested capital alongside volatile economic profitability and spread ratios. The peak performance in 2022 in terms of economic profit and spread was notably followed by a sharp decline in 2023, which may suggest operational challenges or changes in market conditions that year. The subsequent recovery in both profitability and efficiency metrics suggests responsive management actions or improving conditions. Despite fluctuations, the general upward trend in invested capital underlines ongoing commitment to growth and capacity expansion.

The financial data exhibits distinct patterns over the analyzed periods, indicating fluctuations in both profitability and revenue generation.

Adjusted Revenues

Adjusted revenues demonstrate a general upward trend, starting from 23,135 million US dollars and increasing steadily to 44,328 million by the final period. There is a notable peak in the third period at 43,737 million US dollars, followed by a dip in the fourth period to 35,699 million, after which revenues resume growth reaching higher levels in the subsequent periods.

Economic Profit

Economic profit shows significant volatility throughout the periods. Initially, it rises sharply from approximately 2,051 million to a peak of 8,535 million in the third period. This is followed by a sharp contraction to 897 million in the fourth period, reflecting a substantial drop in profitability. Subsequently, economic profit recovers moderately, reaching 4,770 million by the last period, but does not return to the earlier peak level.

Economic Profit Margin

This margin moves in alignment with economic profit figures, indicating fluctuations in the efficiency of converting revenues into economic profit. Starting at 8.87%, it increases notably to 19.51% by the third period. A steep decline to 2.51% occurs in the fourth period, mirroring the drastic drop in economic profit. The margin subsequently improves to 10.76% by the last period, although it remains below the earlier high.

Overall, the company exhibits strong revenue growth across the years, but economic profit and margin display pronounced cyclicality with a marked downturn in the middle of the timeline. This pattern suggests that while the company’s sales capacity strengthens, operational or cost factors may have constrained profitability during certain periods, followed by a partial recovery.