Qualcomm Inc. (NASDAQ:QCOM)

The financial data reveals several key trends concerning profitability, capital efficiency, and economic value creation over the periods analyzed.

Net Operating Profit After Taxes (NOPAT)

The NOPAT experienced a significant increase from 4798 million to a peak of 13,145 million over the first three reported years, indicating robust growth in operating profitability. However, it declined sharply to 5865 million in the fourth year before gradually recovering to 9896 million in the most recent year. This pattern suggests some period of operational challenges or lower earnings, followed by improvement but not yet reaching prior peak levels.

Cost of Capital

The cost of capital has remained relatively stable throughout the periods, fluctuating slightly around 15.7% to 16.4%. This stability indicates consistent market and financial risk perceptions and financing conditions for the firm, with only a marginal upward trend in the later years.

Invested Capital

Invested capital shows a continuous upward trend from 17,459 million to approximately 31,317 million, nearly doubling over the timeline. This suggests significant reinvestment or expansion efforts by the company, which may correspond to attempts to support or increase operational capacity and future growth opportunities.

Economic Profit

Economic profit trends exhibit substantial fluctuation, increasing markedly from 2050 million to a peak of 8533 million by the third year, then falling dramatically to 895 million thereafter. There is some recovery in the subsequent years, reaching 4768 million, but economic profit remains well below the previous peak. This volatility indicates varying levels of value creation relative to the firm’s cost of capital, reflecting changes in operating performance, capital investment returns, and possibly external market conditions impacting profitability.

Overall, the data depict a company that initially experienced strong profitability growth and effective capital utilization but encountered a period of reduced profitability and economic returns. Despite this setback, signs of recovery appear in the later years, although the scale of economic profit has yet to return to former highs. The steady rise in invested capital alongside fluctuating economic profit suggests ongoing investments with mixed short-term returns, warranting close monitoring of capital efficiency and profitability trends in future periods.

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 demonstrated significant fluctuations over the observed periods. It initially increased substantially from 2050 million USD in 2020 to a peak of 8533 million USD in 2022. This was followed by a sharp decline to 895 million USD in 2023, before partially recovering to 4768 million USD by 2025. The pattern suggests variability in profitability, possibly influenced by changes in operational efficiency or market conditions.

Invested Capital

The invested capital showed a consistent upward trend throughout the years. Starting at 17,459 million USD in 2020, it increased steadily to a high of 31,317 million USD by 2025. The growth indicates ongoing investment or expansion, reflecting a commitment to increasing the asset base or funding business operations.

Economic Spread Ratio

The economic spread ratio also displayed volatility. It rose sharply from 11.74% in 2020 to reach its highest point of 29.29% in 2022. However, this was followed by a steep decline to 2.85% in 2023, indicating a significant reduction in economic returns relative to the cost of capital. Subsequent years showed recovery to 15.23% by 2025, suggesting a restoration in profitability margins but not reaching previous peak levels.

Overall Analysis

The data evidences a period of strong performance around 2021-2022 with high economic profit and favorable economic spread ratio, alongside increasing invested capital. The subsequent decline in 2023 points to challenges faced during that year, possibly stemming from increased costs or reduced revenue generation. The gradual recovery in economic profit and spread ratio through 2024 and 2025, combined with continued growth in invested capital, may indicate strategic adjustments or market improvements contributing to restored financial performance.

The financial data reveal several notable trends in the company's performance over the analyzed periods.

Economic Profit

The economic profit experienced a significant increase from 2,050 million US dollars in 2020 to a peak of 8,533 million US dollars in 2022. However, in the subsequent year, there was a sharp decline to 895 million US dollars in 2023. The economic profit then recovered in the following years, rising to 3,221 million in 2024 and further to 4,768 million in 2025, but it did not reach the previous peak achieved in 2022.

Adjusted Revenues

Adjusted revenues showed a generally upward trend through the period. Revenues rose from 23,135 million US dollars in 2020 to 43,737 million in 2022, indicating strong growth in the first three years. There was a decrease in 2023 to 35,699 million, aligning with the drop in economic profit for the same year. Subsequently, revenues increased again, reaching 38,955 million in 2024 and further to 44,328 million in 2025, surpassing previous highs.

Economic Profit Margin

The economic profit margin followed a pattern similar to economic profit, with margins rising from 8.86% in 2020 to 19.51% in 2022, indicating improved profitability relative to revenues. This margin then fell sharply to 2.51% in 2023, reflecting the reduced economic profit in that year despite only a moderate decline in adjusted revenues. The margin improved again in the last two years, reaching 8.27% in 2024 and 10.76% in 2025, but remaining below the peak margin recorded in 2022.

Overall, the data suggest that the company experienced a peak in profitability and economic value creation in 2022, followed by a significant contraction in 2023. Despite this setback, both economic profit and revenues recovered in subsequent years, though profitability ratios have not yet returned to their prior highs. The fluctuations indicate sensitivity to underlying operational or market factors impacting both revenue generation and economic profit margins.