Qualcomm Inc. (NASDAQ:QCOM)

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibited fluctuating trends over the observed periods. Initially, there was a decline from 5,963 million USD in 2019 to 4,798 million USD in 2020, followed by a substantial increase to 8,512 million USD in 2021, and further growth reaching a peak of 13,145 million USD in 2022. Subsequently, NOPAT declined sharply to 5,865 million USD in 2023, before recovering to 8,262 million USD in 2024.

Cost of Capital

The cost of capital showed a gradual upward trend across the years. Starting at 15.4% in 2019, it increased slightly each year to reach 16.65% in 2024. The rise was consistent, though relatively moderate, indicating a slowly increasing financing or opportunity cost environment.

Invested Capital

Invested capital demonstrated significant growth over the period. After an initial decline from 21,089 million USD in 2019 to 17,459 million USD in 2020, it increased steadily from 20,003 million USD in 2021 to a high of 31,383 million USD in 2023, with a slight decrease to 30,887 million USD in 2024. This reflects an expansion in capital resources deployed by the company.

Economic Profit

Economic profit showed notable volatility. It decreased from 2,714 million USD in 2019 to 1,995 million USD in 2020, rose sharply to 5,277 million USD in 2021, and further increased reaching a peak of 8,441 million USD in 2022. However, it then contracted dramatically to 796 million USD in 2023 before recovering to 3,119 million USD in 2024. This pattern suggests fluctuations in value generation relative to the cost of capital.

The financial data reveals notable fluctuations in both net income and net operating profit after taxes (NOPAT) over the analyzed six-year period.

Net Income

Net income demonstrated a general upward trajectory from 2019 through 2022, with a marked increase from $4,386 million in 2019 to $12,936 million in 2022. This indicates a strong growth phase during these years.

However, in 2023, net income experienced a significant decline, dropping to $7,232 million, which is approximately a 44% decrease from the previous year. This suggests a material change in profitability or potential challenges faced during this period.

In 2024, net income recovered to $10,142 million, indicating a rebound though still below the peak achieved in 2022.

Net Operating Profit After Taxes (NOPAT)

NOPAT followed a somewhat similar pattern to net income, initially decreasing from $5,963 million in 2019 to $4,798 million in 2020, which contrasts with the initial increase in net income for 2020. This may reflect operational challenges or higher effective tax rates impacting after-tax operating profit in that year.

From 2020 onwards, NOPAT increased substantially to reach its peak of $13,145 million in 2022, consistent with the peak seen in net income, indicating strong operating performance.

In 2023, NOPAT dropped sharply to $5,865 million, representing a more pronounced decline compared to net income for the same period. This could suggest operational inefficiencies, increased costs, or other factors adversely impacting core operations.

By 2024, NOPAT improved to $8,262 million, showing partial recovery though remaining significantly below the 2022 peak.

Overall, the data indicates strong growth up to 2022 followed by a considerable dip in 2023 in both net income and NOPAT. The subsequent recovery in 2024, while positive, does not fully restore performance to prior peak levels. The larger proportional decline and slower recovery in NOPAT compared to net income in the downturn suggest that underlying operating profitability was particularly affected during the challenging period.

Income tax provision from continuing operations

The income tax provision experienced a significant decline from 3,095 million USD in 2019 to 521 million USD in 2020. Following this sharp decrease, the provision saw a moderate recovery, rising to 1,231 million USD in 2021 and further increasing to 2,012 million USD in 2022. However, in the subsequent years, it sharply declined again to 104 million USD in 2023, before slightly rebounding to 226 million USD in 2024. This pattern suggests considerable volatility in the tax expense, with substantial fluctuations over the period examined.

Cash operating taxes

Cash operating taxes demonstrated a somewhat different trend compared to the income tax provision. After a decrease from 1,167 million USD in 2019 to 793 million USD in 2020, cash operating taxes increased significantly to 1,484 million USD in 2021 and continued to rise to 2,189 million USD in 2022. Although there was a decline in 2023 to 1,803 million USD, cash operating taxes increased again to 2,127 million USD in 2024. Overall, this indicates a generally upward trend in cash operating taxes over the timeframe, with occasional decreases but a recovery subsequent to those declines.

Comparative observations

The divergence between income tax provision and cash operating taxes is notable. While the income tax provision shows high variability and generally lower levels in recent years, cash operating taxes have trended upwards, suggesting possible timing differences or adjustments affecting the provision relative to actual tax cash outflows. The disparity between accrued tax expense and cash taxes paid might warrant further investigation to understand tax accounting policies or one-time tax impacts during this period.

Total Reported Debt & Leases

The total reported debt and leases exhibit a slightly decreasing trend over the analyzed periods. Starting from US$16,287 million in 2019, the figure shows minor fluctuations but generally moves downward to US$15,440 million by 2024. This reflects a moderate reduction in leverage or financial obligations over time.

Stockholders’ Equity

Stockholders’ equity demonstrates a strong upward trajectory throughout the periods. Beginning at US$4,909 million in 2019, equity increases significantly each year, reaching US$26,274 million in 2024. This substantial rise indicates a growing value attributable to shareholders, possibly due to profitable operations, retained earnings accumulation, or capital injections.

Invested Capital

Invested capital presents a more variable pattern with an overall increase. It starts at US$21,089 million in 2019, decreases to a low of US$17,459 million in 2020, then rises steadily to a peak of US$31,383 million in 2023, before a slight decline to US$30,887 million in 2024. This suggests increased investment in the company's operational assets or business expansions with some stabilization in the final year.

Insights

The data indicates a strengthening equity base and relatively stable or diminishing debt levels, which could enhance the company's financial stability and creditworthiness. The upward movement in invested capital corresponds with the growth in equity, implying that the company is reinvesting funds to support expansion or operational capacity. The moderate decline in invested capital in the last period may suggest a phase of consolidation or optimization of asset deployment.

Economic Profit

The economic profit experienced notable fluctuations throughout the observed periods. It started at a level of 2,714 million USD in 2019, then declined to 1,995 million USD in 2020. A strong recovery occurred in the following years, reaching a peak of 8,441 million USD in 2022. However, this was followed by a sharp decrease to 796 million USD in 2023, before rising again to 3,119 million USD in 2024. Overall, the economic profit displays significant volatility with a general upward trend interrupted by sharp declines.

Invested Capital

Invested capital showed an initial decline from 21,089 million USD in 2019 to 17,459 million USD in 2020. From 2020 onward, the invested capital increased steadily, surpassing previous levels, peaking at 31,383 million USD in 2023 before slightly decreasing to 30,887 million USD in 2024. The trend indicates an ongoing expansion in capital investment after a brief contraction in the early period.

Economic Spread Ratio

The economic spread ratio began at 12.87% in 2019 and decreased to 11.43% in 2020. It then increased sharply to 26.38% in 2021 and further to its highest point at 28.98% in 2022, reflecting strong profitability relative to the cost of invested capital. This ratio collapsed to 2.54% in 2023, indicating a significant drop in economic profitability, but partially recovered to 10.1% in 2024. Despite the recovery, the ratio remained below the earlier peak values, suggesting fluctuating efficiency in value creation.

Economic Profit

The economic profit displayed a varied trend over the analyzed periods. Initially, there was a decline from 2714 million US dollars in 2019 to 1995 million in 2020. This was followed by a substantial increase reaching a peak of 8441 million US dollars in 2022. However, the subsequent years saw a sharp downturn to 796 million in 2023, before recovering to 3119 million in 2024. This pattern indicates volatility in profitability, with a significant peak mid-period and notable fluctuations thereafter.

Adjusted Revenues

Adjusted revenues exhibited a generally increasing trend across the years. Starting from 23878 million US dollars in 2019, there was a slight decrease in 2020 to 23135 million, followed by a strong upward movement reaching 43737 million in 2022. A decline was noted in 2023, with revenues dropping to 35699 million, but revenues rose again in 2024 to 38955 million. Overall, adjusted revenues grew significantly over the period, despite some short-term reductions.

Economic Profit Margin

The economic profit margin showed significant fluctuations during the period under review. It decreased from 11.37% in 2019 to 8.62% in 2020, then improved markedly to a high of 19.3% in 2022. This was followed by a steep decline to 2.23% in 2023, before partially recovering to 8.01% in 2024. The margin's volatility reflects the variability in the company’s efficiency in converting revenues into economic profit.