Regeneron Pharmaceuticals Inc. (NASDAQ:REGN)

Current Tax Expense

The current tax expense shows a notable upward movement from 2020 to 2021, rising from approximately $222 million to about $1.40 billion. Subsequently, it decreases to roughly $1.27 billion in 2022 and continues to decline moderately to around $1.08 billion in 2023 before marginally increasing again to approximately $1.12 billion in 2024. This pattern indicates an initial sharp increase followed by a gradual reduction and slight recovery in the later years.

Deferred Tax Expense (Benefit)

The deferred tax expense exhibits a reversal from a positive value of about $75.6 million in 2020 to significant negative values in the subsequent years, indicating deferred tax benefits. Beginning in 2021, the deferred tax benefit deepens to approximately $147.1 million and reaches a peak in magnitude at around $837.8 million in 2023. In 2024, the benefit slightly decreases in magnitude to about $757.3 million. This trend suggests increasing deferred tax benefits over the years following 2020.

Income Tax Expense

The total income tax expense experiences considerable volatility over the period analyzed. It escalates sharply from roughly $297 million in 2020 to about $1.25 billion in 2021. Subsequently, there is a significant decline to approximately $520 million in 2022, followed by further reductions to about $246 million in 2023. In 2024, the income tax expense rises again, reaching approximately $367 million. This pattern reflects the combined effects of changes in both current and deferred tax expenses.

Summary of Trends

The data reveals that the current tax expense largely drives the income tax expense's fluctuations, particularly with the sharp increase in 2021 followed by gradual reductions in the following years. Concurrently, the deferred tax expense shifts from a benefit to a substantial recurring tax benefit in the years after 2020, partially offsetting the current tax expense. The overall movement in income tax expense reflects these dynamics, with notable volatility and a peak in 2021.

The analysis of the effective income tax rate and its components over the five-year period reveals several notable trends and fluctuations.

U.S. Federal Statutory Tax Rate

The statutory tax rate remained constant at 21% throughout the observed period, providing a stable benchmark against which other tax-related components can be compared.

Stock-Based Compensation

This item showed a general negative impact on the effective tax rate, starting with a substantial -7.6% in 2020, which significantly decreased to -2.4% by 2021. It then fluctuated slightly, increasing to -2.9% in 2022, before amplifying again to -4.6% in 2023 and -4.9% in 2024. The pattern suggests variability in stock-based compensation expenses affecting the tax rate, with a noticeable resurgence in its negative influence in the latter years.

Taxation of Non-U.S. Operations

This influenced the tax rate negatively throughout, with an increasing impact from -1.8% in 2020 to a peak of -6.6% in 2023, followed by a rebound to -4.0% in 2024. The increase until 2023 indicates growing foreign tax benefits or deductions, which slightly eased in 2024 but remained significantly impactful.

Income Tax Credits

Tax credits consistently reduced the effective tax rate, starting at -2.8% in 2020, declining to -1.0% in 2021, and then increasing in magnitude again to -2.0% in 2022, -3.2% in 2023, and -3.5% in 2024. The pattern suggests cyclical utilization of available income tax credits, peaking in the latter years.

Foreign-Derived Intangible Income Deduction

Initially absent in 2020, this deduction appeared in 2021 at -1.4%, decreased to -1.0% in 2022, dipped further to -0.3% in 2023, and slightly rose to -0.8% in 2024. The declining magnitude indicates a reduction in the benefits from this deduction over time, especially notable in 2023.

Sale of Non-Inventory Related Assets Between Foreign Subsidiaries

Recognized only in 2020 with a minimal negative effect of -0.8%, this item was absent in subsequent years, suggesting a one-time transaction impacting the tax profile.

Other Permanent Differences

This component fluctuated, starting with a minor negative influence of -0.2% in 2020, no effect in 2021, rising unexpectedly to a positive 1.1% in 2022, indicating an increase in taxable income due to permanent differences. It then reversed to -0.4% in 2023 and marginally improved to -0.1% in 2024, reflecting variability in non-recurring tax items.

Effective Income Tax Rate

The effective tax rate exhibited significant volatility, beginning at a low 7.8% in 2020, rising sharply to 13.4% in 2021, then declining to 10.7% in 2022. It fell further to a low of 5.9% in 2023 before slightly increasing to 7.7% in 2024. This volatility reflects the combined impact of the aforementioned factors, with 2021 marking the peak rate and 2023 the lowest, likely influenced by varying utilization of tax credits, deductions, and stock-based compensation adjustments.

The financial data reveals several notable trends in various asset and liability categories over the five-year period.

Capitalized Research and Development Expenses

There is a clear upward trajectory in capitalized research and development expenses, growing from 845,300 thousand USD in 2022 to 2,530,200 thousand USD in 2024. This significant increase suggests a strategic emphasis on developing proprietary technologies or products, reflecting greater investment in innovation activities.

Deferred Compensation

Deferred compensation exhibits relative stability, fluctuating mildly around the 400,000 thousand USD mark. Beginning at 436,600 thousand USD in 2020, it slightly decreased to 406,600 thousand USD in 2021, then modestly rose and settled near 419,700 thousand USD by 2024, indicating consistent obligations towards future employee compensation or related liabilities.

Accrued Expenses

Accrued expenses peaked at 262,100 thousand USD in 2021 but then showed a gradual decline each subsequent year, dropping to 185,000 thousand USD by 2024. This decline may reflect improved cash flow management or reduction in short-term liabilities.

Fixed Assets and Intangible Assets

Fixed and intangible assets rose initially, reaching 257,500 thousand USD in 2021, but then experienced a consistent decrease through 2024, ending at 145,100 thousand USD. This downward trend could indicate asset disposals, write-downs, or lower capital expenditure in tangible and intangible assets after an earlier ramp-up.

Tax Attribute Carryforwards

Tax attribute carryforwards show growth from 6,100 thousand USD in 2021 to a peak of 88,700 thousand USD in 2023, with a slight decline to 84,100 thousand USD in 2024. This pattern suggests utilization or reassessment of tax benefits that can offset future tax liabilities.

Other Assets

Other assets increased steadily from 10,800 thousand USD in 2021 to 43,000 thousand USD in 2024, implying accumulation or recognition of miscellaneous asset categories contributing to the overall asset base.

Deferred Revenue

Deferred revenue showed activity in 2020 and 2021 with values of 44,600 and 57,300 thousand USD respectively but no reported balances beyond 2021, possibly indicating recognition of previously deferred income or changes in revenue recognition policies.

Deferred Tax Assets

Deferred tax assets saw strong growth, more than quadrupling from 761,500 thousand USD in 2020 to 3,407,100 thousand USD in 2024. This indicates an increasing recognition of future tax benefits, which may be related to timing differences or carryforward of losses, reflecting favorable tax planning or accounting treatments.

Unrealized Gains on Investments

This item was negative throughout the observed periods with losses peaking in 2021 at -123,500 thousand USD, improving marginally thereafter yet remaining negative (-93,000 thousand USD in 2024). Persistent unrealized losses suggest the portfolio of investments held has experienced declines in fair value, impacting comprehensive income negatively.

Deferred Tax Liabilities

Deferred tax liabilities closely mirror the negative values of unrealized gains on investments, moving from -42,800 thousand USD in 2020 to -93,000 thousand USD in 2024. This alignment suggests that deferred tax liabilities are largely driven by tax effects of unrealized losses, representing future tax obligations tied to temporary differences.

Net Deferred Tax Assets (Liabilities)

The net deferred tax assets grew significantly, starting at 718,700 thousand USD in 2020 and reaching 3,314,100 thousand USD by 2024, reinforcing the trend of increasing deferred tax benefits surpassing liabilities. This net asset position enhances the company's future tax advantage and positively impacts its balance sheet.

Deferred Tax Assets

The deferred tax assets have demonstrated a consistent and significant growth trend over the five-year period analyzed. Starting at $858.9 million in 2020, the figure increased marginally to $876.9 million in 2021. A marked acceleration is observed in 2022, with the value nearly doubling to $1.7237 billion. This upward trajectory continued robustly in 2023 and 2024, reaching $2.5754 billion and $3.3141 billion, respectively. This progression suggests an increase in deductible temporary differences or carryforwards that can reduce future tax liabilities.

Deferred Tax Liabilities

The deferred tax liabilities were reported at $140.2 million in 2020. However, no data are available for subsequent years, preventing the assessment of trends or changes beyond the initial year. The absence of this data limits the understanding of the company's future tax obligations from taxable temporary differences.

Assets

The reported total assets show a consistent upward trend from 17,163,300 thousand US dollars in 2020 to 37,759,400 thousand US dollars in 2024. Adjusted total assets follow a similar trajectory, increasing steadily from 16,304,400 thousand US dollars in 2020 to 34,445,300 thousand US dollars in 2024. The adjustments appear to consistently reduce the reported total assets, but the growth pattern remains consistent across the years.

Liabilities

Reported total liabilities demonstrate moderate growth, rising from 6,138,000 thousand US dollars in 2020 to 8,405,800 thousand US dollars in 2024. Adjusted liabilities align closely with the reported figures, showing no variation from the reported data starting 2021. This indicates deferred income tax adjustments have little to no impact on the liability figures over the observed period.

Stockholders’ Equity

Reported stockholders’ equity increases significantly from 11,025,300 thousand US dollars in 2020 to 29,353,600 thousand US dollars in 2024. Adjusted equity also grows substantially, but remains consistently lower than the reported figures, starting at 10,306,600 thousand US dollars in 2020 and reaching 26,039,500 thousand US dollars in 2024. The gap between reported and adjusted equity suggests that the adjustments primarily reduce equity without altering the general upward trend.

Net Income

The reported net income experiences considerable volatility. It spikes sharply from 3,513,200 thousand US dollars in 2020 to 8,075,300 thousand US dollars in 2021, then declines to 4,338,400 thousand US dollars in 2022, followed by a further drop in 2023 to 3,953,600 thousand US dollars, before rising again in 2024 to 4,412,600 thousand US dollars. The adjusted net income mirrors this pattern but is consistently lower than the reported net income. Notably, the adjusted figures show even more pronounced declines after 2021, dropping to 3,592,000 thousand US dollars in 2022, then to 3,115,800 thousand US dollars in 2023, and recovering somewhat to 3,655,300 thousand US dollars in 2024. This suggests that deferred tax adjustments have a significant impact on net income volatility and overall lower adjusted profitability compared to reported earnings.

Net Profit Margin

The reported net profit margin displayed an upward trend from 41.35% in 2020 to a peak of 50.25% in 2021, followed by a notable decline through 2022 to 30.14% in 2023. It showed a slight improvement to 31.07% by 2024. The adjusted net profit margin followed a similar pattern but with a more pronounced decrease after 2021, dropping from 49.33% to 23.75% in 2023 before a modest recovery to 25.74% in 2024. This suggests that factors excluded in the adjusted figures had some mitigating effect on the margin contraction.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios peaked in 2021 at 0.63 and 0.65 respectively, then consistently declined over the subsequent years. By 2024, reported turnover fell to 0.38 and adjusted to 0.41. The relatively stable but diminishing asset turnover indicates a reduced efficiency in generating sales from assets over time, with adjusted figures consistently slightly higher, reflecting adjustment benefits.

Financial Leverage

The financial leverage ratios decreased from 1.56 (reported) and 1.58 (adjusted) in 2020 to lows near 1.27 (reported) and 1.30 (adjusted) in 2023, then showed a slight increase in 2024. This trend points to a gradual reduction in reliance on debt or equity amplification for financing assets, reaching its lowest leverage in 2023 before stabilizing.

Return on Equity (ROE)

Reported ROE climbed from 31.86% in 2020 to a high of 43.03% in 2021, followed by a sharp decline to about 15% for the last two years. Adjusted ROE mirrored this trajectory but exhibited slightly lower values during the decline phase, bottoming at 13.32% in 2023 with a minor improvement to 14.04% in 2024. This decline signals a reduced profitability for shareholders after the peak year, reflecting the combined impact of margin compression and asset turnover trends.

Return on Assets (ROA)

ROA showed a similar pattern, rising from 20.47% (reported) and 22.01% (adjusted) in 2020 to peaks near 32% in 2021, then declining steadily to near 11.7% (reported) and 10.6% (adjusted) in 2024. The consistent gap between reported and adjusted figures suggests ongoing adjustments affect profitability measurement, with overall reduced effectiveness in asset utilization for generating net income post-2021.

Overall Observations

The data reveals strong financial performance in 2021, characterized by high margins, turnover, and profitability metrics. However, from 2022 onwards, there is a clear downward trend across most key ratios, indicating challenges in maintaining profitability and asset efficiency. Adjusted figures generally trend slightly lower than reported measures, highlighting the impact of non-recurring or deferred income tax adjustments on reported results. Financial leverage steadily decreased, implying a moderation in financial risk or capital structure changes during this period.

The financial data reveals several notable trends in the company’s income performance over the five-year period. Both reported and adjusted net incomes exhibit fluctuations, with a peak observed in the year ending December 31, 2021, followed by a decline in subsequent years and a moderate recovery in the latest period.

Reported net income

The reported net income increases from approximately 3.51 billion US dollars in 2020 to a high of 8.08 billion in 2021, representing a substantial growth. However, this figure declines sharply in 2022 to 4.34 billion and further declines slightly in 2023 to 3.95 billion before rising again to 4.41 billion in 2024. This pattern indicates a peak in profitability in 2021 with volatility and partial recovery thereafter.

Adjusted net income

Adjusted net income follows a similar pattern but with somewhat lower values than reported net income reflecting the impact of income tax adjustments. It peaks at 7.93 billion US dollars in 2021, then declines more steeply to 3.59 billion in 2022 and continues to decrease to 3.12 billion in 2023 before recovering to 3.66 billion in 2024. The larger relative drop suggests that adjustments have increasingly significant impacts on profitability after 2021.

Reported net profit margin

The reported net profit margin increases noticeably from 41.35% in 2020 to 50.25% in 2021, indicating improved efficiency or profitability in that year. Subsequently, it decreases to 35.64% in 2022, continuing downward to 30.14% in 2023, with a slight rebound to 31.07% in 2024. This trend mirrors the net income trajectory, implying fluctuating profitability margins within the business environment or operational performance.

Adjusted net profit margin

Adjusted net profit margin similarly peaks in 2021 at 49.33% before dropping significantly to 29.51% in 2022, then declining further to 23.75% in 2023, and finally recovering modestly to 25.74% in 2024. The margins post-adjustment show a more pronounced decrease from the peak, indicating that deferred and annual income tax adjustments have a considerable reducing effect on profit margins in the latter years of the period.

Overall, the data indicates the company experienced its highest profitability in 2021 both in absolute net income and profit margins. The years following show a noticeable decline and heightened volatility, with partial recovery by 2024. Adjustments for annual reported and deferred income tax have a material impact on net income and profitability, especially evident in the reduction of adjusted figures compared to reported ones after 2021. This suggests increased tax-related accounting impacts or changing tax circumstances affecting the company’s adjusted earnings and margins in recent years.

The data reveals notable trends in the reported and adjusted total assets as well as the total asset turnover ratios over the five-year period ending December 31, 2024.

Reported Total Assets

Reported total assets increased steadily from US$17.16 billion in 2020 to US$37.76 billion in 2024. This reflects a compound growth pattern, more than doubling over the time span, indicating continued expansion in asset base.

Adjusted Total Assets

Adjusted total assets, which account for deferred income tax adjustments, also showed consistent growth from US$16.30 billion in 2020 to US$34.45 billion in 2024. The gap between reported and adjusted assets persisted, but both measures displayed parallel upward trajectories suggesting that deferred tax adjustments do not significantly alter the overall asset growth trend.

Reported Total Asset Turnover

The reported total asset turnover ratio, indicating efficiency in generating revenue from assets, peaked at 0.63 in 2021 but showed a declining trend thereafter, reaching 0.38 in 2024. This decline suggests that although assets grew, the revenue generated per unit of asset decreased, potentially reflecting diminishing returns on asset utilization or a change in operational efficiency.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio followed a similar pattern to the reported ratio, peaking at 0.65 in 2021 and declining to 0.41 by 2024. The adjustment for deferred taxes results in slightly higher turnover values compared to the reported ones but maintains the same downward trend, reinforcing the observation of decreasing asset efficiency over the period.

In summary, the company’s asset base expanded significantly throughout the analyzed timeframe, both on a reported and adjusted basis. However, the efficiency in using these assets to generate revenue decreased consistently after 2021. This pattern may warrant further examination into the factors causing declining asset turnover, such as investment in lower-yielding assets or shifts in revenue generation dynamics.

Total Assets

The reported total assets exhibited a consistent upward trend over the five-year period, increasing from approximately $17.2 billion at the end of 2020 to nearly $37.8 billion by the end of 2024. Adjusted total assets followed a similar trajectory, rising from about $16.3 billion to $34.4 billion in the same timeframe. The growth rates suggest sustained asset expansion, with the gap between reported and adjusted figures remaining relatively stable, indicating consistent adjustments across the years.

Stockholders’ Equity

Reported stockholders’ equity increased significantly from roughly $11 billion in 2020 to $29.4 billion in 2024, reflecting strong equity growth. Adjusted stockholders’ equity also showed consistent growth, moving from around $10.3 billion to $26 billion. The steady increase in both reported and adjusted equity values implies robust internal capital generation and/or capital infusion activities. The difference between reported and adjusted equity remained fairly consistent, suggesting systematic adjustments in equity accounting or tax effects.

Financial Leverage

The reported financial leverage ratio demonstrated a declining trend from 1.56 in 2020 to a low of 1.27 by 2023, before slightly rising to 1.29 in 2024. A similar pattern is observed in adjusted financial leverage, which decreased from 1.58 in 2020 to 1.3 in 2023 and experienced a minor increase to 1.32 in 2024. This trend indicates a reduction in relative debt or other liabilities compared to equity over the majority of the period, followed by stabilization or a slight increase in leverage towards the end. The close alignment between reported and adjusted leverage ratios indicates consistent adjustment impact on leverage measures.

Net Income Trends

Reported net income shows a notable increase from 3,513,200 thousand US dollars in 2020 to a peak of 8,075,300 thousand US dollars in 2021, followed by a marked decline in the subsequent years reaching 4,412,600 thousand US dollars in 2024. Adjusted net income mirrors this pattern but with lower values across all periods, peaking at 7,928,200 thousand US dollars in 2021 and declining more sharply to 3,655,300 thousand US dollars by 2024.

Stockholders' Equity Patterns

Reported stockholders’ equity has steadily increased throughout the period, starting at 11,025,300 thousand US dollars in 2020 and growing to 29,353,600 thousand US dollars in 2024. The adjusted stockholders’ equity follows a similar upward trend but consistently registers lower levels than the reported figures, ending at 26,039,500 thousand US dollars in 2024.

Return on Equity (ROE) Analysis

Reported ROE exhibits significant variability, with a high of 43.03% in 2021, before declining to approximately 15% in the last two reported years. Adjusted ROE likewise peaks in 2021 at 44.31% but shows a more pronounced decrease thereafter, falling to 14.04% by 2024. The adjusted ROE is consistently higher than the reported ROE during the initial years but becomes slightly lower in later years, indicating changes in earnings quality and equity adjustments over time.

Overall Insights

The data reveals that while net income experienced a strong surge in 2021, the following years show a contraction, particularly in adjusted earnings, suggesting underlying factors affecting profitability beyond the reported figures. Continued growth in stockholders’ equity indicates a strengthening capital base despite fluctuating earnings. The declining ROE over time implies reduced efficiency in generating profits from equity, with adjusted measures reflecting a more conservative perspective on sustainable profitability. These trends highlight the importance of considering adjusted financial metrics to gain a fuller understanding of financial performance and capital efficiency.

Net Income

Reported net income shows significant fluctuation over the observed period. It increased sharply from 3.51 billion in 2020 to 8.08 billion in 2021, followed by a decrease to 4.34 billion in 2022, and further declines to 3.95 billion in 2023, before a moderate recovery to 4.41 billion in 2024. Adjusted net income exhibits a similar pattern but is consistently lower than reported figures, increasing from 3.59 billion in 2020 to 7.93 billion in 2021, then declining steadily to 3.60 billion in 2022, 3.12 billion in 2023, and rising slightly to 3.66 billion in 2024.

Total Assets

Both reported and adjusted total assets present a continuous upward trend throughout the years. Reported total assets rose from approximately 17.16 billion in 2020 to 37.76 billion in 2024, signaling continued asset growth. Adjusted total assets follow a similar trajectory but remain consistently below reported values, increasing from 16.30 billion in 2020 to 34.45 billion in 2024. The gap between reported and adjusted assets suggests the impact of deferred tax adjustments on asset valuation.

Return on Assets (ROA)

Reported ROA experienced a peak in 2021 at 31.75%, significantly higher than the 20.47% recorded in 2020. Afterward, there was a marked decline to 14.85% in 2022, followed by a gradual decrease to 11.95% in 2023 and a slight dip to 11.69% in 2024. Adjusted ROA shows a comparable pattern with a high of 32.28% in 2021, then falling sharply to 13.07% in 2022, declining further to 10.21% in 2023, and marginally improving to 10.61% in 2024. The narrowing difference between reported and adjusted ROA over time suggests decreased effects of tax-related adjustments on profitability metrics relative to assets.

Overall Observations

The financial data indicates that the company achieved peak profitability ratios and net income in 2021, followed by a period of contraction through 2023, with some recovery in 2024. Asset growth has been steady throughout, indicating continued expansion or capitalization. The adjustments related to deferred income taxes consistently reduce reported net income, total assets, and ROA, but the magnitude of these adjustments appears to lessen over time as the gap between reported and adjusted figures tightens, particularly in profitability measures. This trend may imply optimization or stabilization in tax-related factors affecting financial reporting.