Regeneron Pharmaceuticals Inc. (NASDAQ:REGN)

Net Operating Profit After Taxes (NOPAT)

The NOPAT experienced a substantial increase from 3,702,177 thousand USD in 2020 to a peak of 7,819,887 thousand USD in 2021. However, this was followed by a marked decline to 3,547,649 thousand USD in 2022, continuing downward to 2,823,336 thousand USD in 2023 before a moderate recovery to 3,374,924 thousand USD in 2024. This suggests volatility in operating profitability after taxes over the period.

Cost of Capital

The cost of capital showed a slight upward trend from 5.64% in 2020 to a high of 5.77% in 2023, before marginally decreasing to 5.74% in 2024. The increase indicates a rising cost to finance the company's capital, which might impact investment decisions and valuation.

Invested Capital

Invested capital steadily increased each year from 8,423,300 thousand USD in 2020 to 12,653,600 thousand USD in 2024. This consistent growth suggests ongoing investments or asset acquisitions, reflecting expansion or capital intensiveness in the company's operations over time.

Economic Profit

Economic profit followed a pattern similar to NOPAT. It increased significantly from 3,227,159 thousand USD in 2020 to 7,206,578 thousand USD in 2021, then declined sharply to 2,840,440 thousand USD in 2022 and further to 2,131,226 thousand USD in 2023 before increasing again to 2,648,067 thousand USD in 2024. This demonstrates the company’s ability to generate returns above its cost of capital fluctuated notably, with peak performance in 2021, followed by a decline and slight recovery.

Net Income Trend

The net income exhibited significant volatility over the five-year period. It increased markedly from approximately $3.51 billion in 2020 to a peak of $8.08 billion in 2021. However, in the subsequent years, net income declined sharply to about $4.34 billion in 2022 and further declined to $3.95 billion in 2023. There was a moderate recovery observed in 2024, with net income increasing to roughly $4.41 billion.

Net Operating Profit After Taxes (NOPAT) Trend

The NOPAT also showed a similar pattern of fluctuation. Starting at approximately $3.70 billion in 2020, it rose significantly to around $7.82 billion in 2021. After this peak, NOPAT experienced a marked decrease to about $3.55 billion in 2022, continuing its downward trend to approximately $2.82 billion in 2023. A slight improvement is noted in 2024, where NOPAT increased to nearly $3.37 billion.

Comparative Analysis Between Net Income and NOPAT

Both net income and NOPAT followed parallel trajectories, with substantial growth in 2021 followed by pronounced declines in 2022 and 2023, and moderate recovery in 2024. Notably, the decline in NOPAT after 2021 was somewhat steeper than the decline in net income, particularly between 2022 and 2023. Despite the fluctuations, net income consistently remained slightly lower than NOPAT throughout the period, indicating possible differences in non-operating income, expenses, or tax effects.

General Insights

The data reveals a peak in profitability metrics in 2021, suggestive of exceptional performance or favorable conditions during that year. The subsequent deterioration through 2022 and 2023 may imply operational challenges, increased expenses, or adverse market conditions impacting operational efficiency and profitability. The modest rebound in 2024 suggests some recovery, though neither net income nor NOPAT returned to the peak levels observed in 2021.

The financial data reveals notable fluctuations in tax-related expenses over the five-year period under review. Income tax expense and cash operating taxes show varying trends that indicate changes in the company’s profitability, tax strategies, or regulatory environment impacts.

Income Tax Expense

This item increased substantially from 297,200 thousand US dollars in 2020 to a peak of 1,250,500 thousand US dollars in 2021, representing a more than fourfold increase. The subsequent years show a marked decrease to 520,400 thousand US dollars in 2022 and further declines to 245,700 thousand US dollars in 2023. In 2024, there was a modest recovery to 367,300 thousand US dollars. These changes suggest significant variations in taxable income or effective tax rates year over year.

Cash Operating Taxes

Cash operating taxes exhibit a different pattern. Starting at 212,370 thousand US dollars in 2020, these taxes surge to 1,400,760 thousand US dollars in 2021, exceeding the income tax expense increase, which may indicate timing differences or adjustments in tax payments versus accruals. Unlike income tax expense, cash operating taxes peaked in 2022 at 1,246,398 thousand US dollars, only slightly decreasing thereafter to 995,682 thousand US dollars in 2023 and stabilizing around 989,515 thousand US dollars in 2024. This suggests that cash payments for taxes remained relatively high and steady after the initial spike in 2021.

Overall, the data points to a significant tax-related financial impact in 2021 followed by a normalization trend in subsequent years, though cash operating taxes remained at elevated levels compared to 2020. The divergence between income tax expense and cash operating taxes in later years could reflect changes in deferred tax assets or liabilities, timing differences, or tax planning strategies.

Total Reported Debt & Leases

The total reported debt and leases remained relatively stable from 2020 to 2023, fluctuating slightly around the 2.76 to 2.79 billion US dollars range. In 2024, there was a noticeable increase to approximately 2.94 billion, indicating a rise in the company's leverage or financing obligations during that year.

Stockholders’ Equity

Stockholders’ equity showed a strong and consistent upward trend across the entire period. Starting at about 11.03 billion in 2020, it increased significantly each year, reaching nearly 29.35 billion by the end of 2024. This growth suggests robust retained earnings and possibly additional equity financing, reflecting an overall strengthening in the company’s net worth and financial position.

Invested Capital

Invested capital experienced growth from 8.42 billion in 2020 to a peak of approximately 12.29 billion in 2022. However, a decline followed in 2023, dropping to about 12.00 billion, before rising again to roughly 12.65 billion in 2024. This pattern indicates a moderate fluctuation in the capital deployed within the business, which could be related to changes in assets or operational investments during the period.

Economic Profit

Economic profit demonstrated significant volatility over the analyzed period. It reached its highest point in 2021 at approximately 7.21 billion US dollars, more than doubling the 3.23 billion recorded in 2020. However, it sharply declined in 2022 to about 2.84 billion and dropped further in 2023 to roughly 2.13 billion. A moderate recovery is seen in 2024, with economic profit increasing to nearly 2.65 billion US dollars.

Invested Capital

Invested capital generally increased throughout the period, indicating ongoing investment or expansion. Starting at approximately 8.42 billion US dollars in 2020, it grew steadily each year, reaching around 12.65 billion US dollars by 2024. The growth shows a slight slowdown after 2022 but remains positive overall.

Economic Spread Ratio

The economic spread ratio exhibited notable fluctuations. It surged from 38.31% in 2020 to a peak of 66.81% in 2021, reflecting very high profitability relative to invested capital during this period. Subsequently, it declined substantially to 23.12% in 2022 and continued to decrease to 17.76% in 2023. A slight rebound occurred in 2024, bringing the ratio to 20.93%, though still well below the peaks observed earlier.

Summary of Trends

Overall, the data suggests that while the company’s invested capital has steadily increased over the years, economic profit and profitability as measured by the economic spread ratio have been more volatile. The peak profitability in 2021 was followed by a pronounced decline through 2023, with some recovery evident in 2024. This indicates that, despite growing capital investments, economic efficiency and returns faced challenges after 2021, potentially due to operational or market factors impacting profit generation relative to capital employed.

Economic Profit

The economic profit exhibited notable fluctuations over the five-year period. It increased significantly from approximately 3.23 billion US dollars in 2020 to a peak of around 7.21 billion US dollars in 2021. However, subsequent years saw a decline with economic profit dropping to approximately 2.84 billion in 2022 and further to 2.13 billion in 2023. The figure showed a moderate recovery in 2024, rising to about 2.65 billion US dollars. This pattern suggests volatility in profitability, with a strong performance in 2021 followed by a period of contraction and partial rebound.

Adjusted Revenues

Adjusted revenues demonstrated a generally upward trajectory with some variability. Revenues almost doubled from approximately 8.65 billion US dollars in 2020 to 15.95 billion in 2021. Although there was a decline to about 12.21 billion in 2022, revenues rebounded steadily in the next two years, reaching roughly 13.15 billion in 2023 and 14.43 billion in 2024. Overall, the adjusted revenues indicate growth with a temporary downturn in 2022 before resuming an upward trend.

Economic Profit Margin

The economic profit margin displayed a similar trend to economic profit, reflecting the company’s profitability relative to its revenue. It peaked at 45.18% in 2021, up from 37.33% in 2020, indicating high efficiency that year. The margin then declined sharply to 23.27% in 2022 and further to 16.20% in 2023, signaling reduced profitability efficiency. A slight recovery to 18.35% was observed in 2024, although the margin remained substantially below the 2020–2021 peak levels. This suggests challenges in sustaining profit margins following the strong performance in 2021.