Regeneron Pharmaceuticals Inc. (NASDAQ:REGN)

Net Operating Profit After Taxes (NOPAT)

The NOPAT showed a significant increase from 3,702,177 thousand USD in 2020 to a peak of 7,819,887 thousand USD in 2021, more than doubling within one year. However, this profit declined sharply in the subsequent years, falling to 3,547,649 thousand USD in 2022 and further down to 2,823,336 thousand USD in 2023. A partial recovery is observed in 2024, with NOPAT reaching 3,374,924 thousand USD, which still remains below the 2020 and 2021 levels.

Invested Capital

Invested capital exhibited a steady upward trend throughout the period. Starting at 8,423,300 thousand USD in 2020, it increased consistently each year, reaching 10,786,500 in 2021, 12,287,700 in 2022, and 11,998,500 in 2023, finally rising to 12,653,600 thousand USD in 2024. The growth in invested capital suggests ongoing investments or asset accumulation despite fluctuations in profitability.

Return on Invested Capital (ROIC)

The ROIC followed a similar trajectory to NOPAT but with more pronounced changes. In 2020, the ROIC was very strong at 43.95%, peaking exceptionally at 72.5% in 2021, coinciding with the peak in NOPAT. Subsequently, ROIC dropped considerably to 28.87% in 2022 and continued declining to 23.53% in 2023. In 2024, a modest improvement to 26.67% was recorded. This volatility indicates that the efficiency of capital utilization saw a significant decrease after 2021, aligning with the decline in operating profit despite the continued increase in invested capital.

Summary

The company experienced robust profitability and capital efficiency in 2021, highlighted by both NOPAT and ROIC peaking substantially. However, the following years were characterized by a notable decline in profitability and return rates, despite steadily increasing invested capital. This suggests either reduced operational effectiveness or challenging market or internal conditions impacting profitability. The slight rebound in 2024 could indicate initial signs of recovery or improved capital usage, albeit still below peak performance levels. Continuous monitoring and potential strategic adjustments may be necessary to restore previous profitability and investment returns.

Operating Profit Margin (OPM)

The operating profit margin exhibited notable fluctuations during the observed period. Starting at 45.28% in 2020, it reached a peak of 57.8% in 2021, indicating a significant improvement in operational efficiency or profitability that year. However, a marked decline followed, with the margin decreasing to 39.28% in 2022 and further down to 29.03% in 2023. A slight recovery was noted in 2024, with the margin rising marginally to 30.25%, though it remained substantially lower than the peak in 2021.

Turnover of Capital (TO)

Turnover of capital showed a relatively stable pattern with some variation. It started at 1.03 in 2020 and improved to 1.48 in 2021, reflecting more efficient use of capital to generate revenue. The ratio then declined sharply to 0.99 in 2022 before gradually increasing over the next two years to 1.10 in 2023 and 1.14 in 2024. These values indicate a recovery in capital utilization efficiency after the dip in 2022, but still below the 2021 level.

1 – Effective Cash Tax Rate (CTR)

The effective cash tax rate demonstrated a consistent downward trend from 2020 through 2023, starting at an unusually high 94.57% and decreasing to a low of 73.93% by 2023. In 2024, it increased slightly to 77.33%. Overall, this trend suggests some improvement in tax management or changes in tax obligations, with a notable reduction in the effective cash tax burden over the years, albeit with a minor uptick in the last year.

Return on Invested Capital (ROIC)

Return on invested capital experienced significant variability throughout the period. The ROIC was relatively high in 2020 at 43.95%, surged dramatically to 72.5% in 2021, suggesting exceptional operational performance or capital efficiency. However, the rate declined sharply thereafter, falling to 28.87% in 2022 and continuing downward to 23.53% in 2023. A moderate improvement was observed in 2024 when ROIC increased to 26.67%, though it remained considerably below the peak of 2021. This pattern signals volatility in the company’s ability to generate returns from invested capital, with a peak followed by a sustained decline and a slight recovery at the end of the period.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT shows significant fluctuations over the five-year period. There was a substantial increase from approximately 3.9 billion USD in 2020 to over 9.2 billion USD in 2021. However, this was followed by a pronounced decline in 2022 to around 4.8 billion USD, with further decreases in 2023 to about 3.8 billion USD. A slight recovery is observed in 2024, reaching approximately 4.4 billion USD, though it remains below the peak of 2021.

Adjusted Revenues

Adjusted revenues exhibited strong growth in 2021, nearly doubling from roughly 8.6 billion USD in 2020 to nearly 16 billion USD. A decline occurred in 2022, dropping to approximately 12.2 billion USD, followed by steady increases in both 2023 and 2024, reaching about 13.2 billion USD and 14.4 billion USD, respectively. Despite the dip in 2022, the trend from 2020 to 2024 is overall positive, with revenues in 2024 substantially higher than the starting point.

Operating Profit Margin (OPM)

The operating profit margin experienced notable variation alongside other performance indicators. It peaked in 2021 at 57.8%, reflecting the highest profitability relative to revenues in the analyzed timeframe. Thereafter, a sharp decline occurred, with margins dropping below 40% in 2022 and further falling to approximately 29% in 2023. A modest improvement to about 30.3% is observed in 2024, though margins remain significantly lower compared to the peak in 2021.

Summary of Trends

The data reveals a volatile financial performance with a peak in 2021 marked by both the highest adjusted revenues and operating profit margin, leading to a record NOPBT. Subsequent years showed contraction in profit levels and margins despite partial revenue recovery, indicating possible increases in costs or changes in operational efficiency. The modest recovery in NOPBT and OPM in 2024 suggests some stabilization. Overall, the trends highlight a period of rapid growth followed by correction and gradual adjustment toward profitability and revenue balance.

Revenues

Adjusted revenues demonstrate a significant increase from 8,645,200 thousand USD in 2020 to 15,951,500 thousand USD in 2021, indicating a substantial growth in this period. However, there is a noticeable decline in 2022 to 12,205,300 thousand USD. After 2022, revenues show a recovery trend, gradually increasing to 13,155,100 thousand USD in 2023 and further to 14,429,800 thousand USD in 2024, though they do not reach the peak level observed in 2021.

Invested Capital

Invested capital steadily increases over the period from 8,423,300 thousand USD in 2020 to 12,653,600 thousand USD in 2024. The trend is consistently upwards, with the largest increment occurring between 2021 and 2022. There is a slight dip in 2023 compared to 2022, followed by a recovery in 2024. Overall, there is a clear expansion in the amount of capital invested over the five-year span.

Turnover of Capital (TO)

The turnover of capital ratio shows variability throughout the period. Starting at 1.03 in 2020, it rises sharply to 1.48 in 2021, indicating improved efficiency in generating revenues from invested capital. Subsequently, it declines to 0.99 in 2022, reflecting a reduction in capital efficiency. The ratio then improves gradually from 1.10 in 2023 to 1.14 in 2024, suggesting a moderate recovery in the ability to generate revenues relative to invested capital.

Summary Insights

The financial data reflects a peak year in 2021 with the highest revenues and capital turnover ratio, followed by a challenging year in 2022 marked by decreased revenues and reduced capital efficiency. The invested capital mostly grows throughout the period, signifying ongoing investment in the company’s operations. The recovery in 2023 and 2024, both in revenues and capital turnover, suggests strategic adjustments or market improvements contributing to enhanced performance after the 2022 setback. Nonetheless, the turnover of capital in the latter years remains below the 2021 peak, indicating potential for further efficiency improvements.

The financial data reveals notable changes in the company's operating taxes, profitability before taxes, and cash tax rate over the five-year period.

Cash Operating Taxes

Cash operating taxes increased substantially from 212,370 thousand US dollars in 2020 to a peak of 1,400,760 thousand in 2021, representing a significant rise. This was followed by a gradual decline over the next three years, reaching 989,515 thousand US dollars by 2024, slightly below the 2023 figure.

Net Operating Profit Before Taxes (NOPBT)

Net operating profit before taxes showed a strong increase from 3,914,546 thousand US dollars in 2020 to a peak of 9,220,646 thousand in 2021, indicating a robust growth phase. However, there was a sharp decline in 2022 to 4,794,046 thousand, and this downward trend continued with some fluctuations, reducing to 3,819,018 thousand in 2023 before rising moderately to 4,364,439 thousand in 2024.

Effective Cash Tax Rate (CTR)

The effective cash tax rate started at a low level of 5.43% in 2020 and increased significantly to 15.19% in 2021, followed by more than a one-and-a-half-fold increase to 26% in 2022. It remained relatively stable at around 26% in 2023 before declining to 22.67% in 2024, indicating a slight improvement in tax efficiency or changes in tax strategy in the latter year.

Overall, the data indicates a period of strong profitability growth in 2021 accompanied by higher cash taxes and an increasing effective tax rate. Subsequently, the profitability contracted substantially, which corresponded with reductions in cash operating taxes. The tax rate remained elevated after 2021 but showed a modest decrease by 2024, suggesting some stabilization in tax expenses relative to profits.