Oracle Corp. (NYSE:ORCL)

The net operating profit after taxes (NOPAT) experienced fluctuations over the periods under review. Initially, there was a notable increase from 10,144 million US dollars in 2020 to 14,348 million in 2021. This was followed by a significant decline to 7,492 million in 2022, indicating a period of decreased profitability. However, NOPAT rebounded in the subsequent years, rising to 10,160 million in 2023, 11,940 million in 2024, and reaching 14,158 million in 2025, suggesting a recovery and improvement in operational earnings.

Invested capital showed a decreasing trend in the early years, falling from 87,978 million US dollars in 2020 to 77,262 million in 2022. This decline was reversed in the later years, with invested capital increasing substantially to 98,251 million in 2023, continuing upward to 101,930 million in 2024, and further to 115,423 million in 2025. This pattern indicates a renewed commitment to capital investment following an initial period of contraction.

The return on invested capital (ROIC) exhibited considerable variability. Starting at 11.53% in 2020, ROIC increased sharply to 17.55% in 2021, reflecting enhanced capital efficiency. This was followed by a steep decline to 9.7% in 2022, aligning with the reduced profitability and lower invested capital in that year. Subsequent years showed gradual improvement with ROIC reaching 10.34% in 2023, 11.71% in 2024, and 12.27% in 2025, indicating a steady recovery in the effective deployment of capital despite the fluctuations.

Overall, the data reveals a period of operational and capital investment instability around 2021 and 2022, followed by a recovery phase through 2025. Profitability and capital efficiency experienced volatility, but later improved steadily, while invested capital grew significantly after a period of reduction, highlighting a renewed focus on long-term investments.

The analysis of the financial ratios over the six-year period reveals several noteworthy trends in profitability, efficiency, and capital returns.

Operating Profit Margin (OPM)

The operating profit margin demonstrates considerable variability. It initially increased from 34.29% in 2020 to a peak of 40.03% in 2021, indicating improved operational efficiency or profitability. However, the margin sharply declined to 24.11% in 2022, followed by a gradual recovery to 31.76% by 2025. Despite this recovery trend, the margin in 2025 remains below the 2021 peak, suggesting some volatility in operating profit generation during the period under review.

Turnover of Capital (TO)

The turnover of capital ratio exhibits relative stability with slight fluctuations. Starting at 0.44 in 2020, the ratio reached a high of 0.54 in 2022, then slightly decreased to 0.5 in 2025. This relatively stable pattern indicates consistent asset utilization efficiency over the years, with minor variations potentially reflecting changes in asset base or sales dynamics.

1 – Effective Cash Tax Rate (CTR)

This measure shows fluctuations around the mid-70s percentage range. The value climbed from 76.58% in 2020 to a high of 86.72% in 2021, then decreased to levels around 74% in subsequent years, ending at 77.4% in 2025. These changes suggest variability in tax obligations or tax planning strategies over time, with a peak in 2021 followed by relative stabilization.

Return on Invested Capital (ROIC)

The return on invested capital reveals a pattern similar to that of the operating profit margin but at lower absolute levels. Starting at 11.53% in 2020, ROIC increased significantly to 17.55% in 2021, then declined sharply to 9.7% in 2022. Following this trough, it showed a steady upward trend, reaching 12.27% by 2025. The recovery indicates improved returns on capital invested after a period of reduced performance, though not returning to the peak of 2021 within the observed timeframe.

Overall, the data indicates a period of strong operational and capital return performance in 2021, followed by a downturn in 2022. Both profitability and invested capital returns have shown gradual recovery since then, despite ongoing fluctuations in the effective tax rate. Capital turnover has remained relatively stable throughout, pointing to consistent asset management practices.

Net Operating Profit Before Taxes (NOPBT)

During the period from 2020 to 2025, the net operating profit before taxes exhibited variability with an initial increase from approximately 13.2 billion to 16.5 billion between 2020 and 2021. This was followed by a sharp decline to around 10.1 billion in 2022. Subsequently, the NOPBT recovered steadily, reaching approximately 18.3 billion by 2025, the highest value in the observed timeframe.

Adjusted Revenues

The adjusted revenues demonstrated consistent growth throughout the entire period, rising from approximately 38.6 billion in 2020 to nearly 57.6 billion in 2025. The increase was particularly pronounced after 2021, with revenues expanding at an accelerated pace, reflecting a robust upward trend in income generation over the years.

Operating Profit Margin (OPM)

The operating profit margin displayed notable fluctuations across the years. It peaked at around 40% in 2021, followed by a significant drop to just over 24% in 2022. Thereafter, the margin showed a gradual recovery reaching roughly 31.8% by 2025. Despite this rebound, the margin in 2025 remained below its highest point recorded in 2021, indicating variability in profitability relative to revenues over the period.

Summary of Trends

Overall, the data reveals that while adjusted revenues increased steadily year over year, the net operating profit before taxes and operating profit margin experienced considerable fluctuations. The dip observed in 2022 for both profit and margin suggests challenges or increased costs impacting profitability during that year. Subsequent recovery in these metrics highlights an improvement in operational efficiency or cost management. By 2025, profitability metrics approached or exceeded earlier levels, supporting a positive outlook on the company's operational performance despite interim volatility.

The financial data over the period from May 31, 2020, to May 31, 2025, shows several notable trends regarding revenues, invested capital, and capital turnover.

Adjusted Revenues

There is a consistent upward trend in adjusted revenues throughout the years analyzed. Revenues increased from US$ 38,624 million in 2020 to US$ 57,586 million in 2025. This represents a significant growth period with annual increments that accelerated especially after 2022, indicating improved sales or service income contributing positively to the company's overall financial strength.

Invested Capital

Invested capital exhibited fluctuations within the period. Initially, there was a decrease from US$ 87,978 million in 2020 to US$ 77,262 million in 2022, suggesting a possible reduction in fixed and working capital investment or asset base optimization. However, from 2022 onward, invested capital increased steadily reaching US$ 115,423 million by 2025. This upward shift could imply renewed investment efforts in growth initiatives or asset accumulation.

Turnover of Capital (TO)

Turnover of capital, which measures the efficiency in utilizing invested capital to generate revenues, shows a mixed pattern. Starting at 0.44 in 2020, it rose to a peak of 0.54 in 2022, suggesting enhanced capital efficiency during that time. However, from 2023 onward, the ratio declined slightly, settling at 0.50 in 2025. Though still higher than the initial value, the recent downward trend could indicate that the pace of revenue growth is not fully keeping up with the increased invested capital.

Overall, the data suggests a company expanding its revenue base steadily while managing changes in invested capital strategically. The capital turnover ratio indicates that while efficiency improved initially, maintaining that efficiency amid growing capital investment remains a challenge to monitor closely in future periods.

The financial data reveals several noticeable trends over the period under review, specifically concerning cash operating taxes, net operating profit before taxes (NOPBT), and the effective cash tax rate (CTR).

Cash Operating Taxes

The cash operating taxes exhibited a fluctuating yet generally upward trajectory. Initially, there was a decline from 3,101 million in 2020 to 2,197 million in 2021. This was followed by a recovery and consistent increase each subsequent year, peaking at approximately 4,134 million by 2025. This suggests an increasing cash tax outflow, potentially reflecting higher taxable earnings or changes in tax strategies.

Net Operating Profit Before Taxes (NOPBT)

NOPBT showed considerable volatility across the years. The profit rose from 13,245 million in 2020 to a peak of 16,545 million in 2021, then significantly dropped to 10,151 million in 2022. Afterward, there was a steady upward trend again, reaching a projected 18,292 million by 2025. This pattern indicates fluctuating operational performance, with potential impacts from market conditions or internal operational changes.

Effective Cash Tax Rate (CTR)

The effective cash tax rate experienced variability during the period. It started relatively high at 23.42% in 2020, decreased sharply to 13.28% in 2021, then increased to a range between about 25% and 26% in the years 2022 to 2024. By 2025, it declined again to 22.6%. The oscillating tax rate may be attributable to shifts in tax regulations, tax planning initiatives, or changes in the composition of taxable income.

In summary, the data depicts a scenario of operational profit volatility accompanied by a general increase in cash tax payments. Although tax rates fluctuated, they remained within a band roughly between 13% and 26%, indicating variable but controlled tax exposure over time. The increasing cash taxes alongside recovering NOPBT from 2022 onwards suggest strengthening profitability and tax obligations.