Salesforce Inc. (NYSE:CRM)

The analysis of the annual current and deferred income tax expense data reveals notable fluctuations and trends over the six-year period.

Current Income Tax Expense

The current income tax expense exhibited a generally upward trend. Starting at $553 million in 2020, it decreased significantly in 2021 to $279 million, but then consistently increased in the subsequent years, reaching $2,454 million by 2025. This pattern suggests an increasing tax obligation based on current earnings or taxable income over time, with a sharp rise especially in the last two years.

Deferred Income Tax Expense

The deferred income tax expense showed a contrasting trend compared to the current tax. Beginning with a small positive expense of $27 million in 2020, it shifted to a substantial deferred tax benefit of -$1,790 million in 2021. Although the benefit magnitude decreased in 2022 (-$254 million) and 2023 (-$334 million), it again increased in absolute terms with larger negative amounts in 2024 (-$742 million) and 2025 (-$1,213 million). This suggests significant fluctuations in the timing differences of income recognition or tax deductions, with the deferred tax impact generally acting to reduce the total tax expense in most years except 2020.

Provision for Income Taxes

The total provision for income taxes reflects the combined effect of current and deferred taxes. The overall figures started at a positive $580 million in 2020, dropped dramatically to a tax benefit of -$1,511 million in 2021, indicating more tax credits or deferred tax benefits than expense. From 2022 onwards, the provision rose steadily back to positive territory and continued to increase, reaching $1,241 million by 2025. This indicates recovery and growth in tax expenses after the significant benefit year of 2021.

In summary, the current tax expense trend indicates increasing taxable income or effective tax rates, while deferred taxes show volatile timing differences impacting the total tax provision. The overall income tax provision demonstrates significant variability, with a large tax benefit in 2021 followed by continuous increases in tax expense through 2025, reflecting changes in the company's tax position and deferred tax balances over the period.

The analysis of the fiscal data reveals distinct variability in the effective tax rate over the observed periods, contrasting with a constant U.S. federal statutory tax rate. The statutory tax rate remained stable at 21% throughout all periods from January 31, 2020, to January 31, 2025, indicating no change in the statutory framework affecting the company's taxation.

On the other hand, the effective tax rate displayed significant fluctuations during the same timeframe. Beginning at a high level of 82.15% in January 31, 2020, it plunged to a negative 59% in January 31, 2021, suggesting an unusual tax benefit or accounting adjustment during that fiscal year. This negative value marks a notable deviation from typical tax expense behavior, indicating either accounting strategies, changes in deferred tax assets or liabilities, or recognition of tax credits.

Following this irregularity, the effective tax rate normalized somewhat to 5.74% in January 31, 2022. Subsequently, it rose again to 68.48% in January 31, 2023, before decreasing substantially to 16.44% in January 31, 2024, and maintaining a similar level of 16.68% in January 31, 2025. This downward trend after 2023 suggests improved tax efficiency or changes in income composition affecting taxable income and tax expense recognition.

Overall, the effective tax rate exhibits a pattern of high volatility in the earlier years with an eventual stabilization at a lower level in the later periods. These variations might reflect changes in tax planning, operational factors, or regulatory impacts influencing the company's tax expenses. The persistent statutory rate underscores that changes in the effective rate are predominantly driven by internal factors rather than shifts in statutory tax policy.

The financial data reveals several significant trends and fluctuations across multiple categories over the years analyzed. The items reflect varying degrees of growth, decline, and volatility, allowing for insights into the company's evolving financial position and operational focus.

Losses and Deductions Carryforward

This item shows a high degree of volatility, starting at 218 million USD in early 2020, decreasing slightly in 2021, then sharply increasing to 682 million USD in 2022. Subsequently, it declined to 176 million USD by early 2024 before rising again to 209 million USD in 2025. This pattern suggests fluctuations in the company’s net losses or deductible expenses across these periods.

Deferred Stock-Based Compensation Expense

There is a noticeable upward trend from 193 million USD in 2020 to a peak of 312 million USD in 2023, followed by a decline to 237 million USD by 2025. This trend indicates increased stock-based compensation costs over several years, possibly reflecting changes in employee compensation strategies or valuation methods, with a slight easing in the latest period.

Tax Credits

Tax credits increased steadily from 913 million USD in 2020 to a high of 1,469 million USD in 2022, before decreasing substantially to around 760-770 million USD in the last two years. This decline after 2022 may suggest reduced tax incentive utilization or changes in applicable tax regulations.

Accrued Liabilities

Accrued liabilities exhibit an overall increasing trend, rising from 214 million USD in 2020 to 482 million USD in 2025. Notable increments occurred between 2021 and 2023, indicating growing short-term obligations or expenses accrued but not yet paid.

Intangible Assets

Intangible assets present a gradual decline from 2,011 million USD in 2021 to 1,694 million USD in 2025, reflecting potential amortization, impairments, or disposal of intangible items over time.

Lease Liabilities

Lease liabilities increased from 769 million USD in 2020 to 948 million USD in 2021, then fluctuated downward to 740 million USD in 2025. These changes may reflect revised lease agreements, asset disposals, or modified lease payment structures.

Unearned Revenue

This metric exhibits substantial variability, increasing from negligible levels in 2020 to 116 million USD in 2022, followed by a sharp decline to negative 28 million USD in 2025. Negative unearned revenue may indicate recognition of previously deferred revenue or adjustments affecting revenue timing.

Capitalized Research & Development

Absent in early years, capitalized R&D emerges at 914 million USD in 2023 and grows sharply to 2,431 million USD in 2025. This pattern reflects a strategic shift towards capitalization of development costs, indicating focus on innovation and investment in new product development.

Other

This category fluctuates without a clear directional trend, moving between 31 million USD in 2020 and 65 million USD in 2025, with interim peaks and troughs, suggesting minor or miscellaneous items with no major impact on overall financials.

Deferred Tax Assets and Valuation Allowance

Deferred tax assets have nearly tripled from 2,342 million USD in 2020 to 6,599 million USD in 2025, indicating the accumulation of tax benefits. Concurrently, the valuation allowance grew negatively from -290 million USD to -786 million USD, showing increased reserved amounts against deferred tax assets. Net of valuation allowance, deferred tax assets increased significantly from 2,052 million USD to 5,813 million USD, demonstrating improved prospective tax benefit realization prospects.

Capitalized Costs to Obtain Revenue Contracts

This item shows a consistent negative value, deepening from -449 million USD in 2020 to a peak negative of -913 million USD in 2023, then slightly recovering to -850 million USD by 2025. The pattern indicates ongoing capital investment in customer acquisition costs with some moderation in the last two years.

Purchased Intangible Assets

Purchased intangible assets have a pronounced negative pattern, initially at -915 million USD in 2020, dropping steeply to -1,902 million USD in 2022, followed by a recovery to -650 million USD in 2025. This suggests fluctuating procurement or amortization of intangible assets acquired through acquisition or other means.

Depreciation and Amortization

Depreciation and amortization expenses increased consistently from -76 million USD in 2020 to a peak of -304 million USD in 2023 before declining to -164 million USD in 2025. The trend reflects expanding amortizable assets, with a reduction likely tied to asset retirements or slower acquisition pace.

Basis Difference on Strategic and Other Investments

The basis difference shows a decreasing negative trend from -69 million USD in 2020 to -106 million USD in 2025, with a trough of -400 million USD in 2021. This indicates variable adjustments in the carrying values of investments, stabilizing in recent periods.

Lease Right-of-Use Assets

These assets decreased in absolute negative terms from -695 million USD in 2020 to -554 million USD in 2025, consistent with the pattern in lease liabilities, indicating lease asset amortization or asset disposals.

Deferred Tax Liabilities

Deferred tax liabilities increased negatively from -2,204 million USD in 2020 to -3,969 million USD in 2022, then declined to -2,324 million USD by 2025. This variation points to changes in temporary differences affecting taxable amounts, possibly related to asset revaluations or timing differences in recognition.

Net Deferred Tax Assets (Liabilities)

Net deferred tax assets shifted markedly from negative -152 million USD in 2020 to strong positive balances, reaching 3,489 million USD in 2025. This substantial improvement suggests a strengthening tax position and a favorable outlook on tax recoverability.

In summary, the financial data indicates growth in deferred tax assets and capitalized R&D investments, signaling increasing intangible investment and tax planning. Contrastingly, volatility in losses carryforward, unearned revenue, and intangible assets illustrates areas of operational complexity or changing business conditions. Lease-related metrics suggest active management of lease portfolios. Depreciation and amortization trends corroborate the investment in assets combined with their systematic expense recognition. Overall, the data reflects dynamic financial management with areas of both expansion and adjustment over the five-year span.

The financial data reveals several distinct trends in assets, liabilities, equity, and net income over the six-year period ending January 31, 2025. Both reported and adjusted figures demonstrate growth in most categories, though some fluctuations are notable.

Total Assets

Reported total assets increased steadily from US$55,126 million in 2020 to US$102,928 million in 2025, nearly doubling over the period. The adjusted total assets follow a similar upward trajectory, though slightly lower than reported values from 2021 onward, indicating some downward adjustments applied to reported figures. Overall, total assets showed consistent growth with minor divergence between reported and adjusted data.

Total Liabilities

Both reported and adjusted total liabilities increased from approximately US$21,241 million in 2020 to around US$41,755 million in 2025. The adjustment had minimal impact on liabilities data, with reported and adjusted liabilities nearly identical in all periods. The increase in liabilities aligns with asset expansion, maintaining a level of financial leverage.

Stockholders’ Equity

Reported stockholders' equity grew from US$33,885 million in 2020 to US$61,173 million in 2025, showing a notable increase and supporting the growth in total assets beyond the rise in liabilities. Adjusted equity values, while generally mirroring the trend, are consistently lower than reported figures, indicating adjustments that reduce equity over time. Despite the adjustments, equity exhibits a steady upward trend, although the rate of increase moderates slightly post-2022.

Net Income

Reported net income shows high volatility. After beginning at US$126 million in 2020, it surged to US$4,072 million in 2021, then declined sharply to US$1,444 million in 2022, and further dropped to US$208 million in 2023. Subsequently, net income rebounded significantly to US$4,136 million in 2024 and reached US$6,197 million in 2025. Adjusted net income follows a similar but more subdued pattern with lower values, reflecting the impact of tax-related adjustments. Notably, adjusted net income turned negative in 2023 (-US$126 million), contrasting with the positive reported figure, before recovering in subsequent years. This suggests considerable influence of deferred tax adjustments on reported profitability during that period.

Net Profit Margin

The reported net profit margin exhibited notable volatility over the periods, initially increasing sharply from 0.74% in 2020 to 19.16% in 2021, followed by a steep decline to 5.45% in 2022 and further reduction to 0.66% in 2023. Subsequently, it recovered to 11.87% in 2024 and continued to improve to 16.35% in 2025. The adjusted net profit margin followed a similar pattern but generally remained lower than the reported figures, showing a peak in 2021 at 10.74%, declining to negative territory (-0.4%) in 2023, before rising again to 9.74% in 2024 and 13.15% in 2025. This indicates fluctuations in profitability influenced by adjustments related to deferred income tax or other factors.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios remained relatively stable throughout the years with a slight upward trend. The reported ratio fluctuated modestly between 0.28 and 0.37, showing a gradual increase from 0.31 in 2020 to 0.37 in 2025. The adjusted turnover generally tracked close to the reported ratio but showed a slightly higher level, moving from 0.31 in 2020 to 0.38 in 2025. This suggests a modest improvement in asset utilization efficiency over time.

Financial Leverage

Financial leverage ratios, both reported and adjusted, demonstrated a steady increase across the periods. Reported financial leverage rose from 1.63 in 2020 to 1.68 in 2025, while the adjusted leverage increased from 1.62 to 1.72 during the same timeframe. These incremental rises indicate a cautious increase in the use of debt or other liabilities relative to equity.

Return on Equity (ROE)

The reported ROE experienced significant fluctuations, peaking at 9.81% in 2021 but falling sharply to 0.36% in 2023 before rebounding to 10.13% by 2025. Adjusted ROE showed a generally lower and more volatile trend, with a peak of 5.72% in 2021, dropping to negative values (-0.22%) in 2023, before recovering to 8.64% in 2025. These patterns reflect the impact of adjustments on the company's profitability from an equity perspective and indicate a period of decreased profitability around 2023.

Return on Assets (ROA)

Both reported and adjusted ROA mirrored the trends seen in ROE but at lower absolute levels. The reported ROA increased from 0.23% in 2020 to 6.02% in 2025, with a marked dip to 0.21% in 2023. Adjusted ROA followed a similar pattern, moving from 0.28% to 5.01% over the six years, including a negative value of -0.13% in 2023. These fluctuations indicate variability in asset profitability, highlighting 2023 as a challenging year for operational returns.

Analysis of the financial data reveals notable fluctuations and trends in both reported and adjusted net income figures over the observed periods.

Reported Net Income

The reported net income exhibits significant volatility. Beginning with a modest value of 126 million USD in early 2020, it surged sharply to 4,072 million USD by January 2021. A decline followed in 2022, dropping to 1,444 million USD, and further waning to 208 million USD in 2023. However, recovery is evident in the latest two years, with net income rising to 4,136 million USD in 2024 and reaching 6,197 million USD in 2025, indicating a strong rebound after the 2023 trough.

Adjusted Net Income

The adjusted net income trend mirrors the reported figures in terms of volatility but with some divergence in magnitude and direction. Starting at 153 million USD in 2020, it increased notably to 2,282 million USD in 2021, then decreased to 1,190 million USD in 2022. Unlike the reported figures, it turned negative in 2023 at -126 million USD, suggesting exceptional or non-recurring adjustments impacting profitability in that year. The adjusted net income rebounds strongly thereafter, rising to 3,394 million USD in 2024 and further to 4,984 million USD in 2025.

Reported Net Profit Margin

The reported net profit margin reflects the trends observed in net income values. It showed a low margin of 0.74% in 2020, peaked at 19.16% in 2021, and then decreased substantially to 5.45% in 2022 and further down to 0.66% in 2023. Following the drop, it registered a recovery to 11.87% in 2024 and further increased to 16.35% in 2025. This pattern underscores the volatility in profitability relative to revenue over the years.

Adjusted Net Profit Margin

The adjusted net profit margin also indicates substantial variability. Starting at 0.89% in 2020, it rose to a peak of 10.74% in 2021, then declined to 4.49% in 2022 before turning negative at -0.4% in 2023. This negative margin aligns with the adjusted net income loss, suggesting that underlying operational or exceptional factors adversely affected profitability that year. The margin recovers subsequently to 9.74% in 2024 and 13.15% in 2025, indicating improvement in operational profitability excluding deferred tax effects or other adjustments.

Overall, the data demonstrates a pattern of sharp increases in profitability during 2021, followed by declines in both net income and margins through 2022 and especially 2023. The year 2023 stands out as a challenging period, notably for adjusted results where a loss was recorded. The subsequent two years, 2024 and 2025, show strong recoveries in both reported and adjusted metrics, signaling an improvement in financial performance after a period of adversity.

The analysis of the annual reported and deferred income tax adjusted financial data reveals several notable trends over the examined periods.

Total Assets

The reported total assets exhibit a consistent upward trajectory from 55,126 million US dollars in early 2020 to 102,928 million US dollars projected for early 2025. This represents an overall increase of approximately 87%. Similarly, the adjusted total assets follow a comparable growth pattern, rising from 55,126 million USD in 2020 to 99,439 million USD in 2025. Although the adjusted values are slightly lower than the reported figures in subsequent years, the difference remains relatively small and stable over time.

Total Asset Turnover Ratios

The reported total asset turnover ratio starts at 0.31 in 2020 and shows minor fluctuations across the years, dropping to 0.28 in 2022 before recovering to reach 0.37 by 2025. This indicates a modest improvement in the efficiency of asset utilization, particularly noticeable in the latter years. The adjusted total asset turnover ratio follows a similar trend, starting at 0.31 in 2020, peaking slightly higher at 0.33 in 2021, dipping to 0.28 in 2022, and increasing steadily thereafter to 0.38 in 2025. The adjusted ratio consistently remains slightly above the reported ratio beyond 2020, suggesting marginally better asset productivity when deferred income tax adjustments are considered.

Comparative Insights

The parallel growth patterns of both reported and adjusted total assets imply that deferred income tax adjustments do not significantly distort the overall asset base figures. The increasing total asset turnover ratios demonstrate improved efficiency in asset utilization over time, with a notable recovery after the 2022 dip. The gradual increase in both reported and adjusted turnover ratios toward 2025 indicates potential enhancements in managing asset-driven revenues. This improvement could suggest better operational performance or more effective asset deployment strategies.

The financial data indicates a consistent growth trend in both total assets and stockholders’ equity over the observed periods. Total assets, reported on a non-adjusted basis, increased steadily from 55,126 million US dollars in early 2020 to 102,928 million US dollars by early 2025. The adjusted total assets follow a similar pattern, albeit with slightly lower values, reflecting accounting adjustments related to deferred income taxes or other items. This adjusted figure rose from 55,126 million US dollars in 2020 to 99,439 million US dollars in 2025.

Stockholders’ equity demonstrates a parallel upward trajectory. The reported equity expanded significantly, from 33,885 million US dollars in 2020 to 61,173 million US dollars by 2025. The adjusted equity also increased, from 34,037 million US dollars to 57,684 million US dollars over the same period, reflecting adjustments likely associated with deferred income tax accounting.

Examining financial leverage, which measures the ratio of total assets to stockholders’ equity, reveals slight fluctuations but an overall modest rising trend. The reported financial leverage ratio declined marginally from 1.63 in 2020 to 1.60 in 2021, then increased gradually reaching 1.68 by 2025. The adjusted financial leverage ratio shows a comparable pattern, starting at 1.62 in 2020, remaining stable in 2021, and then climbing steadily to 1.72 by 2025.

Comparing reported and adjusted measures shows that the adjustments slightly reduce both total assets and stockholders’ equity figures across all periods. These adjustments consequently result in somewhat higher financial leverage ratios, suggesting that deferred income tax effects or similar adjustments reduce equity proportionally more than assets. This indicates a marginally higher reliance on liabilities relative to equity after adjustments.

Overall, the data reflects significant growth in the company's asset base and equity capital over the five-year horizon, with financial leverage increasing moderately. The presence of adjustments emphasizes the importance of considering deferred tax-related impacts to obtain a more accurate representation of the company’s financial position and capital structure.

Net Income Trends

The reported net income exhibits significant fluctuations over the periods. It starts very low at 126 million US dollars in early 2020, surges dramatically to 4,072 million in 2021, and then decreases to 1,444 million in 2022. There is a further decline to 208 million in 2023, followed by a substantial rise again to 4,136 million in 2024 and finally reaching 6,197 million in 2025. The adjusted net income follows a similar pattern but with lower magnitude and shows a negative value of -126 million in 2023, indicating a loss under adjusted parameters. The adjustment reduces the peaks and elevates the troughs except for the negative adjusted net income in 2023, revealing potential transient impacts or one-time adjustments affecting reported figures.

Stockholders’ Equity Analysis

The reported stockholders’ equity shows a general upward trend from 33,885 million in 2020 to 61,173 million in 2025, with particularly strong growth between 2020 and 2022. From 2022 onwards, the increase becomes more moderate but steady. Adjusted stockholders’ equity follows a closely aligned trend but consistently reports slightly lower values than the reported figures. This suggests that adjustments, possibly related to tax treatments or accounting estimates, slightly reduce equity figures but maintain the upward trajectory.

Return on Equity (ROE) Patterns

Reported ROE fluctuates significantly across the periods, starting very low at 0.37% in 2020, peaking sharply at 9.81% in 2021, and then dropping to 2.48% in 2022. A notable decline occurs in 2023 to 0.36%, followed by recovery to 6.93% in 2024 and a new high of 10.13% in 2025. Adjusted ROE follows a similar but less volatile pattern and includes a negative ROE of -0.22% in 2023, which aligns with the adjusted net income loss for the same period. The adjusted ROE values are consistently lower than their reported counterparts, reflecting the impact of adjustments on profitability metrics and highlighting a year with negative adjusted returns.

Overall Insights

The data reveals volatile profitability over the analyzed periods, with peaks and troughs in net income and ROE. The year 2023 stands out as a period of significant difficulty under adjusted measures, showing losses and negative returns, which contrasts with the reported figures that remain positive but low. Stockholders’ equity growth is steady and less volatile, suggesting stable capital accumulation despite income fluctuations. Adjustments generally moderate profitability and equity figures, implying that certain items excluded from the reported data materially affect financial outcomes. The recovery and growth post-2023 indicate a return to stronger financial performance.

The financial data reveal notable fluctuations and trends in reported and adjusted net income, total assets, and return on assets (ROA) over the observed periods.

Net Income

Reported net income exhibited significant volatility, with an initial sharp increase from 126 million US dollars in 2020 to 4072 million in 2021, followed by a decrease to 1444 million in 2022. It further declined to 208 million in 2023 before rising again to 4136 million in 2024 and peaking at 6197 million in 2025. Adjusted net income showed similar volatility but with lower absolute values in most periods. It increased from 153 million in 2020 to 2282 million in 2021, then decreased to 1190 million in 2022. Notably, it turned negative at -126 million in 2023, then recovered to 3394 million and 4984 million in 2024 and 2025 respectively.

Total Assets

Reported total assets grew steadily from 55,126 million US dollars in 2020 to 102,928 million in 2025, demonstrating sustained asset base expansion. Adjusted total assets followed a similar gradual increase from 55,126 million to 99,439 million over the same period, though consistently slightly lower than reported totals, suggesting adjustments reducing asset values marginally.

Return on Assets (ROA)

Reported ROA mirrored the trends in net income, rising from a very low 0.23% in 2020 to a peak of 6.14% in 2021, followed by a decline to 1.52% in 2022 and a sharp drop to 0.21% in 2023. It then rebounded significantly to 4.14% in 2024 and further to 6.02% in 2025. Adjusted ROA, reflecting adjustments related to income tax and other factors, remained consistently below reported ROA, starting at 0.28% in 2020, rising to 3.53% in 2021, dipping to 1.27% in 2022, and turning negative (-0.13%) in 2023 before recovering to 3.48% and 5.01% in 2024 and 2025 respectively.

Overall, the data indicate periods of strong earnings performance and asset growth, interrupted by marked declines especially evident in 2023 when adjusted figures showed negative profitability impacts. The recovery in the latest years suggests an improving income quality and operational efficiency. The consistent gap between reported and adjusted figures highlights ongoing impacts from deferred and annual income tax adjustments, affecting income and profitability metrics.