Salesforce Inc. (NYSE:CRM)

Net Operating Profit After Taxes (NOPAT)

Over the period from January 31, 2020, to January 31, 2025, there is a general upward trend in net operating profit after taxes. The value increased from 2,422 million US dollars in 2020 to 7,196 million US dollars in 2025, despite a noticeable dip in 2023. This indicates a recovery and growth phase following a temporary decline.

Cost of Capital

The cost of capital remains relatively stable throughout the years, fluctuating within a narrow range between 16.62% and 17.18%. This consistency implies steady financing costs and risk assessment over time.

Invested Capital

Invested capital shows a significant increase, rising from 47,247 million US dollars in 2020 to 85,881 million US dollars in 2025. The most substantial growth occurs between 2021 and 2022, suggesting considerable investment or asset acquisition during that period. Growth thereafter is more gradual but persistent.

Economic Profit

Economic profit remains negative across all periods, indicating that the company’s returns have not exceeded the cost of capital. The deficit widened from -5,644 million US dollars in 2020 to a peak negative value of -11,485 million US dollars in 2023, but subsequently improved to -7,534 million US dollars by 2025. This pattern reflects initial increasing inefficiency or overcapitalization followed by partial recovery.

The financial data indicates significant fluctuations in net income and net operating profit after taxes (NOPAT) over the analyzed years, highlighting periods of both substantial growth and decline.

Net Income Trends

Net income started at a relatively low level and then surged dramatically by the year ending January 31, 2021, reflecting a strong performance during this period. However, the following year saw a considerable drop, indicating either extraordinary costs or reduced profitability. The subsequent year also showed a low point before a sharp increase resumed, reaching peak levels by January 31, 2025. This pattern suggests volatility in profitability, with distinct cycles of growth and contraction.

Net Operating Profit After Taxes (NOPAT) Trends

NOPAT followed a similar but less volatile pattern compared to net income. It doubled from January 31, 2020, to January 31, 2021, showing operational strength and efficiency. The following years saw a moderate decline and recovery pattern, with a notable dip in 2023 before surpassing previous highs in the latest year. The progression indicates that operations remained generally profitable, with improved ability to generate profits from the core business activities, particularly in the last reported year.

Comparative Observations

While both net income and NOPAT exhibit growth over the overall period, net income shows greater relative fluctuations, likely reflecting impacts from non-operating items, taxes, or extraordinary events. NOPAT’s smoother trajectory underscores consistent operational profitability, even when net income faces pressures. The recovery and growth in the last years suggest effective management and operational improvements contributing to enhanced financial health.

Provision for (benefit from) income taxes

There is considerable volatility in the provision for income taxes over the years. Starting at a positive value of 580 million USD in 2020, it unexpectedly dropped to a negative figure of -1511 million USD in 2021, indicating a benefit or tax credit during that period. In subsequent years, the provision returned to positive territory and showed a steady increase, reaching 1241 million USD by 2025. This pattern suggests fluctuations in taxable income or tax rates, with a recovery and growth trend in the latter years.

Cash operating taxes

Cash paid for operating taxes exhibits a clear and consistent upward trend throughout the period. Beginning at 598 million USD in 2020, the amount increased steadily each year, more than quadrupling to 2531 million USD by 2025. This strong growth indicates rising taxable income, increased tax liabilities, or a change in tax payment timing or policies influencing cash outflows.

Total reported debt & leases

The total reported debt and leases exhibit a significant increase from January 31, 2020, to January 31, 2023. Starting at $6,257 million in 2020, the figure rises moderately to $6,413 million in 2021 before sharply increasing to $14,370 million in 2022 and further to $14,879 million in 2023. Following this peak, there is a declining trend in the subsequent years with amounts decreasing to $13,562 million in 2024 and further to $12,070 million in 2025. This pattern suggests a period of aggressive leverage growth until early 2023, followed by a measured reduction in debt levels.

Stockholders’ equity

Stockholders’ equity demonstrates consistent growth throughout the observed period. Beginning at $33,885 million in 2020, equity increases steadily year over year, reaching $41,493 million in 2021, $58,131 million in 2022, and then maintaining a more gradual increase to $58,359 million in 2023. This positive trend continues moderately, with equity reaching $59,646 million in 2024 and $61,173 million by 2025. The figures reflect a sustained strengthening in the company’s net asset base over the years.

Invested capital

Invested capital follows a trajectory generally aligned with the trends in debt and equity, showing considerable growth from 2020 to 2025. Initially at $47,247 million in 2020, invested capital rises to $53,200 million in 2021 before experiencing a substantial jump to $81,940 million in 2022. The increase continues at a slower pace, reaching $84,299 million in 2023 and remaining relatively stable with slight growth to $84,431 million in 2024 and $85,881 million in 2025. The sharp increase in 2022 may reflect capital expenditures, acquisitions, or other investments undertaken during this period, with subsequent years indicating stabilization in capital deployment.

Economic Profit

The economic profit figures demonstrate a consistent negative trend, indicating losses throughout the analyzed periods. Initially, the loss decreases from -5644 million US dollars in early 2020 to -4751 million in 2021, suggesting a temporary improvement. However, this is followed by a sharp deterioration in 2022, with the loss widening to -9180 million, and further deepening to -11485 million in 2023. Subsequently, there is a partial recovery as losses moderate, reaching -9596 million in 2024 and -7534 million in 2025. Despite this improvement, the company continues to experience substantial economic losses by the end of the period.

Invested Capital

Invested capital reveals a rising trajectory across all years. Beginning at 47247 million US dollars in 2020, it increases steadily to 53200 million in 2021. A significant jump occurs between 2021 and 2022, reaching 81940 million, followed by a slight increase to 84299 million in 2023. The growth stabilizes somewhat in the last two periods, with values of 84431 million in 2024 and 85881 million in 2025. This upward trend suggests continual expansion or reinvestment.

Economic Spread Ratio

The economic spread ratio remains negative throughout, indicating that the returns do not exceed the cost of capital. Starting at -11.95% in 2020, the ratio improves to -8.93% in 2021 but deteriorates again to -11.2% in 2022 and further to -13.62% in 2023, the lowest point in the period. Following this, a recovery trend is observed with ratios improving to -11.37% in 2024 and -8.77% in 2025. This pattern reflects fluctuations in profitability relative to capital costs, with periods of both decline and recovery but no positive spread achieved.

The financial data reveals several significant trends over the analyzed periods. Adjusted revenues display a consistent upward trajectory, increasing steadily from 19,196 million US dollars to 39,635 million US dollars over the six-year span. This growth indicates robust sales performance and expansion within the business operations.

Conversely, economic profit figures remain negative throughout the entire period, signaling that the company has not achieved positive economic profit in any of the years under review. Despite some fluctuations, the economic profit shows a worsening trend in certain years, notably reaching its lowest point in the period ending January 31, 2023, at -11,485 million US dollars. However, following this trough, there is an improvement trend as economic profit losses diminish, reaching -7,534 million US dollars by the period ending January 31, 2025.

The economic profit margin follows a pattern consistent with the economic profit values. Starting at -29.4% in 2020, the margin improves somewhat in 2021 to -20.48%, then worsens sharply in 2022 and 2023, bottoming out at -34.7%. Subsequently, the margin shows recovery trends through 2024 and 2025, improving to -19.01% by the latest period.

Overall, while the company's revenue growth is strong and continuous, profitability measured through economic profit and its margin remains negative, revealing ongoing challenges in generating economic value above costs. The recent trends in reducing economic losses and improving profit margins may suggest management efforts toward greater efficiency or cost control, but the company has yet to achieve positive economic returns.

Adjusted Revenues

Demonstrated steady and significant growth over six years, nearly doubling from 19,196 to 39,635 million US dollars.

Economic Profit

Remained negative across all periods, with the highest loss recorded in 2023, followed by gradual improvement in subsequent years.

Economic Profit Margin

Fluctuated considerably, peaking negatively in 2023 at -34.7%, before showing signs of recovery down to -19.01% in 2025.