Autodesk Inc. (NASDAQ:ADSK)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes shows a significant increase from 41 million USD in January 2019 to a peak of 1,197 million USD in January 2020. However, it then declines to 833 million USD in January 2021 before experiencing a mild recovery to 970 million USD in January 2022. The figure further increases to 1,402 million USD in January 2023, indicating strong profitability in that year. Nonetheless, there is a sharp decline to 493 million USD in January 2024, suggesting volatility or challenges impacting profitability in the most recent period.

Cost of Capital

The cost of capital remains relatively stable over the years, fluctuating narrowly between 18.29% and 18.9%. Specifically, it starts at 18.65% in January 2019, dips slightly to 18.29% in January 2020, and remains in a similar range through to January 2024, where it records 18.71%. This indicates a consistent capital cost environment across the evaluated periods with minor variations.

Invested Capital

Invested capital shows a steady upward trend throughout the period analyzed. It grows from 4,412 million USD in January 2019 to 7,372 million USD in January 2023, indicating ongoing investment and capital deployment in the business. A slight decrease to 7,325 million USD in January 2024 is observed, but overall the invested capital more than increased by 65% over five years.

Economic Profit

The economic profit figures exhibit considerable volatility and fluctuation. It begins at a negative value of -782 million USD in January 2019, turns positive to 184 million USD in January 2020, and then declines again into negative territory (-249 million USD in January 2021 and -284 million USD in January 2022). A marginally positive economic profit of 29 million USD occurs in January 2023, suggesting a brief period of value creation exceeding the cost of capital. Nevertheless, a substantial drop to -877 million USD in January 2024 indicates significant value destruction in the most recent period, despite the previously higher operating profits.

Overall Observations

The data reflects a company experiencing fluctuations in profitability and economic value creation across the analyzed years. While net operating profit after taxes reached high levels around 2020 and 2023, the economic profit indicates that these profits were not consistently exceeding the cost of capital, as evidenced by frequent negative economic profit values. The invested capital generally increased, implying ongoing investment strategies. The cost of capital stability suggests external financing conditions remained largely unchanged. The sharp decline in both economic profit and NOPAT in the latest period raises concerns about the company’s recent financial performance and efficiency in generating value from its investments.

Net Income (Loss)

The net income demonstrates significant fluctuations over the observed periods. Starting from a loss of US$81 million in January 2019, the company experienced a substantial turnaround, achieving a positive net income of US$215 million in January 2020. This upward trend accelerated noticeably in January 2021, reaching a peak of US$1,208 million. Subsequently, net income declined to US$497 million in January 2022 but rebounded to US$823 million in January 2023 and further increased to US$906 million by January 2024. The data suggests a period of recovery and growth following an initial loss, followed by some volatility, with the most recent figures indicating a strengthening profit position.

Net Operating Profit After Taxes (NOPAT)

NOPAT shows a rising trend from January 2019 through January 2023, starting at US$41 million and climbing consistently to a peak of US$1,402 million in January 2023. After a low base in 2019, there was a rapid increase to US$1,197 million in 2020, followed by a decrease to US$833 million in January 2021. NOPAT then resumed growth with US$970 million in January 2022 and peaked notably in January 2023. However, in January 2024, NOPAT declined sharply to US$493 million. This pattern indicates periods of strong operational profitability, especially between 2020 and 2023, though the most recent year shows a significant reduction.

The financial data indicates notable fluctuations in both the income tax provision (benefit) and cash operating taxes over the analyzed periods.

Income Tax Provision (Benefit)

The income tax provision demonstrates considerable volatility throughout the periods. Initially, it increased from 38 million USD in 2019 to 80 million USD in 2020, indicating a rising tax expense. However, in 2021, there is a significant benefit recorded, reflected by a negative provision of -662 million USD, which represents a tax benefit rather than an expense. This sharp reversal may suggest extraordinary tax adjustments or recognition of deferred tax assets during that period. Subsequent years show a return to positive provisions, rising from 68 million USD in 2022 to 123 million USD in 2023, and reaching 230 million USD in 2024, indicating increased tax expenses once again. Overall, the income tax provision reflects uneven tax charges with an exceptional benefit in 2021 followed by increasing tax liabilities.

Cash Operating Taxes

Cash operating taxes display a generally upward trend across the years, with some variation in magnitude. Starting at 64 million USD in 2019, cash taxes increased slightly to 82 million USD in 2020. A more substantial rise is seen in 2021 with 130 million USD, despite the negative income tax provision in the same year, suggesting a divergence between cash taxes paid and accounting tax charges. Cash taxes decreased to 100 million USD in 2022 but then surged significantly to 415 million USD in 2023 before declining to 310 million USD in 2024. This pattern indicates increasing cash tax outflows, peaking in 2023, which might reflect higher taxable income or changes in tax payment schedules.

In summary, the data reveal inconsistencies between accounting tax provisions and cash tax payments, particularly highlighted by the negative income tax provision in 2021 juxtaposed with rising cash operating taxes. The overall trend suggests increasing tax-related cash outflows in recent years, and significant fluctuations in tax accounting entries, which could be attributable to changes in tax regulations, one-time adjustments, or differences in timing between tax accruals and payments.

The financial data presents a mixed set of trends over the six-year period ending in January 2024. The following analysis focuses on the reported debt and leases, stockholders’ equity, and invested capital, highlighting significant movements and potential implications.

Total Reported Debt & Leases

The debt and lease obligations experienced fluctuations over the period. Starting at 2,445 million USD in early 2019, the total increased slightly to 2,545 million USD by 2020, followed by a noticeable reduction to 2,105 million USD in 2021. However, debt levels surged again in 2022, reaching 3,060 million USD, which is the highest in the provided timeframe. Subsequently, it declined to 2,666 million USD in 2023 and further to 2,626 million USD in early 2024. The pattern suggests an overall cyclical adjustment in financing strategy, with a peak possibly reflecting increased borrowing or lease arrangements in 2022, and partial deleveraging thereafter.

Stockholders’ Equity (Deficit)

The stockholders’ equity profile shows a significant transformation from a deficit position to a positive equity base. At the start of 2019, equity was negative at -211 million USD, indicating liabilities exceeded assets. This deficit narrowed to -139 million USD in 2020 before turning positive at 966 million USD in 2021. Although there was a slight decrease to 849 million USD in 2022, the trend reversed with equity rising substantially to 1,145 million USD in 2023 and 1,855 million USD in 2024. This improvement demonstrates strengthening financial health, reflecting either retained earnings growth, capital injections, or asset revaluation effectively reducing the deficit and building shareholder value.

Invested Capital

Invested capital steadily increased over the analyzed periods. Commencing at 4,412 million USD in 2019, it rose to 5,535 million USD in 2020, and 5,723 million USD in 2021. Growth accelerated in the following years, reaching 6,835 million USD in 2022, peaking at 7,372 million USD in 2023, and slightly declining to 7,325 million USD in 2024. The general upward movement of invested capital suggests ongoing investments in operations, fixed assets, or other long-term assets, supporting expansion or optimization strategies. The marginal drop in 2024 may reflect asset disposals or adjustments but does not significantly reverse the growth trend.

In summary, the company's financial structure demonstrates evolving leverage with a notable peak in debt in 2022, followed by partial reduction. Simultaneously, a transition from equity deficit to a positive and growing equity base indicates improving solvency and capital adequacy. Continuous increases in invested capital highlight sustained investment activity, supporting business growth and operational capacity enhancement.

Economic Profit

The economic profit figures exhibit significant volatility over the six-year period. Starting at a substantial negative value of -782 million US dollars in early 2019, the metric improved sharply to a positive 184 million in 2020. However, this improvement was not sustained, as the economic profit declined again to negative values in 2021 (-249 million) and 2022 (-284 million). A modest recovery to 29 million US dollars in 2023 was observed, followed by a steep downturn to -877 million US dollars in early 2024. This fluctuation suggests challenges in maintaining consistent economic profitability.

Invested Capital

Invested capital shows a generally increasing trend across the period, with values rising from 4,412 million US dollars in 2019 to a peak of 7,372 million in 2023. A slight decrease is noted in early 2024, with invested capital falling marginally to 7,325 million. This upward trajectory indicates ongoing investments or asset accumulation over time, potentially supporting operational capacity or strategic initiatives.

Economic Spread Ratio

The economic spread ratio, expressed as a percentage, mirrors the variability seen in economic profit. It begins at a deeply negative rate (-17.72%) in 2019, improves to a positive rate of 3.33% in 2020, then retreats to negative values again in 2021 (-4.36%) and 2022 (-4.15%). A slight positive figure (0.4%) is noted in 2023 before a significant decline to -11.98% in the latest period. This ratio's volatility further underscores inconsistent returns relative to the cost of capital or invested assets.

Adjusted Net Revenue

The Adjusted Net Revenue demonstrates an overall upward trend from January 31, 2019, through January 31, 2023. It increased from $2,706 million in 2019 to a peak of $5,795 million in 2023, representing substantial revenue growth over this period. However, in the latest period ending January 31, 2024, there is a noticeable decline to $5,181 million, indicating a potential slowdown or contraction in revenue after several years of growth.

Economic Profit

The Economic Profit displays significant volatility across the years. Beginning with a negative figure of -$782 million in 2019, it shifted to a positive value of $184 million in 2020, signaling improved profitability. Nevertheless, the figures reverted to negative territory in the following years, with fluctuations ranging from -$249 million to -$284 million between 2021 and 2022. A small positive profit of $29 million was observed in 2023, but the most recent figure in 2024 shows a sharp decline to -$877 million, the lowest point in the six-year timeline, which may indicate increasing economic challenges or rising costs impacting overall profit generation.

Economic Profit Margin

The Economic Profit Margin aligns closely with the trend in Economic Profit. It started at a substantial negative margin of -28.88% in 2019, improving to a positive 4.4% in 2020. Thereafter, the margin deteriorated again, holding negative values of approximately -6% in 2021 and 2022. The margin turned marginally positive in 2023 at 0.51%, before moving back down to -16.93% in 2024. This pattern reflects fluctuating profitability relative to revenue, with the margin demonstrating instability and recent significant erosion in economic profitability ratio despite generally increasing revenue levels over the same period.

Overall Insights

While Adjusted Net Revenue has grown substantially over the period observed, particularly up to 2023, the Economic Profit figures and margins indicate inconsistent profitability outcomes and considerable volatility in generating economic value. The sharp decline in economic profit and margin in the latest period contrasts with historically higher revenue, suggesting increasing cost pressures or inefficiencies. This divergence between revenue growth and economic profitability highlights potential concerns regarding cost management, pricing strategies, or investment efficacy that warrant further detailed examination.