Autodesk Inc. (NASDAQ:ADSK)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes exhibited significant fluctuations over the period. It increased sharply from 41 million USD in 2019 to a peak of 1,197 million USD in 2020, followed by a decrease to 833 million USD in 2021. Subsequently, it rose again to 970 million USD in 2022 and reached another high of 1,402 million USD in 2023, before dropping considerably to 493 million USD in 2024. This indicates volatility in operational profitability with notable peaks in 2020 and 2023, and declines in 2021 and especially in 2024.

Cost of Capital

The cost of capital remained relatively stable throughout the observed periods. It fluctuated slightly between 18.15% and 18.76%, with minor variations but no clear upward or downward trend. The cost was 18.51% in 2019, dipping to 18.15% in 2020, then increasing marginally to 18.76% in 2021 before settling around an average of approximately 18.4% in subsequent years.

Invested Capital

Invested capital showed a consistent increasing trend from 4,412 million USD in 2019 to a peak of 7,372 million USD in 2023. It slightly decreased to 7,325 million USD in 2024, but the general pattern reflects a growth in capital investment over the years. The growth was especially notable between 2021 and 2023, indicating increased resource deployment for operational or growth purposes.

Economic Profit

Economic profit was negative in most years, indicating that the returns did not exceed the cost of capital for those periods. It started negative at -775 million USD in 2019, turned positive to 192 million USD in 2020, then again fell negative to -241 million USD in 2021 and -274 million USD in 2022. A marginal positive economic profit of 39 million USD was recorded in 2023, followed by a sharp decline to -867 million USD in 2024, the lowest in the observed timeframe. This pattern suggests challenges in achieving value creation consistently, with only brief periods of positive economic profit.

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.

The economic performance over the reported periods demonstrates considerable volatility. Economic profit fluctuates significantly, starting with a substantial negative value in 2019, turning positive in 2020, then reverting to negative values in subsequent years except for a modest positive figure in 2023 before sharply declining to a large negative value in 2024. This pattern indicates inconsistent profitability and challenges in sustaining economic gains.

Invested capital shows a steady upward trend from 2019 through 2023, increasing from 4,412 million US dollars to 7,372 million US dollars before slightly decreasing in 2024 to 7,325 million US dollars. This growth suggests continual investment in capital assets, reflecting expansion or reinvestment efforts in the business.

The economic spread ratio aligns with the volatility observed in economic profit. It shifts from a deeply negative ratio in 2019, improves to a positive ratio in 2020, and then remains negative in the following years, except for a slight positive rate in 2023. The steep decline back into negative territory in 2024 indicates a deterioration in the rate of return above the cost of capital.

Summary of Trends

- Economic profit exhibits high variability with no sustained positive trend, pointing to fluctuating financial efficiency and profitability challenges.

- Invested capital generally trends upward, indicating consistent investment and likely business growth initiatives.

- Economic spread ratio mirrors economic profit performance, showing intermittent profitability with predominance of negative returns suggesting economic value destruction in multiple years.

Overall, the data reveals a business experiencing significant variability in economic returns, despite continuous capital investments, highlighting the need to evaluate factors affecting profitability and capital efficiency to improve future economic outcomes.

Adjusted net revenue

The adjusted net revenue shows an overall growth trend from 2019 to 2023, increasing from 2,706 million USD in 2019 to a peak of 5,795 million USD in 2023. However, in 2024 there is a notable decline to 5,181 million USD, indicating a reversal of the upward trend observed over the previous years.

Economic profit

The economic profit fluctuates considerably over the period. It started at a significant loss of 775 million USD in 2019, turned positive in 2020 at 192 million USD, but then reverted to negative figures in subsequent years with -241 million USD in 2021 and -274 million USD in 2022. There is a slight improvement in 2023, showing a positive 39 million USD; however, this is followed by a steep decline to -867 million USD in 2024, the lowest point in the period examined.

Economic profit margin

The economic profit margin mirrors the fluctuations seen in economic profit. It begins with a strong negative margin of -28.66% in 2019, improves to a positive 4.58% in 2020, then deteriorates to negative margins in 2021 and 2022 at -5.82% and -5.69%, respectively. In 2023, it achieves a slight positive margin of 0.68%, but drops substantially to -16.74% in 2024.

Insights

Despite the growth in adjusted net revenue until 2023, economic profitability has been inconsistent and generally weak, demonstrating challenges in converting increased revenue into economic profit. The sharp decline in both economic profit and its margin in 2024 suggests a significant deterioration in operational efficiency or cost management relative to revenue. The positive spikes in 2020 and 2023 indicate some periods of improved economic profitability but appear insufficient to establish a sustained positive trend. Overall, the data suggests volatility in the company's financial performance, especially regarding profitability measures despite revenue growth.