Market Value Added (MVA)
Market value added (MVA) is the difference between a firm fair value and its invested capital. MVA is a measure of the value a company has created in excess of the resources already committed to the enterprise.
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MVA
Cadence Design Systems Inc., MVA calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 Fair value of debt. See details »
2 Invested capital. See details »
The market value of the company demonstrates a generally positive trajectory over the observed period, though with some fluctuation. Invested capital consistently increased throughout the period. Market value added (MVA) mirrors the trend in market value, exhibiting substantial growth followed by a decline and subsequent recovery.
- Market Value Trend
- The market value increased significantly from 2021 to 2023, rising from US$38,001,437 thousand to US$82,546,746 thousand. A decrease was then observed in 2024, with the market value falling to US$73,257,883 thousand. However, the market value recovered in 2025, reaching US$83,400,525 thousand, surpassing the 2023 peak.
- Invested Capital Trend
- Invested capital showed a consistent upward trend throughout the five-year period. Starting at US$3,138,367 thousand in 2021, it increased to US$8,067,529 thousand in 2025. The rate of increase appeared to accelerate between 2023 and 2024, with a substantial jump in invested capital.
- Market Value Added (MVA) Trend
- MVA experienced substantial growth from 2021 to 2023, increasing from US$34,863,070 thousand to US$78,490,057 thousand. Similar to the market value, MVA decreased in 2024 to US$66,011,337 thousand, before recovering to US$75,332,996 thousand in 2025. The fluctuations in MVA closely followed the changes in the overall market value.
The relationship between invested capital and MVA suggests that increases in invested capital are generally associated with increases in MVA, although the magnitude of the MVA increase is significantly larger than the increase in invested capital, indicating efficient capital allocation. The dip in both market value and MVA in 2024 warrants further investigation to understand the underlying causes.
MVA Spread Ratio
Cadence Design Systems Inc., MVA spread ratio calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| MVA spread ratio3 | ||||||
| Benchmarks | ||||||
| MVA Spread Ratio, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 MVA. See details »
2 Invested capital. See details »
3 2025 Calculation
MVA spread ratio = 100 × MVA ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The Market Value Added (MVA) exhibited a generally increasing trend from 2021 to 2023, followed by a decrease in 2024 and a subsequent recovery in 2025. Simultaneously, Invested Capital consistently increased throughout the observed period. The MVA spread ratio, calculated as MVA divided by Invested Capital, demonstrates significant fluctuations reflecting the interplay between these two metrics.
- Market Value Added (MVA)
- MVA increased substantially from US$34.86 million in 2021 to US$78.49 million in 2023, representing a compound annual growth rate of approximately 51.7%. A decline to US$66.01 million was noted in 2024, before recovering to US$75.33 million in 2025. This suggests periods of strong value creation followed by a temporary setback and subsequent partial recovery.
- Invested Capital
- Invested Capital showed consistent growth throughout the period, increasing from US$3.14 million in 2021 to US$8.07 million in 2025. The rate of increase accelerated between 2023 and 2024, potentially indicating significant capital deployment during that timeframe. This consistent growth suggests ongoing investment in the business.
- MVA Spread Ratio
- The MVA spread ratio increased significantly from 1,110.87% in 2021 to 1,934.83% in 2023, indicating a growing ability to generate value relative to invested capital. The ratio decreased substantially to 910.94% in 2024, coinciding with the decline in MVA, and then slightly increased to 933.78% in 2025. The high values suggest the company is effectively utilizing its invested capital to create substantial market value. The decrease in 2024 warrants further investigation to understand the underlying drivers.
The relationship between MVA and Invested Capital, as reflected in the MVA spread ratio, indicates a period of exceptional value creation between 2021 and 2023. The subsequent decline in the ratio in 2024, despite continued growth in Invested Capital, suggests a potential decrease in the efficiency of capital allocation or a temporary market correction impacting MVA. The partial recovery in 2025 indicates a stabilization of value creation relative to capital employed.
MVA Margin
Cadence Design Systems Inc., MVA margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Market value added (MVA)1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| MVA margin2 | ||||||
| Benchmarks | ||||||
| MVA Margin, Competitors3 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 MVA. See details »
2 2025 Calculation
MVA margin = 100 × MVA ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The Market Value Added (MVA) exhibited a generally positive trajectory between 2021 and 2025, although with some fluctuation. Simultaneously, Adjusted Revenue demonstrated consistent growth throughout the period. The MVA margin, calculated as MVA relative to Adjusted Revenue, reveals the efficiency with which the company translates revenue into shareholder value.
- Market Value Added (MVA)
- MVA increased from US$34,863,070 thousand in 2021 to US$47,923,739 thousand in 2022, representing a substantial gain. This growth continued through 2023, reaching US$78,490,057 thousand. A decrease was then observed in 2024, with MVA falling to US$66,011,337 thousand. However, MVA recovered somewhat in 2025, closing at US$75,332,996 thousand. The 2024 decline warrants further investigation to determine its underlying causes.
- Adjusted Revenue
- Adjusted Revenue consistently increased year-over-year. From US$3,089,413 thousand in 2021, it rose to US$3,688,690 thousand in 2022, US$4,071,879 thousand in 2023, US$4,729,890 thousand in 2024, and finally reached US$5,378,610 thousand in 2025. This steady revenue growth provides a positive foundation for value creation.
- MVA Margin
- The MVA margin experienced significant growth from 2021 to 2023, increasing from 1,128.47% to 1,927.61%. This indicates an increasing ability to generate value from each dollar of revenue. However, the margin decreased to 1,395.62% in 2024, coinciding with the decline in MVA. The margin stabilized in 2025 at 1,400.60%, suggesting the 2024 decrease may not be a continuing trend, but a temporary fluctuation. The high absolute values of the MVA margin suggest a potentially unique business model or capital structure.
In summary, while both MVA and Adjusted Revenue generally trended upward, the MVA margin experienced a notable dip in 2024 before stabilizing. The relationship between MVA and MVA margin suggests that revenue growth alone does not fully explain the fluctuations in shareholder value, and further analysis is needed to understand the drivers behind the 2024 performance.