Economic Value Added (EVA)
EVA is registered trademark of Stern Stewart.
Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.
Paying user area
Try for free
Intuitive Surgical Inc. pages available for free this week:
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Price to FCFE (P/FCFE)
- Operating Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Analysis of Revenues
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Intuitive Surgical Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Intuitive Surgical Inc., economic profit calculation
US$ in thousands
| 12 months ended: | Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
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 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2025 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The analysis of economic value added reveals a period of significant volatility in value creation, characterized by a transition from positive economic profit to a two-year period of value destruction, followed by a recovery. While operating profitability has shown a strong upward trajectory in recent years, the aggressive expansion of the invested capital base has created a challenging environment for maintaining consistent economic profit.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited a non-linear growth pattern. After a decline in 2022 to 1,187,823 thousand US$, a sustained recovery began in 2023. By 2025, NOPAT reached 2,976,548 thousand US$, representing a significant increase from the 2021 level of 1,700,018 thousand US$. This suggests a strengthening of core operational profitability over the five-year period.
- Invested Capital and Cost of Capital
- The cost of capital remained static at approximately 25.29% throughout the period, providing a constant benchmark for required returns. Simultaneously, invested capital grew aggressively and consistently, rising from 4,517,800 thousand US$ in 2021 to 11,374,500 thousand US$ by 2025. This expansion indicates a substantial increase in the resources deployed to generate returns.
- Economic Profit Dynamics
- Economic profit fluctuated significantly, moving from a positive 557,584 thousand US$ in 2021 to negative values in 2022 (-176,458 thousand US$) and 2023 (-213,925 thousand US$). This period of value destruction occurred because the growth in invested capital outpaced the generation of NOPAT, resulting in returns that fell below the 25.29% cost of capital. A return to positive economic profit was achieved in 2024 at 269,709 thousand US$. However, despite the continued rise in NOPAT in 2025, economic profit declined to 100,448 thousand US$, as the surge in invested capital to 11.37 billion US$ once again placed downward pressure on the net economic gain.
Net Operating Profit after Taxes (NOPAT)
Intuitive Surgical Inc., NOPAT 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 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowances.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in equity equivalents to net income attributable to Intuitive Surgical, Inc..
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net income attributable to Intuitive Surgical, Inc..
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
9 Elimination of after taxes investment income.
Net income attributable to Intuitive Surgical, Inc. and Net Operating Profit After Taxes (NOPAT) both demonstrate fluctuating performance over the five-year period. While both metrics generally trend upwards, significant variations are observed, particularly in 2022.
- NOPAT Trend
- NOPAT experienced a notable decrease from US$1,700,018 thousand in 2021 to US$1,187,823 thousand in 2022, representing a substantial decline. A subsequent recovery is evident in 2023, with NOPAT reaching US$1,596,933 thousand. Continued growth is observed in 2024 and 2025, with NOPAT increasing to US$2,242,154 thousand and US$2,976,548 thousand respectively. This indicates a strong upward trajectory in recent years following the 2022 dip.
- Relationship between Net Income and NOPAT
- The values for Net Income and NOPAT are closely aligned throughout the period. The difference between the two metrics remains relatively consistent, suggesting minimal adjustments are being made between net income and operating profit after taxes. This consistency implies that non-operating items or accounting adjustments have a limited impact on the overall profitability picture.
- Growth Rates
- The largest percentage increase in NOPAT occurred between 2024 and 2025, with a growth rate of approximately 32.7%. The decline in 2022 represents the most significant percentage decrease in NOPAT over the observed period. The recovery from 2022 to 2023 shows a growth rate of approximately 34.4%.
Overall, the observed trends suggest a period of disruption in 2022 followed by a robust recovery and continued expansion in subsequent years. The strong correlation between net income and NOPAT indicates that core operating performance is the primary driver of overall profitability.
Cash Operating Taxes
Intuitive Surgical Inc., cash operating taxes calculation
US$ 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).
The reported income tax expense and cash operating taxes demonstrate distinct patterns over the five-year period. Income tax expense fluctuates, while cash operating taxes exhibit a more complex trend with an initial increase followed by stabilization and a slight decline.
- Income Tax Expense
- Income tax expense increased significantly from 2021 to 2022, rising from US$162.2 million to US$262.4 million. A substantial decrease was then observed in 2023, with expense falling to US$141.6 million. This was followed by increases in both 2024 and 2025, reaching US$336.3 million and US$434.8 million respectively. The overall trend indicates volatility, with a clear upward movement in the latter two years of the observed period.
- Cash Operating Taxes
- Cash operating taxes show a pronounced increase from 2021 to 2022, moving from US$226.7 million to US$448.3 million. The rate of increase slowed in 2023, with taxes reported at US$423.0 million. Values for 2024 and 2025 are US$472.97 million and US$417.4 million, respectively. While remaining relatively high, the 2025 figure represents a slight decrease from the 2024 level, suggesting a potential stabilization or minor reduction in cash tax outflows.
The difference between income tax expense and cash operating taxes is notable throughout the period. Cash operating taxes consistently exceed income tax expense, indicating the presence of timing differences or non-cash tax effects. The magnitude of this difference varies annually, potentially impacting the calculation of economic value added (EVA) and requiring further investigation into the underlying causes of these discrepancies.
- Relationship between Income Tax Expense and Cash Taxes
- The consistent difference between the two measures suggests the influence of deferred tax assets or liabilities. The larger cash tax payments relative to reported income tax expense could be due to factors such as accelerated depreciation for tax purposes, or the recognition of taxable temporary differences. Understanding these factors is crucial for accurate EVA calculation and financial performance assessment.
The observed trends in both income tax expense and cash operating taxes warrant continued monitoring to assess their impact on future financial performance and the company’s ability to generate economic value.
Invested Capital
Intuitive Surgical Inc., invested capital calculation (financing approach)
US$ 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 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of allowance for doubtful accounts receivable.
4 Addition of deferred revenue.
5 Addition of equity equivalents to total Intuitive Surgical, Inc. stockholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction-in-process.
8 Subtraction of available-for-sale marketable securities.
The invested capital of the company demonstrates a consistent upward trend over the five-year period. Simultaneously, the composition of capital sources has shifted, with a notable increase in reported debt and leases alongside growth in stockholders’ equity.
- Invested Capital Trend
- Invested capital increased from US$4,517.8 million in 2021 to US$11,374.5 million in 2025. This represents a cumulative increase of 151.8% over the period. The growth rate appears to be accelerating, with larger absolute increases observed in the later years of the period, particularly between 2023 and 2025.
- Debt & Leases
- Total reported debt and leases exhibited an overall increasing trend. While a slight decrease was observed between 2022 and 2023, the amount rose significantly from US$87.0 million in 2021 to US$170.9 million in 2025, representing a 96.4% increase. The most substantial increase occurred between 2023 and 2024, jumping from US$89.8 million to US$146.0 million.
- Stockholders’ Equity
- Total stockholders’ equity also increased over the period, moving from US$11,901.1 million in 2021 to US$17,824.0 million in 2025, a 49.8% increase. There was a decrease between 2021 and 2022, but equity then increased consistently through 2025. The rate of increase in equity appears to be relatively stable compared to the more volatile changes in debt.
- Capital Structure Shift
- The relative contribution of debt to invested capital has increased. In 2021, debt and leases represented approximately 2.0% of invested capital. By 2025, this proportion had risen to approximately 1.5%. While the percentage appears small, the absolute increase in debt suggests a growing reliance on debt financing to fund growth, despite a larger overall increase in equity.
The observed trends suggest the company is actively investing in its operations and expansion, funded by a combination of debt and equity. The increasing reliance on debt warrants further investigation to assess associated financial risks and sustainability.
Cost of Capital
Intuitive Surgical Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
Economic Spread Ratio
Intuitive Surgical Inc., economic 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) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group 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 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial performance from 2021 to 2025 is characterized by significant volatility in economic value generation coupled with a consistent and aggressive expansion of the capital base. While invested capital grew steadily every year, increasing from 4.52 billion USD in 2021 to 11.37 billion USD by 2025, the ability to generate economic profit above the cost of capital fluctuated considerably.
- Economic Profit Trends
- A notable inversion in value creation occurred between 2021 and 2023. After recording a positive economic profit of 557.58 million USD in 2021, the figure shifted to negative values in 2022 and 2023, reaching a low of -213.93 million USD. A recovery was observed in 2024 with a return to positive territory at 269.71 million USD, although this figure contracted to 100.45 million USD by 2025.
- Economic Spread Ratio Analysis
- The economic spread ratio mirrors the volatility of the economic profit. The ratio began at a peak of 12.34% in 2021 before dropping to -3.27% in 2022 and -2.99% in 2023, indicating that the return on invested capital was below the required cost of capital during this period. Although the ratio recovered to 3.46% in 2024, it declined sharply to 0.88% in 2025.
- Capital Efficiency and Value Dilution
- An inverse relationship is observed between the growth of invested capital and the economic spread ratio in the final period. Despite the return to positive economic profit in 2024 and 2025, the rapid increase in invested capital—particularly the jump to 11.37 billion USD in 2025—has diluted the economic spread. This suggests that the incremental capital deployed is not yielding returns that significantly exceed the cost of capital, resulting in a diminishing spread ratio.
Economic Profit Margin
Intuitive Surgical Inc., economic profit 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) | ||||||
| Economic profit1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Abbott Laboratories | ||||||
| Elevance Health Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group 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 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial performance from 2021 to 2025 is characterized by a consistent expansion in revenue contrasted with significant volatility in economic value creation. While top-line growth has remained uninterrupted, the ability to generate returns exceeding the cost of capital has fluctuated, resulting in an inconsistent economic profit margin.
- Adjusted Revenue Trends
- A steady upward trajectory in adjusted revenue is observed throughout the period, increasing from 5,741,800 thousand US dollars in 2021 to 10,139,900 thousand US dollars by 2025. This indicates a consistent growth in operational scale over the five-year interval.
- Economic Profit Volatility
- Economic profit experienced a sharp reversal following 2021, moving from a surplus of 557,584 thousand US dollars to deficits in 2022 (-176,458 thousand US dollars) and 2023 (-213,925 thousand US dollars). Although the metric returned to positive territory in 2024 at 269,709 thousand US dollars, it contracted again to 100,448 thousand US dollars in 2025.
- Economic Profit Margin Analysis
- The economic profit margin reflects this instability, peaking at 9.71% in 2021 before falling to negative values of -2.82% in 2022 and -2.98% in 2023. A recovery was noted in 2024 with a margin of 3.22%, though this momentum diminished by 2025, as the margin compressed to 0.99%.
The divergence between continuous revenue growth and inconsistent economic profit margins suggests that increases in scale have not consistently translated into proportional economic value. The period between 2022 and 2023 indicates a phase where the capital employed failed to yield returns sufficient to cover the cost of capital. While 2024 marked a return to value creation, the subsequent decline in 2025 suggests a tightening of economic efficiency despite reaching record revenue levels.