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.
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- Income Statement
- Statement of Comprehensive Income
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
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Economic Profit
Lam Research Corp., economic profit calculation
US$ in thousands
| 12 months ended: | Jun 29, 2025 | Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | Jun 28, 2020 | |
|---|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | |||||||
| Cost of capital2 | |||||||
| Invested capital3 | |||||||
| Economic profit4 | |||||||
Based on: 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28).
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
= – × =
- Net Operating Profit After Taxes (NOPAT)
- The net operating profit after taxes exhibited a generally upward trend from 2020 to 2025, with the exception of a notable decline in the years 2023 and 2024. Starting at 2,400,750 thousand US dollars in 2020, the figure increased significantly to a peak of 5,632,304 thousand US dollars in 2022. Following this peak, NOPAT decreased to 3,251,005 thousand US dollars in 2024 before rebounding sharply to 6,105,707 thousand US dollars in 2025.
- Cost of Capital
- The cost of capital showed a steady incremental rise throughout the observed period. It increased from 18.04% in 2020 to 19.52% in 2025, suggesting a gradually increasing cost or required return on invested capital over these years.
- Invested Capital
- Invested capital demonstrated a consistent upward trajectory over the years. Beginning at 11,789,502 thousand US dollars in 2020, it progressively rose each year, reaching 16,358,579 thousand US dollars in 2025. This indicates ongoing investment or expansion of capital assets.
- Economic Profit
- Economic profit experienced significant fluctuations during the period under review. It started relatively low at 273,347 thousand US dollars in 2020 and increased substantially to 3,085,453 thousand US dollars in 2022. However, economic profit declined thereafter, dropping to 388,005 thousand US dollars in 2024 before recovering strongly to 2,912,223 thousand US dollars in 2025. This pattern reflects variability in the company's ability to generate returns above its cost of capital over time.
- Summary of Financial Trends
- Overall, the financial data indicates a pattern of growth in both net operating profit and invested capital, interspersed with periods of profit contraction, particularly evident in 2023 and 2024. The steady increase in cost of capital may have influenced some of the dips in economic profit during this period. The rebound in both NOPAT and economic profit by 2025 suggests a potential recovery or improvement in operational efficiency and value creation.
Net Operating Profit after Taxes (NOPAT)
Lam Research Corp., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in product warranty reserves.
5 Addition of increase (decrease) in restructuring liability.
6 Addition of increase (decrease) in equity equivalents to net income.
7 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
8 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
9 Addition of after taxes interest expense to net income.
10 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
11 Elimination of after taxes investment income.
- Net Income
- The net income demonstrated a generally positive trend over the analyzed period, with some fluctuations. Starting at approximately 2.25 billion USD in 2020, it almost doubled in 2021 to 3.91 billion USD and increased further to about 4.61 billion USD in 2022. A slight decrease occurred in 2023, falling to 4.51 billion USD, followed by a more pronounced decline in 2024 to 3.83 billion USD. However, in 2025, net income surged significantly to approximately 5.36 billion USD, marking the highest point in the time frame.
- Net Operating Profit After Taxes (NOPAT)
- The NOPAT showed a generally upward trajectory until 2022, beginning at about 2.40 billion USD in 2020 and increasing substantially to approximately 5.63 billion USD by 2022. However, there was a notable reduction in the following years; NOPAT dropped to 4.06 billion USD in 2023 and further declined to 3.26 billion USD in 2024. A strong recovery is observed in 2025, with NOPAT rising sharply to around 6.11 billion USD, the highest value recorded in the examined periods.
- General Observations
- Both net income and NOPAT largely followed similar trends, with growth peaking in 2022, followed by declines in 2023 and 2024, prior to significant recoveries in 2025. The reductions in 2023 and 2024 suggest temporary challenges affecting profitability and operational efficiency. The considerable rebound in 2025 indicates successful measures to restore profitability and operational performance. Overall, the company appears to maintain strong profit-generating capabilities with cyclical variability.
Cash Operating Taxes
Lam Research Corp., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28).
- Provision for Income Taxes
- The provision for income taxes exhibits a generally increasing trend from 2020 through 2023, rising from approximately 323 million US dollars in 2020 to nearly 598 million US dollars in 2023. However, in the subsequent year (2024), there is a noticeable decline to about 532 million US dollars, before rising again significantly in 2025 to approximately 600 million US dollars. This pattern suggests some fluctuation in estimated tax liabilities despite an overall upward movement.
- Cash Operating Taxes
- Cash operating taxes show a consistent and marked upward trajectory over the entire period analyzed. Starting at approximately 361 million US dollars in 2020, cash taxes almost double to around 654 million US dollars in 2021. The upward momentum continues sharply into 2022 with cash taxes reaching about 883 million US dollars. Although there is a downward adjustment in 2023 and 2024—declining to roughly 782 million and 718 million US dollars respectively—the value increases again considerably in 2025 to approximately 954 million US dollars. This indicates variability in actual cash outflows for taxes, with a generally increasing trend over the six-year period.
- Comparative Insights
- When comparing provision for income taxes with cash operating taxes, cash taxes have consistently been higher than provisions throughout all years. The gap between these two metrics widens substantially from 2020 to 2022, implying that actual tax payments in cash increasingly exceeded estimated provisions in these years. Although provisions increase steadily, the fluctuations and higher amounts in cash operating taxes may reflect timing differences, changes in tax planning strategies, or variations in tax payments versus accrual estimates.
Invested Capital
Lam Research Corp., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28).
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 product warranty reserves.
6 Addition of restructuring liability.
7 Addition of equity equivalents to stockholders’ equity.
8 Removal of accumulated other comprehensive income.
- Total Reported Debt & Leases
- The total debt and leases demonstrate a declining trend over the reported periods. Starting from approximately 5.98 billion in mid-2020, the amount decreases to around 4.76 billion by mid-2025. This suggests a possible strategy of reducing leverage or paying down debt over the years, particularly notable from mid-2024 to mid-2025.
- Stockholders’ Equity
- Stockholders’ equity shows a consistent upward trend across all periods. It grows from about 5.17 billion in 2020 to nearly 9.86 billion in 2025. This significant increase indicates enhanced company value or accumulated earnings, suggesting strengthened financial health and increased net assets over time.
- Invested Capital
- Invested capital rises steadily from approximately 11.79 billion in 2020 to around 16.36 billion in 2025, with a minor dip observed between mid-2023 and mid-2024. This overall upward movement reflects continued investment in operations or assets, supporting growth initiatives or expansion efforts.
Cost of Capital
Lam Research Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-06-29).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt and finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-06-30).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt and finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-06-25).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt and finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-06-26).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt and finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-06-27).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt and finance lease obligations. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease obligations3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-06-28).
1 US$ in thousands
2 Equity. See details »
3 Long-term debt and finance lease obligations. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Lam Research Corp., economic spread ratio calculation, comparison to benchmarks
| Jun 29, 2025 | Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | Jun 28, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| Economic spread ratio3 | |||||||
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | |||||||
| Analog Devices Inc. | |||||||
| Applied Materials Inc. | |||||||
| Broadcom Inc. | |||||||
| Intel Corp. | |||||||
| KLA Corp. | |||||||
| Micron Technology Inc. | |||||||
| NVIDIA Corp. | |||||||
| Qualcomm Inc. | |||||||
| Texas Instruments Inc. | |||||||
Based on: 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28).
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.
- Economic Profit
- The economic profit experienced significant fluctuations over the analyzed periods. Starting from a modest value of approximately 273 million US dollars in 2020, it surged dramatically to over 2.2 billion US dollars in 2021 and further increased to around 3.1 billion US dollars in 2022. Following this peak, it sharply declined to roughly 1.2 billion US dollars in 2023 and continued to decrease to about 388 million US dollars in 2024. However, it rebounded strongly in 2025 to approximately 2.9 billion US dollars. This pattern indicates periods of substantial growth interspersed with notable downturns, suggesting variability in profitability or operational efficiency.
- Invested Capital
- The invested capital shows a consistent upward trend throughout the periods. Commencing at about 11.8 billion US dollars in 2020, it has steadily increased each year to reach approximately 16.4 billion US dollars in 2025. This gradual increase denotes continual investment or asset accumulation, reflecting a growing scale of operations or expanding capital base over time.
- Economic Spread Ratio
- The economic spread ratio exhibits considerable variability mirroring the trend in economic profit. It started at a relatively low 2.32% in 2020, surged to a high of 18.2% in 2021 and peaked at 22.83% in 2022. Subsequently, it declined sharply to 7.93% in 2023 and further decreased to 2.61% in 2024, before increasing again to 17.8% in 2025. This ratio's movements suggest fluctuating effectiveness in generating returns above the cost of invested capital, with strong performance periods followed by notable contractions.
- Overall Observations
- The company demonstrates a pattern of cyclical performance in terms of economic profit and economic spread ratio, with peaks in 2022 and 2025, and troughs around 2024. Meanwhile, invested capital steadily increases, indicating ongoing growth or reinvestment. The disparity between steady capital growth and fluctuating profitability suggests that while the company is expanding its capital base, its ability to generate returns on that capital varies significantly over time. This could be influenced by operational factors, market conditions, or strategic decisions affecting profit margins and capital efficiency.
Economic Profit Margin
Lam Research Corp., economic profit margin calculation, comparison to benchmarks
| Jun 29, 2025 | Jun 30, 2024 | Jun 25, 2023 | Jun 26, 2022 | Jun 27, 2021 | Jun 28, 2020 | ||
|---|---|---|---|---|---|---|---|
| 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 | |||||||
| Advanced Micro Devices Inc. | |||||||
| Analog Devices Inc. | |||||||
| Applied Materials Inc. | |||||||
| Broadcom Inc. | |||||||
| Intel Corp. | |||||||
| KLA Corp. | |||||||
| Micron Technology Inc. | |||||||
| NVIDIA Corp. | |||||||
| Qualcomm Inc. | |||||||
| Texas Instruments Inc. | |||||||
Based on: 10-K (reporting date: 2025-06-29), 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-25), 10-K (reporting date: 2022-06-26), 10-K (reporting date: 2021-06-27), 10-K (reporting date: 2020-06-28).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
- Economic Profit
- The economic profit demonstrated significant fluctuations over the analyzed periods. It experienced a sharp increase from approximately 273 million USD in mid-2020 to over 2.2 billion USD in mid-2021. This peak was followed by further growth to about 3.1 billion USD in mid-2022. However, economic profit declined notably in mid-2023 and further in mid-2024, reaching a low near 388 million USD before rebounding substantially to approximately 2.9 billion USD by mid-2025. The variation indicates periods of strong profitability interspersed with considerable reductions.
- Adjusted Revenue
- Adjusted revenue showed a general upward trend throughout the years, despite some periods of decline. Starting from around 10.1 billion USD in mid-2020, revenue climbed to 15.2 billion USD in mid-2021 and peaked at 18.3 billion USD in mid-2022. It subsequently decreased in the following two periods, dropping to approximately 17.1 billion USD and then 14.6 billion USD in mid-2023 and mid-2024, respectively. By mid-2025, revenue rebounded significantly to about 19.6 billion USD, marking the highest level in the series. This pattern suggests a generally expanding top line with intermittent contractions.
- Economic Profit Margin
- The economic profit margin shows a pattern consistent with the fluctuations in economic profit. Starting at a low 2.7% in mid-2020, it surged to approximately 14.7% in mid-2021 and further increased to nearly 16.9% in mid-2022. After this peak, the margin contracted sharply to about 7.0% in mid-2023, then declined further to around 2.7% in mid-2024. The margin recovered significantly to 14.9% by mid-2025. This suggests that profitability efficiency relative to revenue was subject to notable variation, aligning with changes in economic profit rather than following the steadier revenue trend.
- Overall Analysis
- The company's financial performance, as reflected in economic profit and margin, displayed considerable volatility over the five-year period, indicating exposure to fluctuating market or operational conditions. Adjusted revenue followed a mostly upward trajectory with some downturns, hinting at overall revenue growth potential but with challenges affecting certain periods. The divergence between revenue trends and economic profitability in some years indicates that increased revenues did not always translate to proportional profitable outcomes. The most recent data point suggests a recovery phase with improvements in both revenue and profitability margins.