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
Lumentum Holdings Inc. pages available for free this week:
- Balance Sheet: Assets
- Common-Size Income Statement
- Analysis of Profitability Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Price to FCFE (P/FCFE)
- Operating Profit Margin since 2015
- Return on Equity (ROE) since 2015
- Debt to Equity since 2015
- Total Asset Turnover since 2015
- Aggregate Accruals
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Lumentum Holdings Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Lumentum Holdings Inc., economic profit calculation
US$ in thousands
| 12 months ended: | Jun 27, 2026 | Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | |
|---|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | |||||||
| Cost of capital2 | |||||||
| Invested capital3 | |||||||
| Economic profit4 | |||||||
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2026 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The financial trajectory indicates a significant transition from value creation to substantial value destruction. While the initial period showed a positive economic profit, subsequent years demonstrate a consistent inability to generate returns exceeding the cost of capital, culminating in a severe erosion of economic value in the final projected period.
- Net Operating Profit After Taxes (NOPAT)
- A precipitous decline in operational profitability is observed. After starting at 442,032 thousand US dollars in 2021, NOPAT turned negative in 2023 and experienced a catastrophic collapse to -7,232,921 thousand US dollars by 2026. This trend signifies a fundamental breakdown in the ability to generate operating income from the core business activities.
- Invested Capital
- The capital base has expanded steadily over the analyzed timeframe. Invested capital grew from 1,964,100 thousand US dollars in 2021 to 3,056,300 thousand US dollars in 2024, before a sharp increase to 4,756,400 thousand US dollars in 2026. This increase in the asset base occurred despite the simultaneous decline in operating profits, effectively amplifying the scale of value destruction.
- Cost of Capital
- The cost of capital exhibited moderate volatility, reaching a low of 13.14% in 2023 before trending upward. A significant spike to 18.57% is noted in 2026. The combination of a rising cost of capital and a growing capital base has increased the financial hurdle required to achieve a positive economic profit.
- Economic Profit
- Economic profit shifted from a positive 117,391 thousand US dollars in 2021 to negative territory starting in 2022. The deficit deepened progressively, reaching -886,038 thousand US dollars in 2024. The final period reflects a critical failure in value generation, with economic profit falling to -8,115,988 thousand US dollars, driven by the simultaneous occurrence of massive operational losses and a peak in both invested capital and the cost of capital.
The overall analysis reveals a compounding negative effect where increasing capital investments and rising financing costs coincided with a collapse in operating performance, leading to an accelerating rate of economic value loss.
Net Operating Profit after Taxes (NOPAT)
Lumentum Holdings Inc., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses on trade receivables.
3 Addition of increase (decrease) in deferred revenue and customer deposits.
4 Addition of increase (decrease) in product warranty reserve.
5 Addition of increase (decrease) in restructuring and related accrual.
6 Addition of increase (decrease) in equity equivalents to net income (loss).
7 2026 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
8 2026 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 (loss).
10 2026 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
11 Elimination of after taxes investment income.
A significant and accelerating deterioration in operational profitability is evident over the analyzed period, characterized by a transition from positive earnings to severe losses.
- Net Operating Profit After Taxes (NOPAT) Performance
- NOPAT exhibited a consistent downward trajectory, starting at 442,032 thousand USD in July 2021 and decreasing to 232,961 thousand USD by July 2022. The metric transitioned into negative territory in July 2023 (-170,266 thousand USD) and experienced further volatility through June 2024 (-457,466 thousand USD) and June 2025 (-233,587 thousand USD). This trend culminated in a precipitous collapse in June 2026, where NOPAT reached -7,232,921 thousand USD, indicating a profound decline in the ability to generate operating value.
- Net Income Trends
- Net income mirrored the decline observed in NOPAT, falling from 397,300 thousand USD in 2021 to 198,900 thousand USD in 2022, before entering a period of deficit in 2023 and 2024. Although a marginal recovery to 25,900 thousand USD was recorded in June 2025, this was followed by a substantial loss of -6,935,100 thousand USD in June 2026.
- Comparative Operational Analysis
- The strong correlation between NOPAT and net income suggests that the observed financial distress is rooted in core operational performance rather than non-operating expenses or financing structures. A notable divergence occurred in June 2025, where net income returned to a positive value despite NOPAT remaining negative; this suggests that non-operating gains or tax credits temporarily masked the continuing operational inefficiency during that period.
Cash Operating Taxes
Lumentum Holdings Inc., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
An analysis of the tax obligations reveals a general downward trajectory in cash operating taxes over the observed period, characterized by an initial steady decline, a sharp contraction in 2024, and a subsequent period of modest recovery.
- Cash Operating Tax Trends
- Cash operating taxes exhibited a consistent decline from July 2021 to July 2023, moving from 81.9 million to 68.4 million. This downward trend accelerated significantly in June 2024, with cash taxes dropping to 37.4 million, representing the lowest point in the series. Following this trough, a gradual increase is observed in June 2025 and June 2026, with values rising to 46.6 million and 49.3 million, respectively, although these levels remain substantially lower than those recorded in 2021.
- Divergence Between Accounting Provisions and Cash Outflows
- A pronounced decoupling is observed between the income tax provision and cash operating taxes starting in 2024. In June 2024, the income tax provision peaked at 140.8 million while cash taxes fell to 37.4 million. This divergence intensified in the final two years, as the income tax provision shifted into substantial tax benefits of 198 million in 2025 and 237.7 million in 2026. Despite these accounting-based tax benefits, cash operating taxes remained positive and increasing, indicating that non-cash tax adjustments or deferred tax assets are driving the provision benefits while actual cash outflows for taxes persist.
- Impact on Economic Value Added (EVA) Components
- The reduction in cash operating taxes from 2021 through 2024 suggests an improvement in cash flow available for EVA calculations during that window. However, the subsequent rise in cash taxes from 2024 to 2026, occurring simultaneously with massive accounting tax benefits, suggests that the cash-basis tax burden is not declining at the same rate as the book-basis tax provision.
Invested Capital
Lumentum Holdings Inc., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
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 and customer deposits.
5 Addition of product warranty reserve.
6 Addition of restructuring and related accrual.
7 Addition of equity equivalents to stockholders’ equity.
8 Removal of accumulated other comprehensive income.
9 Subtraction of construction in progress.
10 Subtraction of short-term investments.
The total invested capital demonstrates a consistent upward trajectory over the analyzed period, rising from 1,964,100 thousand US dollars in July 2021 to 4,756,400 thousand US dollars by June 2026. While the growth was steady between 2021 and 2024, a period of relative stability occurred in 2025 before a substantial increase in the final year.
- Debt and Lease Obligations
- Total reported debt and leases exhibited a peak in July 2023 at 2,873,700 thousand US dollars, following a sharp increase from the 2021 baseline of 1,239,900 thousand US dollars. Subsequent years show a gradual reduction, culminating in a significant decline to 1,671,200 thousand US dollars by June 2026.
- Stockholders' Equity Trends
- A prolonged downward trend in stockholders' equity is observed from July 2021 through June 2024, with values falling from 1,972,800 thousand US dollars to a low of 957,300 thousand US dollars. This trend is reversed sharply in the final period, where equity increases to 4,643,900 thousand US dollars by June 2026.
- Capital Structure Dynamics
- The composition of invested capital shifted markedly over the period. Between 2021 and 2024, the expansion of invested capital was primarily driven by increased debt levels amid declining equity, indicating a period of rising financial leverage. Conversely, the increase in invested capital by June 2026 is almost entirely attributable to a surge in stockholders' equity, coinciding with a simultaneous reduction in total debt.
Cost of Capital
Lumentum Holdings Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2026-06-27).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-06-28).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-06-29).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-07-01).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-07-02).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Debt3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-07-03).
1 US$ in thousands
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Lumentum Holdings Inc., economic spread ratio calculation, comparison to benchmarks
| Jun 27, 2026 | Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | |||||||
| Invested capital2 | |||||||
| Performance Ratio | |||||||
| Economic spread ratio3 | |||||||
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
| Super Micro Computer Inc. | |||||||
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
1 Economic profit. See details »
2 Invested capital. See details »
3 2026 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The financial trajectory from 2021 to 2026 indicates a significant shift from economic value creation to substantial value destruction. While the initial period showed positive returns above the cost of capital, subsequent years are characterized by deepening economic losses and a deteriorating relationship between invested capital and generated profit.
- Economic Profit Trends
- A transition from a positive economic profit of 117,391 thousand US dollars in 2021 to consistent negative values is observed. Losses expanded progressively through 2024, peaking at a deficit of 886,038 thousand US dollars. Although a moderate recovery occurred in 2025, reducing the loss to 708,276 thousand US dollars, the final period shows a precipitous decline to a loss of 8,115,988 thousand US dollars.
- Invested Capital Growth
- The capital base has expanded steadily over the analyzed period. Invested capital rose from 1,964,100 thousand US dollars in 2021 to 3,056,300 thousand US dollars by 2024. Following a period of stability in 2025, there was a significant increase in the final year, with invested capital reaching 4,756,400 thousand US dollars.
- Economic Spread Ratio Analysis
- The economic spread ratio reflects a severe decline in capital efficiency. Starting at a positive 5.98% in 2021, the ratio turned negative in 2022 (-6.34%) and continued to deteriorate to -28.99% by 2024. Despite a marginal improvement to -23.27% in 2025, the ratio collapsed to -170.63% in 2026, indicating that the economic loss far exceeded the total amount of invested capital.
The divergence between increasing invested capital and plummeting economic profit suggests that capital allocations have failed to generate adequate returns. The extreme negative spread in the final year points to a critical failure in value generation relative to the cost of capital employed.
Economic Profit Margin
Lumentum Holdings Inc., economic profit margin calculation, comparison to benchmarks
| Jun 27, 2026 | Jun 28, 2025 | Jun 29, 2024 | Jul 1, 2023 | Jul 2, 2022 | Jul 3, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | |||||||
| Net revenue | |||||||
| Add: Increase (decrease) in deferred revenue and customer deposits | |||||||
| Adjusted net revenue | |||||||
| Performance Ratio | |||||||
| Economic profit margin2 | |||||||
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Apple Inc. | |||||||
| Arista Networks Inc. | |||||||
| Cisco Systems Inc. | |||||||
| Dell Technologies Inc. | |||||||
| Super Micro Computer Inc. | |||||||
Based on: 10-K (reporting date: 2026-06-27), 10-K (reporting date: 2025-06-28), 10-K (reporting date: 2024-06-29), 10-K (reporting date: 2023-07-01), 10-K (reporting date: 2022-07-02), 10-K (reporting date: 2021-07-03).
1 Economic profit. See details »
2 2026 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted net revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial trajectory from 2021 to 2026 exhibits a significant deterioration in economic value creation, transitioning from a positive economic profit to substantial losses. While revenue shows volatility and a projected spike in the final year, the economic profit margin demonstrates a severe downward trend, indicating that the cost of capital is significantly exceeding the operating returns.
- Economic Profit Trends
- A positive economic profit of 117,391 thousand US dollars in 2021 shifted to a deficit in 2022, with losses expanding progressively through 2024 to reach negative 886,038 thousand US dollars. Although a marginal recovery was observed in 2025, the 2026 figures indicate a catastrophic decline to negative 8,115,988 thousand US dollars, signaling a profound failure to generate returns above the required cost of capital.
- Adjusted Net Revenue Performance
- Revenue remained relatively stable between 2021 and 2023, hovering around 1.7 billion US dollars, before experiencing a contraction to 1,357,700 thousand US dollars in 2024. A subsequent recovery trend is evident, with revenue climbing to 1,645,100 thousand US dollars in 2025 and projecting a sharp increase to 3,030,100 thousand US dollars by 2026.
- Economic Profit Margin Analysis
- The economic profit margin declined from a positive 6.74% in 2021 to negative 65.26% in 2024. A temporary improvement to negative 43.05% occurred in 2025; however, this was followed by an extreme collapse to negative 267.85% in 2026. This indicates that the growth in revenue in the final year was not only insufficient to cover the cost of capital but was accompanied by a disproportionate increase in economic losses.
The divergence between revenue growth and economic profit in 2026 is particularly notable. Despite the highest recorded adjusted net revenue in the period, the economic profit margin reached its lowest point. This suggests that the expansion in scale was achieved at an unsustainable cost or accompanied by a massive increase in capital charges, resulting in an accelerated erosion of shareholder value.