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.
Economic Profit
Palantir Technologies Inc., economic profit 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 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
= 1,618,029 – 25.97% × 2,399,047 = 994,982
The financial performance, as measured by economic profit, demonstrates a significant shift over the observed period. Initially, substantial economic losses are recorded, followed by a progression towards substantial economic profit generation. This analysis details the trends in net operating profit after taxes, cost of capital, invested capital, and ultimately, economic profit.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibits a marked improvement throughout the period. Negative values are recorded in 2021 and 2022, representing losses of approximately US$377.6 million and US$221.5 million, respectively. A positive NOPAT of US$207.0 million is achieved in 2023, which continues to grow substantially to US$339.2 million in 2024 and reaching US$1.6 billion in 2025. This indicates a strengthening of core operational profitability.
- Cost of Capital
- The cost of capital remains relatively stable across the five-year period, fluctuating slightly between 25.69% and 25.97%. This consistency suggests that the company’s risk profile and financing structure have remained largely unchanged during this time. The marginal increase in later years may reflect broader macroeconomic conditions.
- Invested Capital
- Invested capital shows considerable variation. It increases from US$2.6 billion in 2021 to US$3.1 billion in 2022, then decreases significantly to US$1.2 billion in 2023. A substantial increase is observed in 2024, reaching US$2.5 billion, followed by a slight decrease to US$2.4 billion in 2025. These fluctuations may be attributable to changes in capital expenditure, asset sales, or financing activities.
- Economic Profit
- Economic profit mirrors the trend in NOPAT, transitioning from significant losses to substantial gains. Large negative economic profits are recorded in 2021 (US$1.04 billion loss) and 2022 (US$1.01 billion loss). The loss is reduced in 2023 to US$113.5 million, and further reduced in 2024 to US$311.9 million. By 2025, a substantial economic profit of approximately US$995.0 million is generated. This indicates that the company is not only generating accounting profits but also earning returns exceeding its cost of capital.
In summary, the progression from negative economic profit to positive economic profit is driven primarily by the substantial increase in NOPAT. While invested capital fluctuates, the overall trend suggests a growing ability to generate returns above the cost of capital, particularly evident in the final year of the observed period.
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Net Operating Profit after Taxes (NOPAT)
Palantir Technologies Inc., NOPAT calculation
US$ 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 allowance for credit losses.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to common stockholders.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 229,338 × 7.00% = 16,054
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 16,054 × 21.00% = 3,371
7 Addition of after taxes interest expense to net income (loss) attributable to common stockholders.
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 229,181 × 21.00% = 48,128
9 Elimination of after taxes investment income.
The financial performance, as reflected by Net Income and Net Operating Profit After Taxes (NOPAT), demonstrates a significant shift over the five-year period. Initially, both metrics indicate losses, followed by substantial improvements and growth in subsequent years.
- NOPAT Trend
- NOPAT exhibited a negative value in 2021 and 2022, registering -377,568 thousand and -221,451 thousand respectively. This indicates that, during these years, the company’s operating profits were insufficient to cover its tax obligations, resulting in an after-tax operating loss. A positive turning point occurred in 2023, with NOPAT reaching 207,040 thousand. This positive trend continued, with NOPAT increasing to 339,176 thousand in 2024 and reaching 1,618,029 thousand in 2025. This represents a substantial and accelerating improvement in the company’s core operating profitability after accounting for taxes.
- Relationship between Net Income and NOPAT
- The patterns in Net Income attributable to common stockholders closely mirror those observed in NOPAT. Both metrics were negative in 2021 and 2022, then turned positive in 2023. The magnitude of the increase from 2023 to 2025 is considerable for both metrics, with Net Income growing from 209,825 thousand to 1,625,033 thousand and NOPAT growing from 207,040 thousand to 1,618,029 thousand. The close correlation suggests that changes in core operating profitability are a primary driver of changes in overall net income.
The progression from negative NOPAT and Net Income to substantial positive values suggests a successful turnaround or significant growth phase for the company. The accelerating growth in both metrics from 2023 to 2025 indicates increasing efficiency and profitability in core operations.
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Cash Operating Taxes
Palantir Technologies 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 provision for income taxes exhibited volatility over the observed period. Beginning at US$31.885 thousand in 2021, it decreased significantly to US$10.067 thousand in 2022 before increasing to US$19.716 thousand in 2023. Further increases were noted in 2024 and 2025, reaching US$21.255 thousand and US$22.724 thousand respectively. This suggests a fluctuating tax burden, potentially influenced by changes in taxable income or applicable tax rates.
- Cash Operating Taxes Trend
- Cash operating taxes demonstrated a markedly different pattern. A substantial increase is apparent from US$7.577 thousand in 2021 to US$67.243 thousand in 2022. This was followed by a dramatic decline to US$1.246 thousand in 2023. Subsequently, cash operating taxes became negative, reaching US$-15.989 thousand in 2024 and further decreasing to US$-18.119 thousand in 2025. This indicates a shift from cash outflows for taxes to cash inflows, potentially due to tax refunds or the utilization of tax loss carryforwards.
The divergence between the provision for income taxes and cash operating taxes is significant. While the provision for income taxes generally trended upwards after 2022, cash operating taxes experienced a substantial reversal, becoming negative in the latter years of the period. This discrepancy warrants further investigation to understand the underlying reasons, such as timing differences between accounting income and taxable income, changes in deferred tax assets and liabilities, or the impact of specific tax incentives or credits.
The negative cash operating taxes in 2024 and 2025 suggest the company received more in tax benefits than it paid in taxes during those years. This could be a temporary phenomenon or indicative of a sustained shift in the company’s tax position. Continued monitoring of these trends is recommended to assess the long-term implications for the company’s financial performance and cash flow.
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Invested Capital
Palantir Technologies Inc., invested capital calculation (financing approach)
US$ 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 Palantir’s stockholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of marketable securities.
The reported figures reveal notable fluctuations in invested capital alongside changes in the company’s debt and equity structure over the five-year period. Total reported debt & leases generally decreased, while total stockholders’ equity exhibited a consistent upward trajectory. However, invested capital demonstrates a more complex pattern, initially increasing then experiencing a significant decline before a partial recovery.
- Total Reported Debt & Leases
- Total reported debt & leases decreased from US$260,073 thousand in 2021 to US$249,404 thousand in 2022, continuing to US$229,392 thousand in 2023. A slight increase to US$239,219 thousand was observed in 2024, followed by a further decrease to US$229,338 thousand in 2025. This indicates a general trend of decreasing reliance on debt financing, although the 2024 figure represents a temporary deviation from this pattern.
- Total Stockholders’ Equity
- Total stockholders’ equity increased substantially throughout the period. From US$2,291,030 thousand in 2021, it rose to US$2,565,326 thousand in 2022, then to US$3,475,561 thousand in 2023. This growth continued with figures of US$5,003,275 thousand in 2024 and US$7,387,268 thousand in 2025. This consistent increase suggests strengthening financial health and potentially increased investor confidence.
- Invested Capital
- Invested capital initially increased from US$2,585,786 thousand in 2021 to US$3,071,913 thousand in 2022. However, a substantial decrease was recorded in 2023, falling to US$1,237,836 thousand. A partial recovery occurred in 2024, with invested capital rising to US$2,507,175 thousand, but this level decreased again in 2025 to US$2,399,047 thousand. The significant drop in 2023 warrants further investigation to understand the underlying reasons, such as asset sales, changes in operational needs, or shifts in capital allocation strategy. The subsequent recovery in 2024, followed by a slight decline in 2025, suggests a period of capital restructuring.
The divergence between the increasing equity and the fluctuating invested capital suggests a changing relationship between funding sources and asset deployment. The decrease in invested capital, particularly in 2023, despite rising equity, could indicate a shift towards more efficient capital utilization or a reduction in capital-intensive projects.
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Cost of Capital
Palantir Technologies Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 318,140,703) | 318,140,703) | ÷ | 318,370,041) | = | 1.00 | 1.00 | × | 25.99% | = | 25.97% | ||
| Operating lease liability3 | 229,338) | 229,338) | ÷ | 318,370,041) | = | 0.00 | 0.00 | × | 7.00% × (1 – 21.00%) | = | 0.00% | ||
| Total: | 318,370,041) | 1.00 | 25.97% | ||||||||||
Based on: 10-K (reporting date: 2025-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 292,278,328) | 292,278,328) | ÷ | 292,517,547) | = | 1.00 | 1.00 | × | 25.99% | = | 25.96% | ||
| Operating lease liability3 | 239,219) | 239,219) | ÷ | 292,517,547) | = | 0.00 | 0.00 | × | 7.00% × (1 – 21.00%) | = | 0.00% | ||
| Total: | 292,517,547) | 1.00 | 25.97% | ||||||||||
Based on: 10-K (reporting date: 2024-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 51,777,952) | 51,777,952) | ÷ | 52,007,344) | = | 1.00 | 1.00 | × | 25.99% | = | 25.87% | ||
| Operating lease liability3 | 229,392) | 229,392) | ÷ | 52,007,344) | = | 0.00 | 0.00 | × | 6.00% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 52,007,344) | 1.00 | 25.89% | ||||||||||
Based on: 10-K (reporting date: 2023-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 17,798,750) | 17,798,750) | ÷ | 18,048,154) | = | 0.99 | 0.99 | × | 25.99% | = | 25.63% | ||
| Operating lease liability3 | 249,404) | 249,404) | ÷ | 18,048,154) | = | 0.01 | 0.01 | × | 6.25% × (1 – 21.00%) | = | 0.07% | ||
| Total: | 18,048,154) | 1.00 | 25.69% | ||||||||||
Based on: 10-K (reporting date: 2022-12-31).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 24,016,300) | 24,016,300) | ÷ | 24,276,373) | = | 0.99 | 0.99 | × | 25.99% | = | 25.71% | ||
| Operating lease liability3 | 260,073) | 260,073) | ÷ | 24,276,373) | = | 0.01 | 0.01 | × | 6.03% × (1 – 21.00%) | = | 0.05% | ||
| Total: | 24,276,373) | 1.00 | 25.76% | ||||||||||
Based on: 10-K (reporting date: 2021-12-31).
Economic Spread Ratio
Palantir Technologies 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 | 994,982) | (311,903) | (113,457) | (1,010,764) | (1,043,615) | |
| Invested capital2 | 2,399,047) | 2,507,175) | 1,237,836) | 3,071,913) | 2,585,786) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 41.47% | -12.44% | -9.17% | -32.90% | -40.36% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Accenture PLC | 0.62% | 0.26% | 1.04% | 3.91% | 5.73% | |
| Adobe Inc. | 13.09% | 0.81% | 0.97% | 6.47% | 8.85% | |
| AppLovin Corp. | 27.94% | 0.23% | -20.87% | -26.99% | -30.43% | |
| Cadence Design Systems Inc. | -1.21% | -2.80% | 7.25% | 6.66% | 6.88% | |
| CrowdStrike Holdings Inc. | -13.31% | -8.37% | -4.64% | -7.93% | -10.19% | |
| Datadog Inc. | -8.87% | -9.56% | -6.08% | -11.83% | -4.01% | |
| International Business Machines Corp. | -0.61% | -7.44% | -3.41% | -11.17% | -6.03% | |
| Intuit Inc. | -5.23% | -8.90% | -10.94% | -9.79% | -2.25% | |
| Microsoft Corp. | 7.74% | 9.62% | 12.66% | 20.63% | 29.66% | |
| Oracle Corp. | -4.39% | -4.38% | -5.30% | -4.61% | 3.53% | |
| Palo Alto Networks Inc. | -4.01% | 5.18% | 11.32% | 3.36% | -5.34% | |
| Salesforce Inc. | -12.51% | -14.32% | -17.76% | -14.64% | -12.49% | |
| ServiceNow Inc. | 2.76% | 6.03% | 5.33% | 0.82% | 2.04% | |
| Synopsys Inc. | -12.38% | -8.12% | -7.42% | -0.82% | -6.85% | |
| Workday Inc. | -11.67% | -13.08% | -19.30% | -14.13% | -19.38% | |
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 × 994,982 ÷ 2,399,047 = 41.47%
4 Click competitor name to see calculations.
The economic spread ratio demonstrates a significant shift over the five-year period. Initially negative, the ratio transitions to a positive value, indicating a change in the company’s ability to generate returns exceeding its cost of capital.
- Economic Spread Ratio Trend
- The economic spread ratio began at -40.36% in 2021 and exhibited a gradual improvement, reaching -9.17% in 2023. This suggests a narrowing gap between the company’s return on invested capital and its weighted average cost of capital during this period. A further decline to -12.44% in 2024 was observed, before a substantial increase to 41.47% in 2025. This final value signifies that the company’s returns significantly exceeded its cost of capital in the latest year.
The movement in the economic spread ratio correlates with changes in economic profit. While economic profit remained negative through 2023, it became positive in 2025, aligning with the positive shift in the economic spread ratio. This suggests a strong relationship between the two metrics.
- Invested Capital Relationship
- Invested capital decreased considerably from 2022 to 2023, falling from US$3,071,913 thousand to US$1,237,836 thousand. It then increased in 2024 to US$2,507,175 thousand, and experienced a slight decrease in 2025 to US$2,399,047 thousand. The fluctuations in invested capital likely influenced the economic spread ratio, particularly in conjunction with the changes in economic profit.
The substantial improvement in the economic spread ratio in 2025 warrants further investigation to understand the drivers behind this positive change. The concurrent positive economic profit suggests that the company’s strategic initiatives and operational performance contributed to enhanced value creation.
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Economic Profit Margin
Palantir Technologies Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Economic profit1 | 994,982) | (311,903) | (113,457) | (1,010,764) | (1,043,615) | |
| Revenue | 4,475,446) | 2,865,507) | 2,225,012) | 1,905,871) | 1,541,889) | |
| Add: Increase (decrease) in deferred revenue | 155,670) | 24,561) | 81,633) | (74,718) | 27,988) | |
| Adjusted revenue | 4,631,116) | 2,890,068) | 2,306,645) | 1,831,153) | 1,569,877) | |
| Performance Ratio | ||||||
| Economic profit margin2 | 21.48% | -10.79% | -4.92% | -55.20% | -66.48% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Accenture PLC | 0.40% | 0.15% | 0.53% | 1.88% | 2.94% | |
| Adobe Inc. | 11.84% | 0.91% | 1.22% | 7.53% | 11.03% | |
| AppLovin Corp. | 28.71% | 0.22% | -28.57% | -50.53% | -60.93% | |
| Cadence Design Systems Inc. | -1.81% | -4.29% | 7.22% | 6.65% | 6.98% | |
| CrowdStrike Holdings Inc. | -21.89% | -13.14% | -6.22% | -12.42% | -21.17% | |
| Datadog Inc. | -5.26% | -8.67% | -3.80% | -8.18% | -3.18% | |
| International Business Machines Corp. | -1.08% | -13.16% | -6.07% | -19.34% | -11.47% | |
| Intuit Inc. | -6.75% | -13.67% | -17.91% | -18.83% | -2.86% | |
| Microsoft Corp. | 11.54% | 13.45% | 14.42% | 19.77% | 24.62% | |
| Oracle Corp. | -8.79% | -8.34% | -10.26% | -8.47% | 6.98% | |
| Palo Alto Networks Inc. | -4.75% | 5.50% | 11.24% | 3.91% | -7.18% | |
| Salesforce Inc. | -27.01% | -33.09% | -44.91% | -40.64% | -28.65% | |
| ServiceNow Inc. | 3.04% | 4.96% | 4.29% | 0.66% | 1.76% | |
| Synopsys Inc. | -72.22% | -13.61% | -10.47% | -1.16% | -10.89% | |
| Workday Inc. | -12.40% | -14.56% | -23.68% | -19.15% | -25.29% | |
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 × 994,982 ÷ 4,631,116 = 21.48%
3 Click competitor name to see calculations.
The economic profit margin demonstrates a clear progression from negative values to positive territory over the observed period. Initially, substantial economic losses are recorded, which diminish over time before culminating in a significant economic profit. This shift is driven by changes in both economic profit and adjusted revenue.
- Economic Profit Margin Trend
- In 2021 and 2022, the economic profit margin is deeply negative, registering at -66.48% and -55.20% respectively. This indicates substantial economic losses relative to adjusted revenue. A notable improvement is observed in 2023, with the margin narrowing to -4.92%, suggesting a reduction in the magnitude of economic losses. The negative trend continues in 2024, albeit at a slower pace, with the margin reaching -10.79%. A significant turning point occurs in 2025, as the economic profit margin becomes positive, reaching 21.48%. This signifies that the company is generating economic profit, exceeding the cost of capital.
- Relationship to Economic Profit
- The economic profit margin’s trajectory closely mirrors the trend in economic profit. The substantial negative economic profit values in 2021 and 2022 contribute to the large negative margins. As economic profit moves towards zero in 2023 and 2024, the margin improves, though remains negative. The substantial positive economic profit recorded in 2025 directly drives the significant increase in the economic profit margin.
- Relationship to Adjusted Revenue
- Adjusted revenue consistently increases throughout the period. However, the impact of revenue growth on the economic profit margin is initially offset by larger economic losses. The increasing revenue base, combined with the reduction in economic losses, contributes to the margin improvement in 2023 and 2024. The substantial revenue growth in 2025, coupled with positive economic profit, results in a substantial increase in the economic profit margin.
The progression suggests a transition from a period of value destruction to one of value creation. The company appears to be improving its ability to generate returns exceeding its cost of capital, as evidenced by the positive economic profit margin in the final year of the observed period.
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