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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Palantir Technologies Inc. pages available for free this week:
- Income Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Price to FCFE (P/FCFE)
- Selected Financial Data since 2020
- Return on Assets (ROA) since 2020
- Current Ratio since 2020
- Price to Operating Profit (P/OP) since 2020
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Economic Profit
Palantir Technologies 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 financial trajectory from 2021 through 2025 indicates a significant transition from a period of economic value destruction to a state of value creation. This shift is primarily driven by a substantial improvement in operating profitability, which eventually overcame a consistently high cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- A consistent upward trend is observed in NOPAT, moving from a deficit of $377.6 million in 2021 to a substantial surplus of $1.62 billion by 2025. The transition to positive operating profitability occurred in 2023, followed by an exponential increase in earnings between 2024 and 2025.
- Cost of Capital
- The cost of capital remained remarkably stable throughout the analyzed period, fluctuating minimally between 25.66% and 25.94%. This indicates a persistently high hurdle rate that the company's returns on invested capital were required to exceed to generate positive economic profit.
- Invested Capital
- Invested capital exhibited notable volatility, peaking at approximately $3.07 billion in 2022 before experiencing a sharp contraction to $1.24 billion in 2023. A recovery followed in 2024, with capital increasing to $2.51 billion, before stabilizing slightly at $2.40 billion in 2025.
- Economic Profit
- Economic profit remained negative from 2021 through 2024, signaling that the returns generated were insufficient to cover the weighted cost of the capital employed. Although the deficit narrowed significantly in 2023, it widened again in 2024. A definitive pivot occurred in 2025, with economic profit shifting to a positive $995.7 million, confirming that the company successfully began generating value above its cost of capital by the end of the period.
Net Operating Profit after Taxes (NOPAT)
Palantir Technologies Inc., NOPAT calculation
US$ 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
= × =
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 (loss) attributable to common stockholders.
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.
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.
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$-18.119 thousand in 2025. This indicates a shift from cash outflows for taxes to cash inflows, potentially due to tax refunds or the utilization of tax loss carryforwards.
The divergence between the provision for income taxes and cash operating taxes is significant. While the provision for income taxes generally trended upwards after 2022, cash operating taxes experienced a substantial reversal, becoming negative in the latter years of the period. This discrepancy warrants further investigation to understand the underlying reasons, such as timing differences between accounting income and taxable income, changes in deferred tax assets and liabilities, or the impact of specific tax incentives or credits.
The negative cash operating taxes in 2024 and 2025 suggest the company received more in tax benefits than it paid in taxes during those years. This could be a temporary phenomenon or indicative of a sustained shift in the company’s tax position. Continued monitoring of these trends is recommended to assess the long-term implications for the company’s financial performance and cash flow.
Invested Capital
Palantir Technologies Inc., invested capital calculation (financing approach)
US$ 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.
Cost of Capital
Palantir Technologies 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
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 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| 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 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 trajectory from 2021 through 2025 reflects a transition from significant economic value destruction to a state of value creation. The period is characterized by a consistent narrowing of losses and a substantial improvement in the efficiency of capital utilization, culminating in a positive economic outcome by the end of the analyzed period.
- Economic Profit Analysis
- A period of substantial losses is observed between 2021 and 2022, with economic profit remaining below negative one billion dollars. A significant recovery trend emerged in 2023, where losses were reduced to 113,066 thousand dollars. While 2024 saw a moderate regression in this trend with losses increasing to 311,108 thousand dollars, a definitive turnaround occurred in 2025, as the company achieved a positive economic profit of 995,742 thousand dollars.
- Invested Capital Volatility
- Invested capital exhibited notable fluctuations during the five-year period. After peaking at 3,071,913 thousand dollars in 2022, there was a sharp contraction in 2023 to 1,237,836 thousand dollars. This was followed by an increase to 2,507,175 thousand dollars in 2024 and a relative stabilization at 2,399,047 thousand dollars in 2025. The correlation between capital levels and profit suggests a period of restructuring or reallocation of resources prior to the 2025 profit surge.
- Economic Spread Ratio Performance
- The economic spread ratio shows a strong upward trend, indicating that the return on invested capital increasingly exceeded the cost of capital. The ratio improved from a deficit of -40.33% in 2021 to -9.13% in 2023. Although a slight dip to -12.41% was recorded in 2024, the ratio surged to 41.51% in 2025. This shift marks a critical pivot, moving from an environment where capital was being eroded to one where the company is generating returns significantly above its cost of capital.
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 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| AppLovin Corp. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Datadog Inc. | ||||||
| International Business Machines Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| 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 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 trajectory from 2021 through 2025 reflects a comprehensive transition from substantial value destruction to positive economic value creation. A consistent expansion in revenue provided the foundation for a recovery in economic profit, culminating in a pivot to positive economic value added by the end of the period.
- Economic Profit Trends
- Economic profit remained deeply negative during the 2021 and 2022 fiscal years, with losses exceeding 1 billion US dollars in both periods. A significant recovery was observed in 2023, where losses narrowed sharply to 113,066 thousand US dollars. Although a temporary setback occurred in 2024, with economic profit declining to -311,108 thousand US dollars, 2025 marked a definitive shift into positive territory, reaching 995,742 thousand US dollars.
- Adjusted Revenue Growth
- Revenue demonstrated an uninterrupted upward trend throughout the analyzed timeframe. Adjusted revenue grew from 1,569,877 thousand US dollars in 2021 to 4,631,116 thousand US dollars by 2025. The pace of growth accelerated notably in the final year, with the largest single-year increase occurring between 2024 and 2025.
- Economic Profit Margin Evolution
- The economic profit margin experienced a dramatic reversal, shifting from -66.43% in 2021 to 21.50% in 2025. The most rapid improvement occurred between 2022 and 2023, as the margin improved from -55.15% to -4.90%. Following a marginal contraction to -10.76% in 2024, the margin expanded to 21.50% in 2025, signaling that the company is now generating returns in excess of its cost of capital.