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 – 25.94% × 2,399,047 = 995,742
The financial trajectory from 2021 to 2025 is characterized by a transition from significant value destruction to substantial value creation. While the company operated at an economic loss for the majority of the period, a sharp reversal in profitability and capital efficiency occurred by the end of the analyzed timeframe.
- Net Operating Profit After Taxes (NOPAT)
- A consistent upward trend in NOPAT is observed, moving from a loss of 377.6 million USD in 2021 to a profit of 1.62 billion USD by 2025. The shift to positive operating profitability occurred in 2023, with an exponential growth surge recorded in the final year of the period.
- Cost of Capital
- The cost of capital remained remarkably stable throughout the five-year period, fluctuating minimally between 25.66% and 25.94%. This stability indicates a consistent requirement for the rate of return necessary to satisfy investors and creditors.
- Invested Capital
- Invested capital exhibited significant volatility. After peaking at 3.07 billion USD in 2022, there was a sharp contraction to 1.24 billion USD in 2023. Capital levels recovered in 2024 to 2.51 billion USD before stabilizing slightly downward in 2025.
- Economic Profit
- Economic profit remained negative from 2021 through 2024, signaling that the operating returns were insufficient to cover the cost of the capital employed. The most significant improvement occurred between 2022 and 2023, where losses narrowed from 1.01 billion USD to 113.1 million USD. A definitive pivot to value creation was achieved in 2025, with economic profit reaching 995.7 million USD, driven primarily by the surge in NOPAT.
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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 | × | 25.95% | = | 25.93% | ||
| 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 | 25.94% | ||||||||||
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 | × | 25.95% | = | 25.93% | ||
| 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 | 25.94% | ||||||||||
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 | × | 25.95% | = | 25.84% | ||
| 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 | 25.86% | ||||||||||
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 | × | 25.95% | = | 25.59% | ||
| 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 | 25.66% | ||||||||||
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 | × | 25.95% | = | 25.68% | ||
| 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 | 25.73% | ||||||||||
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 | 995,742) | (311,108) | (113,066) | (1,009,803) | (1,042,803) | |
| Invested capital2 | 2,399,047) | 2,507,175) | 1,237,836) | 3,071,913) | 2,585,786) | |
| Performance Ratio | ||||||
| Economic spread ratio3 | 41.51% | -12.41% | -9.13% | -32.87% | -40.33% | |
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Accenture PLC | 0.54% | 0.17% | 0.95% | 3.83% | 5.64% | |
| Adobe Inc. | 13.02% | 0.73% | 0.90% | 6.40% | 8.78% | |
| AppLovin Corp. | 28.19% | 0.47% | -20.65% | -26.83% | -30.22% | |
| Cadence Design Systems Inc. | -1.35% | -2.94% | 7.11% | 6.52% | 6.73% | |
| CrowdStrike Holdings Inc. | -13.40% | -8.47% | -4.73% | -8.02% | -10.28% | |
| Datadog Inc. | -8.93% | -9.62% | -6.15% | -11.90% | -4.08% | |
| International Business Machines Corp. | -0.78% | -7.62% | -3.57% | -11.32% | -6.18% | |
| Intuit Inc. | -5.31% | -8.98% | -11.02% | -9.87% | -2.34% | |
| Microsoft Corp. | 6.00% | 7.88% | 10.93% | 18.91% | 27.95% | |
| Oracle Corp. | -7.24% | -7.13% | -7.96% | -7.01% | 1.19% | |
| Palo Alto Networks Inc. | -4.13% | 5.06% | 11.20% | 3.25% | -5.45% | |
| Salesforce Inc. | -12.57% | -14.38% | -17.82% | -14.70% | -12.56% | |
| ServiceNow Inc. | 2.61% | 5.88% | 5.18% | 0.67% | 1.89% | |
| Synopsys Inc. | -12.48% | -8.24% | -7.54% | -0.94% | -6.97% | |
| Workday Inc. | -11.73% | -13.13% | -19.36% | -14.19% | -19.44% | |
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 × 995,742 ÷ 2,399,047 = 41.51%
4 Click competitor name to see calculations.
The financial trajectory from 2021 to 2025 demonstrates a significant transition from value destruction to value creation. A consistent trend of narrowing economic losses is observed, culminating in a pivot to positive economic profit and a positive economic spread ratio by the end of the period.
- Economic Profit
- A substantial recovery in economic profit is evident, moving from a deficit of US$ 1,042,803 thousand in 2021 to a surplus of US$ 995,742 thousand in 2025. While a marginal increase in losses occurred between 2023 and 2024, the overall movement indicates a successful shift toward generating returns that exceed the company's cost of capital.
- Invested Capital
- Invested capital exhibited notable volatility during the analyzed period. After reaching a peak of US$ 3,071,913 thousand in 2022, there was a sharp contraction to US$ 1,237,836 thousand in 2023. This was followed by a rebound to US$ 2,507,175 thousand in 2024 and a slight stabilization at US$ 2,399,047 thousand in 2025.
- Economic Spread Ratio
- The economic spread ratio reflects a strong upward trend, improving from -40.33% in 2021 to 41.51% in 2025. The ratio showed steady improvement through 2023, a slight setback to -12.41% in 2024, and a definitive shift into positive territory in 2025. This progression signifies that the business has evolved from significantly underperforming its cost of capital to generating a substantial economic premium.
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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 | 995,742) | (311,108) | (113,066) | (1,009,803) | (1,042,803) | |
| 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 | 21.50% | -10.76% | -4.90% | -55.15% | -66.43% | |
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Accenture PLC | 0.35% | 0.10% | 0.49% | 1.84% | 2.89% | |
| Adobe Inc. | 11.78% | 0.83% | 1.13% | 7.45% | 10.94% | |
| AppLovin Corp. | 28.97% | 0.46% | -28.27% | -50.24% | -60.51% | |
| Cadence Design Systems Inc. | -2.02% | -4.51% | 7.08% | 6.50% | 6.84% | |
| CrowdStrike Holdings Inc. | -22.05% | -13.28% | -6.35% | -12.56% | -21.36% | |
| Datadog Inc. | -5.30% | -8.73% | -3.84% | -8.23% | -3.24% | |
| International Business Machines Corp. | -1.38% | -13.47% | -6.36% | -19.60% | -11.75% | |
| Intuit Inc. | -6.87% | -13.81% | -18.05% | -18.99% | -2.97% | |
| Microsoft Corp. | 8.95% | 11.02% | 12.45% | 18.12% | 23.20% | |
| Oracle Corp. | -14.52% | -13.56% | -15.40% | -12.87% | 2.35% | |
| Palo Alto Networks Inc. | -4.90% | 5.38% | 11.12% | 3.78% | -7.33% | |
| Salesforce Inc. | -27.15% | -33.24% | -45.06% | -40.81% | -28.80% | |
| ServiceNow Inc. | 2.88% | 4.84% | 4.17% | 0.54% | 1.63% | |
| Synopsys Inc. | -72.84% | -13.81% | -10.64% | -1.33% | -11.09% | |
| Workday Inc. | -12.46% | -14.62% | -23.74% | -19.23% | -25.36% | |
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 × 995,742 ÷ 4,631,116 = 21.50%
3 Click competitor name to see calculations.
The financial trajectory from 2021 to 2025 indicates a transition from significant economic value destruction to a state of positive value creation. This evolution is characterized by a consistent expansion in adjusted revenue and a subsequent recovery in economic profit margins, culminating in a positive economic profit by the end of the period.
- Adjusted Revenue Trends
- A consistent upward trend in adjusted revenue is observed throughout the five-year period. Growth progressed from 1,569,877 thousand US$ in 2021 to 4,631,116 thousand US$ by 2025. The most substantial acceleration occurred between 2024 and 2025, where revenue increased by approximately 60%, suggesting a significant scaling of operations or market penetration.
- Economic Profit Volatility and Recovery
- Economic profit remained negative from 2021 through 2024, though the magnitude of these losses fluctuated. A sharp reduction in economic loss occurred in 2023, reaching -113,066 thousand US$, before a temporary increase in losses to -311,108 thousand US$ in 2024. This volatility was resolved in 2025 with a pivot to a positive economic profit of 995,742 thousand US$, indicating that the company began generating returns in excess of its cost of capital.
- Economic Profit Margin Evolution
- The economic profit margin reflects a dramatic improvement over the analyzed timeframe. Starting at -66.43% in 2021, the margin narrowed significantly to -4.90% by 2023. Despite a slight contraction to -10.76% in 2024, the margin reached a positive 21.50% in 2025. This progression demonstrates an increase in operational efficiency and a successful alignment of revenue growth with cost management and capital charges.
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