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
Qualcomm Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26).
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
= 8,351 – 23.65% × 37,310 = -471
The financial performance regarding economic profit exhibits significant volatility over the analyzed six-year period, characterized by alternating cycles of value creation and value destruction. While the organization demonstrated strong economic gains in the initial years, subsequent periods show a struggle to maintain operating profits above the cost of capital, particularly in 2023 and 2026.
- Net Operating Profit After Taxes (NOPAT) Trends
- Operating profitability experienced sharp fluctuations, peaking in September 2022 at 13,145 million US$. A substantial contraction occurred in 2023, where NOPAT fell to 5,865 million US$, representing the lowest point in the series. Although a recovery was observed through 2025, reaching 9,896 million US$, a subsequent decline to 8,351 million US$ occurred by September 2026.
- Invested Capital and Cost of Capital Dynamics
- There is a clear upward trajectory in invested capital, which grew from 20,003 million US$ in 2021 to 37,310 million US$ in 2026. Simultaneously, the cost of capital remained relatively stable but trended slightly higher, moving from 22.86% to 23.65%. This combination of increasing capital deployment and a rising cost of capital has incrementally raised the threshold of operating profit required to achieve positive economic profit.
- Economic Profit and Value Creation
- Economic profit fluctuated between positive and negative territory. Value creation peaked in 2022 with an economic profit of 6,502 million US$. However, the organization entered periods of value destruction in 2023 (-1,291 million US$) and 2026 (-471 million US$). These deficits occurred when NOPAT failed to cover the capital charge associated with the invested capital. The return to positive economic profit in 2024 and 2025 indicates a temporary alignment between operating efficiency and capital costs, though the 2026 result suggests a renewed inability to generate returns exceeding the cost of capital.
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Net Operating Profit after Taxes (NOPAT)
Qualcomm Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in unearned revenues.
3 Addition of increase (decrease) in equity equivalents to net income.
4 2026 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 880 × 5.80% = 51
5 2026 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 740 × 21.00% = 155
6 Addition of after taxes interest expense to net income.
7 2026 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 810 × 21.00% = 170
8 Elimination of after taxes investment income.
9 Elimination of discontinued operations.
The financial performance from September 2021 to September 2026 is characterized by significant volatility in both bottom-line profitability and operating performance. While both metrics exhibit cyclical fluctuations, their trajectories diverge notably in the latter part of the period, suggesting a decoupling of operating results from net earnings.
- Net Income Trends
- Net income demonstrates a pattern of sharp oscillations. A peak of US$ 12,936 million in 2022 was followed by a substantial decline to US$ 7,232 million in 2023. Although a partial recovery occurred in 2024, reaching US$ 10,142 million, a significant trough was recorded in 2025 at US$ 5,541 million. The period concludes with a sharp rebound in 2026, achieving a six-year high of US$ 13,628 million.
- Net Operating Profit After Taxes (NOPAT) Analysis
- NOPAT exhibits similar volatility to net income in the initial years, peaking in 2022 at US$ 13,145 million and falling to a low of US$ 5,865 million in 2023. However, unlike net income, NOPAT shows a steady recovery trend between 2024 and 2025, rising to US$ 9,896 million. This growth is reversed in 2026, where NOPAT declines to US$ 8,351 million, despite the concurrent surge in net income.
- Comparative Analysis of NOPAT and Net Income
- The relationship between operating profit and net income shifts dramatically over the observed timeline. In 2022, NOPAT exceeded net income, indicating that operating performance was stronger than the final bottom line. By 2025, a wide divergence appears, where NOPAT is significantly higher than net income, suggesting that non-operating expenses or losses heavily impacted the final result. Conversely, in 2026, net income far exceeds NOPAT by over US$ 5,000 million, implying the presence of substantial non-operating gains or tax benefits that inflated net earnings beyond the actual operating performance of the business.
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Cash Operating Taxes
Qualcomm Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26).
The financial data reveals a fluctuating trend in cash operating taxes and a high degree of volatility in the income tax provision from continuing operations over the six-year period ending September 27, 2026.
- Cash Operating Taxes Trend
- Cash operating taxes exhibited an overall upward trajectory from 2021 to 2025, rising from 1,484 million US$ to a peak of 2,632 million US$. Although a temporary decline occurred in 2023 to 1,803 million US$, the subsequent years showed recovery and growth. However, a significant contraction is observed in 2026, where cash operating taxes dropped to 835 million US$, the lowest level in the analyzed period.
- Income Tax Provision Volatility
- The income tax provision from continuing operations demonstrates extreme variance compared to cash taxes. After reaching 2,012 million US$ in 2022, the provision collapsed to 104 million US$ in 2023 and 226 million US$ in 2024. A substantial spike occurred in 2025, reaching 7,122 million US$, followed by a reversal to a negative provision of -4,214 million US$ in 2026, indicating a significant tax benefit or valuation allowance adjustment.
- Divergence Between Provision and Cash Outflows
- A notable disconnect exists between accounting tax provisions and actual cash tax payments. In 2025, while the provision was 7,122 million US$, the cash operating taxes were substantially lower at 2,632 million US$. Similarly, in 2026, the cash operating taxes remained positive at 835 million US$ despite a negative income tax provision of -4,214 million US$. This divergence suggests significant timing differences, deferred tax impacts, or non-cash tax adjustments affecting the Economic Value Added (EVA) calculations.
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Invested Capital
Qualcomm Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of unearned revenues.
4 Addition of equity equivalents to stockholders’ equity.
5 Removal of accumulated other comprehensive income.
6 Subtraction of construction in progress.
7 Subtraction of marketable securities.
The capital structure reveals a significant expansion of the total invested capital base over the six-year period, growing from 20,003 million USD in 2021 to 37,310 million USD by 2026. This expansion is primarily driven by substantial increases in stockholders' equity, while total reported debt and leases remained relatively constant, indicating a strategic shift toward equity-funded growth.
- Invested Capital Trajectory
- A consistent upward trend is observed in invested capital, which increased by approximately 86.5% over the analyzed period. The most rapid growth occurred between 2021 and 2023, where capital rose from 20,003 million USD to 31,383 million USD. Following a period of relative stabilization between 2023 and 2025, a sharp increase to 37,310 million USD was recorded in 2026, signaling a significant increase in the resources deployed to generate economic value.
- Debt and Lease Stability
- Total reported debt and leases exhibited minimal volatility, fluctuating within a narrow range between 15,440 million USD and 16,299 million USD. The slight downward trend from 2021 to 2024 was followed by a marginal recovery through 2026. The stability of this component suggests that the increase in invested capital was not achieved through additional leverage, maintaining a consistent debt profile throughout the period.
- Stockholders' Equity Volatility and Growth
- Stockholders' equity served as the primary catalyst for the growth of invested capital, rising from 9,950 million USD in 2021 to 30,401 million USD in 2026. A notable contraction occurred in 2025, where equity decreased from 26,274 million USD to 21,206 million USD, which temporarily offset the growth in the overall invested capital base. However, this was followed by a robust recovery in 2026, with equity reaching its peak value for the period.
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Cost of Capital
Qualcomm Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 185,313) | 185,313) | ÷ | 199,992) | = | 0.93 | 0.93 | × | 25.14% | = | 23.30% | ||
| Debt3 | 13,799) | 13,799) | ÷ | 199,992) | = | 0.07 | 0.07 | × | 5.99% × (1 – 21.00%) | = | 0.33% | ||
| Operating lease liability4 | 880) | 880) | ÷ | 199,992) | = | 0.00 | 0.00 | × | 5.80% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 199,992) | 1.00 | 23.65% | ||||||||||
Based on: 10-K (reporting date: 2026-09-27).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 192,480) | 192,480) | ÷ | 207,512) | = | 0.93 | 0.93 | × | 25.14% | = | 23.32% | ||
| Debt3 | 14,200) | 14,200) | ÷ | 207,512) | = | 0.07 | 0.07 | × | 5.12% × (1 – 21.00%) | = | 0.28% | ||
| Operating lease liability4 | 832) | 832) | ÷ | 207,512) | = | 0.00 | 0.00 | × | 6.05% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 207,512) | 1.00 | 23.62% | ||||||||||
Based on: 10-K (reporting date: 2025-09-28).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 192,192) | 192,192) | ÷ | 207,298) | = | 0.93 | 0.93 | × | 25.14% | = | 23.31% | ||
| Debt3 | 14,300) | 14,300) | ÷ | 207,298) | = | 0.07 | 0.07 | × | 4.27% × (1 – 21.00%) | = | 0.23% | ||
| Operating lease liability4 | 806) | 806) | ÷ | 207,298) | = | 0.00 | 0.00 | × | 6.42% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 207,298) | 1.00 | 23.56% | ||||||||||
Based on: 10-K (reporting date: 2024-09-29).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 123,421) | 123,421) | ÷ | 138,390) | = | 0.89 | 0.89 | × | 25.14% | = | 22.42% | ||
| Debt3 | 14,300) | 14,300) | ÷ | 138,390) | = | 0.10 | 0.10 | × | 4.35% × (1 – 21.00%) | = | 0.36% | ||
| Operating lease liability4 | 669) | 669) | ÷ | 138,390) | = | 0.00 | 0.00 | × | 5.90% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 138,390) | 1.00 | 22.80% | ||||||||||
Based on: 10-K (reporting date: 2023-09-24).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 126,113) | 126,113) | ÷ | 141,289) | = | 0.89 | 0.89 | × | 25.14% | = | 22.44% | ||
| Debt3 | 14,499) | 14,499) | ÷ | 141,289) | = | 0.10 | 0.10 | × | 4.18% × (1 – 21.00%) | = | 0.34% | ||
| Operating lease liability4 | 677) | 677) | ÷ | 141,289) | = | 0.00 | 0.00 | × | 5.41% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 141,289) | 1.00 | 22.80% | ||||||||||
Based on: 10-K (reporting date: 2022-09-25).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 155,098) | 155,098) | ÷ | 173,152) | = | 0.90 | 0.90 | × | 25.14% | = | 22.52% | ||
| Debt3 | 17,500) | 17,500) | ÷ | 173,152) | = | 0.10 | 0.10 | × | 4.02% × (1 – 21.00%) | = | 0.32% | ||
| Operating lease liability4 | 554) | 554) | ÷ | 173,152) | = | 0.00 | 0.00 | × | 4.75% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 173,152) | 1.00 | 22.86% | ||||||||||
Based on: 10-K (reporting date: 2021-09-26).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Qualcomm Inc., economic spread ratio calculation, comparison to benchmarks
| Sep 27, 2026 | Sep 28, 2025 | Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (471) | 2,499) | 984) | (1,291) | 6,502) | 3,941) | |
| Invested capital2 | 37,310) | 31,317) | 30,887) | 31,383) | 29,132) | 20,003) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | -1.26% | 7.98% | 3.19% | -4.11% | 22.32% | 19.70% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | — | -21.43% | -27.69% | -29.12% | -28.73% | 27.84% | |
| Analog Devices Inc. | — | -12.05% | -14.17% | -10.08% | -11.45% | -14.69% | |
| Applied Materials Inc. | — | 17.08% | 10.19% | 13.17% | 23.15% | 18.63% | |
| Broadcom Inc. | — | -2.99% | -10.41% | 4.82% | 3.57% | -5.66% | |
| Intel Corp. | — | -18.73% | -30.05% | -19.94% | -13.15% | 3.44% | |
| KLA Corp. | 27.56% | 20.46% | 16.11% | 20.05% | 22.45% | 10.91% | |
| Lam Research Corp. | 11.73% | 11.91% | -3.21% | 2.15% | 17.18% | 12.51% | |
| Marvell Technology Inc. | -8.89% | -26.62% | -26.65% | -22.31% | -25.08% | -26.81% | |
| Micron Technology Inc. | 56.21% | -14.83% | -26.53% | -38.30% | -10.78% | -15.51% | |
| NVIDIA Corp. | 86.10% | 117.20% | 61.75% | -16.34% | 25.86% | 6.34% | |
| Texas Instruments Inc. | — | 2.39% | 2.70% | 12.32% | 32.90% | 31.53% | |
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26).
1 Economic profit. See details »
2 Invested capital. See details »
3 2026 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -471 ÷ 37,310 = -1.26%
4 Click competitor name to see calculations.
The analysis of economic value added reveals a period of significant volatility in value creation, characterized by fluctuating economic profits and a steadily expanding capital base. While the total invested capital shows a general upward trajectory, the company's ability to generate returns above its cost of capital has been inconsistent, alternating between periods of substantial economic gain and value destruction.
- Invested Capital Trends
- A consistent growth pattern in invested capital is observed, rising from 20,003 million in 2021 to 37,310 million by 2026. Aside from a marginal decrease in 2024, the capital base has expanded significantly, indicating a continuous increase in the resources deployed to generate earnings.
- Economic Profit Performance
- Economic profit demonstrates high instability over the analyzed timeframe. After reaching a peak of 6,502 million in 2022, profit plummeted to a deficit of 1,291 million in 2023. A recovery phase followed, with profits rising to 984 million in 2024 and 2,499 million in 2025, before returning to a negative position of 471 million in 2026.
- Economic Spread Ratio Dynamics
- The economic spread ratio reflects the volatility of the economic profit relative to the invested capital. A strong positive spread was recorded in 2021 and 2022, peaking at 22.32%. However, the ratio collapsed to -4.11% in 2023, signaling that the return on invested capital fell below the cost of capital. Although a moderate recovery occurred through 2025, reaching 7.98%, the ratio declined again to -1.26% in 2026, highlighting a recurring inability to maintain a stable positive spread.
The divergence between the steadily increasing invested capital and the oscillating economic spread ratio suggests that the expansion of the capital base has not consistently translated into sustainable economic value. The recurring shifts into negative spread territory indicate periods where the cost of financing the invested capital exceeded the operating returns generated by the business.
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Economic Profit Margin
Qualcomm Inc., economic profit margin calculation, comparison to benchmarks
| Sep 27, 2026 | Sep 28, 2025 | Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | (471) | 2,499) | 984) | (1,291) | 6,502) | 3,941) | |
| Revenues | 43,120) | 44,284) | 38,962) | 35,820) | 44,200) | 33,566) | |
| Add: Increase (decrease) in unearned revenues | (158) | 44) | (7) | (121) | (463) | (353) | |
| Adjusted revenues | 42,962) | 44,328) | 38,955) | 35,699) | 43,737) | 33,213) | |
| Performance Ratio | |||||||
| Economic profit margin2 | -1.10% | 5.64% | 2.53% | -3.62% | 14.87% | 11.86% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Advanced Micro Devices Inc. | — | -38.19% | -62.53% | -74.32% | -71.26% | 10.49% | |
| Analog Devices Inc. | — | -46.01% | -65.44% | -36.21% | -42.90% | -94.37% | |
| Applied Materials Inc. | — | 12.11% | 7.09% | 8.83% | 13.37% | 11.89% | |
| Broadcom Inc. | — | -7.02% | -28.45% | 8.44% | 6.68% | -13.34% | |
| Intel Corp. | — | -41.31% | -52.23% | -33.86% | -18.50% | 3.85% | |
| KLA Corp. | 20.82% | 15.65% | 13.83% | 15.93% | 18.98% | 10.75% | |
| Lam Research Corp. | 9.13% | 9.96% | -3.26% | 1.89% | 12.68% | 10.09% | |
| Marvell Technology Inc. | -20.64% | -82.24% | -92.17% | -75.41% | -111.94% | -82.30% | |
| Micron Technology Inc. | 40.59% | -23.96% | -55.62% | -130.14% | -18.25% | -25.63% | |
| NVIDIA Corp. | 41.70% | 42.44% | 31.17% | -12.92% | 17.34% | 4.95% | |
| Texas Instruments Inc. | — | 3.86% | 4.51% | 15.89% | 28.85% | 28.21% | |
Based on: 10-K (reporting date: 2026-09-27), 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26).
1 Economic profit. See details »
2 2026 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × -471 ÷ 42,962 = -1.10%
3 Click competitor name to see calculations.
The analysis of economic value added indicates a period of significant volatility in the company's ability to generate returns above its cost of capital between 2021 and 2026. The economic profit margin exhibits a cyclical pattern, characterized by sharp peaks and subsequent contractions, suggesting sensitivity to market conditions or capital expenditure cycles.
- Economic Profit Margin Trends
- A peak in profitability was observed in September 2022, where the economic profit margin reached 14.87%, coinciding with an economic profit of 6,502 million USD. This represents the high point of value creation within the analyzed period. However, this was followed by a severe contraction in September 2023, with the margin falling to -3.62%, signaling that the company failed to cover its cost of capital during that fiscal year.
- Recovery and Subsequent Decline
- A recovery phase occurred between 2024 and 2025, with the economic profit margin improving to 2.53% and then 5.64%, respectively. This period of growth was supported by an increase in adjusted revenues, which reached a peak of 44,328 million USD in September 2025. Despite this recovery, the trend reversed in September 2026, as the economic profit margin declined again to -1.10%, resulting in a negative economic profit of 471 million USD.
- Revenue Correlation and Efficiency
- Adjusted revenues demonstrate fluctuations that do not always correlate linearly with economic profit. For instance, while revenues in September 2026 remained relatively high at 42,962 million USD, the economic profit margin turned negative. This divergence suggests that increases in top-line revenue have not consistently translated into economic value creation, indicating potential increases in the cost of capital or a compression in operational efficiency during the latter stages of the period.
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