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: 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), 10-K (reporting date: 2020-09-27).
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
= 9,896 – 19.20% × 31,317 = 3,882
The analysis of economic value added reveals a period of significant expansion followed by a sharp correction and a subsequent recovery phase. The overall trend indicates a capacity for substantial value creation, although a notable sensitivity to operational volatility is evident during the middle of the observed period.
- Net Operating Profit After Taxes (NOPAT)
- A period of robust growth is observed from 2020 to 2022, with NOPAT increasing from 4,798 million to a peak of 13,145 million. This trajectory was sharply reversed in 2023, when profit contracted to 5,865 million. However, a steady recovery followed in the subsequent years, with the figure climbing to 9,896 million by September 2025.
- Invested Capital and Cost of Capital
- Invested capital experienced a consistent upward trend, rising from 17,459 million in 2020 to a peak of 31,383 million in 2023, before stabilizing around 31,317 million by 2025. Concurrently, the cost of capital remained relatively stable at approximately 18.5% for the first four years of the period, followed by a marginal increase to 19.20% by 2025, which raised the minimum return required to generate economic value.
- Economic Profit Analysis
- Economic profit closely mirrored the volatility of NOPAT, reaching a peak of 7,740 million in 2022. A critical downturn occurred in 2023, where economic profit collapsed to 41 million, indicating that the return on invested capital nearly equaled the cost of capital, effectively neutralizing value creation for that year. A recovery trend is observed in 2024 and 2025, with economic profit rising to 2,347 million and 3,882 million, respectively, signaling a return to positive economic value added.
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Net Operating Profit after Taxes (NOPAT)
Qualcomm Inc., NOPAT calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-09-27).
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 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 832 × 6.05% = 50
5 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 714 × 21.00% = 150
6 Addition of after taxes interest expense to net income.
7 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 893 × 21.00% = 188
8 Elimination of after taxes investment income.
9 Elimination of discontinued operations.
The financial data reveals notable fluctuations in key profitability metrics over the examined periods.
- Net Income
- Net income exhibited a strong upward trend from 2020 through 2022, increasing from $5,198 million to a peak of $12,936 million. However, this was followed by a sharp decline in 2023, dropping to $7,232 million. The figure partially recovered in 2024 to $10,142 million before decreasing again in 2025 to $5,541 million, indicating considerable volatility and inconsistency in net profit generation during the latter years.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT followed a somewhat similar pattern but with distinct deviations. Starting at $4,798 million in 2020, it increased steadily to $13,145 million in 2022, slightly surpassing the net income peak. A significant decrease occurred in 2023, bringing NOPAT down to $5,865 million, which is a more pronounced drop compared to net income. In 2024, NOPAT rebounded to $8,262 million and further increased to $9,896 million in 2025. This partial recovery suggests improved operating efficiency or tax management despite the fluctuating net income.
Overall, the data reflects a period of strong profitability growth until 2022, followed by notable declines and subsequent recovery attempts. The divergence between net income and NOPAT trends in recent years could be indicative of changes in non-operating items, tax rates, or extraordinary gains or losses impacting net income figures more heavily than operating profits.
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Cash Operating Taxes
Qualcomm Inc., cash operating taxes calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-09-27).
- Income Tax Provision from Continuing Operations
- The income tax provision demonstrates notable volatility over the analyzed periods. Initially, there is a substantial increase from 521 million US dollars in 2020 to a peak of 2012 million US dollars in 2022. This is followed by a sharp decrease to 104 million US dollars in 2023, indicating a significant reduction in tax expense or possibly tax strategies implemented during that fiscal year. Subsequently, the provision rises moderately to 226 million US dollars in 2024 and then exhibits a pronounced surge to 7122 million US dollars by 2025, suggesting a notable increase in taxable income or changes in tax regulations impacting the latest period.
- Cash Operating Taxes
- Cash operating taxes exhibit a generally increasing trend throughout the periods analyzed. Starting at 793 million US dollars in 2020, there is a consistent upward movement reaching 2632 million US dollars by 2025. Despite a smaller growth pace observed between 2022 and 2023, the overall trend reflects growing cash tax obligations, potentially linked to increased profitability, changes in tax payment timing, or alterations in operational cash flows influencing tax payments.
- Summary of Taxation Trends
- The overall taxation metrics show a divergence between accounting-based tax provisions and actual cash tax payments. While cash operating taxes increase steadily, the income tax provision is characterized by substantial fluctuations, pointing to possible temporary differences between accounting profit and taxable income or significant tax planning activities. The sharp increase in the income tax provision in 2025 compared to prior years warrants further examination to understand underlying causes such as changes in tax legislation, adjustments in deferred tax assets or liabilities, or extraordinary items affecting the tax expense.
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Invested Capital
Qualcomm Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 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), 10-K (reporting date: 2020-09-27).
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.
- Total Reported Debt & Leases
- There is a relatively stable trend in total reported debt and leases over the observed period. The values fluctuate slightly around the range of approximately 15,400 to 16,300 million US dollars, with no significant upward or downward movement. This indicates a consistent level of indebtedness maintained by the company with minor reductions noted in the mid-term followed by a small increase towards the end.
- Stockholders’ Equity
- The stockholders’ equity shows a substantial and continuous growth over the majority of the periods reviewed, starting from about 6,077 million US dollars and reaching up to a peak of 26,274 million US dollars. After this peak, a notable decline occurs, dropping equity to approximately 21,206 million US dollars by the last period. This pattern suggests significant capital appreciation followed by some degree of capital reduction or loss retention in the most recent term.
- Invested Capital
- Invested capital demonstrates a clear upward trajectory from 17,459 million US dollars to over 31,000 million US dollars. The growth is pronounced particularly between the second and third periods, with a slight plateau and minor fluctuations observed between the later periods. Overall, this indicates ongoing capital investment or accumulation of net assets supporting the company’s operations.
- Summary Insights
- The company has maintained a steady level of debt, suggesting a controlled approach to leveraging. The marked increase in stockholders’ equity over four years reflects strong growth in net assets or retained earnings, though the subsequent decline may warrant investigation into recent operational or financial challenges. The consistent rise in invested capital points to sustained commitment to asset growth and operational capacity. The combined trends imply that while the company has generally expanded its capital base and maintained stable debt levels, recent fluctuations in equity highlight potential volatility in financial performance or market valuation.
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Cost of Capital
Qualcomm Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 192,480) | 192,480) | ÷ | 207,512) | = | 0.93 | 0.93 | × | 20.38% | = | 18.91% | ||
| 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 | 19.20% | ||||||||||
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 | × | 20.38% | = | 18.90% | ||
| 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 | 19.15% | ||||||||||
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 | × | 20.38% | = | 18.18% | ||
| 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 | 18.56% | ||||||||||
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 | × | 20.38% | = | 18.19% | ||
| 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 | 18.55% | ||||||||||
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 | × | 20.38% | = | 18.26% | ||
| 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 | 18.59% | ||||||||||
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 »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 145,865) | 145,865) | ÷ | 164,370) | = | 0.89 | 0.89 | × | 20.38% | = | 18.09% | ||
| Debt3 | 18,000) | 18,000) | ÷ | 164,370) | = | 0.11 | 0.11 | × | 4.02% × (1 – 21.00%) | = | 0.35% | ||
| Operating lease liability4 | 505) | 505) | ÷ | 164,370) | = | 0.00 | 0.00 | × | 4.00% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 164,370) | 1.00 | 18.45% | ||||||||||
Based on: 10-K (reporting date: 2020-09-27).
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 28, 2025 | Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | Sep 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | 3,882) | 2,347) | 41) | 7,740) | 4,794) | 1,577) | |
| Invested capital2 | 31,317) | 30,887) | 31,383) | 29,132) | 20,003) | 17,459) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | 12.40% | 7.60% | 0.13% | 26.57% | 23.96% | 9.03% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | -21.52% | -27.79% | -29.22% | -28.83% | 27.74% | — | |
| Analog Devices Inc. | -12.06% | -14.18% | -10.09% | -11.45% | -14.69% | -9.63% | |
| Applied Materials Inc. | 17.02% | 10.13% | 13.12% | 23.09% | 18.58% | 6.93% | |
| Broadcom Inc. | -3.00% | -10.42% | 4.81% | 3.56% | -5.68% | -10.90% | |
| Intel Corp. | -18.76% | -30.08% | -19.97% | -13.18% | 3.40% | — | |
| KLA Corp. | 20.42% | 16.08% | 20.01% | 22.42% | 10.88% | — | |
| Lam Research Corp. | 11.84% | -3.28% | 2.09% | 17.11% | 12.45% | — | |
| Marvell Technology Inc. | -26.67% | -26.71% | -22.37% | -25.14% | -26.87% | — | |
| Micron Technology Inc. | -5.88% | -17.78% | -29.73% | -2.10% | -6.71% | -12.14% | |
| NVIDIA Corp. | 117.11% | 61.66% | -16.42% | 25.78% | 6.26% | — | |
| Texas Instruments Inc. | 2.38% | 2.70% | 12.32% | 32.90% | 31.53% | — | |
Based on: 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), 10-K (reporting date: 2020-09-27).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 3,882 ÷ 31,317 = 12.40%
4 Click competitor name to see calculations.
The financial performance from 2020 to 2025 is characterized by a period of significant expansion, a sharp contraction in value creation, and a subsequent recovery phase.
- Economic Profit Trends
- Economic profit exhibited strong growth between 2020 and 2022, rising from 1,577 million US dollars to a peak of 7,740 million US dollars. This trajectory was interrupted by a severe decline in 2023, where economic profit fell to 41 million US dollars. A recovery trend emerged in 2024 and 2025, with values increasing to 2,347 million and 3,882 million US dollars, respectively, although these levels remain below the 2022 peak.
- Invested Capital Analysis
- Invested capital increased steadily from 17,459 million US dollars in 2020 to a maximum of 31,383 million US dollars in 2023. Following this peak, the invested capital base stabilized, showing a slight decrease to 30,887 million US dollars in 2024 and returning to 31,317 million US dollars by 2025. This indicates a period of aggressive capital deployment followed by a phase of capital maintenance.
- Economic Spread Ratio Dynamics
- The economic spread ratio demonstrates significant volatility, peaking at 26.57% in 2022, which indicates a high capacity to generate returns well above the cost of capital. In 2023, the ratio plummeted to 0.13%, signaling that the return on invested capital nearly converged with the cost of capital, resulting in minimal economic value addition. The ratio has since rebounded to 7.60% in 2024 and 12.40% in 2025, reflecting an improving spread and a return to positive value creation.
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Economic Profit Margin
Qualcomm Inc., economic profit margin calculation, comparison to benchmarks
| Sep 28, 2025 | Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | Sep 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | 3,882) | 2,347) | 41) | 7,740) | 4,794) | 1,577) | |
| Revenues | 44,284) | 38,962) | 35,820) | 44,200) | 33,566) | 23,531) | |
| Add: Increase (decrease) in unearned revenues | 44) | (7) | (121) | (463) | (353) | (396) | |
| Adjusted revenues | 44,328) | 38,955) | 35,699) | 43,737) | 33,213) | 23,135) | |
| Performance Ratio | |||||||
| Economic profit margin2 | 8.76% | 6.02% | 0.12% | 17.70% | 14.43% | 6.82% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Advanced Micro Devices Inc. | -38.35% | -62.75% | -74.56% | -71.49% | 10.46% | — | |
| Analog Devices Inc. | -46.03% | -65.46% | -36.23% | -42.92% | -94.41% | -31.31% | |
| Applied Materials Inc. | 12.08% | 7.05% | 8.79% | 13.33% | 11.85% | 5.27% | |
| Broadcom Inc. | -7.05% | -28.49% | 8.42% | 6.66% | -13.37% | -30.08% | |
| Intel Corp. | -41.39% | -52.27% | -33.91% | -18.54% | 3.81% | — | |
| KLA Corp. | 15.62% | 13.80% | 15.90% | 18.95% | 10.72% | — | |
| Lam Research Corp. | 9.90% | -3.33% | 1.83% | 12.63% | 10.04% | — | |
| Marvell Technology Inc. | -82.42% | -92.37% | -75.59% | -112.19% | -82.48% | — | |
| Micron Technology Inc. | -9.62% | -37.77% | -102.30% | -3.59% | -11.22% | -23.96% | |
| NVIDIA Corp. | 42.41% | 31.13% | -12.99% | 17.28% | 4.89% | — | |
| Texas Instruments Inc. | 3.86% | 4.51% | 15.88% | 28.85% | 28.21% | — | |
Based on: 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), 10-K (reporting date: 2020-09-27).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 3,882 ÷ 44,328 = 8.76%
3 Click competitor name to see calculations.
The analysis of economic value creation over the observed six-year period reveals a volatile trajectory characterized by an initial phase of rapid expansion, a severe contraction in 2023, and a subsequent recovery trend.
- Economic Profit Margin Volatility
- A significant upward trend is observed between 2020 and 2022, with the economic profit margin expanding from 6.82% to a peak of 17.70%. This indicates a period of high efficiency where value generation substantially exceeded the cost of capital. This trend was abruptly reversed in 2023, as the margin collapsed to 0.12%, representing a near-total erosion of economic profit relative to revenues.
- Revenue and Profit Divergence
- Adjusted revenues grew steadily from 23,135 million USD in 2020 to 43,737 million USD in 2022. In 2023, while revenues experienced a moderate decline to 35,699 million USD, the impact on economic profit was disproportionately severe, falling from 7,740 million USD to 41 million USD. This suggests that during 2023, the company's operating returns barely covered its weighted average cost of capital.
- Recovery Phase Analysis
- A sustained recovery is evident from 2024 through 2025. Adjusted revenues reached a period high of 44,328 million USD by September 2025. During this same window, economic profit rebounded to 3,882 million USD, bringing the economic profit margin back up to 8.76%. Although the recovery is consistent, the margin remains below the peak levels achieved in 2021 and 2022, indicating that while value creation has returned, it has not yet reached its previous maximum efficiency.
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