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 – 19.26% × 31,317 = 3,863
The financial trajectory from 2020 to 2025 is characterized by significant volatility in operating profitability and a steady expansion of the capital base. While the overall trend indicates growth in value creation, a critical inflection point occurred in 2023, where economic value added nearly neutralized before resuming an upward trend.
- Net Operating Profit After Taxes (NOPAT)
- A period of rapid expansion is observed between 2020 and 2022, with NOPAT increasing from 4,798 million to a peak of 13,145 million. This growth was followed by a sharp contraction in 2023, where NOPAT fell to 5,865 million. However, a recovery phase is evident in the subsequent two years, with profitability rising to 9,896 million by 2025.
- Invested Capital and Cost of Capital
- Invested capital shows a consistent upward trend, growing from 17,459 million in 2020 to 31,317 million in 2025, representing a substantial increase in the company's asset base. Concurrently, the cost of capital remained relatively stable, fluctuating within a narrow range between 18.50% and 19.26%, with a slight increase observed in the final two years of the period.
- Economic Profit Trends
- Economic profit mirrored the volatility of NOPAT, peaking at 7,723 million in 2022. A severe decline occurred in 2023, where economic profit dropped to 23 million, indicating that the NOPAT generated was barely sufficient to cover the capital charge for that year. Following this trough, a positive recovery trend is observed, with economic profit climbing to 2,328 million in 2024 and reaching 3,863 million by 2025.
The analysis indicates that while the company has successfully scaled its invested capital, the efficiency of this capital—as measured by economic profit—has been subject to cyclical pressures. The recovery observed in 2024 and 2025 suggests a return to sustainable value creation, although levels remain below the 2022 high.
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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 | × | 20.45% | = | 18.97% | ||
| 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 | 19.26% | ||||||||||
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 | × | 20.45% | = | 18.96% | ||
| 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 | 19.21% | ||||||||||
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 | × | 20.45% | = | 18.24% | ||
| 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 | 18.62% | ||||||||||
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 | × | 20.45% | = | 18.25% | ||
| 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 | 18.61% | ||||||||||
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 | × | 20.45% | = | 18.32% | ||
| 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 | 18.65% | ||||||||||
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 | × | 20.45% | = | 18.15% | ||
| 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 | 18.50% | ||||||||||
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 | 3,863) | 2,328) | 23) | 7,723) | 4,782) | 1,567) | |
| Invested capital2 | 31,317) | 30,887) | 31,383) | 29,132) | 20,003) | 17,459) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | 12.33% | 7.54% | 0.07% | 26.51% | 23.91% | 8.98% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | -21.59% | -27.86% | -29.29% | -28.90% | 27.67% | — | |
| Analog Devices Inc. | -12.12% | -14.24% | -10.15% | -11.51% | -14.75% | -9.69% | |
| Applied Materials Inc. | 16.96% | 10.06% | 13.05% | 23.03% | 18.51% | 6.87% | |
| Broadcom Inc. | -3.06% | -10.48% | 4.75% | 3.50% | -5.73% | -10.95% | |
| Intel Corp. | -18.82% | -30.12% | -20.02% | -13.23% | 3.35% | — | |
| KLA Corp. | 20.36% | 16.01% | 19.95% | 22.36% | 10.81% | — | |
| Lam Research Corp. | 11.77% | -3.35% | 2.02% | 17.05% | 12.38% | — | |
| Micron Technology Inc. | -5.94% | -17.84% | -29.79% | -2.16% | -6.77% | -12.20% | |
| NVIDIA Corp. | 117.04% | 61.59% | -16.49% | 25.71% | 6.18% | — | |
| Texas Instruments Inc. | 2.33% | 2.64% | 12.26% | 32.84% | 31.47% | — | |
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 × 3,863 ÷ 31,317 = 12.33%
4 Click competitor name to see calculations.
The financial trajectory from 2020 to 2025 is characterized by a period of rapid expansion in economic value creation, a severe contraction in 2023, and a subsequent recovery phase.
- Economic Spread Ratio Trends
- A strong upward trajectory was observed between 2020 and 2022, with the ratio increasing from 8.98% to a peak of 26.51%, indicating highly efficient capital utilization. This was followed by a precipitous decline in 2023, where the ratio fell to 0.07%, suggesting that the return on invested capital converged with the cost of capital. A recovery trend emerged thereafter, with the ratio climbing to 7.54% in 2024 and reaching 12.33% by 2025.
- Economic Profit Fluctuations
- Economic profit mirrored the movements of the spread ratio, growing from US$ 1,567 million in 2020 to a maximum of US$ 7,723 million in 2022. In 2023, a significant contraction occurred, with economic profit dropping to US$ 23 million, representing a near-total erosion of value added. The period concluded with a steady rebound, with profits rising to US$ 2,328 million in 2024 and US$ 3,863 million in 2025.
- Invested Capital Dynamics
- Invested capital showed a consistent growth pattern from 2020 through 2023, rising from US$ 17,459 million to a peak of US$ 31,383 million. Following this expansion, the capital base stabilized, ending the period at US$ 31,317 million in 2025. The data indicates that while the capital base nearly doubled over the five-year span, the volatility in economic profit was driven by operational returns rather than fluctuations in the amount of capital invested.
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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 | 3,863) | 2,328) | 23) | 7,723) | 4,782) | 1,567) | |
| 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 | 8.71% | 5.98% | 0.06% | 17.66% | 14.40% | 6.77% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Advanced Micro Devices Inc. | -38.49% | -62.91% | -74.75% | -71.67% | 10.43% | — | |
| Analog Devices Inc. | -46.26% | -65.74% | -36.44% | -43.15% | -94.78% | -31.50% | |
| Applied Materials Inc. | 12.03% | 7.00% | 8.75% | 13.30% | 11.81% | 5.22% | |
| Broadcom Inc. | -7.20% | -28.65% | 8.31% | 6.55% | -13.49% | -30.22% | |
| Intel Corp. | -41.51% | -52.35% | -34.00% | -18.61% | 3.75% | — | |
| KLA Corp. | 15.57% | 13.74% | 15.85% | 18.90% | 10.66% | — | |
| Lam Research Corp. | 9.84% | -3.40% | 1.77% | 12.58% | 9.98% | — | |
| Micron Technology Inc. | -9.72% | -37.89% | -102.50% | -3.70% | -11.32% | -24.08% | |
| NVIDIA Corp. | 42.39% | 31.10% | -13.05% | 17.23% | 4.83% | — | |
| Texas Instruments Inc. | 3.76% | 4.42% | 15.81% | 28.80% | 28.15% | — | |
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 × 3,863 ÷ 44,328 = 8.71%
3 Click competitor name to see calculations.
The financial trajectory between 2020 and 2025 is characterized by an initial phase of rapid value creation, a severe contraction in 2023, and a subsequent recovery period. The volatility in economic profit indicates significant fluctuations in the ability to generate returns above the weighted average cost of capital.
- Economic Profit Margin Volatility
- A strong upward trend is observed from 2020 to 2022, with the margin expanding from 6.77% to a peak of 17.66%. This suggests a period of high operational efficiency and substantial value addition. This trend reversed sharply in 2023, with the margin collapsing to 0.06%, indicating that the entity barely achieved its cost of capital. A recovery phase followed, with the margin rising to 5.98% in 2024 and reaching 8.71% by 2025.
- Revenue Growth and Contraction
- Adjusted revenues demonstrated consistent growth from 2020 to 2022, increasing from US$ 23,135 million to US$ 43,737 million. A notable decline occurred in 2023, where revenues dropped to US$ 35,699 million. Subsequent years show a return to expansion, with revenues climbing to US$ 38,955 million in 2024 and reaching a period high of US$ 44,328 million by 2025.
- Economic Profit Analysis
- Economic profit grew aggressively in the early period, rising from US$ 1,567 million in 2020 to US$ 7,723 million in 2022. The precipitous drop to US$ 23 million in 2023 represents a near-total erosion of economic value creation. While economic profit rebounded to US$ 2,328 million in 2024 and US$ 3,863 million in 2025, the recovery in absolute economic profit remains below the 2022 peak, despite 2025 revenues exceeding 2022 levels. This suggests a decrease in the efficiency of value generation relative to the revenue base compared to the 2022 peak.
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