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.
Paying user area
Try for free
Trade Desk Inc. pages available for free this week:
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Operating Profit Margin since 2016
- Current Ratio since 2016
- Debt to Equity since 2016
- Total Asset Turnover since 2016
- Price to Operating Profit (P/OP) since 2016
- Price to Book Value (P/BV) since 2016
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Trade Desk Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Economic Profit
Trade Desk Inc., economic profit calculation
US$ in thousands
| 12 months ended: | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 NOPAT. See details »
2 Cost of capital. See details »
3 Invested capital. See details »
4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= – × =
The financial data reveals several notable trends over the five-year period ending in 2024. The net operating profit after taxes (NOPAT) exhibits significant volatility. Starting at a high level in 2020, there is a marked decline through 2021 and 2022, reaching a low point in 2022. This is followed by a recovery in 2023 and a substantial increase in 2024, surpassing the initial value observed in 2020.
The cost of capital remains remarkably stable throughout the period, fluctuating only slightly around an average of approximately 19.56%, which suggests consistent capital market conditions or risk assessment by the company.
Invested capital shows a clear upward trend from 2020 to 2024, with a notable increase between 2023 and 2024. This steady growth indicates continued investment in assets or business expansion, despite some fluctuations in the intermediate years.
Economic profit, calculated as the difference between NOPAT and the cost of capital applied to invested capital, presents a concerning pattern. While positive in 2020, it turns sharply negative in 2021 and remains deeply negative through 2024. The magnitude of these negative values suggests that the company is not generating sufficient returns above its cost of capital, despite the improvements seen in NOPAT towards the end of the period.
- Net Operating Profit After Taxes (NOPAT)
- Declines steeply from 221,768 in 2020 to 27,018 in 2022, then recovers to 264,450 in 2024, indicating recovery and growth after a challenging period.
- Cost of Capital
- Remains steady, around 19.56%, showing no significant changes in financing costs or perceived risk.
- Invested Capital
- Increases from 1,062,113 in 2020 to 2,455,827 in 2024, reflecting ongoing investments or asset accumulation.
- Economic Profit
- Positive in 2020 at 13,871, but negative and large in magnitude from 2021 to 2024, indicating returns below the cost of capital, a potential concern for value creation.
In summary, while the company demonstrates resilience and recovery in operational profitability by 2024, the negative economic profit over multiple years highlights a disconnect between capital investment and value generation, which may warrant strategic review and efficiency improvements.
Net Operating Profit after Taxes (NOPAT)
Trade Desk Inc., NOPAT calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2020-12-31).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for credit losses.
3 Addition of increase (decrease) in equity equivalents to net income.
4 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
5 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
6 Addition of after taxes interest expense to net income.
7 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
8 Elimination of after taxes investment income.
The financial data exhibits considerable fluctuations in both net income and net operating profit after taxes (NOPAT) over the observed five-year period. The net income demonstrates a significant decline from US$242,317 thousand in 2020 to a low point of US$53,385 thousand in 2022. Following this trough, there is a marked recovery with net income rising to US$178,940 thousand in 2023 and further accelerating to US$393,076 thousand in 2024, surpassing the initial 2020 level.
In parallel, NOPAT follows a somewhat similar pattern. It begins at US$221,768 thousand in 2020, sharply decreases to US$27,018 thousand by 2022, indicating a challenging operational environment or increased costs impacting profitability. However, NOPAT recovers noticeably in the subsequent years, reaching US$73,055 thousand in 2023 and significantly improving to US$264,450 thousand in 2024. Despite this recovery, the NOPAT in 2024 remains below the 2020 level, suggesting operational gains that have yet to fully match earlier performance.
- Trends in Profitability
- The data reveals a period of financial stress or restructuring through 2021 and 2022, where both net income and NOPAT declined substantially. The subsequent years indicate a robust turnaround, with profitability recovering and net income achieving new highs by 2024.
- Comparative Analysis of Net Income and NOPAT
- While net income shows a strong rebound exceeding initial levels, NOPAT, which represents operating efficiency after taxes, though improved, does not fully return to or exceed its starting position by 2024. This differential may reflect changes in non-operating items or tax impacts influencing net income beyond core operational performance.
- Implications
- The patterns suggest a company that experienced significant challenges impacting profitability mid-period but took actions resulting in considerable improvement by the end of the timeframe. The divergence in recovery levels between net income and NOPAT warrants close monitoring to understand the sustainability and drivers of net income growth.
Cash Operating Taxes
Trade Desk Inc., cash operating taxes calculation
US$ in thousands
Based on: 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), 10-K (reporting date: 2020-12-31).
The financial data reveals significant changes in the tax-related items over the five-year period from 2020 to 2024. Both the provision for income taxes and the cash operating taxes exhibit distinct trends that can be analyzed to understand their financial impacts.
- Provision for (benefit from) income taxes
- This item shows a substantial shift over the analyzed period. Starting with a negative figure of -98,414 thousand USD in 2020, indicating a tax benefit, the amount decreases sharply in magnitude to -15,726 thousand USD in 2021. From 2022 onwards, the provision turns positive, indicating a tax provision rather than a benefit, increasing to 73,985 thousand USD in 2022, then to 89,055 thousand USD in 2023, and further to 114,226 thousand USD in 2024. This pattern suggests a significant turnaround from tax benefits to increasing tax expenses during the period, which may reflect changes in profitability, tax strategies, or tax law impacts.
- Cash operating taxes
- Starting from a negative value of -65,246 thousand USD in 2020, indicating tax refunds or tax credits received, the cash operating taxes turn positive in the following years and show a rising trend. In 2021, it is reported at 4,359 thousand USD and escalates markedly each year to 98,789 thousand USD in 2022, 137,273 thousand USD in 2023, and further to 175,853 thousand USD in 2024. This upward trend in cash tax payments reflects increasing tax cash outflows, which could be due to higher taxable income or changes in payment timing and tax policy compliance.
Overall, the data illustrates a transition from a tax benefit situation with tax credits or refunds in 2020 to progressively higher tax provisions and cash operating tax payments through 2024. This transition highlights significant changes in the company’s tax position that could be influenced by operational growth, profitability improvements, or external tax environment changes. The consistent increases in both provision and cash taxes imply growing tax obligations and cash tax outflows over the recent years.
Invested Capital
Trade Desk Inc., invested capital calculation (financing approach)
US$ in thousands
Based on: 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), 10-K (reporting date: 2020-12-31).
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 equity equivalents to stockholders’ equity.
5 Removal of accumulated other comprehensive income.
6 Subtraction of construction in progress.
7 Subtraction of short-term investments, net.
- Total reported debt & leases
- The total reported debt and leases show a generally declining trend from 2020 to 2023, decreasing from approximately 292 million USD to 236 million USD. However, there is a notable increase in 2024, rising sharply to 312 million USD, which represents the highest value in the five-year period.
- Stockholders’ equity
- Stockholders’ equity exhibits a consistent upward trajectory over the entire period, growing significantly each year. Starting at roughly 1.0 billion USD in 2020, it nearly doubles by 2022 to over 2.1 billion USD and continues to rise to nearly 2.95 billion USD by 2024, indicating strengthening financial stability and increased retained earnings or capital contributions.
- Invested capital
- Invested capital increases markedly from about 1.06 billion USD in 2020 to a peak of approximately 1.87 billion USD in 2022. There is a slight contraction in 2023 to around 1.76 billion USD, followed by a significant expansion in 2024, reaching approximately 2.46 billion USD. This pattern suggests fluctuating but overall growing investment in the company's assets supported by equity and liabilities.
Cost of Capital
Trade Desk 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: 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).
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Operating lease liability3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2020-12-31).
Economic Spread Ratio
Trade Desk Inc., economic spread ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =
4 Click competitor name to see calculations.
The analysis of the financial metrics over the five-year period reveals significant trends in economic profit, invested capital, and economic spread ratio for the company.
- Economic Profit
-
Economic profit displayed a notable decline from a positive figure of 13,871 thousand US dollars in 2020 to negative values in subsequent years. It reached -173,850 thousand in 2021 and further deteriorated to -337,778 thousand in 2022. Although there was some improvement in 2023, with economic profit reducing its negative gap to -272,469 thousand, and further to -215,621 thousand in 2024, the figures indicate persistent losses over the period following 2020.
- Invested Capital
-
Invested capital increased consistently from 1,062,113 thousand US dollars in 2020 to 2,455,827 thousand in 2024. There was a steady growth trend, with a significant rise in 2024 after a slight decrease in 2023 compared to 2022. This suggests continuous investment in capital resources, despite the economic profit challenges.
- Economic Spread Ratio
-
The economic spread ratio followed a downward trend starting from a positive 1.31% in 2020 and turning negative from 2021 onwards. It reached the lowest point at -18.1% in 2022, then gradually improved to -15.44% in 2023 and -8.78% in 2024. This pattern correlates with the economic profit trend and highlights ongoing difficulties in generating returns above the cost of capital, although with some signs of recovery in the last two years.
In summary, the firm experienced increasing invested capital throughout the period, but economic profit remained negative after 2020, pointing to challenges in achieving profitable returns on the capital employed. The economic spread ratio confirms this situation, showing negative spreads after 2020 with gradual improvement towards 2024. These trends suggest that while capital investments have been expanded, the company has struggled to generate economic value, though there are signs of partial recovery in the most recent years analyzed.
Economic Profit Margin
Trade Desk Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Economic profit1 | ||||||
| Revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The financial data reveals significant trends in revenue and economic profit for the company over the five-year period analyzed.
- Revenue
- The company experienced consistent and substantial revenue growth year-over-year. Revenue increased from approximately $836 million in 2020 to nearly $2.44 billion in 2024. This upward trajectory indicates a strong expanding business, with revenue nearly tripling during the analyzed period.
- Economic Profit
- Despite the increasing revenue, economic profit demonstrated a starkly negative trend. The company recorded positive economic profit in 2020 at approximately $13.9 million but shifted to significant economic losses in subsequent years. Economic profit deteriorated sharply to roughly -$174 million in 2021 and further worsened to nearly -$338 million by 2022. Although there was some improvement in 2023 and 2024, economic profit remained substantially negative at approximately -$272 million and -$216 million, respectively.
- Economic Profit Margin
- The economic profit margin also declined markedly. Starting from a positive margin of 1.66% in 2020, it fell into negative territory in 2021 and remained negative throughout the period. The margin bottomed at -21.41% in 2022 before improving moderately to -8.82% by 2024. The negative margins reflect that despite strong revenue growth, the company's economic returns have been insufficient to cover the cost of capital.
In summary, while the company’s revenue growth trend is robust, the economic profit and its margin reveal challenges in generating value in excess of capital costs. The persistent economic losses suggest that increased revenues have not translated into corresponding economic profitability, highlighting potential issues with cost management, investment returns, or competitive pressures that merit further investigation.