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.
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2016
- Total Asset Turnover since 2016
- Price to Operating Profit (P/OP) since 2016
- Price to Sales (P/S) since 2016
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Economic Profit
Trade Desk Inc., economic profit calculation
US$ in thousands
| 12 months ended: | Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|
| Net operating profit after taxes (NOPAT)1 | ||||||
| Cost of capital2 | ||||||
| Invested capital3 | ||||||
| Economic profit4 | ||||||
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
= – × =
The financial trajectory between 2021 and 2025 reflects a transition from consistent value destruction to the achievement of positive economic value added. While the initial period was characterized by returns failing to meet the cost of capital, a significant reversal in profitability trends occurred toward the end of the period.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited substantial volatility in the early years, dropping sharply from 127,366 thousand US$ in 2021 to 27,018 thousand US$ in 2022. Following this trough, a period of aggressive growth ensued, with profits increasing to 73,055 thousand US$ in 2023, 264,450 thousand US$ in 2024, and reaching a peak of 579,226 thousand US$ in 2025.
- Cost of Capital
- The cost of capital remained highly stable throughout the analyzed timeframe, maintaining a narrow range between 18.70% and 18.74% from 2021 to 2024. A slight reduction to 18.28% was observed in 2025, indicating a marginal decrease in the required rate of return on invested capital.
- Invested Capital
- Invested capital followed a non-linear trend, increasing from 1,539,599 thousand US$ in 2021 to a peak of 2,455,827 thousand US$ in 2024. A contraction occurred in 2025, with invested capital decreasing to 2,114,481 thousand US$, suggesting a potential optimization of assets or a reduction in capital expenditures.
- Economic Profit
- Economic profit remained negative for four consecutive years, signaling that the company was not generating sufficient operating returns to cover its cost of capital. Value destruction peaked in 2022 at -322,025 thousand US$. However, a steady recovery trend was observed from 2023 onwards, culminating in a shift to positive economic profit of 192,686 thousand US$ in 2025, marking the transition to actual economic value creation.
Net Operating Profit after Taxes (NOPAT)
Trade Desk 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 equity equivalents to net income.
4 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
5 2025 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 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
8 Elimination of after taxes investment income.
Net operating profit after taxes (NOPAT) exhibited significant fluctuations over the five-year period. While net income demonstrated volatility, the trend in NOPAT presents a more pronounced pattern of initial decline followed by substantial recovery and growth.
- Overall Trend
- NOPAT decreased considerably from 2021 to 2022, then experienced a period of moderate growth in 2023. A substantial increase occurred between 2023 and 2024, and this upward trajectory continued into 2025, resulting in the highest NOPAT value within the observed timeframe.
- Year-over-Year Changes
- A significant decrease in NOPAT is observed from US$127,366 thousand in 2021 to US$27,018 thousand in 2022, representing a substantial contraction. The subsequent year, 2023, showed improvement, with NOPAT reaching US$73,055 thousand. However, the most dramatic change occurred between 2023 and 2024, with NOPAT increasing to US$264,450 thousand. This growth continued in 2025, with NOPAT reaching US$579,226 thousand.
- Relationship to Net Income
- While both net income and NOPAT experienced fluctuations, NOPAT’s decline in 2022 was more pronounced than that of net income. Conversely, the growth in NOPAT from 2024 to 2025 outpaced the growth in net income, suggesting increasing operational efficiency or changes in the capital structure impacting the calculation of NOPAT. The difference between net income and NOPAT remained consistent throughout the period, indicating a stable relationship between non-operating items and net income.
The substantial recovery and growth in NOPAT from 2023 onwards suggest a positive shift in the company’s operational performance and profitability. Further investigation into the factors driving these changes would be beneficial for a comprehensive understanding of the company’s financial health.
Cash Operating Taxes
Trade Desk Inc., cash operating taxes calculation
US$ 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 (benefit from) income taxes and cash operating taxes exhibit distinct trends over the observed period. The provision for income taxes demonstrates a significant shift from a benefit in 2021 to substantial provisions in subsequent years, indicating increasing tax liabilities. Conversely, cash operating taxes show a more volatile pattern, peaking in 2023 and declining sharply in 2025.
- Provision for Income Taxes
- A substantial benefit from income taxes was recorded in 2021, amounting to negative US$15.726 million. This was followed by a marked increase in provisions, reaching US$73.985 million in 2022, US$89.055 million in 2023, US$114.226 million in 2024, and further increasing to US$215.451 million in 2025. This consistent upward trend suggests growing taxable income and potentially changes in applicable tax rates or available tax credits.
- Cash Operating Taxes
- Cash operating taxes began at US$4.359 million in 2021, increasing significantly to US$98.789 million in 2022. This growth continued into 2023, reaching US$137.273 million, and then to US$175.853 million in 2024. However, a considerable decrease is observed in 2025, with cash operating taxes falling to US$32.711 million. This decline could be attributed to various factors, including changes in tax payment schedules, utilization of tax loss carryforwards, or adjustments to estimated tax payments.
The divergence between the provision for income taxes and cash operating taxes is noteworthy. While the provision for income taxes consistently increased, cash operating taxes peaked in 2024 and then decreased substantially in 2025. This difference suggests a timing mismatch between the recognition of taxable income and the actual cash outflow for taxes. Further investigation would be required to determine the specific reasons for this discrepancy, such as deferred tax assets or liabilities, or changes in the timing of tax payments.
Invested Capital
Trade Desk Inc., invested capital calculation (financing approach)
US$ 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 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.
The reported invested capital exhibited a fluctuating pattern over the five-year period. Initially, a growth trajectory was observed, followed by a decline and subsequent increase, culminating in a final decrease. A detailed examination of the components contributing to invested capital reveals further insights.
- Total Invested Capital Trend
- Invested capital increased from US$1,539,599 thousand in 2021 to US$1,865,761 thousand in 2022, representing a growth of approximately 21.1%. A subsequent decrease was noted in 2023, with invested capital falling to US$1,764,443 thousand. This was followed by a significant increase in 2024, reaching US$2,455,827 thousand. Finally, invested capital decreased to US$2,114,481 thousand in 2025.
- Debt & Leases
- Total reported debt and leases generally decreased from 2021 to 2023, moving from US$284,598 thousand to US$235,893 thousand. However, a substantial increase occurred in 2024, rising to US$312,215 thousand, and continued into 2025, reaching US$436,330 thousand. This suggests a shift towards increased reliance on debt financing in the later years of the period.
- Stockholders’ Equity
- Stockholders’ equity demonstrated a consistent increase from 2021 to 2024. It rose from US$1,527,306 thousand in 2021 to US$2,949,145 thousand in 2024. However, a decrease was observed in 2025, with equity falling to US$2,484,391 thousand. This suggests potential factors impacting equity value in the most recent year, such as share repurchases or changes in retained earnings.
The interplay between debt and equity significantly influences the overall invested capital. The increase in debt in 2024 and 2025, coupled with the decrease in equity in 2025, contributed to the overall decline in invested capital observed in the final year. The fluctuations in invested capital warrant further investigation to understand the underlying drivers and their implications for the company’s financial performance and risk profile.
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: 2025-12-31).
| 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).
Economic Spread Ratio
Trade Desk 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 | ||||||
| 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: 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 × ÷ =
4 Click competitor name to see calculations.
The financial trajectory between 2021 and 2025 reflects a transition from economic value destruction to value creation. After a period of widening losses, a sustained recovery trend emerged, resulting in positive economic performance by the end of the period.
- Economic Profit Trends
- Economic profit exhibited significant volatility, reaching its lowest point in 2022 with a loss of 322,025 thousand US dollars. Subsequently, losses narrowed steadily through 2023 and 2024, before shifting to a positive economic profit of 192,686 thousand US dollars in 2025. This transition indicates that the returns on invested capital began to exceed the required cost of capital.
- Invested Capital Dynamics
- Invested capital showed a fluctuating trend, growing from 1,539,599 thousand US dollars in 2021 to a peak of 2,455,827 thousand US dollars in 2024. A subsequent contraction occurred in 2025, with capital decreasing to 2,114,481 thousand US dollars. The increase in capital during the loss-making years suggests a phase of investment that preceded the eventual positive turnaround.
- Economic Spread Ratio Performance
- The economic spread ratio mirrored the trend of economic profit, declining from -10.45% in 2021 to a trough of -17.26% in 2022. From that point, a consistent upward trajectory is observed, improving to -14.60% in 2023 and -7.94% in 2024. The ratio transitioned into positive territory in 2025, reaching 9.11%, signaling that the entity successfully generated a spread above its cost of capital.
Economic Profit Margin
Trade Desk 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 | ||||||
| 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: 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 ÷ Revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The company exhibited a consistent expansion in revenue from 2021 through 2025, which served as the foundation for a significant turnaround in economic performance. While the period began with a phase of economic value destruction, a steady recovery in the latter years culminated in the achievement of positive economic profit by the end of 2025.
- Revenue Trajectory
- Revenue grew steadily each year, increasing from US$ 1,196,467 thousand in 2021 to US$ 2,896,284 thousand in 2025. This consistent upward trajectory indicates a robust growth in top-line scale over the five-year period.
- Economic Profit Analysis
- Economic profit experienced an initial decline, reaching a trough of negative US$ 322,025 thousand in 2022. Following this low point, the deficit narrowed progressively through 2023 and 2024, eventually pivoting to a positive value of US$ 192,686 thousand in 2025. This transition indicates a fundamental shift from eroding shareholder value to generating returns that exceed the company's cost of capital.
- Economic Profit Margin Trends
- The economic profit margin mirrored the trajectory of the absolute economic profit. The margin deteriorated from -13.44% in 2021 to a low of -20.41% in 2022. Subsequently, the margin improved steadily to -13.23% in 2023 and -7.97% in 2024, before turning positive at 6.65% in 2025. This trend suggests a progressive improvement in capital efficiency and operational profitability relative to the scale of the business.