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
Fair Isaac Corp., economic profit calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
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
= 589,082 – 20.17% × 1,416,757 = 303,349
A comprehensive analysis of economic performance from 2019 to 2024 reveals a significant transition from value destruction to substantial value creation. The most prominent trend is the steady and accelerating growth in net operating profit after taxes (NOPAT), which more than doubled over the observed period.
- Net Operating Profit After Taxes (NOPAT) Trends
- NOPAT exhibited consistent year-over-year growth, rising from 238,184 thousand USD in 2019 to 589,082 thousand USD in 2024. This upward trajectory indicates a strong improvement in operational efficiency and profitability.
- Invested Capital and Cost of Capital Dynamics
- Invested capital remained remarkably stable, fluctuating within a narrow range between 1.329 billion USD and 1.445 billion USD. Concurrently, the cost of capital stayed relatively constant, averaging approximately 19%, with a slight increase to 20.17% in 2024. The stability of these two metrics suggests that the increase in profitability was achieved without requiring significant new capital injections or facing volatile funding costs.
- Economic Profit Evolution
- Economic profit underwent a profound reversal, moving from a negative value of -32,220 thousand USD in 2019 to a positive 303,349 thousand USD by 2024. The pivot to value creation occurred in 2021, when economic profit first turned positive at 150,631 thousand USD. This shift demonstrates that operating returns began to exceed the cost of capital significantly starting in the 2021 fiscal year.
The synthesis of these trends indicates a marked increase in capital productivity. By growing NOPAT while maintaining a nearly flat invested capital base, the organization has successfully enhanced its economic value added, resulting in an accelerating rate of wealth creation over the six-year horizon.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Net Operating Profit after Taxes (NOPAT)
Fair Isaac Corp., NOPAT calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in allowance for doubtful accounts.
3 Addition of increase (decrease) in deferred revenue.
4 Addition of increase (decrease) in restructuring accruals.
5 Addition of increase (decrease) in equity equivalents to net income.
6 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 33,518 × 6.41% = 2,149
7 2024 Calculation
Tax benefit of interest expense, net = Adjusted interest expense, net × Statutory income tax rate
= 107,787 × 21.00% = 22,635
8 Addition of after taxes interest expense to net income.
A sustained growth trajectory is evident in both Net Operating Profit After Taxes (NOPAT) and Net Income from 2019 through 2024. Core operational profitability has demonstrated consistent expansion, while bottom-line net earnings have grown substantially despite a brief period of volatility.
- Net Operating Profit After Taxes (NOPAT) Trends
- NOPAT exhibited uninterrupted growth throughout the analyzed period, increasing from 238,184 thousand in 2019 to 589,082 thousand in 2024. The most significant acceleration occurred between 2020 and 2021, with a growth rate of approximately 46%. The steady climb in NOPAT suggests a strengthening of core operational efficiency and an increasing capacity to generate profit from primary business activities regardless of capital structure.
- Net Income Performance
- Net Income rose from 192,124 thousand in 2019 to 512,811 thousand in 2024. While the overall trend is positive, a marginal contraction is observed in 2022, where net income declined to 373,541 thousand from 392,084 thousand in the previous year. Recovery followed in 2023 and 2024, with the latter year marking the highest net income in the reported period.
- Operational vs. Net Profitability Analysis
- A notable divergence exists between NOPAT and Net Income during the 2022 fiscal year. While Net Income experienced a decline, NOPAT continued to grow, increasing by approximately 9.4% over the prior year. This indicates that the decline in net income was not driven by operational failure, but rather by non-operating factors such as increased interest expenses, tax adjustments, or other non-core financial charges. The consistent gap where NOPAT exceeds Net Income across all years further highlights the impact of non-operating costs on the final net earnings.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Cash Operating Taxes
Fair Isaac Corp., cash operating taxes calculation
US$ in thousands
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
An analysis of tax-related outflows between 2019 and 2024 reveals a substantial increase in both reported tax provisions and actual cash tax payments, indicating a significantly higher tax burden over the five-year period.
- Provision for Income Taxes Trend
- The provision for income taxes exhibited a consistent upward trajectory following a slight dip in 2020. From a baseline of 23,948 thousand dollars in 2019, the provision rose to 129,214 thousand dollars by 2024. A critical increase occurred between 2020 and 2021, where the provision grew by approximately 293%, signaling a sharp rise in the company's accounting tax obligations.
- Cash Operating Taxes Analysis
- Cash operating taxes demonstrated more pronounced volatility and a steeper overall growth curve compared to the tax provisions. Outflows increased from 25,518 thousand dollars in 2019 to a peak of 192,079 thousand dollars in 2023, before experiencing a moderate decline to 179,179 thousand dollars in 2024. The most significant escalation in cash payments occurred in 2023, where values rose by approximately 83% over the previous year.
- Variance Between Cash Taxes and Provisions
- A consistent divergence is observed where cash operating taxes exceed the provision for income taxes in every period analyzed. This variance expanded significantly over time, reaching its widest margin in 2023, when cash taxes exceeded provisions by 67,830 thousand dollars. From an Economic Value Added (EVA) perspective, the reliance on cash operating taxes rather than accrual-based provisions reveals a higher actual cash outflow, which directly reduces the net operating profit after tax (NOPAT).
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Invested Capital
Fair Isaac Corp., invested capital calculation (financing approach)
US$ in thousands
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
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 deferred revenue.
5 Addition of restructuring accruals.
6 Addition of equity equivalents to stockholders’ equity (deficit).
7 Removal of accumulated other comprehensive income.
8 Subtraction of marketable securities.
The financial structure from 2019 to 2024 is characterized by a significant shift in capital composition, where a substantial increase in leverage has been offset by a declining and eventually negative equity position. Despite these aggressive movements in debt and equity, the total invested capital has remained remarkably stable, fluctuating within a narrow range over the six-year period.
- Debt and Lease Obligations
- A consistent upward trend in total reported debt and leases is observed, growing from 927,510 thousand US dollars in 2019 to 2,252,946 thousand US dollars by September 30, 2024. The most pronounced increases occurred between 2020 and 2022, during which debt levels more than doubled. This suggests a strategic reliance on borrowed funds to finance corporate activities or shareholder returns.
- Stockholders' Equity Dynamics
- Equity transitioned from a positive position of 289,767 thousand US dollars in 2019 to a significant deficit of 962,679 thousand US dollars by 2024. The shift to a negative equity balance began in 2021 and deepened substantially in 2022 and 2024. This pattern typically indicates that the company has returned more capital to shareholders via buybacks or dividends than has been generated through retained earnings, funded by the aforementioned increase in debt.
- Invested Capital Stability
- Invested capital has exhibited low volatility, starting at 1,401,400 thousand US dollars in 2019 and ending at 1,416,757 thousand US dollars in 2024. The data reveals a mechanical neutralization where the increase in debt almost perfectly offsets the decrease in equity. This indicates that while the financing mix has shifted toward high leverage, the actual amount of capital deployed in the business operations has remained nearly constant.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Cost of Capital
Fair Isaac Corp., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 50,902,456) | 50,902,456) | ÷ | 53,128,631) | = | 0.96 | 0.96 | × | 20.87% | = | 20.00% | ||
| Debt and finance lease liabilities3 | 2,192,657) | 2,192,657) | ÷ | 53,128,631) | = | 0.04 | 0.04 | × | 5.19% × (1 – 21.00%) | = | 0.17% | ||
| Operating lease liability4 | 33,518) | 33,518) | ÷ | 53,128,631) | = | 0.00 | 0.00 | × | 6.41% × (1 – 21.00%) | = | 0.00% | ||
| Total: | 53,128,631) | 1.00 | 20.17% | ||||||||||
Based on: 10-K (reporting date: 2024-09-30).
1 US$ in thousands
2 Equity. See details »
3 Debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 23,241,370) | 23,241,370) | ÷ | 25,044,659) | = | 0.93 | 0.93 | × | 20.87% | = | 19.37% | ||
| Debt and finance lease liabilities3 | 1,763,050) | 1,763,050) | ÷ | 25,044,659) | = | 0.07 | 0.07 | × | 5.10% × (1 – 21.00%) | = | 0.28% | ||
| Operating lease liability4 | 40,239) | 40,239) | ÷ | 25,044,659) | = | 0.00 | 0.00 | × | 4.58% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 25,044,659) | 1.00 | 19.66% | ||||||||||
Based on: 10-K (reporting date: 2023-09-30).
1 US$ in thousands
2 Equity. See details »
3 Debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 11,083,430) | 11,083,430) | ÷ | 12,859,541) | = | 0.86 | 0.86 | × | 20.87% | = | 17.99% | ||
| Debt and finance lease liabilities3 | 1,717,550) | 1,717,550) | ÷ | 12,859,541) | = | 0.13 | 0.13 | × | 4.38% × (1 – 21.00%) | = | 0.46% | ||
| Operating lease liability4 | 58,561) | 58,561) | ÷ | 12,859,541) | = | 0.00 | 0.00 | × | 4.01% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 12,859,541) | 1.00 | 18.46% | ||||||||||
Based on: 10-K (reporting date: 2022-09-30).
1 US$ in thousands
2 Equity. See details »
3 Debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 10,631,730) | 10,631,730) | ÷ | 12,035,474) | = | 0.88 | 0.88 | × | 20.87% | = | 18.44% | ||
| Debt and finance lease liabilities3 | 1,328,000) | 1,328,000) | ÷ | 12,035,474) | = | 0.11 | 0.11 | × | 3.26% × (1 – 21.00%) | = | 0.28% | ||
| Operating lease liability4 | 75,744) | 75,744) | ÷ | 12,035,474) | = | 0.01 | 0.01 | × | 3.64% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 12,035,474) | 1.00 | 18.74% | ||||||||||
Based on: 10-K (reporting date: 2021-09-30).
1 US$ in thousands
2 Equity. See details »
3 Debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 13,435,210) | 13,435,210) | ÷ | 14,432,216) | = | 0.93 | 0.93 | × | 20.87% | = | 19.43% | ||
| Debt and finance lease liabilities3 | 901,012) | 901,012) | ÷ | 14,432,216) | = | 0.06 | 0.06 | × | 4.28% × (1 – 21.00%) | = | 0.21% | ||
| Operating lease liability4 | 95,994) | 95,994) | ÷ | 14,432,216) | = | 0.01 | 0.01 | × | 3.86% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 14,432,216) | 1.00 | 19.66% | ||||||||||
Based on: 10-K (reporting date: 2020-09-30).
1 US$ in thousands
2 Equity. See details »
3 Debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 9,603,381) | 9,603,381) | ÷ | 10,565,222) | = | 0.91 | 0.91 | × | 20.87% | = | 18.97% | ||
| Debt and finance lease liabilities3 | 864,545) | 864,545) | ÷ | 10,565,222) | = | 0.08 | 0.08 | × | 4.52% × (1 – 21.00%) | = | 0.29% | ||
| Operating lease liability4 | 97,296) | 97,296) | ÷ | 10,565,222) | = | 0.01 | 0.01 | × | 4.52% × (1 – 21.00%) | = | 0.03% | ||
| Total: | 10,565,222) | 1.00 | 19.30% | ||||||||||
Based on: 10-K (reporting date: 2019-09-30).
1 US$ in thousands
2 Equity. See details »
3 Debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Fair Isaac Corp., economic spread ratio calculation, comparison to benchmarks
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | 303,349) | 206,653) | 200,229) | 150,631) | (4,933) | (32,220) | |
| Invested capital2 | 1,416,757) | 1,372,115) | 1,329,445) | 1,370,014) | 1,445,030) | 1,401,400) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | 21.41% | 15.06% | 15.06% | 10.99% | -0.34% | -2.30% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Accenture PLC | 1.13% | 1.92% | 4.78% | 6.61% | — | — | |
| Adobe Inc. | 0.83% | 1.00% | 6.49% | 8.87% | 1.15% | — | |
| AppLovin Corp. | 0.70% | -20.45% | -26.69% | -30.02% | — | — | |
| Cadence Design Systems Inc. | -2.88% | 7.17% | 6.58% | 6.80% | — | — | |
| Datadog Inc. | -9.53% | -6.05% | -11.80% | -3.98% | — | — | |
| International Business Machines Corp. | -7.59% | -3.55% | -11.30% | -6.16% | — | — | |
| Intuit Inc. | -6.59% | -8.64% | -7.53% | 0.10% | — | — | |
| Microsoft Corp. | 7.48% | 10.52% | 18.51% | 27.55% | — | — | |
| Oracle Corp. | -7.89% | -8.69% | -7.67% | 0.54% | — | — | |
| Palantir Technologies Inc. | -12.27% | -8.99% | -32.73% | -40.19% | — | — | |
| Palo Alto Networks Inc. | 5.35% | 11.48% | 3.51% | -5.19% | — | — | |
| Salesforce Inc. | -14.29% | -17.73% | -14.61% | -12.46% | — | — | |
| ServiceNow Inc. | 5.94% | 5.24% | 0.73% | 1.95% | — | — | |
| Synopsys Inc. | -8.17% | -7.47% | -0.87% | -6.90% | -6.70% | — | |
| Workday Inc. | -13.04% | -19.26% | -14.09% | -19.34% | — | — | |
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
1 Economic profit. See details »
2 Invested capital. See details »
3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 303,349 ÷ 1,416,757 = 21.41%
4 Click competitor name to see calculations.
The financial performance from 2019 to 2024 demonstrates a significant transition from value destruction to substantial value creation. A consistent upward trajectory in economic profit and the economic spread ratio indicates a marked improvement in the ability to generate returns exceeding the cost of capital.
- Economic Profit Trends
- A recovery phase is observed between 2019 and 2021, where economic profit moved from a deficit of US$ 32.22 million to a surplus of US$ 150.63 million. This positive momentum continued through 2024, with economic profit peaking at US$ 303.35 million. The shift from negative to positive values signifies that the organization began generating wealth above its required return on investment starting in the 2021 fiscal year.
- Invested Capital Stability
- Invested capital remained relatively stable throughout the analyzed period, fluctuating within a narrow range between US$ 1.33 billion and US$ 1.45 billion. The lack of aggressive capital expansion suggests that the growth in economic profit was driven by operational efficiencies and increased profitability rather than significant increases in the capital base.
- Economic Spread Ratio Analysis
- The economic spread ratio reflects a sharp improvement, rising from -2.30% in 2019 to 21.41% in 2024. The ratio remained negative through 2020, indicating that the return on invested capital was below the cost of capital. However, a substantial leap to 10.99% occurred in 2021, followed by a period of stability at 15.06% in 2022 and 2023, and a final acceleration to 21.41% by September 30, 2024. This trend confirms a strengthening competitive advantage and enhanced capital efficiency.
In summary, the correlation between stable invested capital and rapidly increasing economic profit has resulted in a robust expansion of the economic spread ratio. The data indicates a high level of effectiveness in optimizing assets to generate economic value.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Economic Profit Margin
Fair Isaac Corp., economic profit margin calculation, comparison to benchmarks
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Economic profit1 | 303,349) | 206,653) | 200,229) | 150,631) | (4,933) | (32,220) | |
| Revenues | 1,717,526) | 1,513,557) | 1,377,270) | 1,316,536) | 1,294,562) | 1,160,083) | |
| Add: Increase (decrease) in deferred revenue | 16,974) | 16,675) | 15,797) | (11,378) | 5,821) | 8,202) | |
| Adjusted revenues | 1,734,500) | 1,530,232) | 1,393,067) | 1,305,158) | 1,300,383) | 1,168,285) | |
| Performance Ratio | |||||||
| Economic profit margin2 | 17.49% | 13.50% | 14.37% | 11.54% | -0.38% | -2.76% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Accenture PLC | 0.64% | 0.99% | 2.30% | 3.39% | — | — | |
| Adobe Inc. | 0.94% | 1.25% | 7.56% | 11.05% | 1.65% | — | |
| AppLovin Corp. | 0.68% | -27.99% | -49.97% | -60.11% | — | — | |
| Cadence Design Systems Inc. | -4.41% | 7.14% | 6.57% | 6.90% | — | — | |
| Datadog Inc. | -8.65% | -3.79% | -8.16% | -3.16% | — | — | |
| International Business Machines Corp. | -13.42% | -6.31% | -19.56% | -11.71% | — | — | |
| Intuit Inc. | -10.13% | -14.15% | -14.49% | 0.13% | — | — | |
| Microsoft Corp. | 10.45% | 11.98% | 17.74% | 22.86% | — | — | |
| Oracle Corp. | -15.00% | -16.81% | -14.08% | 1.07% | — | — | |
| Palantir Technologies Inc. | -10.64% | -4.83% | -54.91% | -66.20% | — | — | |
| Palo Alto Networks Inc. | 5.68% | 11.39% | 4.09% | -6.98% | — | — | |
| Salesforce Inc. | -33.02% | -44.83% | -40.55% | -28.58% | — | — | |
| ServiceNow Inc. | 4.89% | 4.21% | 0.59% | 1.68% | — | — | |
| Synopsys Inc. | -13.69% | -10.54% | -1.23% | -10.97% | -11.50% | — | |
| Workday Inc. | -14.52% | -23.63% | -19.10% | -25.24% | — | — | |
Based on: 10-K (reporting date: 2024-09-30), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30).
1 Economic profit. See details »
2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 303,349 ÷ 1,734,500 = 17.49%
3 Click competitor name to see calculations.
The company has demonstrated a significant turnaround in its economic performance between fiscal year 2019 and 2024, evolving from a state of value destruction to substantial value creation. This transition is characterized by a steady increase in adjusted revenues coupled with a rapid expansion of economic profit.
- Economic Profit Trajectory
- A pronounced upward trend is observed in economic profit, which moved from a deficit of US$ 32.22 million in 2019 to a surplus of US$ 303.35 million by 2024. The critical pivot occurred in 2021, when the figure shifted from negative to positive, marking the point where the company began generating returns exceeding its cost of capital.
- Revenue Growth Patterns
- Adjusted revenues exhibited consistent year-over-year growth throughout the period. Starting at US$ 1.17 billion in 2019, revenues increased to US$ 1.73 billion by 2024, providing a stable foundation for the expansion of economic profit.
- Economic Profit Margin Analysis
- The economic profit margin reflects a strong recovery and expansion. The margin improved from -2.76% in 2019 to 17.49% in 2024. While a minor contraction occurred in 2023, where the margin dipped to 13.50% from 14.37% in 2022, the subsequent jump to 17.49% in 2024 indicates accelerating efficiency in converting revenue into economic value.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?