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 – 20.15% × 1,416,757 = 303,623
Fair Isaac Corp. has demonstrated a significant turnaround in economic value creation over the six-year period ending September 30, 2024. The transition from negative to positive economic profit indicates a shift from destroying shareholder value to generating returns that exceed the company's cost of capital.
- Net Operating Profit After Taxes (NOPAT)
- A consistent upward trajectory is observed in NOPAT, which grew from 238,184 thousand US$ in 2019 to 589,082 thousand US$ in 2024. The most substantial acceleration occurred between 2020 and 2021, where profit increased by approximately 46%, establishing a foundation for sustained growth in subsequent years.
- Invested Capital and Cost of Capital
- Invested capital remained remarkably stable, fluctuating within a narrow range between 1.32 billion and 1.44 billion US$. This stability suggests that the increase in profitability was not driven by aggressive capital expansion, but rather by improved operational efficiency and asset utilization. Meanwhile, the cost of capital remained high and relatively volatile, oscillating between 18.45% and 20.15%, which represents a high hurdle rate for the company to achieve positive economic profit.
- Economic Profit Analysis
- The economic profit transitioned from a deficit of 31,963 thousand US$ in 2019 to a surplus of 303,623 thousand US$ in 2024. The company reached a break-even point shortly after September 30, 2020, entering a phase of value creation in 2021. The divergence between the steadily increasing NOPAT and the stagnant invested capital base resulted in an exponential increase in economic profit, confirming that the company is generating substantial returns above its weighted average cost of capital.
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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.
- Net Income
- The net income exhibits a consistent upward trend over the six-year period. Starting at 192,124 thousand USD in September 2019, it increased to 236,411 thousand USD in 2020 and then surged to 392,084 thousand USD in 2021. Although a slight decline occurred in 2022 to 373,541 thousand USD, the net income rebounded in the following years, reaching 429,375 thousand USD in 2023 and further rising to 512,811 thousand USD in 2024. Overall, net income more than doubled from 2019 to 2024, indicating strong profitability growth with only a minor setback in 2022.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT shows a robust increasing pattern throughout the same timeframe. Starting at 238,184 thousand USD in 2019, it steadily rose each year, reaching 279,157 thousand USD in 2020, and notably increasing to 407,349 thousand USD in 2021. The upward trajectory continued in 2022 with 445,701 thousand USD, followed by further growth to 476,369 thousand USD in 2023, and culminating at 589,082 thousand USD in 2024. The consistent annual growth in NOPAT reflects improved operating efficiency and profitability after tax considerations.
- Trend Analysis
- Both net income and NOPAT demonstrate strong expanding trends, suggesting effective operational management and increasing earnings capacity over the years analyzed. While net income experienced a minor dip in 2022, it recovered promptly in subsequent years, maintaining an upward direction. The continuous growth in NOPAT supports the view of enhanced operational success independent of non-operating influences. The increase in these profitability measures indicates sustained financial strength and improved returns from core business activities.
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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).
- Provision for Income Taxes
- The provision for income taxes exhibits a general upward trend over the analyzed periods. Starting at $23,948 thousand in September 2019, it decreased slightly in 2020 to $20,589 thousand but then rose significantly to $81,058 thousand in 2021. This upward momentum continued with increases to $97,768 thousand in 2022, $124,249 thousand in 2023, and $129,214 thousand in 2024. The data suggests heightened tax liabilities, particularly from 2021 onward, indicating either increased profitability or changes in tax rates or accounting practices.
- Cash Operating Taxes
- Cash operating taxes show a more volatile pattern compared to the provision for income taxes. Starting at $25,518 thousand in 2019, there is a noticeable increase to $38,863 thousand in 2020. A substantial jump occurred in 2021 to $96,011 thousand, followed by a further increase to $104,928 thousand in 2022. The highest cash operating taxes were recorded in 2023 at $192,079 thousand, nearly doubling the previous year. However, in 2024, a decline to $179,179 thousand is observed. This volatility might reflect timing differences in tax payments, changes in taxable income, or cash flow management strategies related to tax obligations.
- Comparative Insights
- While both provisions and cash operating taxes generally trend upward, the cash taxes demonstrate more pronounced fluctuations with a peak in 2023 followed by a reduction in 2024. The provision for income taxes increases steadily, which may imply growing profitability or an accounting recognition of tax expenses more consistently aligned with earnings. The disparity between the two measures could indicate temporary differences in tax expense recognition and actual tax payments over the periods analyzed.
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Invested Capital
Fair Isaac Corp., invested capital calculation (financing approach)
US$ 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.
- Total Reported Debt & Leases
- The total reported debt and leases have shown a consistent upward trend over the six-year period. Starting at approximately 928 million USD in 2019, the value increased steadily each year, with a notable acceleration between 2020 and 2022. By 2024, the debt and lease obligations reached roughly 2.25 billion USD, more than doubling the initial amount. This indicates an increasing reliance on debt financing or lease commitments.
- Stockholders’ Equity (Deficit)
- Stockholders’ equity experienced significant fluctuations over the period. Initially positive, it grew from about 290 million USD in 2019 to 331 million USD in 2020. However, from 2021 onward, equity turned negative and continued to deteriorate, reaching a deficit of nearly 963 million USD in 2024. The negative equity values suggest sustained losses or significant reductions in net assets during these years.
- Invested Capital
- Invested capital exhibited moderate variability but remained relatively stable compared to the other metrics. Starting at approximately 1.4 billion USD in 2019, it experienced a slight decline in the following years, bottoming out near 1.33 billion USD by 2022. Subsequently, invested capital showed a gradual increase, ending at about 1.42 billion USD in 2024. This relative stability indicates that the underlying capital investment base has not changed dramatically despite fluctuations in debt and equity.
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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 | × | 20.85% | = | 19.98% | ||
| 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 | 20.15% | ||||||||||
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 | × | 20.85% | = | 19.35% | ||
| 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 | 19.64% | ||||||||||
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 | × | 20.85% | = | 17.97% | ||
| 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 | 18.45% | ||||||||||
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 | × | 20.85% | = | 18.42% | ||
| 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 | 18.72% | ||||||||||
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 | × | 20.85% | = | 19.41% | ||
| 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 | 19.64% | ||||||||||
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 | × | 20.85% | = | 18.95% | ||
| 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 | 19.28% | ||||||||||
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 | 303,623) | 206,910) | 200,460) | 150,875) | (4,662) | (31,963) | |
| 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 | 21.43% | 15.08% | 15.08% | 11.01% | -0.32% | -2.28% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Accenture PLC | 0.29% | 1.07% | 3.94% | 5.76% | 6.36% | — | |
| Adobe Inc. | 0.84% | 1.01% | 6.51% | 8.89% | 1.17% | — | |
| AppLovin Corp. | 0.41% | -20.71% | -26.87% | -30.28% | — | — | |
| Cadence Design Systems Inc. | -2.79% | 7.26% | 6.67% | 6.88% | — | — | |
| CrowdStrike Holdings Inc. | -8.34% | -4.60% | -7.90% | -10.16% | — | — | |
| Datadog Inc. | -9.51% | -6.04% | -11.79% | -3.97% | — | — | |
| International Business Machines Corp. | -7.46% | -3.42% | -11.18% | -6.05% | — | — | |
| Intuit Inc. | -8.87% | -10.90% | -9.75% | -2.22% | 1.23% | — | |
| Microsoft Corp. | 9.62% | 12.66% | 20.63% | 29.66% | 27.74% | — | |
| Oracle Corp. | -4.37% | -5.29% | -4.60% | 3.54% | -1.99% | — | |
| Palantir Technologies Inc. | -12.35% | -9.08% | -32.82% | -40.27% | — | — | |
| Palo Alto Networks Inc. | 5.20% | 11.33% | 3.37% | -5.32% | -6.16% | — | |
| Salesforce Inc. | -14.28% | -17.72% | -14.60% | -12.45% | — | — | |
| ServiceNow Inc. | 6.04% | 5.33% | 0.82% | 2.04% | — | — | |
| Synopsys Inc. | -8.10% | -7.40% | -0.81% | -6.83% | -6.63% | — | |
| Workday Inc. | -13.03% | -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 × 303,623 ÷ 1,416,757 = 21.43%
4 Click competitor name to see calculations.
The financial performance over the analyzed six-year period demonstrates a significant transition from value destruction to substantial value creation. A consistent upward trajectory in economic profit and the economic spread ratio indicates an increasing ability to generate returns well above the cost of invested capital.
- Economic Profit Trends
- Economic profit exhibited a strong recovery and growth phase, moving from a deficit of 31.96 million USD in 2019 to a surplus of 303.62 million USD by 2024. The transition to positive economic profit occurred in 2021, marking a pivotal shift in value generation. The most pronounced acceleration in profit occurred between 2023 and 2024, where economic profit increased by approximately 46%.
- Invested Capital Stability
- Invested capital remained relatively stable throughout the period, fluctuating within a narrow range between 1.33 billion USD and 1.45 billion USD. The lack of significant expansion in the capital base suggests that the growth in economic profit was driven by operational efficiencies and improved returns on existing assets rather than an increase in capital expenditure or funding.
- Economic Spread Ratio Analysis
- The economic spread ratio mirrored the trend of economic profit, evolving from -2.28% in 2019 to 21.43% in 2024. A notable surge is observed between 2020 and 2021, where the ratio shifted from -0.32% to 11.01%. The stability of the ratio at 15.08% during 2022 and 2023 was followed by a sharp increase in 2024, signifying a marked improvement in the company's capacity to create economic value relative to its invested capital.
Overall, the data reveals a period of high efficiency gains. The simultaneous increase in the economic spread ratio and economic profit, while maintaining a nearly constant level of invested capital, indicates a strong improvement in the return on invested capital (ROIC) relative to the weighted average cost of capital (WACC).
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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 | 303,623) | 206,910) | 200,460) | 150,875) | (4,662) | (31,963) | |
| 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 | 17.50% | 13.52% | 14.39% | 11.56% | -0.36% | -2.74% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Accenture PLC | 0.16% | 0.55% | 1.90% | 2.95% | 3.24% | — | |
| Adobe Inc. | 0.96% | 1.27% | 7.58% | 11.08% | 1.68% | — | |
| AppLovin Corp. | 0.39% | -28.35% | -50.32% | -60.62% | — | — | |
| Cadence Design Systems Inc. | -4.28% | 7.23% | 6.65% | 6.99% | — | — | |
| CrowdStrike Holdings Inc. | -13.08% | -6.18% | -12.37% | -21.10% | — | — | |
| Datadog Inc. | -8.64% | -3.78% | -8.16% | -3.15% | — | — | |
| International Business Machines Corp. | -13.19% | -6.10% | -19.37% | -11.51% | — | — | |
| Intuit Inc. | -13.62% | -17.86% | -18.77% | -2.82% | 1.39% | — | |
| Microsoft Corp. | 13.45% | 14.42% | 19.77% | 24.62% | 20.59% | — | |
| Oracle Corp. | -8.31% | -10.23% | -8.44% | 7.01% | -4.52% | — | |
| Palantir Technologies Inc. | -10.72% | -4.87% | -55.05% | -66.34% | — | — | |
| Palo Alto Networks Inc. | 5.52% | 11.25% | 3.93% | -7.16% | -10.00% | — | |
| Salesforce Inc. | -33.00% | -44.81% | -40.53% | -28.55% | — | — | |
| ServiceNow Inc. | 4.97% | 4.29% | 0.66% | 1.77% | — | — | |
| Synopsys Inc. | -13.58% | -10.44% | -1.13% | -10.87% | -11.39% | — | |
| Workday Inc. | -14.51% | -23.62% | -19.09% | -25.23% | — | — | |
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 × 303,623 ÷ 1,734,500 = 17.50%
3 Click competitor name to see calculations.
A comprehensive review of financial performance between 2019 and 2024 reveals a significant turnaround in economic value creation. The period is characterized by a transition from negative economic profit to substantial positive gains, supported by a consistent and steady increase in adjusted revenues.
- Economic Profit Trajectory
- Economic profit experienced a sharp recovery, moving from a deficit of 31.96 million USD in 2019 to a surplus of 303.62 million USD by 2024. The pivot to positive value creation occurred in 2021, with subsequent years showing accelerated growth. A notable surge is observed between 2023 and 2024, where economic profit increased from 206.91 million USD to 303.62 million USD, marking a significant acceleration in value generation.
- Adjusted Revenue Growth
- Adjusted revenues demonstrated a consistent upward trend throughout the analyzed period. Revenues grew from 1.17 billion USD in 2019 to 1.73 billion USD in 2024. This steady expansion of the top line provided the fundamental scale required to transition the organization from economic loss to profit.
- Economic Profit Margin Evolution
- The economic profit margin reflects an increase in the efficiency of value generation relative to revenue. The margin improved from -2.74% in 2019 to a peak of 17.50% in 2024. While a slight contraction occurred in 2023, falling to 13.52% from 14.39% the previous year, the overall trend remains strongly positive. The expansion of this margin indicates that economic profit is growing at a faster rate than adjusted revenues, suggesting enhanced operational leverage and capital efficiency.
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