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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- Analysis of Profitability Ratios
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- Enterprise Value to EBITDA (EV/EBITDA)
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Economic Profit
Meta Platforms Inc., economic profit calculation
US$ in millions
| 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 performance, as measured by economic value added (EVA) metrics, demonstrates a fluctuating pattern over the five-year period. Net operating profit after taxes (NOPAT) experienced a significant decline in 2022 before recovering and exhibiting substantial growth through 2025. Invested capital consistently increased throughout the period, while the cost of capital remained relatively stable. Consequently, economic profit mirrored the NOPAT trend, showing volatility but ultimately increasing significantly.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT decreased considerably from US$40,147 million in 2021 to US$20,828 million in 2022. A strong recovery followed, with NOPAT reaching US$38,290 million in 2023, US$56,844 million in 2024, and further increasing to US$79,619 million in 2025. This indicates a substantial improvement in core operational profitability in the later years of the observed period.
- Cost of Capital
- The cost of capital remained relatively consistent, fluctuating between 20.09% and 20.60% across the five years. In 2021, it was 20.60%, decreasing to 20.09% in 2022, then increasing to 20.47% in 2023 and 20.54% in 2024, before slightly decreasing to 20.28% in 2025. This stability suggests consistent risk and funding characteristics over the period.
- Invested Capital
- Invested capital demonstrated a consistent upward trend, increasing from US$92,809 million in 2021 to US$101,764 million in 2022, US$141,324 million in 2023, US$165,969 million in 2024, and reaching US$216,060 million in 2025. This continuous growth suggests ongoing investment in the business and expansion of its asset base.
- Economic Profit
- Economic profit experienced a dramatic decrease from US$21,030 million in 2021 to US$384 million in 2022, mirroring the decline in NOPAT. It then recovered to US$9,362 million in 2023, US$22,757 million in 2024, and significantly increased to US$35,793 million in 2025. This pattern indicates that the entity generated substantial economic profit in 2021, experienced a near-break-even situation in 2022, and then progressively improved its ability to generate returns exceeding its cost of capital.
The increasing trend in invested capital coupled with the recovery and growth in NOPAT and economic profit suggests that investments are becoming more effective in generating returns. The relatively stable cost of capital provides a consistent benchmark against which to measure performance.
Net Operating Profit after Taxes (NOPAT)
Meta Platforms Inc., NOPAT calculation
US$ in millions
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 deferred revenue.
3 Addition of increase (decrease) in accrued severance and other personnel liabilities.
4 Addition of increase (decrease) in equity equivalents to net income.
5 2025 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =
6 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= × 21.00% =
7 Addition of after taxes interest expense to net income.
8 2025 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =
9 Elimination of after taxes investment income.
Net operating profit after taxes (NOPAT) exhibited considerable fluctuation over the five-year period. While net income experienced its own volatility, the NOPAT figures demonstrate a distinct pattern of decline followed by substantial recovery and growth.
- Overall Trend
- NOPAT decreased significantly from 2021 to 2022, then demonstrated a recovery in 2023. This recovery accelerated through 2024 and 2025, culminating in a substantial increase by the end of the period. The 2025 NOPAT value is nearly double that of 2021.
- 2021 to 2022
- A marked decrease in NOPAT is observed between 2021 and 2022, falling from US$40,147 million to US$20,828 million. This represents a substantial contraction, indicating a significant change in operational profitability after accounting for taxes. This decline outpaced the decrease in net income during the same period.
- 2022 to 2023
- The period from 2022 to 2023 shows a recovery in NOPAT, increasing to US$38,290 million. While not fully restoring the 2021 level, this represents a considerable improvement and suggests a stabilization of operational performance.
- 2023 to 2025
- Continued growth in NOPAT is evident from 2023 to 2025. NOPAT increased to US$56,844 million in 2024 and further to US$79,619 million in 2025. This sustained upward trend suggests improving operational efficiency and/or increased revenue generation, exceeding the growth rate observed in net income.
- Relationship to Net Income
- While both net income and NOPAT fluctuate, NOPAT appears to be a more sensitive indicator of core operational performance. The larger percentage decline in NOPAT from 2021 to 2022, compared to net income, suggests that factors beyond net income, such as changes in operating expenses or tax impacts, significantly influenced profitability. The accelerated growth in NOPAT from 2023 to 2025, exceeding the growth in net income, indicates a strengthening of core operational profitability.
In summary, the NOPAT figures reveal a period of initial decline followed by a robust recovery and substantial growth, indicating a positive trajectory in underlying operational profitability.
Cash Operating Taxes
Meta Platforms Inc., cash operating taxes calculation
US$ in millions
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 income taxes and cash operating taxes exhibited distinct patterns over the five-year period. While the provision for income taxes generally increased, the cash operating taxes demonstrated more volatility.
- Provision for Income Taxes
- The provision for income taxes decreased from US$7,914 million in 2021 to US$5,619 million in 2022, representing a substantial decline. It then increased to US$8,330 million in 2023 and remained relatively stable at US$8,303 million in 2024. A significant surge is observed in 2025, reaching US$25,474 million. This final year increase is markedly higher than any prior value in the observed period.
- Cash Operating Taxes
- Cash operating taxes increased from US$7,290 million in 2021 to US$8,950 million in 2022. A slight decrease occurred in 2023, with the value falling to US$8,095 million. The year 2024 saw a considerable increase to US$12,827 million. However, in 2025, cash operating taxes decreased significantly to US$6,745 million.
A notable divergence between the provision for income taxes and cash operating taxes is apparent, particularly in 2025. While the provision for income taxes experienced a large increase, cash operating taxes decreased. This suggests a potential shift in the timing of tax payments or the utilization of tax credits or loss carryforwards. The increase in provision for income taxes in 2025, coupled with the decrease in cash operating taxes, warrants further investigation to understand the underlying reasons for this discrepancy.
The volatility in cash operating taxes, especially the fluctuations between 2023, 2024, and 2025, indicates potential impacts from changes in tax laws, accounting adjustments, or strategic tax planning initiatives. The overall trend in the provision for income taxes suggests a growing tax burden, although the 2022 decrease and the 2025 spike require further scrutiny.
Invested Capital
Meta Platforms Inc., invested capital calculation (financing approach)
US$ in millions
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 deferred revenue.
4 Addition of accrued severance and other personnel liabilities.
5 Addition of equity equivalents to stockholders’ equity.
6 Removal of accumulated other comprehensive income.
7 Subtraction of construction in progress.
8 Subtraction of marketable securities.
The reported invested capital demonstrates a consistent upward trend over the five-year period. Simultaneously, both total reported debt & leases and stockholders’ equity have increased, contributing to the growth in invested capital.
- Invested Capital Trend
- Invested capital increased from US$92,809 million in 2021 to US$216,060 million in 2025. This represents a cumulative increase of 132.8% over the period. The rate of increase appears to be accelerating, with larger absolute increases observed in later years.
- Debt & Leases
- Total reported debt & leases exhibited substantial growth, rising from US$14,454 million in 2021 to US$85,081 million in 2025. This signifies a significant reliance on debt financing, with the most substantial increase occurring between 2023 and 2025. The growth rate of debt & leases consistently outpaced that of stockholders’ equity.
- Stockholders’ Equity
- Stockholders’ equity also increased, moving from US$124,879 million in 2021 to US$217,243 million in 2025. While positive, the growth in equity was less pronounced than the growth in debt. The increase was relatively steady year-over-year, though the absolute increase was larger between 2022 and 2023, and again between 2023 and 2024.
- Relationship between Components and Invested Capital
- The increase in invested capital is directly attributable to the combined growth of both debt & leases and stockholders’ equity. The increasing proportion of debt within the capital structure suggests a shift towards greater financial leverage. The consistent growth in invested capital, coupled with the increasing reliance on debt, warrants further investigation into the company’s capital allocation efficiency and its ability to generate returns exceeding the cost of capital.
The observed trends suggest a company actively investing in its operations and growth, funded by a combination of equity and, increasingly, debt. Continued monitoring of these figures is recommended to assess the sustainability of this growth strategy and the associated financial risks.
Cost of Capital
Meta Platforms Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2023-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2022-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | ÷ | = | × | = | |||||||||
| Long-term debt and finance lease liabilities3 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Operating lease liability4 | ÷ | = | × | × (1 – 21.00%) | = | ||||||||
| Total: | |||||||||||||
Based on: 10-K (reporting date: 2021-12-31).
1 US$ in millions
2 Equity. See details »
3 Long-term debt and finance lease liabilities. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Meta Platforms 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 millions) | ||||||
| Economic profit1 | ||||||
| Invested capital2 | ||||||
| Performance Ratio | ||||||
| Economic spread ratio3 | ||||||
| Benchmarks | ||||||
| Economic Spread Ratio, Competitors4 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk 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 economic spread ratio demonstrates a volatile pattern over the five-year period. Initial values are high, followed by a significant decline, and then a consistent upward trajectory. Economic profit fluctuates considerably, while invested capital consistently increases throughout the period.
- Economic Spread Ratio
- In 2021, the economic spread ratio stood at 22.66%. A substantial decrease is observed in 2022, falling to 0.38%. The ratio then begins a recovery, reaching 6.62% in 2023, and continues to improve, attaining 13.71% in 2024 and 16.57% in 2025. This indicates an increasing ability to generate returns exceeding the cost of capital in later years, following a period of minimal spread.
- Economic Profit
- Economic profit begins at US$21,030 million in 2021. It experiences a dramatic reduction in 2022, reporting only US$384 million. A significant rebound occurs in 2023, with economic profit reaching US$9,362 million. Further growth is evident in 2024 and 2025, with values of US$22,757 million and US$35,793 million respectively. This suggests a recovery and strengthening of profitability relative to capital employed.
- Invested Capital
- Invested capital shows a consistent upward trend throughout the period. Starting at US$92,809 million in 2021, it increases to US$101,764 million in 2022, US$141,324 million in 2023, US$165,969 million in 2024, and culminates at US$216,060 million in 2025. This continuous growth in invested capital suggests ongoing investment and expansion activities.
The combination of increasing invested capital and fluctuating economic profit results in the observed pattern of the economic spread ratio. While invested capital consistently grows, the economic spread ratio’s improvement is dependent on the growth of economic profit outpacing the growth of invested capital.
Economic Profit Margin
Meta Platforms Inc., economic profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Economic profit1 | ||||||
| Revenue | ||||||
| Add: Increase (decrease) in deferred revenue | ||||||
| Adjusted revenue | ||||||
| Performance Ratio | ||||||
| Economic profit margin2 | ||||||
| Benchmarks | ||||||
| Economic Profit Margin, Competitors3 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Trade Desk 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 ÷ Adjusted revenue
= 100 × ÷ =
3 Click competitor name to see calculations.
The economic profit margin exhibited significant fluctuation over the five-year period. Initial values were strong, followed by a substantial decline, and then a recovery towards levels approaching the initial period.
- Economic Profit Margin Trend
- In 2021, the economic profit margin stood at 17.80%. A dramatic decrease was observed in 2022, falling to 0.33%. This represents a significant contraction in profitability relative to revenue. A subsequent recovery began in 2023, with the margin increasing to 6.93%. This upward trend continued into 2024, reaching 13.83%, and further accelerated in 2025, culminating in a margin of 17.78%.
The economic profit margin’s trajectory closely mirrors the changes in economic profit. The substantial drop in economic profit in 2022 directly resulted in the low margin observed for that year. The subsequent increases in economic profit in 2023, 2024, and 2025 drove the corresponding increases in the economic profit margin.
- Relationship to Adjusted Revenue
- While adjusted revenue generally increased throughout the period, the economic profit margin did not consistently rise with it. The increase in adjusted revenue from 2022 to 2023 did not immediately translate into a proportional increase in the economic profit margin, suggesting that cost of capital or other factors impacted economic profit more significantly during that period. However, the substantial revenue growth from 2024 to 2025 was accompanied by a significant margin increase, indicating improved efficiency in generating economic profit from increased sales.
The return to a margin of 17.78% in 2025 suggests a restoration of profitability to levels comparable to those experienced in 2021, despite the considerable revenue growth. This indicates that the company effectively managed its capital and costs as revenue expanded.