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
Qualcomm Inc., economic profit calculation
US$ in millions
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27).
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
= 9,896 – 19.11% × 31,317 = 3,913
The analysis of economic profit reveals a period of significant volatility, characterized by an initial growth phase, a sharp contraction, and a subsequent recovery. The overall trend indicates that while value creation remained positive throughout the period, the margin of economic profit fluctuated substantially in response to shifts in operating performance and capital requirements.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT exhibited a strong upward trajectory from 2020 to 2022, peaking at 13,145 million US$. A severe correction occurred in 2023, with profit dropping to 5,865 million US$, representing a decline of more than 55% from the peak. A recovery phase followed, with NOPAT increasing to 8,262 million US$ in 2024 and reaching 9,896 million US$ by 2025.
- Invested Capital and Cost of Capital
- Invested capital grew consistently from 17,459 million US$ in 2020 to a peak of 31,383 million US$ in 2023, indicating a significant expansion of the asset base. The cost of capital remained relatively stable but showed a slight upward trend, moving from 18.35% in 2020 to 19.11% by 2025. This gradual increase in the cost of capital, combined with a larger invested capital base, elevated the threshold required to generate positive economic profit.
- Economic Profit Performance
- Economic profit grew rapidly between 2020 and 2022, reaching a high of 7,767 million US$. In 2023, a critical inflection point was reached where economic profit plummeted to 71 million US$, nearly reaching a breakeven point. This collapse was driven by the simultaneous occurrence of a sharp decrease in NOPAT and the peak level of invested capital. From 2024 onward, economic profit returned to a growth trajectory, rising to 2,377 million US$ and 3,913 million US$ in 2025, respectively.
The data suggests a period of aggressive capital investment that coincided with high operational returns until 2022. The sharp dip in 2023 indicates a misalignment between the expanded capital base and operating returns during that fiscal year. The subsequent recovery in economic profit demonstrates an improvement in operating efficiency relative to the cost of the capital employed.
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Net Operating Profit after Taxes (NOPAT)
Qualcomm Inc., NOPAT calculation
US$ in millions
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27).
1 Elimination of deferred tax expense. See details »
2 Addition of increase (decrease) in unearned revenues.
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
= 832 × 6.05% = 50
5 2025 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 714 × 21.00% = 150
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
= 893 × 21.00% = 188
8 Elimination of after taxes investment income.
9 Elimination of discontinued operations.
The financial data reveals notable fluctuations in key profitability metrics over the examined periods.
- Net Income
- Net income exhibited a strong upward trend from 2020 through 2022, increasing from $5,198 million to a peak of $12,936 million. However, this was followed by a sharp decline in 2023, dropping to $7,232 million. The figure partially recovered in 2024 to $10,142 million before decreasing again in 2025 to $5,541 million, indicating considerable volatility and inconsistency in net profit generation during the latter years.
- Net Operating Profit After Taxes (NOPAT)
- NOPAT followed a somewhat similar pattern but with distinct deviations. Starting at $4,798 million in 2020, it increased steadily to $13,145 million in 2022, slightly surpassing the net income peak. A significant decrease occurred in 2023, bringing NOPAT down to $5,865 million, which is a more pronounced drop compared to net income. In 2024, NOPAT rebounded to $8,262 million and further increased to $9,896 million in 2025. This partial recovery suggests improved operating efficiency or tax management despite the fluctuating net income.
Overall, the data reflects a period of strong profitability growth until 2022, followed by notable declines and subsequent recovery attempts. The divergence between net income and NOPAT trends in recent years could be indicative of changes in non-operating items, tax rates, or extraordinary gains or losses impacting net income figures more heavily than operating profits.
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Cash Operating Taxes
Qualcomm Inc., cash operating taxes calculation
US$ in millions
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27).
- Income Tax Provision from Continuing Operations
- The income tax provision demonstrates notable volatility over the analyzed periods. Initially, there is a substantial increase from 521 million US dollars in 2020 to a peak of 2012 million US dollars in 2022. This is followed by a sharp decrease to 104 million US dollars in 2023, indicating a significant reduction in tax expense or possibly tax strategies implemented during that fiscal year. Subsequently, the provision rises moderately to 226 million US dollars in 2024 and then exhibits a pronounced surge to 7122 million US dollars by 2025, suggesting a notable increase in taxable income or changes in tax regulations impacting the latest period.
- Cash Operating Taxes
- Cash operating taxes exhibit a generally increasing trend throughout the periods analyzed. Starting at 793 million US dollars in 2020, there is a consistent upward movement reaching 2632 million US dollars by 2025. Despite a smaller growth pace observed between 2022 and 2023, the overall trend reflects growing cash tax obligations, potentially linked to increased profitability, changes in tax payment timing, or alterations in operational cash flows influencing tax payments.
- Summary of Taxation Trends
- The overall taxation metrics show a divergence between accounting-based tax provisions and actual cash tax payments. While cash operating taxes increase steadily, the income tax provision is characterized by substantial fluctuations, pointing to possible temporary differences between accounting profit and taxable income or significant tax planning activities. The sharp increase in the income tax provision in 2025 compared to prior years warrants further examination to understand underlying causes such as changes in tax legislation, adjustments in deferred tax assets or liabilities, or extraordinary items affecting the tax expense.
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Invested Capital
Qualcomm Inc., invested capital calculation (financing approach)
US$ in millions
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27).
1 Addition of capitalized operating leases.
2 Elimination of deferred taxes from assets and liabilities. See details »
3 Addition of unearned revenues.
4 Addition of equity equivalents to stockholders’ equity.
5 Removal of accumulated other comprehensive income.
6 Subtraction of construction in progress.
7 Subtraction of marketable securities.
- Total Reported Debt & Leases
- There is a relatively stable trend in total reported debt and leases over the observed period. The values fluctuate slightly around the range of approximately 15,400 to 16,300 million US dollars, with no significant upward or downward movement. This indicates a consistent level of indebtedness maintained by the company with minor reductions noted in the mid-term followed by a small increase towards the end.
- Stockholders’ Equity
- The stockholders’ equity shows a substantial and continuous growth over the majority of the periods reviewed, starting from about 6,077 million US dollars and reaching up to a peak of 26,274 million US dollars. After this peak, a notable decline occurs, dropping equity to approximately 21,206 million US dollars by the last period. This pattern suggests significant capital appreciation followed by some degree of capital reduction or loss retention in the most recent term.
- Invested Capital
- Invested capital demonstrates a clear upward trajectory from 17,459 million US dollars to over 31,000 million US dollars. The growth is pronounced particularly between the second and third periods, with a slight plateau and minor fluctuations observed between the later periods. Overall, this indicates ongoing capital investment or accumulation of net assets supporting the company’s operations.
- Summary Insights
- The company has maintained a steady level of debt, suggesting a controlled approach to leveraging. The marked increase in stockholders’ equity over four years reflects strong growth in net assets or retained earnings, though the subsequent decline may warrant investigation into recent operational or financial challenges. The consistent rise in invested capital points to sustained commitment to asset growth and operational capacity. The combined trends imply that while the company has generally expanded its capital base and maintained stable debt levels, recent fluctuations in equity highlight potential volatility in financial performance or market valuation.
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Cost of Capital
Qualcomm Inc., cost of capital calculations
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 192,480) | 192,480) | ÷ | 207,512) | = | 0.93 | 0.93 | × | 20.28% | = | 18.81% | ||
| Debt3 | 14,200) | 14,200) | ÷ | 207,512) | = | 0.07 | 0.07 | × | 5.12% × (1 – 21.00%) | = | 0.28% | ||
| Operating lease liability4 | 832) | 832) | ÷ | 207,512) | = | 0.00 | 0.00 | × | 6.05% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 207,512) | 1.00 | 19.11% | ||||||||||
Based on: 10-K (reporting date: 2025-09-28).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 192,192) | 192,192) | ÷ | 207,298) | = | 0.93 | 0.93 | × | 20.28% | = | 18.80% | ||
| Debt3 | 14,300) | 14,300) | ÷ | 207,298) | = | 0.07 | 0.07 | × | 4.27% × (1 – 21.00%) | = | 0.23% | ||
| Operating lease liability4 | 806) | 806) | ÷ | 207,298) | = | 0.00 | 0.00 | × | 6.42% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 207,298) | 1.00 | 19.05% | ||||||||||
Based on: 10-K (reporting date: 2024-09-29).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 123,421) | 123,421) | ÷ | 138,390) | = | 0.89 | 0.89 | × | 20.28% | = | 18.09% | ||
| Debt3 | 14,300) | 14,300) | ÷ | 138,390) | = | 0.10 | 0.10 | × | 4.35% × (1 – 21.00%) | = | 0.36% | ||
| Operating lease liability4 | 669) | 669) | ÷ | 138,390) | = | 0.00 | 0.00 | × | 5.90% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 138,390) | 1.00 | 18.46% | ||||||||||
Based on: 10-K (reporting date: 2023-09-24).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 126,113) | 126,113) | ÷ | 141,289) | = | 0.89 | 0.89 | × | 20.28% | = | 18.10% | ||
| Debt3 | 14,499) | 14,499) | ÷ | 141,289) | = | 0.10 | 0.10 | × | 4.18% × (1 – 21.00%) | = | 0.34% | ||
| Operating lease liability4 | 677) | 677) | ÷ | 141,289) | = | 0.00 | 0.00 | × | 5.41% × (1 – 21.00%) | = | 0.02% | ||
| Total: | 141,289) | 1.00 | 18.46% | ||||||||||
Based on: 10-K (reporting date: 2022-09-25).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 155,098) | 155,098) | ÷ | 173,152) | = | 0.90 | 0.90 | × | 20.28% | = | 18.16% | ||
| Debt3 | 17,500) | 17,500) | ÷ | 173,152) | = | 0.10 | 0.10 | × | 4.02% × (1 – 21.00%) | = | 0.32% | ||
| Operating lease liability4 | 554) | 554) | ÷ | 173,152) | = | 0.00 | 0.00 | × | 4.75% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 173,152) | 1.00 | 18.50% | ||||||||||
Based on: 10-K (reporting date: 2021-09-26).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
| Capital (fair value)1 | Weights | Cost of capital | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Equity2 | 145,865) | 145,865) | ÷ | 164,370) | = | 0.89 | 0.89 | × | 20.28% | = | 18.00% | ||
| Debt3 | 18,000) | 18,000) | ÷ | 164,370) | = | 0.11 | 0.11 | × | 4.02% × (1 – 21.00%) | = | 0.35% | ||
| Operating lease liability4 | 505) | 505) | ÷ | 164,370) | = | 0.00 | 0.00 | × | 4.00% × (1 – 21.00%) | = | 0.01% | ||
| Total: | 164,370) | 1.00 | 18.35% | ||||||||||
Based on: 10-K (reporting date: 2020-09-27).
1 US$ in millions
2 Equity. See details »
3 Debt. See details »
4 Operating lease liability. See details »
Economic Spread Ratio
Qualcomm Inc., economic spread ratio calculation, comparison to benchmarks
| Sep 28, 2025 | Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | Sep 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | 3,913) | 2,377) | 71) | 7,767) | 4,812) | 1,594) | |
| Invested capital2 | 31,317) | 30,887) | 31,383) | 29,132) | 20,003) | 17,459) | |
| Performance Ratio | |||||||
| Economic spread ratio3 | 12.49% | 7.70% | 0.23% | 26.66% | 24.06% | 9.13% | |
| Benchmarks | |||||||
| Economic Spread Ratio, Competitors4 | |||||||
| Advanced Micro Devices Inc. | -21.11% | -27.37% | -28.80% | -28.42% | 28.16% | — | |
| Analog Devices Inc. | -12.03% | -14.15% | -10.06% | -11.43% | -14.67% | -9.61% | |
| Applied Materials Inc. | 17.27% | 10.37% | 13.36% | 23.33% | 18.82% | 7.16% | |
| Broadcom Inc. | -2.94% | -10.36% | 4.87% | 3.61% | -5.62% | -10.85% | |
| Intel Corp. | -18.62% | -29.96% | -19.83% | -13.05% | 3.54% | — | |
| KLA Corp. | 20.58% | 16.23% | 20.17% | 22.57% | 11.03% | — | |
| Lam Research Corp. | 12.15% | -2.98% | 2.38% | 17.40% | 12.74% | — | |
| Marvell Technology Inc. | -26.42% | -26.46% | -22.13% | -24.89% | -26.61% | — | |
| Micron Technology Inc. | -5.75% | -17.66% | -29.62% | -1.97% | -6.58% | -12.02% | |
| NVIDIA Corp. | 117.48% | 62.03% | -16.05% | 26.14% | 6.62% | — | |
| Texas Instruments Inc. | 2.39% | 2.70% | 12.32% | 32.90% | 31.54% | — | |
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27).
1 Economic profit. See details »
2 Invested capital. See details »
3 2025 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × 3,913 ÷ 31,317 = 12.49%
4 Click competitor name to see calculations.
The analysis of economic value creation from 2020 to 2025 reveals a period of significant volatility, characterized by a strong growth phase, a sharp contraction, and a subsequent recovery. The overall trend indicates that while value creation has stabilized, it has not yet returned to the peak levels observed in the early 2020s.
- Economic Spread Ratio Trends
- The economic spread ratio exhibited an aggressive upward trajectory from 9.13% in 2020 to a peak of 26.66% in 2022, signaling high efficiency in generating returns above the cost of capital. This was followed by a precipitous decline to 0.23% in 2023, indicating a period where the company barely exceeded its cost of capital. A recovery phase began in 2024, with the ratio climbing to 7.70% and reaching 12.49% by 2025.
- Invested Capital Dynamics
- Invested capital grew steadily from US$ 17,459 million in 2020 to US$ 31,383 million in 2023, representing a substantial expansion of the capital base. Since 2023, this figure has remained relatively stagnant, ending at US$ 31,317 million in 2025, which suggests a shift from capital expansion toward the optimization of existing assets.
- Economic Profitability Analysis
- Economic profit followed a pattern consistent with the spread ratio, increasing from US$ 1,594 million in 2020 to a high of US$ 7,767 million in 2022. The collapse to US$ 71 million in 2023 highlights a near-complete erosion of economic surplus during that fiscal year. The subsequent rebound to US$ 2,377 million in 2024 and US$ 3,913 million in 2025 confirms a return to positive value creation, although the absolute figures remain below the 2022 peak despite the stabilized capital base.
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Economic Profit Margin
Qualcomm Inc., economic profit margin calculation, comparison to benchmarks
| Sep 28, 2025 | Sep 29, 2024 | Sep 24, 2023 | Sep 25, 2022 | Sep 26, 2021 | Sep 27, 2020 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Economic profit1 | 3,913) | 2,377) | 71) | 7,767) | 4,812) | 1,594) | |
| Revenues | 44,284) | 38,962) | 35,820) | 44,200) | 33,566) | 23,531) | |
| Add: Increase (decrease) in unearned revenues | 44) | (7) | (121) | (463) | (353) | (396) | |
| Adjusted revenues | 44,328) | 38,955) | 35,699) | 43,737) | 33,213) | 23,135) | |
| Performance Ratio | |||||||
| Economic profit margin2 | 8.83% | 6.10% | 0.20% | 17.76% | 14.49% | 6.89% | |
| Benchmarks | |||||||
| Economic Profit Margin, Competitors3 | |||||||
| Advanced Micro Devices Inc. | -37.61% | -61.81% | -73.50% | -70.47% | 10.61% | — | |
| Analog Devices Inc. | -45.93% | -65.34% | -36.13% | -42.83% | -94.24% | -31.23% | |
| Applied Materials Inc. | 12.25% | 7.22% | 8.96% | 13.47% | 12.01% | 5.45% | |
| Broadcom Inc. | -6.91% | -28.32% | 8.52% | 6.76% | -13.24% | -29.94% | |
| Intel Corp. | -41.07% | -52.08% | -33.68% | -18.36% | 3.97% | — | |
| KLA Corp. | 15.74% | 13.93% | 16.02% | 19.08% | 10.87% | — | |
| Lam Research Corp. | 10.15% | -3.02% | 2.09% | 12.85% | 10.28% | — | |
| Marvell Technology Inc. | -81.64% | -91.49% | -74.77% | -111.07% | -81.68% | — | |
| Micron Technology Inc. | -9.41% | -37.51% | -101.90% | -3.38% | -11.01% | -23.72% | |
| NVIDIA Corp. | 42.55% | 31.32% | -12.70% | 17.52% | 5.17% | — | |
| Texas Instruments Inc. | 3.86% | 4.52% | 15.89% | 28.85% | 28.21% | — | |
Based on: 10-K (reporting date: 2025-09-28), 10-K (reporting date: 2024-09-29), 10-K (reporting date: 2023-09-24), 10-K (reporting date: 2022-09-25), 10-K (reporting date: 2021-09-26), 10-K (reporting date: 2020-09-27).
1 Economic profit. See details »
2 2025 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenues
= 100 × 3,913 ÷ 44,328 = 8.83%
3 Click competitor name to see calculations.
An analysis of the financial performance from September 2020 to September 2025 reveals a period of significant volatility in value creation, characterized by a rapid expansion, a severe contraction in 2023, and a subsequent recovery phase.
- Economic Profit Trends
- Economic profit experienced substantial growth between 2020 and 2022, rising from 1,594 million US$ to a peak of 7,767 million US$. This upward trajectory was abruptly reversed in 2023, where economic profit plummeted to 71 million US$, representing a near-total erosion of economic value added. However, the subsequent two years show a consistent recovery, with figures climbing to 2,377 million US$ in 2024 and 3,913 million US$ by September 2025.
- Adjusted Revenue Trajectory
- Adjusted revenues followed a similar, though less volatile, pattern. Revenues grew steadily from 23,135 million US$ in 2020 to 43,737 million US$ in 2022. A contraction occurred in 2023, with revenues falling to 35,699 million US$. The period ending September 2025 saw revenues rebound to 44,328 million US$, surpassing the previous 2022 peak.
- Economic Profit Margin Analysis
- The economic profit margin highlights a significant disparity between revenue growth and value generation. The margin expanded from 6.89% in 2020 to a high of 17.76% in 2022. In 2023, the margin collapsed to 0.20%, indicating that while the company remained revenue-positive, it barely exceeded its cost of capital. While the margin improved to 6.10% in 2024 and 8.83% in 2025, it has not yet returned to the efficiency levels observed during the 2021-2022 peak.
The data suggests that while revenue has fully recovered to pre-2023 levels, the capacity to generate economic profit relative to those revenues has diminished. The stark contrast between the 2022 and 2025 margins indicates a shift in the underlying cost structure or capital efficiency during the recovery period.
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