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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
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Palantir Technologies Inc., economic profit calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net operating profit after taxes (NOPAT)¹	207,040)	(221,451)	(377,568)	(1,189,427)
Cost of capital²	29.40%	29.17%	29.25%	29.26%
Invested capital³	1,237,836)	3,071,913)	2,585,786)	2,178,851)

Economic profit⁴	(156,911)	(1,117,584)	(1,133,814)	(1,826,894)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 207,040 – 29.40% × 1,237,836 = -156,911

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Palantir Technologies Inc. economic profit increased from 2021 to 2022 and from 2022 to 2023.

Palantir Technologies Inc., NOPAT calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income (loss) attributable to common stockholders	209,825)	(373,705)	(520,379)	(1,166,391)
Deferred income tax expense (benefit)¹	(4,806)	(174)	43,316)	(20,385)
Increase (decrease) in allowance for credit losses²	400)	10,100)	—)	—)
Increase (decrease) in deferred revenue³	81,633)	(74,718)	27,988)	(23,090)
Increase (decrease) in equity equivalents⁴	77,227)	(64,792)	71,304)	(43,475)
Interest expense	3,470)	4,058)	3,640)	14,139)
Interest expense, operating lease liability⁵	13,764)	15,588)	15,682)	16,413)
Adjusted interest expense	17,234)	19,646)	19,322)	30,552)
Tax benefit of interest expense⁶	(3,619)	(4,126)	(4,058)	(6,416)
Adjusted interest expense, after taxes⁷	13,614)	15,520)	15,265)	24,136)
(Gain) loss on marketable securities	4,500)	272,100)	72,800)	—)
Interest income	(132,572)	(20,309)	(1,607)	(4,680)
Investment income, before taxes	(128,072)	251,791)	71,193)	(4,680)
Tax expense (benefit) of investment income⁸	26,895)	(52,876)	(14,951)	983)
Investment income, after taxes⁹	(101,177)	198,915)	56,242)	(3,697)
Net income (loss) attributable to noncontrolling interest	7,550)	2,611)	—)	—)
Net operating profit after taxes (NOPAT)	207,040)	(221,451)	(377,568)	(1,189,427)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in allowance for credit losses.

³ Addition of increase (decrease) in deferred revenue.

⁴ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to common stockholders.

⁵ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 229,392 × 6.00% = 13,764

⁶ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 17,234 × 21.00% = 3,619

⁷ Addition of after taxes interest expense to net income (loss) attributable to common stockholders.

⁸ 2023 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 128,072 × 21.00% = 26,895

⁹ Elimination of after taxes investment income.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Palantir Technologies Inc. NOPAT increased from 2021 to 2022 and from 2022 to 2023.

Palantir Technologies Inc., cash operating taxes calculation

US$ in thousands

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Provision for (benefit from) income taxes	19,716)	10,067)	31,885)	(12,636)
Less: Deferred income tax expense (benefit)	(4,806)	(174)	43,316)	(20,385)
Add: Tax savings from interest expense	3,619)	4,126)	4,058)	6,416)
Less: Tax imposed on investment income	26,895)	(52,876)	(14,951)	983)
Cash operating taxes	1,246)	67,243)	7,577)	13,182)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Palantir Technologies Inc. cash operating taxes increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Palantir Technologies Inc., invested capital calculation (financing approach)

US$ in thousands

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Debt, noncurrent, net	—)	—)	—)	197,977)
Operating lease liability¹	229,392)	249,404)	260,073)	258,879)
Total reported debt & leases	229,392)	249,404)	260,073)	456,856)
Stockholders’ equity	3,475,561)	2,565,326)	2,291,030)	1,522,550)
Net deferred tax (assets) liabilities²	8,063)	11,965)	1,580)	(42,852)
Allowance for credit losses³	10,500)	10,100)	—)	—)
Deferred revenue⁴	274,948)	193,315)	268,033)	240,045)
Equity equivalents⁵	293,511)	215,380)	269,613)	197,193)
Accumulated other comprehensive (income) loss, net of tax⁶	(801)	5,333)	2,349)	2,745)
Noncontrolling interests	85,404)	77,111)	—)	—)
Adjusted stockholders’ equity	3,853,675)	2,863,150)	2,562,992)	1,722,488)
Construction in progress⁷	(2,099)	(5,506)	(3,126)	(493)
Marketable securities⁸	(2,843,132)	(35,135)	(234,153)	—)
Invested capital	1,237,836)	3,071,913)	2,585,786)	2,178,851)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

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 deferred revenue.

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.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Palantir Technologies Inc. invested capital increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Palantir Technologies Inc., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	51,777,952)	51,777,952)	÷	52,007,344)	=	1.00	1.00	×	29.51%	=	29.38%
Debt³	—)	—)	÷	52,007,344)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	229,392)	229,392)	÷	52,007,344)	=	0.00	0.00	×	6.00% × (1 – 21.00%)	=	0.02%
Total:	52,007,344)					1.00					29.40%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	17,798,750)	17,798,750)	÷	18,048,154)	=	0.99	0.99	×	29.51%	=	29.10%
Debt³	—)	—)	÷	18,048,154)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	249,404)	249,404)	÷	18,048,154)	=	0.01	0.01	×	6.25% × (1 – 21.00%)	=	0.07%
Total:	18,048,154)					1.00					29.17%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	24,016,300)	24,016,300)	÷	24,276,373)	=	0.99	0.99	×	29.51%	=	29.20%
Debt³	—)	—)	÷	24,276,373)	=	0.00	0.00	×	0.00% × (1 – 21.00%)	=	0.00%
Operating lease liability⁴	260,073)	260,073)	÷	24,276,373)	=	0.01	0.01	×	6.03% × (1 – 21.00%)	=	0.05%
Total:	24,276,373)					1.00					29.25%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	43,552,194)	43,552,194)	÷	44,009,050)	=	0.99	0.99	×	29.51%	=	29.21%
Debt³	197,977)	197,977)	÷	44,009,050)	=	0.00	0.00	×	6.34% × (1 – 21.00%)	=	0.02%
Operating lease liability⁴	258,879)	258,879)	÷	44,009,050)	=	0.01	0.01	×	6.34% × (1 – 21.00%)	=	0.03%
Total:	44,009,050)					1.00					29.26%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in thousands

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Palantir Technologies Inc., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in thousands)
Economic profit¹	(156,911)	(1,117,584)	(1,133,814)	(1,826,894)
Invested capital²	1,237,836)	3,071,913)	2,585,786)	2,178,851)
Performance Ratio
Economic spread ratio³	-12.68%	-36.38%	-43.85%	-83.85%
Benchmarks
Economic Spread Ratio, Competitors⁴
Accenture PLC	5.50%	8.35%	10.19%	10.75%
Adobe Inc.	5.27%	10.70%	13.11%	5.39%
Cadence Design Systems Inc.	10.26%	9.64%	9.87%	10.68%
CrowdStrike Holdings Inc.	0.83%	-2.42%	-4.69%	6.19%
International Business Machines Corp.	-1.70%	-9.55%	-4.54%	-4.26%
Intuit Inc.	-6.59%	-5.52%	2.20%	5.55%
Microsoft Corp.	15.91%	23.86%	32.87%	30.90%
Oracle Corp.	-1.48%	-1.16%	6.90%	1.22%
Palo Alto Networks Inc.	14.44%	6.31%	-2.37%	-3.38%
Salesforce Inc.	-12.44%	-10.01%	-7.71%	-10.75%
ServiceNow Inc.	8.58%	4.05%	5.26%	6.88%
Synopsys Inc.	-3.52%	3.06%	-2.96%	-2.79%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -156,911 ÷ 1,237,836 = -12.68%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Palantir Technologies Inc. economic spread ratio improved from 2021 to 2022 and from 2022 to 2023.

Palantir Technologies Inc., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Selected Financial Data (US$ in thousands)
Economic profit¹	(156,911)	(1,117,584)	(1,133,814)	(1,826,894)

Revenue	2,225,012)	1,905,871)	1,541,889)	1,092,673)
Add: Increase (decrease) in deferred revenue	81,633)	(74,718)	27,988)	(23,090)
Adjusted revenue	2,306,645)	1,831,153)	1,569,877)	1,069,583)
Performance Ratio
Economic profit margin²	-6.80%	-61.03%	-72.22%	-170.80%
Benchmarks
Economic Profit Margin, Competitors³
Accenture PLC	2.83%	4.02%	5.22%	5.47%
Adobe Inc.	6.59%	12.47%	16.34%	7.73%
Cadence Design Systems Inc.	10.22%	9.62%	10.03%	10.75%
CrowdStrike Holdings Inc.	1.12%	-3.79%	-9.74%	5.43%
International Business Machines Corp.	-3.03%	-16.58%	-8.66%	-7.41%
Intuit Inc.	-10.79%	-10.63%	2.79%	6.25%
Microsoft Corp.	18.12%	22.87%	27.29%	22.94%
Oracle Corp.	-2.87%	-2.13%	13.65%	2.79%
Palo Alto Networks Inc.	14.34%	7.35%	-3.20%	-5.49%
Salesforce Inc.	-31.68%	-27.80%	-17.69%	-26.46%
ServiceNow Inc.	6.91%	3.26%	4.55%	5.62%
Synopsys Inc.	-4.97%	4.31%	-4.72%	-4.79%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Adjusted revenue
= 100 × -156,911 ÷ 2,306,645 = -6.80%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Palantir Technologies Inc. economic profit margin improved from 2021 to 2022 and from 2022 to 2023.

Palantir Technologies Inc. (NYSE:PLTR)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin