Purpose: This study examines the effect of intellectual capital on firm value and the moderating role of profitability. Due to inconsistent findings regarding the value-creating role of intellectual capital, this study investigates whether profitability strengthens the relationship between intellectual capital and firm value.
Research Methodology: This study uses secondary data from manufacturing companies listed on the Indonesia Stock Exchange during 2022–2024. Hypotheses were tested using moderated regression analysis with the Hayes test in SPSS version 26.
Results: The findings show that intellectual capital has a significant negative effect on firm value, while profitability has a significant positive effect. Furthermore, the interaction between intellectual capital and profitability positively affects firm value, indicating that profitability strengthens this relationship.
Conclusions: Intellectual capital does not directly create firm value and may initially be perceived as a cost. However, higher profitability enables firms to maximize the value-creating potential of intellectual capital.
Limitations: This study is limited to Indonesian manufacturing companies and measures intellectual capital using only the VAIC method.
Contributions: This study contributes by demonstrating that the effect of intellectual capital on firm value depends on profitability. The findings highlight profitability as an important mechanism that enhances the value relevance of intellectual capital.