Create Custom Functions with LAMBDA in Excel: Step-by-Step Tutorial

Published: January 28, 2025 - 5 min read

Hannah Recker

Are you tired of repeating complex formulas in your Excel spreadsheets? Do you wish you could create your own reusable functions without diving into VBA or macros? With the introduction of the LAMBDA function in Excel 365 and Excel for web, you can now transform your intricate formulas into custom named functions that streamline your workflow. In this comprehensive tutorial, we’ll guide you through the process of creating and implementing custom LAMBDA functions in your Excel projects.

Creating Your First Custom LAMBDA Function

To get started with LAMBDA, you’ll need to understand the basic syntax and components. A LAMBDA function consists of two main parts: the parameters (inputs) and the calculation (output). Here’s a simple example:

Function

Result

=LAMBDA(x,x*2)(5)

10

In this case, we define a parameter x and specify the calculation x*2. We then call the LAMBDA function with an argument of 5, which returns the result 10.

To create a reusable custom function, follow these steps:

  1. Open a new Excel workbook and select a cell.
  2. Enter the LAMBDA function with your desired parameters and calculation.
  3. Test the function by providing the necessary arguments in the same cell.
  4. Once you’ve confirmed the function works as intended, open the Name Manager (Formulas > Name Manager).

  1. Click “New” and enter a name for your custom function.

  1. In the “Refers to” field, enter your LAMBDA function definition.

  1. Click “OK” to save your custom function.

Now you can use your custom function throughout your workbook by simply calling its name and providing the required arguments.

Building Multi-Parameter LAMBDA Functions

LAMBDA functions can accept multiple parameters, allowing you to create more complex custom functions. To define multiple parameters, separate them with commas within the LAMBDA function. For example:

Function

Result

=LAMBDA(x,y,z,x+y+z)(1,2,3)

6

In this example, we define three parameters (x, y, and z) and specify the calculation x+y+z. When calling the function, we provide three arguments (1, 2, and 3), which results in the output 6.

When working with multiple parameters, keep in mind:

  • Parameters can accept different data types (numbers, text, booleans, etc.).
  • You can nest other Excel functions within your LAMBDA function to create more advanced calculations.
  • LAMBDA functions can return arrays by performing calculations on array inputs.

What’s the Difference Between LET and LAMBDA?

Both LET and LAMBDA are powerful functions introduced in Excel 365, but they serve different purposes. LET allows you to assign names to calculation results within a formula, making it easier to read and maintain complex formulas. LAMBDA, on the other hand, focuses on creating reusable custom functions.

Here’s a practical example that illustrates the difference:

Function

Description

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=LET(x,1,y,2,z,3,x+y+z)

Assigns names to values and performs a calculation

=LAMBDA(x,y,z,x+y+z)(1,2,3)

Creates a reusable function with parameters

While LET is useful for simplifying complex formulas within a cell, LAMBDA is ideal for creating custom functions that can be used throughout your workbook. However, you can combine LET and LAMBDA to create even more powerful and efficient custom functions.

Converting VBA Functions to LAMBDA

If you have existing VBA functions in your Excel workbooks, you may want to convert them to LAMBDA functions to eliminate the need for macros. To do this:

  1. Identify the VBA function you want to convert and examine its logic.
  2. Restructure the function’s logic to fit the LAMBDA syntax, defining parameters and the calculation.
  3. Test your new LAMBDA function to ensure it maintains the same functionality as the original VBA function.
  4. Compare the performance of your LAMBDA function to the VBA function to ensure there are no significant slowdowns.

By converting VBA functions to LAMBDA, you can maintain functionality while making your workbook more accessible and easier to share with others who may not have macro permissions.

Real-World LAMBDA Applications

LAMBDA functions can be applied to a wide range of real-world scenarios in Excel. Some common applications include:

  • Financial calculations: Create custom functions for loan payments, interest calculations, or depreciation schedules.
  • Text manipulation: Build functions to extract, format, or concatenate text based on specific criteria.
  • Date processing: Develop functions to calculate business days, age, or time differences between dates.
  • Conditional array operations: Create functions that perform calculations on arrays based on specified conditions.

By leveraging LAMBDA functions in these scenarios, you can streamline your spreadsheets and make your calculations more efficient and reusable.

Extending LAMBDA Functions

As you become more comfortable with LAMBDA functions, you can extend their functionality by incorporating advanced features such as:

  • Error handling: Use IFERROR or other error-handling functions within your LAMBDA to gracefully handle potential errors.
  • Recursive functions: Create LAMBDA functions that call themselves to solve problems that require iterative calculations.
  • Range references: Use LAMBDA functions in conjunction with range references to perform calculations on specific cell ranges.
  • Integration with other Excel features: Combine LAMBDA functions with other Excel features like data validation, conditional formatting, or charts to create dynamic and interactive spreadsheets.

By extending your LAMBDA functions with these features, you can create even more powerful and flexible custom functions tailored to your specific needs.

Next Steps

Now that you’ve learned how to create and implement custom LAMBDA functions in Excel, it’s time to put your knowledge into practice:

  1. Start by identifying repetitive or complex formulas in your existing workbooks that could benefit from being converted to LAMBDA functions.
  2. Experiment with different parameter combinations and nested functions to create advanced custom functions.
  3. Share your custom LAMBDA functions with colleagues to promote consistency and efficiency across your organization.

By mastering the art of LAMBDA functions, you’ll unlock a new level of productivity and flexibility in your Excel workflows.

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Hannah Recker Growth Marketer
Hannah Recker was a data-driven growth marketer before partying in the data became a thing. In her 12 years experience, she's become fascinated with the way data enablement amongst teams can truly make or break a business. This fascination drove her to taking a deep dive into the data industry over the past 4 years in her work at StreamSets and Coefficient.
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