S&P 500 Reporting Highest Net Profit Margin in Over 15 Years

Given concerns in the market about tariffs and higher costs, what is the S&P 500 reporting for a net profit margin for Q3?

The blended net profit margin for the S&P 500 for Q3 2025 is 13.1%, which is above the previous quarter’s net profit margin, above the year-ago net profit margin, and above the 5-year average.

In fact, this quarter marks the highest net profit margin reported by the S&P 500 going back to at least 2009 (which is the extent of FactSet’s historical data for this metric). The previous high for the net profit margin was 13.0%, which was recorded in Q2 2021. This quarter also marks the 7^th consecutive quarter that the net profit margin has increased.

At the sector level, six sectors are reporting a year-over-year increase in their net profit margins in Q3 2025 compared to Q3 2024, led by the Information Technology (27.7% vs. 25.1%), Utilities (17.2% vs. 14.8%), and Financials (20.2% vs. 17.0%) sectors. On the other hand, five sectors are reporting a year-over-year decrease in their net profit margins in Q3 2025 compared to Q3 2024, led by the Communication Services (12.4 vs. 14.8%).

Six sectors are reporting net profit margins in Q3 2025 that are above their 5-year averages, led by the Utilities (17.2% vs. 13.6%) sector. On the other hand, five sectors are reporting net profit margins in Q3 2025 that are below their 5-year averages, led by the Energy (8.2% vs. 9.8%) and Health Care (7.8% vs. 9.3%) sectors.

Six sectors are reporting a quarter-over-quarter increase in their net profit margins in Q3 2025 compared to Q2 2025, led by the Utilities (17.2% vs. 12.8%) sector. On the other hand, five sectors are reporting a quarter-over-quarter decrease in their net profit margins in Q3 2025 compared to Q2 2025, led by the Communication Services (12.4% vs. 15.3%) sector.

It is interesting to note that analysts believe net profit margins for the S&P 500 will be even higher in 2026. As of today, the estimated net profit margins for Q4 2025 through Q2 2026 are 12.8%, 13.3% and 13.7%, respectively.

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