S&P 500 Posts Its Fifth Straight Quarter of Double-Digit Earnings Growth — And Margins Hit a Record
Q4 2025 earnings came in at 13.2% growth with record profit margins, and analysts see more upside ahead for 2026.
The Q4 2025 earnings season is wrapping up, and the numbers tell a clear story: corporate America is firing on all cylinders.
The S&P 500 posted a blended earnings growth rate of 13.2% year-over-year — its fifth consecutive quarter of double-digit growth. Seventy-four percent of companies beat EPS estimates, reporting earnings 7.2% above analyst expectations on average.
Revenue Growth Is the Real Story
Earnings beats can come from cost-cutting, but revenue growth of 9.0% — the highest since Q3 2022 and the 21st consecutive quarter of revenue growth — indicates that profits are being driven by genuine demand. Seventy-three percent of companies beat revenue estimates, above both the 5-year average of 70% and the 10-year average of 66%.
Record Profit Margins
S&P 500 net profit margins reached a record 13.2%, achieved through the integration of automated workflows and AI-driven operational improvements. Companies are not just selling more — they are keeping more of every dollar they earn.
Nine of eleven sectors posted year-over-year gains, with Information Technology, Industrials, and Communication Services leading the way. This is a broad-based expansion, not a one-sector story.
The Forward Look
Analysts are projecting Q1 2026 earnings growth of 11.1%, Q2 2026 growth of 14.9%, and full-year 2026 earnings growth of 14.4%. The forward 12-month P/E ratio stands at 21.5 — above the 5-year average of 20.0 but actually down from 22.0 at year-end, suggesting valuations are being supported by growing earnings rather than pure multiple expansion.
The S&P 500 is being pushed toward the historic 7,000 level on the back of these results.
What It Means
This earnings season provides the fundamental scaffolding for the current bull market. Record margins, accelerating revenue, and forward estimates that project even stronger growth ahead — the data says this rally has real legs.
When the market rises on earnings rather than hope, that is the kind of foundation that tends to hold.