It’s official. With earnings season all but over in the US, Q2 was the best reporting season in at least a quarter century if you don’t count the recovery from the GFC and the pandemic whipsaw.

Go ahead: Scoff. I won’t blame you. The “beats” weren’t beats. But then again, they never really are. This is always a bit of a charade.

Even as “fake” beats go, Q2 2025 was anomalous in that the bar was lowered to such an extent that a crippled turtle could’ve cleared it — drunk. Analysts cut estimates aggressively to account for the impact of US trade policy escalations announced in March and April, and those estimates didn’t reset and readjust to account for subsequent developments. The result: A beat rate for the record books.

As the updated figure above from Goldman’s David Kostin shows, 60% of S&P 500 companies beat EPS estimates by at least a standard deviation. As Kostin noted, that’s the “highest rate in 25 years of data history outside of 2009 and the COVID reopening.”

Headed in, consensus was looking for aggregate index EPS growth of just 4% YoY. With more than 90% of the index on the books, the actual figure was 11%.

But it wasn’t all about clearing a low bar. Guidance was good too. In fact, it was twice as good as usual. Six out of 10 companies guided higher for full-year EPS, double the rate from the prior quarter and well above the post-GFC average (figure on the left, below). A mere 14% of companies guided down.

The reason for the upbeat guides: A rethink of the likely hit from trade levies. “Companies explicitly communicated that the projected earnings headwind from tariffs would be smaller than previous management estimates,” Kostin remarked.

There again: Initial expectations were set based on tariff rates communicated in late-March and (especially) early-April. When the worst case didn’t materialize, those expectations appeared far too bearish in hindsight.

Company analysts take their cues first and foremost from management teams in their coverage universe (which is both forgivable and lamentable all at the same time), so it’s hardly surprising that revisions are “extraordinarily robust,” to quote Kostin.

As the figure on the right, above, reminds you, revisions breadth inflected on a near 90-degree angle in recent weeks and now sits at its most bullish levels in four years.