How profitable are the largest US companies?

That’s kind of a trick question. The answer, in a word, is “very.” In fact, with Q4 earnings now mostly on the books, it’s safe to say S&P 500 margins hit a new record during the final quarter of 2025.

But there’s some nuance. Although aggregate profitability hit a record last quarter, the median margin for the S&P 500 — i.e., profitability for the “typical” US large-cap — actually slipped to a multi-quarter low.

The figure above, from Goldman, shows you the aggregate margin for the index was 12.6%, an all-time high, while the median company saw its margins compress by ~20bps versus Q3 to “just” 12.2%.

Obviously, that latter figure’s still quite healthy. It means the typical large, publicly-traded American company remains far more profitable five years on from the worst public health crisis in a century than before the pandemic.

Nevertheless, Q4 was only the fourth quarter since 2020 during which the aggregate index margin outstripped the median. The disparity’s due to “the exceptional profitability of the largest stocks,” Goldman’s Ben Snider noted, adding that index margins increase mechanically with the revenue weights of those stocks given their “above-average profitability.”

That raises the following question: What happens in the event the biggest names don’t deliver on lofty expectations?

Meanwhile, C-suite sentiment’s shifting under the surface, in line with the (for-now-slight) compression in margins for the median company.

The figure above shows you the prevalence of cost mentions on analyst calls.

“With profit margins for the median stock struggling to move higher, one focus of corporate commentary this season was the management of cost pressures,” Snider remarked, describing a “surge” in the share of companies mentioning “expense management.”

Mag7 margins expanded more than 130bps YoY in Q4. That figure for the so-called “S&P 493” was a mere 19bps.