Average profit margin by industry (U.S. public companies)
If you are benchmarking a startup, writing a business plan, or sizing a market, you need a realistic view of profit margins by industry. This map summarizes 94 Damodaran industry groups covering roughly 5,994 listed firms—so you can compare average net profit margin by industry, EBITDA margin by industry, gross margin, and operating margin in one place. Private companies and very small businesses often run different economics; use these figures as anchors for small business profit margin by industry discussions, then adjust for your cost structure and scale.
Tile area reflects how many public firms sit in each group (not market cap). Click a tile for detail, filter by sector below the chart, or switch metrics in the dropdown to explore COGS, R&D, and SG&A ratios alongside profitability.
Highest average net profit margin by industry
| Industry | Net margin | EBITDA / sales |
|---|---|---|
| Semiconductor | 30.4% | 36.8% |
| Software (Entertainment) | 29.9% | 34.9% |
| Bank (Money Center) | 28.9% | 0.0% |
| Precious Metals | 28.6% | 34.6% |
| Banks (Regional) | 27.5% | 0.0% |
| Tobacco | 26.7% | 42.2% |
| Software (System & Application) | 25.5% | 35.9% |
| Transportation (Railroads) | 24.7% | 49.2% |
Highest EBITDA margin by industry
| Industry | EBITDA / sales | Gross margin |
|---|---|---|
| Retail (REITs) | 67.2% | 78.6% |
| Green & Renewable Energy | 58.5% | 55.2% |
| Transportation (Railroads) | 49.2% | 51.0% |
| Utility (Water) | 45.7% | 59.0% |
| R.E.I.T. | 43.8% | 58.1% |
| Oil/Gas (Production and Exploration) | 43.2% | 57.2% |
| Tobacco | 42.2% | 64.3% |
| Semiconductor | 36.8% | 59.0% |
Lower net margins (capital-intensive or cyclical groups)
Comparing the bottom of the distribution helps sanity-check forecasts when you model profit margins by industry in a financial plan.
| Industry | Net margin |
|---|---|
| Green & Renewable Energy | -10.8% |
| Rubber& Tires | -9.5% |
| Electronics (Consumer & Office) | -9.4% |
| Chemical (Diversified) | -5.4% |
| Drugs (Biotechnology) | -5.0% |
| Recreation | -4.7% |
How to use margin benchmarks
- Gross margin shows pricing power after direct costs; pair it with our TAM / SAM / SOM calculator when you tie unit economics to market size.
- Net margin is what ultimately accrues to shareholders—useful when comparing to public comps in the same Damodaran group.
- EBITDA margin is common in M&A and debt capacity work; see Investopedia's EBITDA margin definition for formula context.
- For location and demographic context alongside financial benchmarks, try the market entry scorecard or browse all market research tools.
Data sources & further reading
- NYU Stern — Profit margins by industry (Damodaran)— original margin tables this tool is built from.
- Damodaran data archive— industry datasets for valuation and corporate finance.
- Variable definitions— how operating, lease-adjusted, and R&D-adjusted margins are defined.
- Aswath Damodaran — home page— courses and papers on industry averages in valuation.
- U.S. SBA — break-even and planning— practical guidance when translating industry margins into a small-business plan ( pair with business plan samples).
Also related: AI-resilient jobs scorecard for labor exposure by sector.
Frequently asked questions
- What is the average profit margin by industry?
- There is no single average across all sectors—software, banking, retail, and energy differ sharply. This tool shows group-level aggregates for U.S. listed companies in each Damodaran industry so you can pick the row that matches your business model.
- How should I interpret EBITDA margin by industry?
- EBITDA margin compares operating cash profitability before interest, taxes, and non-cash charges. It is widely used in comparables analysis but ignores capital intensity; read it alongside gross and net margins on the same tile.
- Can I use this for small business profit margin by industry?
- Public-company averages are a starting point. Smaller private firms may have higher or lower margins depending on overhead, geography, and owner compensation. Use the map to set a defensible range, then validate with your own P&L or industry surveys.