What is net profit margin? The formula, with 10 real company examples
Net profit margin is the share of a company's revenue that is left as net income after all costs, interest and taxes. It is calculated as net income divided by revenue. In NVIDIA's latest annual report, net income was $120.1 billion on revenue of $215.9 billion, a net margin of 55.6%: about 56 cents of every dollar of sales.
The net profit margin formula
- Net profit margin = net income ÷ revenue × 100.
- Revenue (also called sales or the top line) is the money a company takes in from what it sells.
- Net income (the bottom line) is what remains after subtracting every expense: cost of goods, operating costs, interest and income taxes.
- Worked example: $133.7 billion ÷ $331.8 billion = 0.4031, or 40.3%, for Microsoft.
Net margin of 10 large US companies
Which US Giant Keeps 56¢ of Every $1? Top 10 Profit Margins, Latest 10-K
| # | Company | Revenue | Net income | Net margin | Fiscal year end |
|---|---|---|---|---|---|
| 1 | NVIDIA | $215.9 billion | $120.1 billion | 55.6% | 2026-01-25 |
| 2 | Microsoft | $331.8 billion | $133.7 billion | 40.3% | 2026-06-30 |
| 3 | Broadcom | $63.9 billion | $23.1 billion | 36.2% | 2025-11-02 |
| 4 | Alphabet | $402.8 billion | $132.2 billion | 32.8% | 2025-12-31 |
| 5 | Eli Lilly | $65.2 billion | $20.6 billion | 31.7% | 2025-12-31 |
| 6 | JPMorgan Chase | $182.4 billion | $57.0 billion | 31.3% | 2025-12-31 |
| 7 | Meta | $201.0 billion | $60.5 billion | 30.1% | 2025-12-31 |
| 8 | Goldman Sachs | $58.3 billion | $17.2 billion | 29.5% | 2025-12-31 |
| 9 | Johnson & Johnson | $94.2 billion | $26.8 billion | 28.5% | 2025-12-28 |
| 10 | Merck | $65.0 billion | $18.3 billion | 28.1% | 2025-12-31 |
Margin is not the same as size
A higher margin does not mean more profit in dollars. In this group, Microsoft had the largest net income, $133.7 billion, with a margin of 40.3%. NVIDIA earned less in dollars, $120.1 billion, but kept a larger share of each dollar of sales. Alphabet had the most revenue, $402.8 billion, and a margin of 32.8%.
Gross, operating and net margin
- Gross margin: revenue minus the direct cost of what was sold, divided by revenue. It shows how much is left before running the business.
- Operating margin: operating income divided by revenue. It also subtracts operating costs such as research, sales and administration.
- Net margin: net income divided by revenue. It also subtracts interest, taxes and one-off items, so it is usually the smallest of the three.
What net margin does not tell you
- Margins differ by industry, so comparing a chip designer with a retailer says more about the industries than the companies.
- Fiscal years end in different months; the reports used here end between 2025-11 and 2026-06.
- One-off items such as tax changes, legal settlements or asset sales can raise or lower net income in a single year.
- For banks such as JPMorgan Chase and Goldman Sachs, revenue means total net revenue as reported, which is defined differently from a manufacturer's sales.
- A margin describes one past year. It is a measurement, not a prediction.
Questions
What is net profit margin?
The share of revenue left as net income after all costs, interest and taxes: net income divided by revenue.
How do you calculate net profit margin?
Divide net income by revenue and multiply by 100. For example, $120.1 billion ÷ $215.9 billion × 100 = 55.6% for NVIDIA.
Which of these companies has the highest net margin?
NVIDIA, at 55.6% in its latest annual report.
Is a higher net margin always better?
It is a measurement, not a verdict. Margins depend on the industry, the year and one-off items, and a company with a lower margin can still earn more in dollars.
How we made this
Source: SEC EDGAR filings (public information), each company's latest annual Form 10-K. Not affiliated with or endorsed by the SEC or any company named. · Data: FYs ended Nov 2025 – Jun 2026For information only. Not financial advice. Every figure on this page is computed by script from the same data as our Shorts and rounded for display.