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Metric · Margin

EBIT Margin Explained

Q: What is a good EBIT margin?

As a rough guide, a margin above 12% is considered strong, below 6% weak. But the industry-typical value varies considerably.

Q: What is the difference between EBIT margin and EBITDA margin?

EBITDA margin doesn't back out depreciation and is therefore usually higher than EBIT margin. It's especially useful for comparing companies with different levels of capital investment.

EBIT margin (operating margin) relates operating profit (EBIT) to revenue. It shows how efficiently a company generates profit from its core business, independent of interest and taxes.

Updated 20266 min read

Formula

EBIT margin = EBIT ÷ Revenue × 100

> 12%Strong margin

6–12%Moderate margin

< 6%Weak margin

Guideline values, industry-dependent, illustrative

The formula in detail

The components of the formula at a glance.

Numerator

EBIT

Operating profit before interest and taxes.

Denominator

Revenue

Revenue from the core operating business.

EBIT margin calculator

Enter your own figures and see the value instantly.

EBIT (€m)

Revenue (€m)

Result EBIT margin

Strong margin

12.0%

An EBIT margin above 12% points to pricing power and cost discipline.

A margin below 6% shows a margin-weak business model that can absorb cost increases or price pressure less well.

The absolute level of the margin is highly industry-dependent. Software companies structurally achieve higher margins than, say, retail.

Typical industry ranges

Typical value range per sector, for orientation.

Real Estate

20.7–63.4%

Utilities

10.0–26.1%

Technology

8.4–28.8%

Healthcare

9.9–26.1%

Financial Services

10.9–27.8%

Basic Materials

8.4–35.1%

Communication Services

9.6–23.0%

Energy

10.6–32.4%

Industrials

7.8–17.6%

Consumer Cyclical

6.5–18.2%

Consumer Defensive

5.0–16.0%

Aggregated sector values (median band). Data as of Nov 15, 2026

Threshold slider

How many sectors meet a threshold?

Move the threshold and see how many of the sectors shown above sit below or above it with their median.

Bounded preview

Threshold for EBIT margin16.2%

Comparison

6 of 11 sectors meet the thresholdBased on the aggregated sector medians above, not on individual companies.

What the metric looks like at large companies

Data as of Nov 15, 2026

Name	Sector	Value	Sector median
Apple Inc.	Technology	33.0%	18.5%
Alphabet Inc Class A	Communication Services	33.3%	16.0%
Amazon.com Inc	Consumer Cyclical	13.1%	11.3%
Space Exploration Technologies Corp. Class A Common Stock	Industrials	-13.9%	11.7%
Saudi Aramco	Energy	42.7%	15.9%
Eli Lilly and Company	Healthcare	46.1%	17.9%

Selection: the company with the highest market cap in each sector. Not a recommendation, only worked examples with real values.

Used in these strategies

Magic Formula: Value + QualityGood companies at cheap prices: two factors, one score.High-Growth / Rule of 40Growth only counts here if it is profitable. Loss-makers drop out.

Frequently asked questions

What is a good EBIT margin?

As a rough guide, a margin above 12% is considered strong, below 6% weak. But the industry-typical value varies considerably.

What is the difference between EBIT margin and EBITDA margin?

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Not investment advice. This explanation is for informational purposes only and does not constitute a recommendation to buy or sell securities.