SM Energy Co (SM)

Gross profit margin

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Gross profit	US$ in thousands	1,225,010	1,119,860	2,121,210	1,318,110	-49,622
Revenue	US$ in thousands	2,671,280	2,373,890	3,345,910	2,597,920	1,126,580
Gross profit margin		45.86%	47.17%	63.40%	50.74%	-4.40%

December 31, 2024 calculation

Gross profit margin = Gross profit ÷ Revenue
= $1,225,010K ÷ $2,671,280K
= 45.86%

The gross profit margin of SM Energy Co has shown significant fluctuations over the past five years. It stood at a negative 4.40% on December 31, 2020, indicating that the company's cost of goods sold exceeded its revenue from sales during that period. However, there has been a notable improvement in subsequent years, with the gross profit margin increasing to 50.74% on December 31, 2021, and further rising to 63.40% on December 31, 2022. This upward trend suggests that the company's profitability from its core operations has strengthened.

However, there was a slight dip in the gross profit margin to 47.17% on December 31, 2023, followed by another decrease to 45.86% on December 31, 2024. These reductions indicate that the company's cost of goods sold relative to its revenue has increased in these years, potentially impacting its overall profitability.

Overall, while SM Energy Co has made significant progress in improving its gross profit margin in recent years, it will be important for the company to closely monitor its cost structure and pricing strategies to sustain and enhance its profitability in the future.