Vital Energy Inc. (VTLE)

Pretax margin

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Earnings before tax but after interest (EBT)	US$ in thousands	-221,261	511,741	637,014	148,653	-878,119
Revenue	US$ in thousands	1,753,840	1,491,170	1,495,400	820,641	661,355
Pretax margin		-12.62%	34.32%	42.60%	18.11%	-132.78%

December 31, 2024 calculation

Pretax margin = EBT ÷ Revenue
= $-221,261K ÷ $1,753,840K
= -12.62%

Based on the data provided, Vital Energy Inc.'s pretax margin has shown considerable variation over the five-year period from December 31, 2020, to December 31, 2024.

In December 2020, the company had a negative pretax margin of -132.78%, indicating that the expenses exceeded the operating income before taxes. This could be a concerning sign for the company's financial health as it implies that the company was operating at a loss.

However, there has been a notable improvement in the pretax margin in the following years. By December 2021, the pretax margin improved significantly to 18.11%, indicating that the company generated a positive operating income relative to its sales before taxes.

The positive trend continued in the subsequent years, with the pretax margin further increasing to 42.60% by December 2022 and then slightly decreasing to 34.32% by December 2023. These improvements suggest that the company has become more efficient in managing its costs and generating profits.

Nonetheless, there was a setback in December 2024, with the pretax margin dropping to -12.62%. This reversal might indicate challenges or unexpected expenses that impacted the company's profitability during that period.

In conclusion, Vital Energy Inc.'s pretax margin has shown volatility over the years, with a mix of positive and negative performances. It is essential for the company to closely monitor its operating efficiency and cost management to sustain profitable growth in the future.