Essential Utilities Inc (WTRG)

Net profit margin

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	595,314	498,226	465,237	431,612	284,849
Revenue	US$ in thousands	2,086,110	2,053,820	2,288,030	1,878,140	1,462,700
Net profit margin		28.54%	24.26%	20.33%	22.98%	19.47%

December 31, 2024 calculation

Net profit margin = Net income ÷ Revenue
= $595,314K ÷ $2,086,110K
= 28.54%

Net profit margin is a key financial ratio that indicates the percentage of revenue that translates into net income after accounting for all expenses. For Essential Utilities Inc, the net profit margin has shown a positive trend over the past five years, with values of 19.47% in 2020, 22.98% in 2021, 20.33% in 2022, 24.26% in 2023, and 28.54% in 2024.

This improvement in net profit margin signifies that the company has been effectively managing its costs and expenses relative to its revenue generation, resulting in a higher proportion of revenue converting to net income. A rising net profit margin is generally a positive indicator of the company's profitability and operational efficiency. It suggests that Essential Utilities Inc has been successful in controlling its expenses and potentially increasing its pricing power or revenue streams.

The consistent growth in net profit margin over the years reflects the company's ability to enhance its bottom line profitability, which could attract investors and indicate a healthy financial performance. However, careful monitoring of this trend is important to ensure that it is sustainable and not solely driven by cost-cutting measures that could potentially impact the company's long-term growth prospects.