3 days ago
3 Key Takeaways from the Q2 Earnings Season
As we head into the final phase of the Q2 earnings season, we can say with complete confidence that the overall earnings picture remains strong and resilient. Even more importantly, the outlook for the current and coming quarters has clearly started improving, with the favorable revisions trend particularly notable for the Tech sector.
While we still have a few key Tech sector players among the 9% of S&P 500 members that are still to report results, the primary focus of the still-to-come reports will be on the retail space.
We have a couple of retail-centric companies, such as Advanced Auto Parts AAP and Birkenstock BIRK, on deck to report this week, but the bulk of the sector results will start coming out the following week.
Here are the three key takeaways from the Q2 earnings season.
First, we saw an above-average proportion of companies beat Q2 EPS and revenue estimates, with the beats percentage particularly notable on the revenues side.
Through Friday, August 8 th, we have seen Q2 results from 455 S&P 500 members, or 91% of the index's total membership. Total earnings for these companies are up +11.6% from the same period last year on +5.9% revenue growth, with 80.4% beating EPS estimates and 79.1% beating revenue estimates.
This is a notably better performance relative to what we have seen from this group of index members in other recent periods, as the comparison charts below show.
The comparison charts below show the Q2 earnings revenue growth pace for the 455 index members that have already reported results.
As you can see above, the revenue performance is particularly notable.
Second, we are on track for a new all-time quarterly record for the aggregate Q2 earnings total for the S&P 500 index, surpassing the previous record set in 2024 Q4.
Looking at Q2 as a whole, combining the actual results from the 455 index members that have reported already with estimates for the still-to-come 45 companies, total S&P 500 earnings are expected to be up +12.1% from the same period last year on +6.2% higher revenues.
The Q2 earnings growth rate improves to +13.9% when the Energy sector's drag is removed from the results and weakens to +8.5% when the Tech sector's substantial contribution is excluded from the aggregate numbers.
The aggregate dollar total for Q2 is a new all-time quarterly record, as the chart below shows.
As you can see above, aggregate earnings are on track to reach $582 billion, up from $556.2 billion in the preceding period, $519.3 billion in the year-earlier quarter, and the previous record of $573.6 billion in 2024 Q4.
Third, the revisions trend has turned positive, with the trend particularly notable for the Tech sector.
For the current period (2025 Q3), the expectation today is for earnings growth of +5.1% for the S&P 500 index on +5.6% higher revenues.
The chart below shows how Q3 earnings growth expectations have evolved in recent weeks.
You can also see above how Q3 estimates have evolved since the start of July.
Since the start of July, Q3 estimates have increased for 6 of the 16 Zacks sectors, with the biggest gains for the Tech, Finance, Energy, and Retail sectors.
On the negative side, Q3 estimates have declined for the remaining 10 sectors since the start of the period, with the biggest declines for the Medical, Transportation, Basic Materials, Construction, and Auto sectors.
For the Tech sector, Q3 earnings are currently expected to be up +10.4% from the same period last year on +11.5% higher revenues. The chart below shows how the sector's Q3 earnings growth expectations have evolved since the quarter got underway.
The Earnings Big Picture
The chart below shows current Q2 earnings and revenue growth expectations in the context of the preceding four quarters and the coming four quarters.
The chart below shows the overall earnings picture on a calendar-year basis.
In terms of S&P 500 index 'EPS', these growth rates approximate to $257.35 for 2025 and $289.35 for 2026.
The chart below shows how these calendar year 2025 earnings growth expectations have evolved since the start of Q2. As you can see below, estimates fell sharply at the start of the quarter, which coincided with the tariff announcements, but have started going back up lately.
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