EBITDA Margin

Profitability
Updated Apr 2026 • Has calculator

Operating profitability as a percentage of revenue, before interest, taxes, depreciation, and amortization.

What is EBITDA Margin?

EBITDA margin divides EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) by total revenue. By adding back non-cash charges (depreciation and amortization), it approximates operating cash profitability and is widely used to compare companies across different capital structures and accounting policies. It is a common benchmark in leveraged buyouts, private equity, and cross-border comparisons where tax and depreciation rules differ. However, it ignores the real cost of capital expenditure needed to sustain assets.

Formula

EBITDA Margin = (EBITDA ÷ Revenue) × 100

Worked Example

Worked example — Apple Inc. (AAPL)

FY2024

Step 1  Operating income: $123,216M + Depreciation & amortization: $11,455M = EBITDA: $134,671M
Step 2  Revenue: $391,035M
Step 3  EBITDA Margin = $134,671M ÷ $391,035M × 100 = 34.44%
Step 4  → Apple retains $0.34 of pre-depreciation operating cash for every $1.00 of revenue

Source: Apple 10-K FY2024 (2024-11-01)

Calculate EBITDA Margin

Operating income plus depreciation and amortization, in millions of USD

Total annual revenue in millions of USD

EBITDA Margin

—

Not investment advice.

How to Interpret EBITDA Margin

< 10
Low — thin margins, likely capital- or cost-intensive
10 – 20
Average — typical for industrials and consumer sectors
20 – 35
Strong — good operational efficiency
> 35
Exceptional — software, pharma, or platform economics

📚 Profitability Metrics — Complete the path

  1. Gross Margin
  2. Operating Margin
  3. EBITDA Margin
  4. Net Margin
  5. ROE
Sources
  1. CFA Institute — Financial Reporting and Analysis, 6th ed., Ch. 5
  2. Investopedia — EBITDA Margin