Net profit margin growth measures the percentage change in a company's trailing twelve-month net profit margin compared to [1 year / 3 years / 5 years] ago. It reveals whether the company is becoming more or less profitable per dollar of revenue. Expanding margins indicate the company is translating a higher share of revenue into profit. Contracting margins indicate cost pressures, competitive dynamics, or strategic decisions like investment spending.
Margin Growth [1Y] = (Net Profit Margin TTM current / Net Profit Margin TTM 1 year ago) − 1 Margin Growth [3Y] = (Net Profit Margin TTM current / Net Profit Margin TTM 3 years ago) − 1 Margin Growth [5Y] = (Net Profit Margin TTM current / Net Profit Margin TTM 5 years ago) − 1
GeminIQ computes TTM net profit margin for the current period and [1/3/5] years prior, then calculates the percentage change.
A: Revenue growth shows whether the business is getting bigger. Margin growth shows whether it is getting more profitable per unit of revenue. The two can diverge — a company can grow revenue rapidly while margins compress (common in competitive markets or during investment phases) or grow slowly with expanding margins (common in mature businesses focusing on efficiency).
A: Both matter, but margin trends often have a larger impact on long-term shareholder returns for mature companies. A company that can grow margins by 2 percentage points annually while maintaining revenue growth is creating significant compounding value.
A: Any difference in the underlying net margin calculation — different net income or revenue figures — propagates into the growth rate. GeminIQ uses as-filed values.