Earnings season for Q3 2025 is well underway, but the exuberance from Q2 has faded. According to FactSet, more than 80% of S&P 500 companies reporting so far have beaten analysts’ expectations with their Q3 results, but the strength of those beats has been underwhelming. The average beat was just 5% above targets, significantly lower than both the five-year average of 8.4% and the 10-year average of 7%.
Of course, one quarter doesn’t equate to a trend, and talking about the strength of a 5% vs. 8% earnings beat is a bit like Goldilocks discussing porridge preferences.
