2014 A&E Financial Performance Benchmarks: Operating Profit Rate

Posted by Jon Bornstein on September 23, 2014

Operating Profit 10 Year Trend

Conducted from January to April 2014, 355 US and Canadian firms participated in the 35th annual Deltek Clarity A&E Industry Study that examined 2013 financials. We poured over more than 250,000 data points about their 2013 financial condition and market outlook.

In last week's blog post, we looked at how the high performing firms fared. These were distinguished by having a Net Labor Multiplier of 3.0 or higher and an Operating Profit rate of 15% or higher (pre-tax, pre-bonus on net revenues).

This week, let's look at a key metric for every firm: Operating Profit on Net Revenue.

This is the generally preferred measure for an A&E firm's profit rate.  What we found in 2013 is that Operating Profit Rates continue to rise for the fourth year in a row, reaching 11.1% last year. While there were no differences by size of firm, Architecture and A/E firms were more profitable than Engineering and E/A firms.  Want more information - download the full report here.

In our next blog post on Oct. 7, we'll look at Utilization Rate.