🧩 What the Company Does
Berkshire Hathaway is a diversified conglomerate that owns many operating businesses while also holding a large investment portfolio. Its core businesses include insurance, railroads, utilities, manufacturing, and services.
- Insurance is especially important because it generates insurance float, which is premium money collected before claims are paid.
- Berkshire invests that float in stocks, bonds, and U.S. Treasury bills.
- Major businesses include GEICO, BNSF Railway, and Berkshire Hathaway Energy.
In simple terms, Berkshire is a mix of a holding company and a long-term investment vehicle.
📊 Financial Highlights
Berkshire’s revenue stayed near $371 billion in FY2024 and FY2025, showing that the company’s top line remained stable. The bigger change came from profitability.
- Net earnings declined from 2023 to 2025.
- Operating income improved in 2024 and remained solid in 2025.
- Investment gains became smaller, which reduced reported earnings.
- Total assets rose above $1.2 trillion by 2025.
- Cash and Treasury bills increased sharply, strengthening liquidity.
Plain English: Berkshire’s core businesses stayed strong, but reported profit was less helped by investment gains in 2025 than in earlier years.
⚠️ Key Risks
Berkshire’s 10-K highlights several company-specific risks tied to its business mix.
- Insurance claims risk: Large disasters or unusually expensive claims can hurt underwriting results.
- GEICO competition: Auto insurance is highly competitive and pricing is closely regulated.
- PacifiCorp wildfire liability: Berkshire disclosed significant legal and financial exposure tied to wildfire claims.
- Insurance regulation: Berkshire operates under complex U.S. and international insurance rules.
- Foreign currency and commodity cost risk: Some subsidiaries face exchange-rate and input-cost pressure.
Plain English: Berkshire is diversified, but some of its biggest risks come directly from insurance, utilities, and other capital-intensive operating businesses.
📈 MD&A
Management emphasizes that Berkshire’s results come from operating businesses and investment activities.
- The company continues to generate large operating earnings from insurance, railroads, energy, and other subsidiaries.
- Insurance float remains a major source of investable capital.
- Berkshire’s large stock portfolio can cause reported earnings to move sharply because accounting rules include market-value changes in net earnings.
Plain English: Management wants investors to pay more attention to operating earnings than to short-term swings in reported net income.
🧭 Takeaway
Berkshire Hathaway remains a unique business built on durable operating companies, a large investment portfolio, and the financial advantage of insurance float. Its FY2025 results show a company with strong assets, strong liquidity, and resilient core operations, even though reported earnings were lower than in prior years. For beginner investors, the most important lesson is that Berkshire’s long-term story depends more on the strength of its businesses and capital allocation discipline than on short-term market-driven earnings swings.
Income Statement Summary
Unit: $m, EPS in $
| Item | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Total Revenues | 364,482 | 371,433 | 371,444 |
| Investment Gains / Losses | 74,855 | 52,799 | 39,078 |
| Total Costs and Expenses | 321,144 | 315,697 | 318,473 |
| Operating Income (derived) | 43,338 | 55,736 | 52,971 |
| Earnings Before Income Taxes and Equity Method Earnings | 118,193 | 108,535 | 92,049 |
| Equity Method Earnings / Losses | 1,973 | 1,841 | (9,590) |
| Earnings Before Income Taxes | 120,166 | 110,376 | 82,459 |
| Income Tax Expense | 23,019 | 20,815 | 15,199 |
| Net Earnings | 97,147 | 89,561 | 67,260 |
| Net Earnings Attributable to Berkshire Shareholders | 96,223 | 88,995 | 66,968 |
| EPS (Class B) | 44.3 | 41.3 | 31.0 |
| Depreciation & Amortization | 12,486 | 12,855 | 13,476 |
| EBITDA (derived) | 55,824 | 68,591 | 66,447 |
Plain English
Berkshire’s revenue was basically flat in 2024 and 2025, which means the headline sales number did not drive the story. The bigger driver was profitability. Derived operating income rose sharply in 2024 as total costs and expenses grew more slowly than revenue, then eased in 2025 as costs moved back up. That tells beginners something important: Berkshire’s underlying businesses improved in 2024, but 2025 was a more mixed year operationally.
Another key point is that GAAP earnings were heavily influenced by investment gains. Berkshire’s net earnings fell from 2023 to 2025 partly because investment gains got smaller each year, not because the whole business suddenly stopped making money. On top of that, 2025 included a negative equity method result, which also pulled down pre-tax earnings. In simple terms, Berkshire still produced a very large profit, but the earnings mix became less favorable.
For new investors, the best way to read this table is to separate business performance from market-driven investment swings. Revenue stayed strong, operating income remained solid, and EBITDA stayed large, but the drop in EPS shows that Berkshire’s bottom line was less boosted by investment gains in 2025 than it was in 2023 or 2024.
Key Financial Ratios
Unit: %, x, or $ as labeled
| Item | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| ROE (%) | 18.6 | 14.7 | 9.8 |
| ROA (%) | 9.5 | 8.0 | 5.6 |
| ROTC (%) | 6.2 | 7.2 | 6.2 |
| ROIC (%) | 5.3 | 6.2 | 5.4 |
| Operating Margin (%) | 11.9 | 15.0 | 14.3 |
| Pretax Margin (%) | 33.0 | 29.7 | 22.2 |
| Net Margin (%) | 26.4 | 24.0 | 18.0 |
| Debt-to-Equity (%) | 22.6 | 19.1 | 17.9 |
| Net Debt / EBITDA (x) | 1.6 | 1.1 | 1.2 |
| Interest Coverage (x) | 8.7 | 10.7 | 10.4 |
Plain English
The ratio table shows that Berkshire remains financially strong, but less boosted by investment-driven earnings than before. ROE and ROA both declined across the three-year period, which fits the drop in net earnings attributable to Berkshire shareholders. That does not automatically mean the business became weak. Instead, it suggests returns normalized as investment gains became less favorable and 2025 included a meaningful equity method loss.
On the operating side, Berkshire looked healthiest in 2024. Operating margin, ROTC, ROIC, and interest coverage all improved in 2024, indicating stronger operating efficiency and better coverage of borrowing costs. In 2025, those metrics softened slightly but still remained solid overall. This suggests Berkshire’s core operating businesses stayed durable even as headline earnings declined.
Leverage remained conservative throughout the period. Debt-to-equity declined each year, and Net Debt / EBITDA stayed low, which is consistent with Berkshire’s long-standing capital discipline. Overall, the balance sheet reflects a company that relies more on internally generated cash and investment income than on aggressive borrowing, reinforcing Berkshire’s reputation for conservative financial management.
📝 Disclaimer
This article is intended for educational purposes only. It does not constitute financial, investment, or legal advice. All investment decisions involve risks, and readers should conduct their own research or consult with a licensed financial advisor.
👉 Berkshire Hathaway (BRK.A / BRK.B) FY 2025 10-K Analysis (Filed 2026) | Explained for Beginners