Industries with the Highest Profit Margin in the US in 2022

1. Tax Preparation Software Developers

Profit Margin 2022: 54.3%

Operators in the Tax Preparation Software Developers industry provide software that enables individuals and small businesses to file federal and state tax returns online, often following an automated step-by-step guide. Due to the necessary nature of filing taxes each year, industry revenue is generally steady. Further, operators have encountered rising demand over the five years to 2022, as more personal and business filers became comfortable using software programs. This has enabled the industry to outpace growth in demand for other tax-filing services. Overall, industry revenue has risen at an annualized rate of 6.2% over the five years to 2022 to... Learn More

2. Industrial Banks in the US

Profit Margin 2022: 51.3%

Over the five years to 2022, the Industrial Banks industry has advanced further into the public spotlight. Industrial banks, also known as industrial loan companies (ILCs), are FDIC-insured banking institutions that can be owned and operated by nonfinancial institutions. They are often established by nonfinancial enterprises to provide consumer financing, make intracompany transactions or simply enter the credit market. The FDIC's high liquidity requirements as well as competition in this highly concentrated industry have spurred the exit of the least competitive industrial banks.

The industry's core business of issuing credit cards and originating loans has grown for much of the period.... Learn More

3. Stock & Commodity Exchanges in the US

Profit Margin 2022: 47.9%

The Stock and Commodity Exchanges industry has remained a vital part of the Finance and Insurance sector (IBISWorld report 52), especially as trade volumes have increased over the five years to 2022, peaking in 2020. Industry operators act as intermediaries and provide physical trading floors or electronic marketplaces where buyers and sellers arrange trades in securities, commodities and related contracts. Exchanges facilitate the transfer of assets between market participants in different locations and with various timeframes.

Total trade volumes have increased over the five years to 2022, which has helped industry revenue grow during the period. For example, the daily trade... Learn More

4. Cigarette & Tobacco Manufacturing in the US

Profit Margin 2022: 47.8%

Operators in the Cigarette and Tobacco Manufacturing industry produce a variety of tobacco products, including cigarettes, cigars and smokeless tobacco, but excluding electronic cigarettes. The industry performs countercyclical with the business cycle. In periods of economic downturn, increased unemployment and decreased consumer confidence, smoking and tobacco usage increases as people find ways to self-medicate and ease the feelings of stress. The COVID-19 (coronavirus) pandemic in 2020 is estimated to have greatly influenced the volume of tobacco consumption. Establishments were forced to close down to curtail the spread of the virus, resulting in heightened levels of unemployment as people were laid... Learn More

5. Venture Capital & Principal Trading in the US

Profit Margin 2022: 42.9%

The Venture Capital and Principal Trading industry comprises companies and individuals that invest in certain classes of financial assets. Participants include venture capitalists, day traders, investment clubs and dealers of mineral royalties or leases, oil royalties and tax liens. The industry also includes viatical settlement companies that purchase life insurance policies at discounted prices to later collect the benefits. Collectively, the industry has benefited from rising security prices, increased trading volumes, unprecedented investment opportunities and increasing merger and acquisition activity. As a result, industry revenue has grown, rising at an annualized rate of 11.3% to $63.0 billion over the five... Learn More

6. Private Equity, Hedge Funds & Investment Vehicles in the US

Profit Margin 2022: 40.3%

The Private Equity, Hedge Funds and Investment Vehicles industry consists of funds that raise capital to invest in various asset classes. Industry assets have become increasingly integral to institutional investors' portfolios and the larger asset-management market over the five years to 2022. Institutional investors are individuals or organizations that trade securities in such substantial volumes that they qualify for lower commissions and fewer protective regulations, since they are assumed to be knowledgeable enough to protect themselves. Increasing demand from institutional investors has contributed to the surge in the industry's assets under management (AUM) and revenue during the current period.

Over the... Learn More

7. Private Banking Services

Profit Margin 2022: 39.2%

The Private Banking Services industry primarily provides investment advisory, asset management and gift and estate planning among other specialized services for high-net-worth (assets over $1.0 million) and ultra-high-net-worth (assets over $10.0 million) individuals. The industry has expanded over the five years to 2022, as wealth managers have capitalized on the growing number of millionaires in emerging markets. Moreover, the relative strength of the US economy has further propelled the industry, as wealthy individuals around the world have sought to park their wealth in secure assets such as urban real estate. Overall, demand for private banking services has increased as the... Learn More

8. Portfolio Management in the US

Profit Margin 2022: 36.1%

Portfolio Management industry operators manage asset portfolios for a fee or commission. Over the five years to 2022, the industry has experienced countervailing trends. For the majority of the period, rising assets under management (AUM) as a result of rising asset prices and growing disposable income have increased the base of assets industry operators charge fees on. However, increased investor preference for passive asset management, including through exchange-traded funds (ETFs), has driven expenses charged for the management of assets down during the period.

Financial markets play an integral role in AUM growth and, consequently, base and performance fees earned by managers.... Learn More

9. Investment Banking & Securities Dealing in the US

Profit Margin 2022: 35.0%

Strong returns in various financial markets and increased trading volumes have benefited operators in the Investment Banking and Securities Dealing industry over the five years to 2022. Operators provide underwriting, originating and market-making services for a range of financial instruments, including bonds, stocks and derivatives. During the majority of the period, industry operators benefited from improving macroeconomic conditions and interest rates remaining below historical averages. This led to increased demand for industry operators' services during the period. Overall, industry revenue has increased an annualized 8.5% to $182.5 billion over the five years to 2022, including an expected increase of 17.6%... Learn More

10. Optical Character Recognition Software

Profit Margin 2022: 33.2%

The Optical Character Recognition Software industry produces the software needed to convert texts on physical documents into digital file formats. Over the five years to 2022, industry revenue is projected to increase at an annualized rate of 4.6% to $2.5 billion, including a decline of 0.7% in 2022 as the percentage of business conducted online is expected to decline following a surge resulting from the COVID-19 (coronavirus) pandemic. The industry has benefited from growing corporate profit, encouraging businesses to invest in cost-saving software such as optical character recognition (OCR). OCR software has increasingly been used to accelerate business processes and... Learn More