Berkshire Hathaway Inc. (BRK-A) Income Statement

The 10.0% revenue growth in 2026Q2 marks a clear acceleration from the 4.4% pace in 2026Q1 and the negative growth seen in 2025Q2 and 2025Q4. This suggests a firming pricing environment in insurance lines and resilient demand in the MSR and rail operations. Investors should monitor whether this trajectory persists, as the prior year's volatility indicates sensitivity to cyclical factors.

The combined ratio has remained consistently below 86% across the last ten quarters, with the 2026Q2 figure of 82.8% reflecting a 40-basis-point improvement year-over-year. This suggests strong pricing discipline and favorable reserve development, though the loss ratio of 76.6% is slightly elevated versus the 2024Q4 trough of 72.2%. The margin stability implies that underwriting remains a reliable earnings contributor, but any deterioration in catastrophe losses could pressure this metric.

The loss ratio has trended upward from 72.2% in 2024Q4 to 76.6% in 2026Q2, yet the combined ratio has remained stable, suggesting that favorable prior-year reserve development is offsetting current accident-year deterioration. This dynamic warrants close monitoring, as the quality of earnings may be partially dependent on releases that could diminish over time. If reserve redundancies are exhausted, the combined ratio could rise toward 90% or higher, pressuring underwriting margins.

The extreme quarterly net income volatility, with EPS ranging from $3,200 in 2025Q1 to $21,412 in 2025Q3, is primarily attributable to unrealized gains and losses on the equity portfolio, not core operations. Operating income has been more consistent, ranging from $12.7B to $17.5B, indicating that the underlying businesses are stable. Investors should focus on operating earnings rather than net income to assess fundamental performance, as the investment portfolio's mark-to-market creates noise that obscures the true earnings power.

With a combined ratio of 82.8% and a loss ratio of 76.6%, the expense ratio is approximately 6.2%, which is exceptionally low compared to peers like Markel, whose expense ratios typically exceed 20%. This efficiency stems from the scale of GEICO's direct distribution and the absence of significant acquisition costs in reinsurance operations. The low expense ratio provides a competitive moat, but investors should watch for any upward drift as the company invests in technology or expands into higher-cost segments.