How Does Berkshire Hathaway Make its Money?
Berkshire Hathaway, led by Warren Buffett, is one of the world’s largest conglomerates — a collection of wholly owned businesses plus a massive public stock portfolio. Berkshire operates across insurance (GEICO, Gen Re, Berkshire Hathaway Reinsurance), railroads (BNSF), energy (Berkshire Hathaway Energy), manufacturing, retail, and services. The company also holds ~$300B in cash/Treasury bills and a $300B+ stock portfolio (Apple, Bank of America, Coca-Cola, American Express, Chevron, and others).
Berkshire Hathaway (BRK.B) Business Model
Berkshire Hathaway operates in the conglomerate sector. Below is a summary of Berkshire Hathaway’s revenue streams, how the company generates income, and the key financial metrics from its most recent annual report. This breakdown uses data from Berkshire Hathaway’s 2024 fiscal year filings with the SEC.
Berkshire Hathaway Competitors
Berkshire Hathaway’s key competitors and comparable public companies in the conglomerate sector include JPMorgan Chase, Apple, and Costco. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Berkshire Hathaway stacks up by comparing their revenue breakdown, margins, and growth metrics.
Berkshire Hathaway Competitors
Berkshire Hathaway’s key competitors and comparable public companies in the conglomerate sector include JPMorgan Chase, Apple, and Costco. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Berkshire Hathaway stacks up by comparing their revenue breakdown, margins, and growth metrics.
Berkshire Hathaway Competitors
Berkshire Hathaway’s key competitors and comparable public companies in the conglomerate sector include JPMorgan Chase, Apple, and Costco. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Berkshire Hathaway stacks up by comparing their revenue breakdown, margins, and growth metrics.
Berkshire Hathaway Competitors
Berkshire Hathaway’s key competitors and comparable public companies in the conglomerate sector include JPMorgan Chase, Apple, and Costco. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Berkshire Hathaway stacks up by comparing their revenue breakdown, margins, and growth metrics.
Berkshire Hathaway Competitors
Berkshire Hathaway’s key competitors and comparable public companies in the conglomerate sector include JPMorgan Chase, Apple, and Costco. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Berkshire Hathaway stacks up by comparing their revenue breakdown, margins, and growth metrics.
Berkshire Hathaway Competitors
Berkshire Hathaway’s key competitors and comparable public companies in the conglomerate sector include JPMorgan Chase, Apple, and Costco. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Berkshire Hathaway stacks up by comparing their revenue breakdown, margins, and growth metrics.
Berkshire Hathaway Competitors
Berkshire Hathaway’s key competitors and comparable public companies in the conglomerate sector include JPMorgan Chase, Apple, and Costco. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Berkshire Hathaway stacks up by comparing their revenue breakdown, margins, and growth metrics.
Berkshire Hathaway Competitors
Berkshire Hathaway’s key competitors and comparable public companies in the conglomerate sector include JPMorgan Chase, Apple, and Costco. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Berkshire Hathaway stacks up by comparing their revenue breakdown, margins, and growth metrics.
Revenue Breakdown
| Segment | 2024 | 2023 | YoY Growth |
|---|---|---|---|
| Insurance (GEICO, Gen Re, etc.) | $83.0B | $79.2B | +4.8% |
| BNSF Railway | $22.8B | $23.1B | -1.3% |
| Berkshire Hathaway Energy | $24.0B | $25.5B | -5.9% |
| Manufacturing | $74.5B | $71.1B | +4.8% |
| McLane (Distribution) | $52.0B | $51.5B | +1.0% |
| Service & Retail | $25.4B | $24.6B | +3.3% |
| Investment Income & Gains | $59.0B | $40.3B | +46.4% |
| Total Revenue | $371.4B | $364.5B | +1.9% |
Insurance — The Engine
Berkshire’s most important segment, not for revenue but for float — the premiums collected before claims are paid:
- GEICO: #2 U.S. auto insurer. Returned to underwriting profitability after multi-year struggles.
- Berkshire Hathaway Reinsurance: One of the world’s largest reinsurers, covering catastrophic risks.
- General Re: Major reinsurer with global operations.
- Insurance Float: ~$170B+ — This money is invested while waiting to pay claims, generating investment income. Buffett calls float “better than free” because Berkshire typically earns an underwriting profit on top of investment returns.
BNSF Railway — One of two U.S. Class I western railroads (the other is Union Pacific). Hauls consumer goods, coal, industrial products, and agricultural commodities across the western U.S.
Berkshire Hathaway Energy — Regulated utilities (PacifiCorp, MidAmerican), natural gas pipelines, and renewable energy. One of the largest renewable energy producers in the U.S.
Manufacturing — Precision Castparts (aerospace parts), Lubrizol (chemicals), Markel (building products), IMC (metalworking), and dozens more.
Investment Portfolio (Top Holdings)
| Company | Value (Dec 2024) |
|---|---|
| Apple | ~$75B |
| Bank of America | ~$35B |
| American Express | ~$42B |
| Coca-Cola | ~$26B |
| Chevron | ~$17B |
Income Statement Overview
| Metric | 2024 | 2023 |
|---|---|---|
| Total Revenue | $371.4B | $364.5B |
| Operating Earnings | $47.4B | $37.4B |
| Net Income (incl. inv. gains) | $89.0B | $96.2B |
Key Financial Metrics
- Operating Earnings: $47.4B — Buffett’s preferred metric. Excludes unrealized investment gains/losses, which are volatile and distort reported earnings.
- Cash & T-Bills: $334B — A record cash pile. Buffett waiting for “fat pitches” — large acquisitions at attractive valuations.
- Insurance Float: $170B+ — Essentially free leverage used to generate investment returns.
- Book Value Per Share: ~$430K (A shares) — The metric Berkshire historically used to measure intrinsic value growth.
Is Berkshire Hathaway Profitable?
Berkshire Hathaway (BRK.B) profitability depends on the reporting period and business cycle. Review the income statement above for the latest figures.
What to Watch
- Capital deployment — With $334B in cash, how Berkshire deploys capital (acquisitions, stock buybacks, investments) is the single most impacthat decision under Buffett’s successor.
- Succession — Warren Buffett (94) and Charlie Munger (deceased Dec 2023). Greg Abel is the designated CEO successor. The transition could affect Berkshire’s deal-making prowess and brand.
- GEICO turnaround — GEICO has been gaining market share after fixing pricing and implementing telematics. Continued profitable growth strengthens the insurance float engine.
- Interest income — Berkshire earns $20B+ annually on its Treasury bill and cash holdings at current interest rates. Rate cuts would reduce this income stream.
- Apple position — Berkshire sold significant Apple shares in 2024 (from $170B to ~$75B), suggesting Buffett sees the stock as fully valued. Major portfolio changes signal market outlook.
Berkshire Hathaway (BRK.B) Financial Summary
Berkshire Hathaway (BRK.B) is a conglomerate company that generated $371.4B in total revenue in fiscal year 2024. For a deeper look at Berkshire Hathaway’s revenue breakdown, business segments, and financial performance, review the detailed analysis above.