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Visualized: Corporate America’s Reliance on Foreign Revenue
September 13, 2024
While the S&P 500 companies are listed on U.S. stock exchanges, they earn a substantial portion of their revenues from international markets and rely on a globally connected consumer base.
Currently, the largest public companies in America generate 41% of their revenue from outside the U.S., which is nearly double the revenue percentage seen in the small-cap firms of the Russell 2000. As these companies broaden their international presence, they gain access to larger markets but also face risks related to foreign exchange fluctuations.
The Russell 2000 index generates the majority of its sales domestically. However, sectors like technology and materials have significant international revenue exposure, similar to trends observed in the S&P 500 index.
This trend can be further seen by taking an equal-weighted view of the S&P 500 index, which gives each of the 500 companies equal representation. The proportion of foreign revenue increases substantially when looking at the market-weighted S&P 500, where representation is based on the size of the company. Larger companies, like Moderna and Intel, which earn over 70% of their revenue internationally, have a greater influence, skewing the figure higher.
For a visual breakdown of how much of corporate America’s revenue comes from foreign markets, our friends at Visual Capitalist have compiled the following infographic, based on data from Citi Global Wealth.
