A method and system to drill a wellbore and identify drill bit failure by deconvoluting sensor data. The method comprises drilling the wellbore using a drill bit; and measuring data indicative of a parameter associated with the drill bit using a sensor located in the wellbore. The method also comprises decomposing the data to generate an intrinsic mode function of the drill bit data; and analyzing the intrinsic mode function to identify a drill bit failure. The system for drilling the wellbore comprises a drill bit; a sensor; and a processor. The sensor is located in the wellbore and operable to measure data indicative of a parameter associated with the drill bit. The processor is in communication with the sensor and operable to decompose the data to generate an intrinsic mode function of the drill bit data; and analyze the intrinsic mode function to identify a drill bit failure.