Common-Size Income Statement
Quarterly Data
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International Business Machines Corp. pages available for free this week:
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Sales (P/S) since 2005
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International Business Machines Corp., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Revenue Composition
- Over the observed periods, Services as a percentage of revenue exhibit a fluctuating but generally declining trend from about 65% in early 2020 down to around 50% by early 2025. Conversely, Sales as a percentage of revenue show an overall increasing trend, rising from roughly 34% at the start to nearly 49% towards the end of the period. Financing remains relatively stable, generally ranging between 1% and 1.7%. This shift suggests a gradual move in revenue dependence from Services toward Sales.
- Cost and Gross Profit
- Cost as a percentage of revenue decreases steadily during the period, moving from near 55% at the beginning to approximately 45% by early 2025. Correspondingly, Gross Profit shows an improving trend, increasing from about 45% to a peak near 59% in late 2023 and maintaining elevated levels above 55% thereafter. This indicates improved cost management and enhanced profitability at the gross level.
- Operating Expenses
- Selling, general and administrative expenses decline moderately as a percentage of revenue, from approximately 34% in early 2020 to around 30-33% by 2025, with some fluctuations. Research and development expenses show variability but with a slight rising trend, increasing from roughly 8.7% in early 2020 to approximately 13.4% by the last period, highlighting increased investment in innovation. Intellectual property and custom development income grows consistently from less than 1% up to about 1.7%, contributing positively to earnings.
- Operating Income and Other Income/Expense
- Operating income fluctuates significantly but generally increases, ranging from low single digits up to over 22% at some points, indicating periods of strong operational performance. Other income and expenses exhibit volatility, with negative impacts early on, including a notable negative spike at one point, then recovering to positive contributions. Interest expense rises slowly over the timeline, increasing from near 1.8% to above 3%, which may impact net profitability.
- Income Before and After Taxes
- Income from continuing operations before taxes displays a variable pattern, starting negative or low, improving to double-digit percentages during some quarters, but also experiencing sharp declines including a large negative value in one instance. Income taxes provision swings between positive and negative effects, indicating fluctuations in effective tax rates or adjustments. Net income from continuing operations generally follows operating income trends but with less volatility.
- Net Income
- Net income as a percentage of revenue shows an overall increasing trend from approximately 6.7% in early 2020, peaking above 18% in late 2023, with periodic decreases including a notable negative value near the end of the dataset. Despite these fluctuations, the general movement indicates improving profitability over the five-year span, supported by enhanced gross margins and controlled expenses.
- Discontinued Operations
- Income from discontinued operations is minimal and mostly near zero, occasionally positive or negative, suggesting limited impact on overall profitability throughout the timeframe.
- Summary
- The data reflect a strategic revenue shift from Services toward Sales, coupled with effective cost containment boosting gross profitability. Operating income and net earnings exhibit volatility but trend upward, supported by controlled operating expenses and rising R&D investment. Interest expenses and variability in other income/expense categories introduce some earnings fluctuations. Overall, the firm’s profitability improves over the analyzed period, despite some episodic declines.