Common-Size Income Statement
Quarterly Data
International Business Machines Corp., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 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 Trends
- The proportion of revenue derived from Services displays a gradual decline over the analyzed periods, dropping from approximately 65% in early 2020 to a range closer to 42-51% in more recent quarters. Conversely, the Sales component has increased its share of total revenue, rising from roughly 34% to a range between 43% and 56%, indicating a strategic shift or evolving business model emphasizing sales activities more than services. The Financing contribution to revenue remains relatively stable and minor, consistently near 1% to 1.7% across all quarters.
- Cost and Profit Margins
- Cost as a percentage of revenue shows a decreasing trend, improving from around 55% at the start of 2020 to about 40-46% in subsequent periods. This reduction in cost base has directly contributed to an improved gross profit margin, which rose from approximately 45% to a range between 53% and 59%, indicating enhanced operational efficiency or favorable pricing strategies.
- Operating Expenses
- Selling, general and administrative expenses generally decline as a share of revenue, moving from near -34% to closer to -27% in more recent quarters, suggesting tighter expense control or operational optimizations. Research and development expenses fluctuate but show an overall increase as a portion of revenue, moving from about -9% to nearly -13%, which may reflect increased investments in innovation and development efforts.
- Operating Income and Margins
- Operating income percentage exhibits volatility but overall improvement, ranging from a low near 2.6% up to over 22%, demonstrating periods of strong operational profitability. Notably, spikes in operating margin occur intermittently, with operating income reaching a peak near 22.8% late in 2023 and again in 2024, indicative of periods of enhanced margin achievement possibly due to cost savings or revenue mix benefits.
- Other Income and Expense Items
- Other income and expense values are variable, with occasional spikes such as a significant negative impact reported in one quarter (-40.8%), but these items generally hover close to zero or small positive or negative values over most periods, suggesting limited consistent impact on operating results. Interest expense remains fairly stable around -1.5% to -3.1% of revenue, indicating steady financing costs over time.
- Profitability Before and After Tax
- Income from continuing operations before taxes fluctuates widely, reflecting variability in core profitability, with some quarters experiencing positive double-digit percentages and others showing negative impacts. Provision for income taxes shows alternating positive and negative impacts on net income, pointing to variability in tax circumstances such as credits, benefits, or adjustments. Overall net income as a percentage of revenue closely follows operating income trends and demonstrates considerable volatility but an improving pattern from earlier lows to peaks in more recent periods, reaching near 18.9% before pulling back slightly in some quarters.
- Discontinued Operations
- Income from discontinued operations remains marginal and inconsistent, generally staying near zero or slightly negative or positive, indicating minimal ongoing financial impact from divested or discontinued business segments.
- Summary of Trends
- Over the observed timeframe, the data reveals a strategic shift in revenue composition from services toward sales, accompanied by improved gross profit margins driven by cost reductions. Expenses related to general administration have been somewhat curtailed, while investments in research and development have slightly increased. Profitability metrics exhibit cyclicality and occasional volatility, influenced in part by variable other income and tax provisions, yet there is an underlying trajectory toward enhanced operating and net income margins. The company appears to be managing costs effectively while increasing its sales emphasis and maintaining research efforts, collectively contributing to better profitability and operational efficiency.