Common-Size Income Statement
Quarterly Data
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International Business Machines Corp. pages available for free this week:
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Total Asset Turnover since 2005
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International Business Machines Corp., common-size consolidated income statement (quarterly data)
Based on: 10-Q (reporting date: 2026-03-31), 10-K (reporting date: 2025-12-31), 10-Q (reporting date: 2025-09-30), 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).
The financial data reveals a distinct seasonal pattern in revenue composition and profitability, characterized by recurring fluctuations between quarters and a general expansion in gross margins over the observed period.
- Revenue Composition and Mix
- A consistent inverse relationship exists between Services and Sales revenue. Services typically represent a higher percentage of revenue in March and September, while Sales dominate in June and December. Over the long term, there is a observable shift toward Sales, with December peaks increasing from 52.98% in 2021 to 58.31% in 2025. Financing revenue remains a marginal and relatively stable component of the total revenue mix, generally fluctuating between 0.9% and 1.6%.
- Gross Profitability and Cost Management
- Gross profit margins exhibit a general upward trend, particularly during the fourth quarter of each year. The year-end gross profit margin rose from 56.91% in 2021 to 60.60% in 2025. This improvement is mirrored by a corresponding decrease in total costs as a percentage of revenue, which dropped from 43.09% to 39.40% in the December periods, suggesting improved cost efficiencies or a more favorable product mix.
- Operating Expense Trends
- Selling, General, and Administrative (SG&A) expenses show significant volatility but tend to be lowest in the December quarters, reaching a low of 27.75% in December 2025. Research and Development (R&D) spending is more stable, typically ranging between 9% and 13% of revenue, though a slight increase in R&D intensity is noted in the March 2026 period at 13.65%.
- Operating Income and Volatility
- Operating income demonstrates strong seasonality, with peaks occurring every December. The December operating margin improved from 18.89% in 2021 to 23.15% in 2025. However, these gains are offset by lower margins in March, which typically fluctuate between 6% and 11%.
- Net Income and Non-Operating Impact
- Net income is heavily influenced by non-operating items, leading to significant anomalies. A substantial deficit occurred in September 2022, where net income dropped to -22.66% of revenue, primarily driven by "Other income and (expense)" which fell to -40.80%. A similar, though less severe, impact is seen in September 2024, where a -14.99% "Other income" figure contributed to a net loss of -2.20%. Excluding these anomalies, net income shows a general trend of growth in the December quarters, peaking at 28.45% in 2025.