Stock Analysis on Net
Stock Analysis on Net

International Business Machines Corp. (NYSE:IBM)

Common-Size Income Statement 

International Business Machines Corp., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Services 47.51 49.11 49.90 50.96 61.13
Sales 51.36 49.70 49.02 47.68 37.33
Financing 1.13 1.19 1.08 1.36 1.54
Revenue 100.00% 100.00% 100.00% 100.00% 100.00%
Services -32.72 -34.03 -34.80 -33.39 -41.30
Sales -10.04 -9.90 -10.53 -10.78 -9.42
Financing -0.59 -0.62 -0.67 -0.93 -0.96
Cost -43.35% -44.55% -46.00% -45.10% -51.68%
Gross profit 56.65% 55.45% 54.00% 54.90% 48.32%
Selling, general and administrative -31.37 -30.72 -30.74 -32.69 -31.35
Research, development and engineering -11.92 -10.95 -10.85 -11.31 -8.60
Intellectual property and custom development income 1.59 1.39 1.10 1.07 0.85
Operating income 14.95% 15.17% 13.50% 11.97% 9.22%
Gains (losses) on foreign currency transactions 0.73 -0.19 1.06 0.36 -0.15
Gains (losses) on derivative instruments -0.82 0.03 -0.37 -0.36 0.14
Interest income 1.19 1.08 0.27 0.09 0.14
Net gains (losses) from securities and investment assets 0.03 0.06 -0.46 0.23 0.03
Retirement-related income (costs) -5.51 0.06 -10.82 -2.24 -1.53
Other 1.42 0.46 0.77 0.43 0.23
Other income and (expense) -2.95% 1.51% -9.55% -1.49% -1.14%
Interest expense -2.73 -2.60 -2.01 -2.01 -1.75
Income from continuing operations before income taxes 9.26% 14.07% 1.94% 8.47% 6.33%
(Provision for) benefit from income taxes 0.35 -1.90 1.03 -0.22 1.17
Income from continuing operations 9.61% 12.17% 2.98% 8.25% 7.50%
Income (loss) from discontinued operations, net of tax 0.01 -0.02 -0.24 1.80 0.12
Net income 9.63% 12.15% 2.74% 10.05% 7.62%
Net income attributable to noncontrolling interest -0.03 -0.03 -0.03 -0.03 -0.03
Net income attributable to IBM 9.60% 12.13% 2.71% 10.01% 7.59%

Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

Revenue Composition
The proportion of revenue derived from Services shows a declining trend, decreasing steadily from 61.13% in 2020 to 47.51% in 2024. Conversely, Sales as a percentage of revenue increased significantly, rising from 37.33% in 2020 to 51.36% in 2024. Financing contributes a minimal and slightly decreasing portion of total revenue, ranging from 1.54% to 1.13% over the period.
Cost and Profit Margins
Costs as a percentage of revenue display a downward trend, declining from -51.68% in 2020 to -43.35% in 2024, which supports improvements in gross profit margins. Gross profit improved from 48.32% in 2020 to 56.65% in 2024, indicating enhanced operational efficiency or favorable pricing strategies.
Operating Expenses
Selling, general, and administrative expenses remained relatively stable as a proportion of revenue, fluctuating modestly around -31%. Research, development, and engineering costs increased as a percentage of revenue from -8.60% in 2020 to -11.92% in 2024, suggesting an increased focus on innovation or product development.
Additional Income and Gains
Intellectual property and custom development income showed steady growth, rising from 0.85% to 1.59%, reflecting increased monetization of intangible assets. Gains and losses on foreign currency transactions and derivative instruments exhibited volatility, with gains on foreign currency peaking at 1.06% in 2022 but dropping afterward. Interest income grew notably from 0.14% in 2020 to 1.19% in 2024. Net gains or losses from securities and investment assets fluctuated around zero, indicating variability without a clear trend.
Retirement-Related and Other Income Impact
Retirement-related income or costs displayed significant volatility, with a large negative impact in 2022 (-10.82%) and 2024 (-5.51%). Similarly, other income and expenses fluctuated, reaching a significant negative in 2022 (-9.55%) and again in 2024 (-2.95%), but positive in 2023 (1.51%), demonstrating unpredictability in these non-operating items.
Interest Expense
Interest expense slightly increased in proportion to revenue, moving from -1.75% in 2020 to -2.73% in 2024, indicating potentially higher debt levels or costs of borrowing over the period.
Income Metrics
Income from continuing operations before income taxes showed significant fluctuations, peaking at 14.07% in 2023 but falling to 9.26% in 2024 after a notable low of 1.94% in 2022. The provision for income taxes also varied, alternating between positive and negative values, indicating changing tax strategies or impact of tax laws. Consequently, income from continuing operations closely followed these patterns, with a substantial dip in 2022 (2.98%) and recovery in subsequent years.
Net Income
Net income exhibited volatility consistent with operational income trends, peaking at 12.15% in 2023 and dropping to 9.63% in 2024 after a sharp decline to 2.74% in 2022. The component attributable to noncontrolling interests remained minimal and constant. Overall, net income attributable to the company mirrored the total net income trend closely.