Stock Analysis on Net
Stock Analysis on Net

International Business Machines Corp. (NYSE:IBM)

$24.99

Net Profit Margin
since 2005

Microsoft Excel

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Calculation

International Business Machines Corp., net profit margin, long-term trends, calculation

Microsoft Excel
Net profit margin = 100 × Net income attributable to IBM1 ÷ Revenue1
Dec 31, 2025 = 100 × ÷
Dec 31, 2024 = 100 × ÷
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Dec 31, 2021 = 100 × ÷
Dec 31, 2020 = 100 × ÷
Dec 31, 2019 = 100 × ÷
Dec 31, 2018 = 100 × ÷
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Dec 31, 2016 = 100 × ÷
Dec 31, 2015 = 100 × ÷
Dec 31, 2014 = 100 × ÷
Dec 31, 2013 = 100 × ÷
Dec 31, 2012 = 100 × ÷
Dec 31, 2011 = 100 × ÷
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Dec 31, 2006 = 100 × ÷
Dec 31, 2005 = 100 × ÷

Based on: 10-K (reporting date: 2025-12-31), 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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).

1 US$ in millions

The net profit margin exhibited a generally increasing trend from 2005 through 2013, followed by significant volatility and a subsequent recovery. Initial values were around 8.71% in 2005, steadily rising to a peak of 16.52% in 2013. This period suggests improving profitability relative to revenue. However, 2014 witnessed a substantial decline to 12.96%, and the margin continued to fluctuate, reaching a low of 2.71% in 2022. A recovery is then observed in the most recent years, with the margin reaching 15.69% in 2025.

Overall Trend (2005-2013)
From 2005 to 2013, the net profit margin demonstrated consistent growth. This indicates that the company was becoming more efficient at converting revenue into profit during this period. The increase suggests effective cost management, pricing strategies, or a shift towards higher-margin products and services.
Period of Volatility (2014-2022)
The years 2014 through 2022 were characterized by considerable fluctuation in the net profit margin. A sharp decrease in 2014 was followed by some recovery, but the margin remained unstable. The low point of 2.71% in 2022 suggests significant challenges in maintaining profitability, potentially due to increased costs, declining revenue, or unfavorable market conditions. The decline in revenue during this period correlates with the decreased margin.
Recent Recovery (2023-2025)
The most recent three years show a positive trend, with the net profit margin increasing from 1.639% in 2022 to 15.69% in 2025. This recovery suggests successful implementation of turnaround strategies, cost-cutting measures, or a return to more favorable market conditions. The increase in revenue in 2024 and 2025 likely contributed to this improvement.
Correlation with Revenue
A noticeable correlation exists between revenue and net profit margin. Periods of revenue decline, such as between 2014 and 2022, often coincide with lower net profit margins. Conversely, revenue growth in 2024 and 2025 appears to be associated with margin improvement. This suggests that revenue volume significantly impacts the company’s ability to generate profit.

In conclusion, the net profit margin has experienced distinct phases: a period of sustained growth, a period of volatility and decline, and a recent recovery. The fluctuations highlight the company’s sensitivity to both internal operational factors and external market conditions.

Comparison to Competitors

International Business Machines Corp., net profit margin, long-term trends, comparison to competitors

Microsoft Excel
International Business Machines Corp. Accenture PLC Adobe Inc. AppLovin Corp. Cadence Design Systems Inc. CrowdStrike Holdings Inc. Datadog Inc. Intuit Inc. Microsoft Corp. Oracle Corp. Palantir Technologies Inc. Palo Alto Networks Inc. Salesforce Inc. ServiceNow Inc. Synopsys Inc. Workday Inc.
Dec 31, 2025
Dec 31, 2024
Dec 31, 2023
Dec 31, 2022
Dec 31, 2021
Dec 31, 2020
Dec 31, 2019
Dec 31, 2018
Dec 31, 2017
Dec 31, 2016
Dec 31, 2015
Dec 31, 2014
Dec 31, 2013
Dec 31, 2012
Dec 31, 2011
Dec 31, 2010
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Dec 31, 2008
Dec 31, 2007
Dec 31, 2006
Dec 31, 2005

Based on: 10-K (reporting date: 2025-12-31), 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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).

Comparison to Sector (Software & Services)

International Business Machines Corp., net profit margin, long-term trends, comparison to sector (software & services)

Microsoft Excel
International Business Machines Corp. Software & Services
Dec 31, 2025
Dec 31, 2024
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Dec 31, 2022
Dec 31, 2021
Dec 31, 2020
Dec 31, 2019
Dec 31, 2018
Dec 31, 2017
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Dec 31, 2014
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Dec 31, 2006
Dec 31, 2005

Based on: 10-K (reporting date: 2025-12-31), 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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).

Comparison to Industry (Information Technology)

International Business Machines Corp., net profit margin, long-term trends, comparison to industry (information technology)

Microsoft Excel
International Business Machines Corp. Information Technology
Dec 31, 2025
Dec 31, 2024
Dec 31, 2023
Dec 31, 2022
Dec 31, 2021
Dec 31, 2020
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Dec 31, 2005

Based on: 10-K (reporting date: 2025-12-31), 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), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).