Analysis of Geographic Areas
International Business Machines Corp. operates in 2 regions: United States and Other countries.
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Present Value of Free Cash Flow to Equity (FCFE)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Area Asset Turnover
International Business Machines Corp., asset turnover by geographic area
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| United States | |||||
| Other countries |
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).
An examination of area asset turnover reveals distinct trends between the United States and other countries over the five-year period. The asset turnover ratio in the United States demonstrates fluctuation, while other countries exhibit consistent growth.
- United States
- The asset turnover ratio for the United States increased from 6.78 in 2021 to 7.82 in 2022, indicating improved efficiency in asset utilization. However, this was followed by a decrease to 7.30 in 2023 and a more substantial decline to 6.27 in 2024. A slight recovery to 6.56 is observed in 2025, but the ratio remains below the 2022 peak. This pattern suggests potential challenges in maintaining consistent asset efficiency within the United States.
- Other Countries
- In contrast to the United States, the asset turnover ratio for other countries shows a consistent upward trend throughout the period. Beginning at 15.03 in 2021, the ratio increased to 16.87 in 2022, 18.03 in 2023, and continued to rise significantly to 21.90 in 2024. This growth trajectory continued into 2025, reaching 22.62. This indicates progressively improving asset utilization efficiency in areas outside of the United States.
- Comparative Analysis
- A significant difference in asset turnover is apparent between the two geographic areas. Throughout the period, the asset turnover ratio in other countries is substantially higher than that of the United States. The gap between the ratios widened over time, with the ratio in other countries nearly tripling that of the United States by 2025. This suggests that assets are being used more effectively to generate sales in other countries compared to the United States. The diverging trends warrant further investigation into the factors driving these differences, such as market conditions, operational strategies, and asset composition.
Overall, the analysis indicates a strengthening asset utilization performance in areas outside of the United States, while the United States experienced volatility and a relative decline in asset turnover efficiency.
Area Asset Turnover: United States
International Business Machines Corp.; United States; area asset turnover calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | |||||
| Plant and other property, net | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
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).
1 2025 Calculation
Area asset turnover = Revenue ÷ Plant and other property, net
= ÷ =
The financial performance within the United States reveals fluctuations in revenue and asset utilization over the five-year period. Revenue exhibited an overall positive trend, while the area asset turnover ratio demonstrated more variability.
- Revenue
- Revenue generated in the United States increased from US$22,893 million in 2021 to US$25,098 million in 2022, representing a substantial gain. Further growth was observed in 2023, reaching US$25,309 million. A slight decrease occurred in 2024, with revenue at US$25,144 million, followed by a more significant increase to US$26,892 million in 2025. This indicates a generally positive revenue trajectory with a minor dip in 2024.
- Plant and other property, net
- The net value of plant and other property experienced a decrease from US$3,375 million in 2021 to US$3,209 million in 2022. An increase was then noted in 2023, reaching US$3,466 million. This was followed by more substantial increases in 2024 and 2025, reaching US$4,009 million and US$4,097 million respectively. This suggests a growing investment in fixed assets within the United States during the latter part of the period.
- Area asset turnover
- The area asset turnover ratio, a measure of how efficiently assets are used to generate revenue, began at 6.78 in 2021. A notable increase was observed in 2022, rising to 7.82. The ratio decreased to 7.30 in 2023, and then experienced a more pronounced decline to 6.27 in 2024. A modest recovery occurred in 2025, with the ratio reaching 6.56. The fluctuations suggest varying levels of efficiency in asset utilization, potentially influenced by changes in revenue and fixed asset investment. The 2024 decrease, despite relatively stable revenue, warrants further investigation.
Overall, while revenue demonstrated consistent growth, the area asset turnover ratio exhibited volatility. The increasing investment in plant and other property, coupled with the fluctuating asset turnover, suggests a potential shift in the company’s asset strategy or operational efficiency within the United States.
Area Asset Turnover: Other countries
International Business Machines Corp.; Other countries; area asset turnover calculation
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Revenue | |||||
| Plant and other property, net | |||||
| Area Activity Ratio | |||||
| Area asset turnover1 | |||||
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).
1 2025 Calculation
Area asset turnover = Revenue ÷ Plant and other property, net
= ÷ =
The financial performance related to assets in areas categorized as “Other countries” demonstrates a consistent positive trend between 2021 and 2025. Revenue generated from these areas has increased steadily, while the net value of plant and other properties has generally decreased. This combination has resulted in a significant and sustained improvement in asset turnover.
- Revenue
- Revenue from these areas increased from US$34,457 million in 2021 to US$40,643 million in 2025, representing a cumulative growth of approximately 18.0%. The year-over-year growth rates were consistently positive, indicating a stable and expanding market presence.
- Plant and other property, net
- The net value of plant and other property decreased from US$2,293 million in 2021 to US$1,717 million in 2024, before experiencing a slight increase to US$1,797 million in 2025. This suggests potential asset optimization or disposal strategies, or possibly differing depreciation policies, contributing to a lower asset base.
- Area asset turnover
- The area asset turnover ratio exhibited a strong upward trend, rising from 15.03 in 2021 to 22.62 in 2025. This indicates that the company is generating more revenue per dollar of assets invested in these areas. The increase from 16.87 in 2022 to 18.03 in 2023 was moderate, but the subsequent increases to 21.90 in 2024 and 22.62 in 2025 were more substantial, suggesting accelerating efficiency in asset utilization. This improvement is likely a result of the combined effect of increasing revenue and decreasing asset values.
Overall, the financial indicators suggest improving operational efficiency and revenue generation within the areas designated as “Other countries”. The increasing asset turnover ratio is a positive sign, indicating effective management of assets and a growing ability to generate sales from the existing asset base.
Revenue
International Business Machines Corp., revenue by geographic area
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| United States | |||||
| Other countries | |||||
| Total |
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).
Revenue figures demonstrate consistent growth across all reported geographic areas between 2021 and 2025. While the United States exhibits steady increases, revenue from other countries demonstrates a more pronounced growth trajectory, contributing significantly to overall revenue expansion.
- United States Revenue
- Revenue from the United States increased from US$22,893 million in 2021 to US$26,892 million in 2025. Growth was not linear, with a slight decrease observed between 2022 and 2024 (US$25,098 million to US$25,144 million) before resuming an upward trend. The overall increase represents approximately 17.4% growth over the five-year period.
- Other Countries Revenue
- Revenue generated from countries outside the United States experienced more substantial growth, rising from US$34,457 million in 2021 to US$40,643 million in 2025. This represents an approximately 17.9% increase over the five-year period. Growth was consistent year-over-year, with no significant declines observed.
- Total Revenue
- Total revenue increased from US$57,350 million in 2021 to US$67,535 million in 2025, representing an overall growth of approximately 17.7%. The rate of growth accelerated in the later years of the period, with larger absolute increases observed between 2023 and 2025 compared to earlier years.
- Geographic Contribution
- In 2021, revenue from other countries represented approximately 60.1% of total revenue. By 2025, this proportion had increased to approximately 60.2%. This indicates a sustained reliance on international markets for revenue generation, with a slight increase in their relative contribution over time. The United States consistently contributed approximately 39.9% to 40.0% of total revenue during the analyzed period.
The observed trends suggest a successful expansion strategy encompassing both domestic and international markets. The consistent growth in revenue from other countries is particularly noteworthy, indicating strong performance and potential in those regions. The slight dip in US revenue between 2022 and 2024 warrants further investigation, though the subsequent recovery suggests it was not indicative of a long-term decline.
Plant and other property, net
International Business Machines Corp., plant and other property, net by geographic area
US$ in millions
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|
| United States | |||||
| Other countries | |||||
| Total |
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).
The net value of plant and other property demonstrates differing trends across geographic regions. Overall, the total net value exhibits a general upward trajectory throughout the observed period, though with some fluctuation. A closer examination of the individual regions reveals the drivers behind this overall trend.
- United States
- The net value of plant and other property in the United States experienced a decrease from 2021 to 2022, declining from US$3,375 million to US$3,209 million. Subsequently, a consistent increase is observed, reaching US$3,466 million in 2023, US$4,009 million in 2024, and further increasing to US$4,097 million in 2025. This indicates a strengthening investment in property, plant, and equipment within the United States in recent years.
- Other Countries
- In contrast to the United States, the net value of plant and other property in other countries generally decreased over the period. From US$2,293 million in 2021, it declined to US$2,100 million in 2022 and US$2,027 million in 2023. This downward trend continued to US$1,717 million in 2024, before a slight recovery to US$1,797 million in 2025. This suggests potential divestments, depreciation exceeding new investments, or currency effects impacting the reported value in these regions.
- Total
- The total net value of plant and other property decreased from US$5,668 million in 2021 to US$5,309 million in 2022. It then showed growth, reaching US$5,493 million in 2023, US$5,726 million in 2024, and US$5,894 million in 2025. The growth in the total value from 2022 onwards is primarily driven by the increase in the United States, partially offsetting the decline observed in other countries.
The divergence in trends between the United States and other countries suggests a strategic shift in capital allocation. The increasing investment in the United States, coupled with the decreasing value in other countries, warrants further investigation to understand the underlying reasons and potential implications for future growth and profitability.