Revenue growth reached 9.5% in 2026Q1, yet inconsistent operating margins ranging from 8.5% to 23.0% suggest that structural profitability remains elusive.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Sales/Revenue | 68.91B | 67.53B | 62.75B | 61.86B | 60.53B | 57.35B | 55.18B | 57.71B | 79.59B | 79.14B | 79.92B | 81.74B | 92.79B | 98.37B | 102.87B | 106.92B | 99.87B | 95.76B | 103.63B | 98.79B | 91.42B | 91.13B | 96.29B | 89.13B | 81.19B | 83.07B | 88.4B | 87.55B | 81.67B | 78.51B | 73.42B |
| Revenue Growth % | 9.68% | 7.62% | 1.44% | 2.2% | 5.54% | 3.94% | -4.39% | -27.49% | 0.57% | -0.98% | -2.23% | -11.91% | -5.67% | -4.38% | -3.78% | 7.05% | 4.3% | -7.6% | 4.9% | 8.05% | 0.32% | -5.36% | 8.04% | 9.79% | -2.26% | -6.03% | 0.97% | 7.2% | 4.02% | 6.92% | 2.06% |
| Cost of Goods Sold | 28.27B | 27.35B | 27.2B | 27.56B | 27.84B | 25.86B | 24.31B | 26.18B | 42.66B | 42.2B | 41.4B | 41.06B | 46.39B | 49.68B | 52.51B | 56.78B | 53.86B | 51.97B | 57.97B | 57.06B | 53.13B | 54.6B | 60.72B | 56.58B | 50.9B | 51.18B | 55.97B | 55.62B | 50.8B | 47.9B | 45.41B |
| COGS % of Revenue | - | 40.5% | 43.35% | 44.55% | 46% | 45.1% | 44.06% | 45.36% | 53.59% | 53.32% | 51.81% | 50.23% | 49.99% | 50.51% | 51.05% | 53.11% | 53.93% | 54.28% | 55.94% | 57.76% | 58.11% | 59.91% | 63.06% | 63.48% | 62.7% | 61.61% | 63.32% | 63.53% | 62.2% | 61.01% | 61.84% |
| Gross Profit | 40.64B | 40.19B | 35.55B | 34.3B | 32.69B | 31.49B | 30.86B | 31.53B | 36.94B | 36.94B | 38.52B | 40.68B | 46.41B | 48.68B | 50.36B | 50.14B | 46.01B | 43.78B | 45.66B | 41.73B | 38.3B | 36.53B | 35.57B | 32.55B | 30.28B | 31.89B | 32.42B | 31.93B | 30.87B | 30.61B | 28.02B |
| Gross Margin % | 58.97% | 59.5% | 56.65% | 55.45% | 54% | 54.9% | 55.94% | 54.64% | 46.41% | 46.68% | 48.19% | 49.77% | 50.01% | 49.49% | 48.95% | 46.89% | 46.07% | 45.72% | 44.06% | 42.24% | 41.89% | 40.09% | 36.94% | 36.52% | 37.3% | 38.39% | 36.68% | 36.47% | 37.8% | 38.99% | 38.16% |
| Gross Profit Growth % | - | 13.03% | 3.65% | 4.93% | 3.81% | 2.01% | -2.12% | -14.63% | -0.02% | -4.08% | -5.33% | -12.33% | -4.68% | -3.33% | 0.44% | 8.96% | 5.09% | -4.11% | 9.42% | 8.97% | 4.83% | 2.71% | 9.29% | 7.47% | -5.03% | -1.65% | 1.55% | 3.42% | 0.86% | 9.26% | -7.74% |
| Operating Expenses | 29.36B | 29.86B | 25.48B | 24.48B | 24.51B | 24.62B | 26.2B | 24B | 23.72B | 23.8B | 24.88B | 24.76B | 27.54B | 28.22B | 28.16B | 28.66B | 26.67B | 26.77B | 29.72B | 28.21B | 26.37B | 27.16B | 25.95B | 23.91B | 23.49B | 22.03B | 20.79B | 20B | 21.71B | 21.51B | 21.94B |
| OpEx % of Revenue | - | 44.21% | 40.6% | 39.57% | 40.5% | 42.93% | 47.49% | 41.58% | 29.8% | 30.08% | 31.13% | 30.3% | 29.68% | 28.68% | 27.37% | 26.8% | 26.7% | 27.96% | 28.68% | 28.56% | 28.84% | 29.8% | 26.95% | 26.83% | 28.93% | 26.53% | 23.52% | 22.85% | 26.58% | 27.4% | 29.89% |
| Selling, General & Admin | 20.27B | 21.54B | 17.91B | 17.56B | 18.61B | 18.75B | 20.56B | 18.72B | 19.37B | 19.68B | 20.28B | 19.89B | 22.47B | 22.92B | 23.09B | 23.22B | 21.55B | 20.52B | 22.77B | 22.06B | 20.26B | 21.31B | 20.08B | 18.6B | 18.74B | 17.05B | 15.64B | 14.73B | 16.66B | 16.63B | 16.85B |
| SG&A % of Revenue | - | 31.89% | 28.54% | 28.39% | 30.74% | 32.68% | 37.26% | 32.44% | 24.33% | 24.87% | 25.37% | 24.34% | 24.22% | 23.3% | 22.44% | 21.72% | 21.57% | 21.43% | 21.98% | 22.33% | 22.16% | 23.39% | 20.85% | 20.87% | 23.08% | 20.52% | 17.69% | 16.82% | 20.4% | 21.19% | 22.95% |
| Research & Development | 8.54B | 8.32B | 7.48B | 6.78B | 6.57B | 6.49B | 6.26B | 5.91B | 5.38B | 5.59B | 5.73B | 5.25B | 5.44B | 5.74B | 5.82B | 6.26B | 6.03B | 5.82B | 6.34B | 6.15B | 6.11B | 5.84B | 5.87B | 5.31B | 4.75B | 4.99B | 5.15B | 5.27B | 5.05B | 4.88B | 5.09B |
| R&D % of Revenue | - | 12.32% | 11.92% | 10.95% | 10.85% | 11.31% | 11.35% | 10.24% | 6.76% | 7.06% | 7.16% | 6.42% | 5.86% | 5.84% | 5.65% | 5.85% | 6.03% | 6.08% | 6.12% | 6.23% | 6.68% | 6.41% | 6.1% | 5.96% | 5.85% | 6% | 5.83% | 6.02% | 6.18% | 6.21% | 6.93% |
| Other Operating Expenses | 3M | 0 | 89M | 145M | -662M | -612M | -620M | -639M | -1.03B | -1.47B | -1.13B | -377M | -368M | -451M | -746M | -819M | -901M | 432M | 612M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 11.27B | 10.32B | 10.07B | 9.82B | 8.17B | 6.87B | 4.66B | 7.54B | 13.22B | 13.14B | 14.68B | 16.51B | 20.34B | 21.5B | 22.99B | 21.92B | 19.98B | 17.01B | 15.94B | 13.52B | 11.93B | 9.38B | 9.62B | 8.63B | 6.8B | 9.86B | 11.63B | 11.93B | 9.16B | 9.1B | 6.07B |
| Operating Margin % | 16.36% | 15.29% | 16.05% | 15.88% | 13.5% | 11.97% | 8.45% | 13.06% | 16.61% | 16.6% | 18.36% | 20.2% | 21.92% | 21.86% | 22.35% | 20.5% | 20.01% | 17.77% | 15.38% | 13.68% | 13.05% | 10.29% | 9.99% | 9.68% | 8.37% | 11.86% | 13.16% | 13.62% | 11.22% | 11.59% | 8.27% |
| Operating Income Growth % | - | 2.49% | 2.58% | 20.15% | 19.07% | 47.25% | -38.15% | -42.97% | 0.59% | -10.48% | -11.09% | -18.83% | -5.4% | -6.48% | 4.87% | 9.69% | 17.48% | 6.73% | 17.93% | 13.3% | 27.23% | -2.5% | 11.4% | 27.02% | -31.04% | -15.29% | -2.46% | 30.15% | 0.73% | 49.81% | -20% |
| EBITDA | 15.08B | 15.35B | 14.74B | 14.22B | 12.98B | 13.28B | 11.36B | 13.6B | 17.7B | 17.68B | 19.06B | 20.36B | 24.83B | 26.18B | 27.67B | 26.74B | 24.82B | 22.01B | 21.39B | 18.72B | 16.91B | 14.56B | 14.53B | 13.55B | 11.29B | 14.36B | 16.63B | 18.51B | 14.16B | 14.1B | 11.09B |
| EBITDA Margin % | 21.89% | 22.72% | 23.49% | 22.98% | 21.44% | 23.16% | 20.58% | 23.56% | 22.23% | 22.34% | 23.85% | 24.91% | 26.76% | 26.61% | 26.89% | 25.01% | 24.85% | 22.98% | 20.64% | 18.95% | 18.5% | 15.98% | 15.09% | 15.2% | 13.91% | 17.29% | 18.81% | 21.14% | 17.33% | 17.96% | 15.1% |
| EBITDA Growth % | 0.62% | 4.1% | 3.69% | 9.56% | -2.3% | 16.95% | -16.47% | -23.17% | 0.1% | -7.23% | -6.41% | -17.99% | -5.15% | -5.38% | 3.47% | 7.74% | 12.77% | 2.88% | 14.28% | 10.67% | 16.12% | 0.23% | 7.26% | 20.01% | -21.39% | -13.64% | -10.17% | 30.77% | 0.4% | 27.19% | -15.98% |
| D&A (Non-Cash Add-back) | 3.81B | 5.02B | 4.67B | 4.4B | 4.8B | 6.42B | 6.7B | 6.06B | 4.48B | 4.54B | 4.38B | 3.85B | 4.49B | 4.68B | 4.68B | 4.82B | 4.83B | 4.99B | 5.45B | 5.2B | 4.98B | 5.19B | 4.92B | 4.92B | 4.49B | 4.51B | 5B | 6.58B | 4.99B | 5B | 5.01B |
| EBIT | 12.51B | 12.26B | 7.51B | 10.3B | 2.37B | 5.99B | 3.86B | 8.55B | 12.06B | 12.02B | 12.96B | 16.41B | 20.47B | 20.65B | 23B | 21.41B | 20.09B | 18.54B | 17.39B | 15.1B | 13.6B | 12.45B | 10.81B | 9.56B | 7.67B | 9.86B | 12.25B | 12.48B | 9.75B | 9.76B | 9.3B |
| Net Interest Income | -1.48B | -1.94B | -965M | -937M | -1.05B | -1.1B | -1.18B | -673M | -422M | -519M | -522M | -360M | -394M | -328M | -350M | -275M | -276M | -308M | -330M | -611M | -278M | -220M | -139M | -145M | -145M | 0 | -717M | -727M | -713M | -728M | -9M |
| Interest Income | 474M | 0 | 747M | 670M | 162M | 52M | 105M | 349M | 264M | 144M | 108M | 108M | 90M | 74M | 109M | 136M | 92M | 94M | 343M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 707M |
| Interest Expense | 1.95B | 1.94B | 1.71B | 1.61B | 1.22B | 1.16B | 1.29B | 1.02B | 686M | 663M | 630M | 468M | 484M | 402M | 459M | 411M | 368M | 402M | 673M | 611M | 278M | 220M | 139M | 145M | 145M | 0 | 717M | 727M | 713M | 728M | 716M |
| Other Income/Expense | -713M | 3M | -4.28B | -1.13B | -7.02B | -2.03B | -2.09B | -332M | -1.88B | -1.74B | -2.35B | -563M | -352M | -1.26B | -450M | -919M | -262M | 1.13B | 776M | 973M | 1.39B | 2.85B | 1.05B | 785M | 728M | 1.59B | -100M | -170M | -124M | -71M | 2.51B |
| Pretax Income | 10.56B | 10.33B | 5.8B | 8.69B | 1.16B | 4.84B | 2.57B | 7.21B | 11.34B | 11.4B | 12.33B | 15.95B | 19.99B | 20.24B | 22.54B | 21B | 19.72B | 18.14B | 16.71B | 14.49B | 13.32B | 12.23B | 10.67B | 9.42B | 7.52B | 11.45B | 11.53B | 11.76B | 9.04B | 9.03B | 8.59B |
| Pretax Margin % | 15.32% | 15.29% | 9.24% | 14.05% | 1.91% | 8.43% | 4.66% | 12.49% | 14.25% | 14.41% | 15.43% | 19.51% | 21.54% | 20.58% | 21.91% | 19.64% | 19.75% | 18.94% | 16.13% | 14.67% | 14.57% | 13.42% | 11.08% | 10.57% | 9.27% | 13.78% | 13.05% | 13.43% | 11.07% | 11.5% | 11.7% |
| Income Tax | -173M | -242M | -218M | 1.18B | -626M | 124M | -1.36B | 60M | 2.62B | 5.64B | 449M | 2.58B | 4.23B | 3.36B | 5.54B | 5.15B | 4.89B | 4.71B | 4.38B | 4.07B | 3.9B | 4.23B | 3.17B | 2.83B | 2.19B | 3.3B | 3.44B | 4.04B | 2.71B | 2.93B | 3.16B |
| Effective Tax Rate % | -1.64% | -2.34% | -3.76% | 13.53% | -54.15% | 2.56% | -52.88% | 0.83% | 23.09% | 49.49% | 3.64% | 16.19% | 21.18% | 16.61% | 24.58% | 24.51% | 24.79% | 25.98% | 26.21% | 28.1% | 29.29% | 34.61% | 29.73% | 30.04% | 29.11% | 28.86% | 29.83% | 34.41% | 30% | 32.5% | 36.78% |
| Net Income | 10.75B | 10.59B | 6.02B | 7.5B | 1.64B | 5.74B | 5.59B | 9.43B | 8.73B | 5.75B | 11.87B | 13.19B | 12.02B | 16.48B | 16.6B | 15.86B | 14.83B | 13.43B | 12.33B | 10.42B | 9.49B | 7.93B | 7.48B | 6.56B | 3.58B | 7.72B | 8.09B | 7.71B | 6.33B | 6.09B | 5.43B |
| Net Margin % | 15.61% | 15.69% | 9.6% | 12.13% | 2.71% | 10.01% | 10.13% | 16.34% | 10.97% | 7.27% | 14.85% | 16.14% | 12.96% | 16.76% | 16.14% | 14.83% | 14.85% | 14.02% | 11.9% | 10.55% | 10.38% | 8.71% | 7.77% | 7.36% | 4.41% | 9.3% | 9.16% | 8.81% | 7.75% | 7.76% | 7.39% |
| Net Income Growth % | 96.49% | 75.88% | -19.71% | 357.44% | -71.44% | 2.72% | -40.73% | 8.05% | 51.71% | -51.54% | -9.99% | 9.72% | -27.06% | -0.73% | 4.72% | 6.89% | 10.49% | 8.85% | 18.39% | 9.76% | 19.64% | 6.08% | 14.04% | 83.24% | -53.66% | -4.57% | 4.94% | 21.87% | 3.86% | 12.23% | 29.94% |
| Net Income (Continuing) | 10.73B | 10.57B | 6.01B | 7.51B | 1.78B | 4.71B | 3.93B | 7.15B | 8.72B | 5.76B | 11.88B | 13.36B | 15.75B | 16.88B | 17B | 15.86B | 14.83B | 13.43B | 12.33B | 10.42B | 9.42B | 7.99B | 7.5B | 6.59B | 5.33B | 8.15B | 8.09B | 7.71B | 6.33B | 6.09B | 5.43B |
| Discontinued Operations | 2M | 22M | 8M | -12M | -143M | 1.03B | 1.66B | 2.29B | 5M | -5M | -9M | -174M | -3.73B | -398M | -395M | 0 | 0 | 0 | 0 | 0 | 76M | -24M | -18M | -30M | -1.75B | -423M | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 81M | 93M | 86M | 80M | 77M | 95M | 129M | 144M | 134M | 131M | 146M | 162M | 146M | 137M | 124M | 97M | 126M | 118M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 11.30 | 11.17 | 6.43 | 8.14 | 1.80 | 6.35 | 6.23 | 10.56 | 9.53 | 6.14 | 12.38 | 13.42 | 11.90 | 14.94 | 14.37 | 13.06 | 11.52 | 10.01 | 8.93 | 7.18 | 6.11 | 4.87 | 4.93 | 4.32 | 2.06 | 4.35 | 4.44 | 4.12 | 3.29 | 3.01 | 2.56 |
| EPS Growth % | 94.66% | 73.72% | -21.01% | 352.22% | -71.65% | 1.93% | -41% | 10.81% | 55.21% | -50.4% | -7.75% | 12.77% | -20.35% | 3.97% | 10.03% | 13.37% | 15.08% | 12.09% | 24.37% | 17.51% | 25.46% | -1.22% | 14.12% | 109.71% | -52.64% | -2.03% | 7.77% | 25.23% | 9.3% | 17.58% | 41.44% |
| EPS (Basic) | - | 11.36 | 6.53 | 8.23 | 1.82 | 6.41 | 6.28 | 10.63 | 9.57 | 6.17 | 12.43 | 13.48 | 11.97 | 15.06 | 14.53 | 13.25 | 11.69 | 10.12 | 9.07 | 7.32 | 6.20 | 4.96 | 5.03 | 4.40 | 2.10 | 4.45 | 4.58 | 4.25 | 3.38 | 3.09 | 2.56 |
| Diluted Shares Outstanding | 952.1M | 948.7M | 937.2M | 922.07M | 912.27M | 904.64M | 896.56M | 892.81M | 916.3M | 937.4M | 958.7M | 982.7M | 1.01B | 1.1B | 1.16B | 1.21B | 1.29B | 1.34B | 1.38B | 1.45B | 1.55B | 1.63B | 1.71B | 1.76B | 1.73B | 1.77B | 1.81B | 1.87B | 1.92B | 2.02B | 2.13B |
| Basic Shares Outstanding | 938.5M | 932.3M | 937.2M | 911.21M | 902.66M | 895.99M | 890.35M | 887.24M | 912M | 932.8M | 955.4M | 978.7M | 1B | 1.09B | 1.14B | 1.2B | 1.27B | 1.33B | 1.36B | 1.42B | 1.53B | 1.6B | 1.67B | 1.72B | 1.7B | 1.73B | 1.76B | 1.81B | 1.87B | 1.97B | 2.11B |
| Dividend Payout Ratio | - | 59.05% | 102.06% | 80.51% | 362.68% | 102.21% | 103.7% | 60.51% | 64.92% | 95.71% | 44.27% | 37.13% | 35.48% | 24.62% | 22.72% | 21.9% | 21.42% | 21.3% | 20.96% | 20.61% | 17.73% | 15.75% | 15.7% | 16.54% | 28.08% | 12.51% | 11.48% | 11.4% | 13.18% | 12.85% | 13% |
Legacy hardware revenue volatility
As indicated by the most recent quarterly data, IBM's revenue growth has accelerated to 9.5% in 2026Q1, marking a significant departure from the stagnant low-single-digit growth rates observed throughout 2024, suggesting that strategic investments in hybrid cloud and AI are finally beginning to scale effectively.
The recent uptick in top-line performance appears to reflect a successful transition toward higher-value software offerings, potentially mitigating the cyclical drag of the mainframe business. Investors should monitor whether this acceleration is sustainable or merely a reflection of favorable year-over-year comparisons following the divestiture of legacy infrastructure assets.
Based on reported financial statements, IBM's gross margin fluctuated between 53.5% and 61.6% over the last ten quarters, highlighting the inherent difficulty in maintaining consistent profitability while balancing high-margin software subscriptions against the more volatile, lower-margin hardware and consulting segments that define the company's current operational mix.
The volatility in gross margins suggests that IBM remains sensitive to the timing of large-scale hardware refresh cycles and the integration costs of its software portfolio. While the 61.6% peak in 2025Q4 demonstrates potential for margin expansion, the subsequent compression to 56.2% in 2026Q1 warrants caution regarding the company's long-term pricing power.
According to the income statement data, operating margins have remained inconsistent, ranging from 8.5% to 23.0%, which suggests that IBM has yet to achieve the level of operating leverage necessary to consistently scale its bottom line faster than its top-line revenue growth in a competitive IT environment.
The lack of a clear, upward trend in operating margins implies that SG&A and R&D expenses continue to consume a significant portion of gross profit gains. This may indicate that the company is still in a heavy investment phase for its AI and hybrid cloud platforms, limiting immediate profitability improvements.
As reported in recent filings, net income has experienced extreme swings, including a notable loss in 2024Q3 and a massive spike in 2025Q4, which complicates the assessment of core earnings quality and suggests that non-operating items and accounting adjustments are significantly distorting the company's true operational performance.
The erratic nature of net income, coupled with fluctuating stock-based compensation expenses, makes it difficult for investors to rely on GAAP EPS as a stable indicator of health. Further investigation into the specific drivers of the 2025Q4 earnings surge is required to determine if these gains are recurring or one-time events.
Based on the provided income statement history, short-term revenue spikes appear to be offset by inconsistent profitability, raising concerns that IBM's recent growth may be driven by unsustainable project-based consulting rather than the recurring, high-margin software revenue that would justify a premium valuation in the current market.
The reliance on large, lumpy consulting engagements may mask underlying weaknesses in the core software business, leaving the company vulnerable to shifts in enterprise IT spending. Investors should be wary of the potential for margin compression if the consulting segment faces increased wage pressure or a slowdown in digital transformation demand.
Quick answers to the most common questions about buying IBM stock.
For fiscal year 2025, International Business Machines Corporation (IBM) reported total revenue of $67.53B. This represents a 8.0% decline compared to $73.42B in 1996.
International Business Machines Corporation (IBM) is profitable, generating $10.59B in net income for the fiscal year ending 2025 with a net profit margin of 15.7%.
International Business Machines Corporation (IBM) reported an operating income of $10.32B, resulting in an operating profit margin of 15.3%. This margin reflects the operational efficiency of the business before interest and taxes.
International Business Machines Corporation (IBM) generated $40.19B in gross profit for the year, representing a gross profit margin of 59.5%. This demonstrates the company's core pricing power and production efficiency.