How does IBM (IBM) make money?

IBM (IBM) primarily makes money through Software, which accounts for 44.6% of total revenue. For TTM through Q1 2026, IBM generated $68.91B in total revenue with a net profit margin of 15.6%.

What is IBM (IBM) gross profit margin?

IBM (IBM) reported a gross profit margin of 59% for TTM through Q1 2026, equivalent to $40.64B in gross profit. This means IBM retains 59% of each revenue unit after direct costs of production.

What is IBM (IBM) operating profit margin?

IBM (IBM) reported an operating profit margin of 16.4% for TTM through Q1 2026, equivalent to $11.27B in operating profit. This reflects profitability after operating expenses such as R&D, sales, and administration, but before taxes and non-operating items.

What is IBM (IBM) net profit margin?

IBM (IBM) reported a net profit margin of 15.6% for TTM through Q1 2026, equivalent to $10.75B in net profit. This is the share of revenue that remains as profit after all expenses, taxes, and non-operating items.

How much does IBM (IBM) invest in R&D?

IBM (IBM) invested $8.54B in research and development in TTM through Q1 2026 (12.4% of total revenue). R&D spending reflects investment in future products, services, and technologies.

How much does IBM (IBM) spend on capital expenditures?

IBM (IBM) spent $904.00M on capital expenditures in TTM through Q1 2026 (1.3% of total revenue). Capital expenditures represent investments in physical assets such as property, equipment, and infrastructure.

What is IBM (IBM) free cash flow?

IBM (IBM) generated $13.09B in free cash flow for TTM through Q1 2026 (19.0% of total revenue). Free cash flow is the cash remaining after capital expenditures and represents the company's ability to fund growth, pay dividends, or reduce debt.

How IBM (IBM) Makes Money: A Visual Guide

IBM (IBM) generated $68.91B in revenue, earning $10.75B in net profit (15.6% margin). Its largest revenue source is Software (44.6% of revenue). Below is an interactive breakdown of how revenue flows through the income statement.

IBM (IBM) Income Statement Flow — TTM through Q1 2026

Calculated from the four most recent reported quarters, ending March 31, 2026 (reported April 23, 2026).

Frequently asked questions

How does IBM (IBM) make money?: IBM (IBM) primarily makes money through Software, which accounts for 44.6% of total revenue. For TTM through Q1 2026, IBM generated $68.91B in total revenue with a net profit margin of 15.6%.
What is IBM (IBM) gross profit margin?: IBM (IBM) reported a gross profit margin of 59% for TTM through Q1 2026, equivalent to $40.64B in gross profit. This means IBM retains 59% of each revenue unit after direct costs of production.
What is IBM (IBM) operating profit margin?: IBM (IBM) reported an operating profit margin of 16.4% for TTM through Q1 2026, equivalent to $11.27B in operating profit. This reflects profitability after operating expenses such as R&D, sales, and administration, but before taxes and non-operating items.
What is IBM (IBM) net profit margin?: IBM (IBM) reported a net profit margin of 15.6% for TTM through Q1 2026, equivalent to $10.75B in net profit. This is the share of revenue that remains as profit after all expenses, taxes, and non-operating items.
How much does IBM (IBM) invest in R&D?: IBM (IBM) invested $8.54B in research and development in TTM through Q1 2026 (12.4% of total revenue). R&D spending reflects investment in future products, services, and technologies.
How much does IBM (IBM) spend on capital expenditures?: IBM (IBM) spent $904.00M on capital expenditures in TTM through Q1 2026 (1.3% of total revenue). Capital expenditures represent investments in physical assets such as property, equipment, and infrastructure.
What is IBM (IBM) free cash flow?: IBM (IBM) generated $13.09B in free cash flow for TTM through Q1 2026 (19.0% of total revenue). Free cash flow is the cash remaining after capital expenditures and represents the company's ability to fund growth, pay dividends, or reduce debt.

Data & methodology

What is a Sankey diagram?: A Sankey diagram shows how money flows through a company from revenue to net profit. The width of each flow represents its proportion.
How is the data calculated?: We use the income statement from company filings. For TTM (Trailing Twelve Months), we use a pre-aggregated twelve-month view aligned with our latest four quarterly periods. Revenue flows to cost of revenue and gross profit, then to operating expenses (R&D, S&M, G&A) and operating profit.
When was this data last updated?: Based on company filings through TTM through Q1 2026.