IBMNEUTRAL

IBM Gross Margin Analysis

57.7%

Updated 77h ago·SEC filings & market data

Key Takeaway

IBM's gross margin of 57.7% means that after deducting the direct costs of producing its products and services, the company retains that percentage of revenue as profit before other expenses.

Sector Performance

67th percentile

IBM

57.7%

Sector Median

46.6%

Sector Avg

47.6%

Prior Period

56.2%(Apr 2026)

↑ Improving

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Deep Analysis

IBM's gross margin of 57.7% means that after deducting the direct costs of producing its products and services, the company retains that percentage of revenue as profit before other expenses.

This figure sits well above the sector median of 44.7%, placing IBM in the 69th percentile among its sector peers, indicating a relatively high level of cost efficiency. No historical trend data is available — the year-over-year change, quarter-over-quarter change, and trend direction over the last eight quarters are all listed as N/A, with only the current value provided. Because the margin level is strong but the trend is unknown, the risk or opportunity cannot be assessed from direction; the high level alone suggests a competitive advantage but offers no insight into whether that advantage is improving or eroding. This metric supports the overall NEUTRAL verdict: the above-median gross margin is a positive signal, but the complete absence of trend data prevents a stronger bullish or bearish stance.

Frequently Asked Questions

What does the Gross Margin tell investors about IBM?

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.

How is the Gross Margin calculated?

Gross Margin is calculated as: Gross Profit / Revenue.

Who are IBM's closest peers by Gross Margin?

The closest peers by Gross Margin include: LVS (46.9%), ORLY (51.4%), MPWR (55.2%), NEM (56.0%), REI (56.0%).

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Learn More About Gross Margin

Gross Margin vs Net Margin: Why the Gap Between Them Tells You Everything

Gross margin vs net margin: learn what the spread between them reveals about operating leverage, cost structure, and early warning signs in any stock.

The Formula

Gross Profit / Revenue

Why It Matters

Gross margin reveals pricing power and cost structure. Software companies often sustain 70–80%; manufacturers typically 30–50%. Expansion is a bullish signal.