Operating income
Operating income is what the business itself earned before the cost of its debt and before tax — gross profit minus the cost of selling, administering and developing.
How it is computed here
| Formula | gross profit − operating expenses (as reported) |
|---|---|
| Unit | Currency amount |
| Period | One fiscal year, as reported |
| Source | Extracted from SEC filings; every value on an asset page carries the accounting tag and the filing it came from |
| Identifier | lucro_operacional |
What goes into the formula
| Gross profit | Revenue less the direct cost of what was sold. |
|---|---|
| Selling, general and administrative expenses | Salespeople, marketing, the head office, the finance department — the cost of running the company rather than the cost of making the product. |
| Research and development | Where the company reports it separately. Expensed in the year, even when what it buys lasts a decade, which is why a research-heavy company looks less profitable than it may be. |
A formula without its inputs explained is decoration. Where an input is missing from a filing, the metric is left empty here rather than completed with a zero or an estimate.
How to calculate operating income, step by step
A manufacturer, continuing the previous example.
| Gross profit | $1,400M |
|---|---|
| Selling, general and administrative | $700M |
| Research and development | $300M |
- Operating expenses = 700 + 300 = $1,000M.
- Operating income = 1,400 − 1,000 = $400M.
- Operating margin = 400 ÷ 4,000 = 10.0%.
Result: $400M, a 10.0% operating margin
$400M is what the operation produced. What happens next depends on how much the company borrowed and where it pays tax — neither of which is the operation's doing.
The figures in this example are illustrative and rounded — they are not a real company. The real figures on this site are the live ones below and on every asset page, each carrying the filing it came from.
What operating income is good for
Operating income is the fairest single comparison between two companies doing the same thing, because it strips out the two decisions that have nothing to do with the business: how it was financed and where it is taxed. Two identical operations, one debt-financed and one not, show the same operating income and very different net income.
What this number does not tell you
Operating income is the line most affected by where a company chooses to put unusual items. A restructuring charge placed above it cuts the figure; the same charge placed below it does not, and the business is identical either way. It also excludes interest — which is a real, contractual, unavoidable cost for a leveraged company, not a detail to be looked past.
Every metric on this site is published with its blind spot stated. A figure without its limit is half a fact.
Highest reported operating income
| MSFTMICROSOFT CORPORATION | $155.2B |
|---|---|
| AAPLApple Inc. | $133.1B |
| NVDANVIDIA CORP | $130.4B |
| GOOGAlphabet Inc. | $129.0B |
| GOOGLAlphabet Inc. | $129.0B |
| METAMeta Platforms, Inc. | $83.3B |
| BRK-ABERKSHIRE HATHAWAY INC | $82.5B |
| BRK-BBERKSHIRE HATHAWAY INC | $82.5B |
From the most recent fiscal year of each company. Only companies reporting in US dollars are ranked here — a figure in yen or won is not larger, it is in another currency.
See it in a published filing
These pages show the figure across up to nineteen fiscal years, with the accounting tag and the filing behind every value.