# Operating margin

> Operating income as a share of revenue, for the same period.

Updated Oct 17, 2026.

Operating margin is operating income as a percentage of revenue. It shows how much of each dollar of sales is left after the costs of running the business, before interest and tax.

## Formula

```
operating margin = operating income / revenue
```

Both figures are for the same period, as reported. A trailing twelve-month margin divides [TTM](/glossary/ttm) operating income by TTM revenue. A negative operating margin means an operating loss.

## Reading it

Operating margin reflects both gross margin and how much the company spends on research, sales and administration. A company can grow its gross margin and still see its operating margin fall if spending grows faster. Large one-off charges distort a single period, so look at several.

## When it says "not reported"

- [Operating income](/glossary/operating-income) is not reported for the period.
- Revenue is not reported, or is zero.

In the forecast leagues, operating margin replaces gross margin for companies that report no gross profit.

## Related terms

- [Operating income](/glossary/operating-income.md)
- [Revenue](/glossary/revenue.md)
- [Gross margin](/glossary/gross-margin.md)
- [Net margin](/glossary/net-margin.md)
- [TTM](/glossary/ttm.md)

All terms: [/glossary.md](/glossary.md)