Definition

Operating margin

Operating income as a share of revenue — what remains after both the direct cost of sales and the operating expenses (R&D, sales & marketing, G&A) that run the business. It measures how much of the gross margin survives the cost of operating the company.

Formula

Operating margin = Operating income ÷ Revenue

Drivers — what actually moves it

Gross margin: everything that moves gross margin flows straight through.
Opex leverage: when revenue grows faster than R&D, S&M and G&A, margin expands — and vice versa.
One-time items: impairments and restructuring charges inside operating income distort single-year comparisons.

Where to find it in the filing

Income statement (Consolidated Statements of Operations). 10-K Item 8 — operating income (or 'income from operations') below the expense lines.

XBRL concepts Echelon grounds to: OperatingIncomeLoss

Sector caveats — where this breaks

Financials rarely present a comparable 'operating income' line — their operating structure is interest-based.

Drill it in a live lesson Gross margin Net margin EBITDA Operating leverage

Educational use only — not investment advice. Figures come from public SEC filings; Echelon teaches you to analyze data, it never recommends buying or selling any security.