What is operating income?
Operating income is the profit a company makes from running its business, before interest and income tax. It is sales minus the cost of what was sold and the other costs of running the company.[S1]
The SEC's guide also calls it operating profit, and notes it is often called "income from operations".[S1]
How is operating income worked out?
Operating income = revenue − cost of sales − operating expenses, including depreciation.[S1]
Operating expenses are costs such as office salaries, research and marketing. Depreciation is the charge for wear on machines, tools and furniture.[S1]
Cisco's page shows revenue of $63.3B (FY2026) and operating income of $15.4B (FY2026). Its GAAP operating margin, operating income as a share of revenue, is 24.3% (FY2026).
Where do you find it in a 10-K or 10-Q?
It sits on the income statement.[S1] That is in 10-K Item 8, or 10-Q Part I, Item 1.[S2][S3]
Management explains why it changed in MD&A: 10-K Item 7, or 10-Q Part I, Item 2.[S2][S3]
The SEC's list of income statement lines has no operating income line. It lists sales and operating costs first, then non-operating income, interest and non-operating expenses.[S4] So the rule does not require a line with that name, and the label can differ between companies.
What does operating income leave out?
- Interest paid on debt and earned on cash.[S1]
- Income tax.[S1]
- Non-operating items, such as dividends received and gains or losses on securities.[S4]
A company's own "adjusted operating income" is a non-GAAP measure. In an SEC filing, the GAAP figure must be shown at least as prominently.[S5] Read more in non-GAAP measures.