What it is
Operating margin scales operating income against revenue. It captures how much of each sale is left after both the direct cost of the product (COGS) and all operating overhead (SG&A, R&D, marketing).
What it tells you
Operating margin is the cleanest read on how well the business itself runs. Two companies with the same revenue can have wildly different operating margins depending on how lean their cost base is.
A consistent or expanding operating margin alongside revenue growth is often described as "operating leverage" — costs growing slower than revenue.