| name | sec-segment-reporting |
| description | Analyze business segment performance and reporting from SEC filings using Octagon MCP. Use when researching segment revenue, operating income, margins, geographic breakdown, and segment restructuring from 10-K and 10-Q filings. |
SEC Segment Reporting
Analyze business segment performance and reporting from SEC filings for public companies using the Octagon MCP server.
Prerequisites
Ensure Octagon MCP is configured in your AI agent (Cursor, Claude Desktop, Windsurf, etc.). See references/mcp-setup.md for installation instructions.
Workflow
1. Identify Analysis Parameters
Determine the following before querying:
- Ticker: Stock symbol (e.g., AAPL, MSFT, GOOGL)
- Filing Type (optional): 10-K (annual) or 10-Q (quarterly)
- Focus Area (optional): Revenue, profitability, geographic, trends
2. Execute Query via Octagon MCP
Use the octagon-agent tool with a natural language prompt:
Analyze business segment performance and reporting from <TICKER>'s latest quarterly filing.
MCP Call Format:
{
"server": "octagon-mcp",
"toolName": "octagon-agent",
"arguments": {
"prompt": "Analyze business segment performance and reporting from IBM's latest quarterly filing."
}
}
3. Expected Output
The agent returns structured segment analysis including:
| Segment | Revenue | YoY Growth | Operating Income | Margin |
|---|
| Software | $7,209M | 10.5% | $2,374M | 32.9% |
| Consulting | $5,324M | 3.3% | $686M | 12.9% |
| Infrastructure | $3,559M | 17.0% | $644M | 18.1% |
| Financing | $200M | 10.4% | $123M | 61.6% |
Key Trends:
- Infrastructure fastest-growing at 17.0%
- Software maintains highest margin at 32.9%
- Consulting stable revenue driver
Data Sources: octagon-financials-agent, octagon-sec-agent
4. Interpret Results
See references/interpreting-results.md for guidance on:
- Understanding segment composition
- Evaluating segment profitability
- Tracking segment restructuring
- Analyzing geographic segments
Example Queries
Full Segment Analysis:
Analyze business segment performance and reporting from IBM's latest quarterly filing.
Segment Profitability:
Compare operating margins across MSFT's business segments in the latest 10-K.
Geographic Segments:
Analyze AAPL's revenue breakdown by geographic region from the latest 10-K.
Segment Growth Trends:
Track revenue growth trends by segment for GOOGL over the last 4 quarters.
Segment Restructuring:
Has AMZN restructured its segment reporting in recent filings and how?
Inter-Segment Comparison:
Compare segment performance between META and GOOGL in their latest annual filings.
Segment Reporting Framework
Operating Segments (ASC 280)
| Element | Description |
|---|
| Revenue | Segment sales, external and intersegment |
| Operating Income | Segment profit/loss |
| Assets | Segment assets allocated |
| CapEx | Capital expenditures by segment |
| Depreciation | D&A by segment |
Geographic Segments
| Element | Description |
|---|
| Revenue by Region | Sales by geography |
| Long-Lived Assets | Property, equipment by location |
| Country Disclosure | Material country breakouts |
Common Segment Structures
| Industry | Typical Segments |
|---|
| Technology | Products, Services, Cloud, Licensing |
| Retail | Stores, Online, Wholesale |
| Financial | Banking, Wealth, Insurance |
| Healthcare | Pharmaceuticals, Devices, Services |
| Industrial | Products, Services, Financing |
Key Metrics by Segment
Revenue Metrics
| Metric | Calculation | What It Shows |
|---|
| Segment Revenue | Reported amount | Size of segment |
| Revenue Mix | Segment / Total | Business composition |
| Growth Rate | (Current - Prior) / Prior | Momentum |
| Intersegment | Internal sales | Vertical integration |
Profitability Metrics
| Metric | Calculation | What It Shows |
|---|
| Operating Income | Segment profit | Profitability |
| Operating Margin | Op Income / Revenue | Efficiency |
| Contribution | Segment / Total Op Income | Profit mix |
| Margin Trend | Current vs. Prior | Direction |
Asset Metrics
| Metric | Calculation | What It Shows |
|---|
| Segment Assets | Reported amount | Capital deployed |
| Asset Turnover | Revenue / Assets | Efficiency |
| CapEx Intensity | CapEx / Revenue | Investment level |
| ROA | Op Income / Assets | Return on assets |
Segment Performance Analysis
Growth Assessment
| Growth Rate | Assessment |
|---|
| >20% | High growth, investment phase |
| 10-20% | Solid growth |
| 5-10% | Moderate growth |
| 0-5% | Mature, stable |
| Negative | Declining, concern |
Margin Assessment
| Margin Level | Assessment |
|---|
| >30% | High margin, premium |
| 20-30% | Strong margin |
| 10-20% | Moderate margin |
| 5-10% | Low margin |
| <5% | Thin margin, scale needed |
Segment Health Matrix
| High Margin | Low Margin |
|---|
| High Growth | Star segment | Investment needed |
| Low Growth | Cash cow | Turnaround/exit |
Geographic Segment Analysis
Revenue Distribution
| Region | Typical Disclosure |
|---|
| Americas | US, Canada, Latin America |
| EMEA | Europe, Middle East, Africa |
| APAC | Asia Pacific, Japan |
| Other | Emerging markets |
Geographic Considerations
| Factor | What to Assess |
|---|
| Concentration | Over-reliance on one region |
| Growth Rates | Regional momentum |
| Currency | FX exposure |
| Regulatory | Region-specific risks |
Segment Restructuring
Types of Changes
| Change | What It Means |
|---|
| Segment Added | New business, acquisition |
| Segment Removed | Divestiture, consolidation |
| Segments Combined | Simplified reporting |
| Segments Split | More granular disclosure |
| Renamed | Strategic repositioning |
Restructuring Red Flags
- Frequent changes - May obscure performance
- Combining declining segments - Hiding weakness
- Timing around issues - Coincides with problems
- Reduced disclosure - Less transparency
- Changed metrics - Different KPIs reported
Tracking Segment Trends
Quarterly Progression
| Metric | Q1 | Q2 | Q3 | Q4 | Trend |
|---|
| Revenue | | | | | |
| Growth | | | | | |
| Margin | | | | | |
Year-over-Year Comparison
| Segment | Prior Year | Current | Change |
|---|
| Segment A | $X | $Y | Z% |
| Segment B | $X | $Y | Z% |
Inter-Company Comparison
Peer Benchmarking
Compare across competitors:
- Segment mix composition
- Relative growth rates
- Margin comparison
- Asset efficiency
Apples-to-Apples Considerations
| Factor | Adjustment Needed |
|---|
| Segment Definition | May differ by company |
| Cost Allocation | Different methodologies |
| Transfer Pricing | Intersegment policies |
| Consolidation | Elimination methods |
Analysis Tips
-
Read segment footnotes: Detailed policies and changes disclosed.
-
Track restructuring: Segment changes may signal strategy shifts.
-
Calculate margins yourself: Verify reported figures.
-
Watch mix shifts: Revenue composition reveals priorities.
-
Consider seasonality: Quarterly patterns affect segments differently.
-
Compare to guidance: Management targets by segment.
Use Cases
- Investment analysis: Understand business composition
- Valuation: Sum-of-parts analysis
- Due diligence: Segment-level performance
- Competitive intelligence: Compare segment positions
- Strategic analysis: Identify growth drivers
