Solutions revenue in the second quarter of 2012 was $44.3 million, an increase of $8.4 million or 23% compared with the second quarter of 2011. As a percentage of total revenue, Solutions revenue was 42% compared with 37% a year ago. The continued improvement in our business mix was mainly being driven by revenue growth from our more profitable healthcare projects. Staffing revenue in the quarter remained flat at $62.4 million.
Second quarter revenue from IBM, our largest customer, was $29 million compared with $29.6 million in the second quarter 2011. As a percent of total revenue, revenue from IBM decreased to 27.2% in the 2012 second quarter compared with 30.1% of total revenue in the 2011 second quarter.
Revenue from our European operations was $16.8 million, a 3% decrease from the $17.3 million recorded in last year’s second quarter. The effect of foreign currency fluctuations during the second quarter of 2012 decreased consolidated revenue by approximately $1.9 million or 1.8%. At a local currency basis, our European revenue increased by 7.8% compared with the 2011 second quarter.
Direct costs as a percentage of revenue were at 78.5% in the second quarter compared with 78.9% in the second quarter of 2011. SG&A expenses as a percent of revenue decreased to 15.7% from 16.3% in the second quarter of 2011.The billable travel expenses included in the second quarter 2012 revenue and direct costs are $3,658,000. The billable travel expenses included in the second quarter 2011 revenue and direct costs were $3,079,000. Second quarter operating income grew to $6.1 million, an increase of $1.5 million or 31% year-over-year reflecting the favorable effect of operating leverage and our higher margin solutions work. Compared with the trailing first quarter of 2011, the second quarter operating income increased $544,000 or 9.7%. Operating margin in the second quarter increased to 5.8% of revenue, a 100 basis point improvement from last year’s 4.8% and 40 basis points higher than the 5.4% operating margin in first quarter 2012. The year-over-year increase was primarily due to the increase in the Solutions business and our sales mix and the additional operating leverage. Read the rest of this transcript for free on seekingalpha.com