company_name (IBM) quarter year International Business Machines Corporation Financial Results Summary
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IBM (IBM) Q4 2025 Financial Results Summary
ARMONK, N.Y., January 28, 2026 — IBM (NYSE: IBM) today announced its fourth-quarter 2025 earnings results, showcasing robust growth in its key segments.
Key Financial Highlights
Fourth-Quarter Results
- Total Revenue: $19.7 billion, up 12% (up 9% at constant currency)
- Software Revenue: $9.0 billion, up 14% (up 11% at constant currency)
- Consulting Revenue: $5.3 billion, up 3% (up 1% at constant currency)
- Infrastructure Revenue: $5.1 billion, up 21% (up 17% at constant currency)
Profitability Metrics
- Gross Profit Margin:
- GAAP: 60.6%, up 110 basis points
- Operating (Non-GAAP): 61.8%, up 120 basis points
Full-Year 2025 Results
- Total Revenue: $67.5 billion, up 8% (up 6% at constant currency)
- Software Revenue: up 11% (up 9% at constant currency)
- Consulting Revenue: up 2% (flat at constant currency)
- Infrastructure Revenue: up 12% (up 10% at constant currency)
- Gross Profit Margin:
- GAAP: 58.2%, up 150 basis points
- Operating (Non-GAAP): 59.5%, up 170 basis points
- Free Cash Flow: $14.7 billion, up 2.0 billion year-over-year
Cash Flow and Balance Sheet
- In Q4, net cash from operating activities reached $4.0 billion, a decrease of $0.3 billion year-over-year.
- Free cash flow for the quarter was $7.6 billion, up $1.4 billion year-over-year.
- The company returned $1.6 billion to shareholders in dividends in Q4.
- At the end of Q4, IBM had $14.5 billion in cash, restricted cash, and marketable securities.
2026 Expectations
- Revenue Growth: Expected to exceed 5% in constant currency.
- Free Cash Flow: Anticipated to increase by approximately $1 billion year-over-year.
Segment Performance Overview
- Software:
- Revenue: $9.0 billion,
- Change YTY: 14%
- Hybrid Cloud (Red Hat): up 10%
- Automation: up 18%
- Data: up 22%
- Consulting:
- Revenue: $5.3 billion,
- Change YTY: 3%
- Strategy & Technology: up 2%
- Intelligent Operations: up 5%
- Infrastructure:
- Revenue: $5.1 billion,
- Change YTY: 21%
- IBM Z: up 67%
- Hybrid Infrastructure: up 29%
Dividend Declaration
The IBM board of directors approved a regular quarterly cash dividend of $1.68 per common share, for stockholders of record on February 10, 2026. This will mark the continuation of consecutive quarterly dividends paid since 1916.
Conclusion
IBM’s fourth-quarter 2025 results reflect a strong performance driven by significant growth in Software and Infrastructure. The company’s focus on generative AI and operational efficiency has yielded positive results, setting a strong foundation for anticipated growth in 2026.
Condensed Consolidated Statements of Income (in millions)
| FULL-YEAR | 2025 | INCOME STATEMENT | Gross | Gross Profit | Pre-tax | Pre-tax Income | Net | Diluted Earnings Per Share | |
|---|---|---|---|---|---|---|---|---|---|
| GAAP from Continuing Operations | $67.5B | $39.3B | 58.2% | $10.3B | 15.3% | $10.6B | -2 | $11.14 | |
| Year/Year | 8%(1) | 11% | 1.5Pts | 78%(3) | 6.1Pts(3) | 76%(2,3) | 74%(2,3) | ||
| Operating (Non-GAAP) | $40.2B | 59.5% | $12.7B | 18.8% | $11.0B | $11.59 | |||
| Year/Year | 11% | 1.7Pts | 13% | 1.0Pts | 14% | 12% |
Condensed Consolidated Balance Sheet (in millions)
| CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) | At December 31, 2025 | At December 31, 2024 |
|---|---|---|
| ASSETS: Current Assets: Cash and cash equivalents | $13,587 | $13,947 |
| Restricted cash | 54 | 214 |
| Marketable securities | 830 | 644 |
| Notes and accounts receivable – trade, net | 8,112 | 6,804 |
| Short-term financing receivables, net Held for investment, net | 7,344 | 6,259 |
| Held for sale | 1,131 | 900 |
| Other accounts receivable, net | 1,052 | 947 |
| Inventories | 1,220 | 1,289 |
| Deferred costs | 1,084 | 959 |
| Prepaid expenses and other current assets | 2,530 | 2,520 |
| Total Current Assets | 36,944 | 34,482 |
| Property, plant and equipment, net | 5,899 | 5,731 |
| Operating right-of-use assets, net | 3,129 | 3,197 |
| Long-term financing receivables, net | 7,708 | 5,353 |
| Prepaid pension assets | 7,544 | 7,492 |
| Deferred costs | 825 | 788 |
| Deferred taxes | 8,610 | 6,978 |
| Goodwill | 67,717 | 60,706 |
| Intangibles, net | 11,391 | 10,660 |
| Investments and sundry assets | 2,112 | 1,787 |
| Total Assets | $151,880 | $137,175 |
| LIABILITIES: Current Liabilities: Taxes | $2,347 | $2,033 |
| Short-term debt | 6,424 | 5,089 |
| Accounts payable | 4,756 | 4,032 |
| Compensation and benefits | 4,114 | 3,605 |
| Deferred income | 16,101 | 13,907 |
| Operating lease liabilities | 800 | 768 |
| Other accrued expense and liabilities | 4,116 | 3,709 |
| Total Current Liabilities | 38,658 | 33,142 |
| Long-term debt | 54,836 | 49,884 |
| Retirement-related obligations | 9,018 | 9,432 |
| Deferred income | 4,271 | 3,622 |
| Operating lease liabilities | 2,547 | 2,655 |
| Other liabilities | 9,810 | 11,048 |
| Total Liabilities | 119,139 | 109,783 |
| EQUITY: IBM Stockholders’ Equity: Common stock | 63,318 | 61,380 |
| Retained earnings | 155,648 | 151,163 |
| Treasury stock – at cost | -170,605 | -169,968 |
| Accumulated other comprehensive income/(loss) | -15,713 | -15,269 |
| Total IBM Stockholders’ Equity | 32,648 | 27,307 |
| Noncontrolling interests | 93 | 86 |
| Total Equity | 32,740 | 27,393 |
| Total Liabilities and Equity | $151,880 | $137,175 |