International Business Machines Corp

Latest Results (20.10.2025):

International Business Machines Corp reported strong second-quarter 2025 earnings, with an 8% increase in revenue to $17.0 billion. The company's software and infrastructure segments led the growth, accompanied by significant margin expansion. IBM also raised its full-year outlook for profit and free cash flow, reflecting robust financial health and continued investment in AI-driven initiatives.

Revenue Growth

IBM achieved revenue of $17.0 billion in Q2 2025, marking an 8% year-over-year increase and 5% growth at constant currency. Software revenues rose by 10%, while infrastructure revenues increased by 14%, contributing significantly to the overall top-line growth.

Profit Margin Expansion

The company's gross profit margin improved to 58.8% (GAAP), up by 200 basis points, and the operating (Non-GAAP) margin reached 60.1%, an increase of 230 basis points. This margin expansion was driven by higher revenue in high-margin segments and ongoing productivity initiatives.

Strong Cash Flow

In Q2 2025, IBM generated net cash from operating activities of $1.7 billion and free cash flow of $2.8 billion. For the first half of the year, net cash from operations totaled $6.1 billion, with free cash flow reaching $4.8 billion. The company also returned $1.6 billion to shareholders through dividends in the quarter.

Segment Performance

Software revenues grew by 10% to $7.4 billion, with Hybrid Cloud (Red Hat) up 16% and Automation up 16%. Consulting revenues saw a modest increase of 3%, while infrastructure revenues surged by 14%, led by a 70% increase in IBM Z. These strong performances across segments underscore IBM's diversified growth strategy.

Full-Year Outlook

IBM has raised its full-year 2025 outlook for free cash flow to exceed $13.5 billion. The company continues to expect constant currency revenue growth of at least 5%, supported by a robust generative AI book of business valued at over $7.5 billion.

Dividend Declaration

The IBM board declared a quarterly cash dividend of $1.68 per common share, continuing a legacy of consecutive quarterly dividends since 1916. This dividend reinforces IBM's commitment to returning value to its shareholders.