International Business Machines Corp

Latest Results (03.09.2025):

International Business Machines Corp reported strong financial results for the second quarter of 2025, surpassing expectations in revenue, profitability, and cash flow. The company's robust performance was driven by growth in software and infrastructure segments, continued advancements in artificial intelligence, and strategic acquisitions, underscoring the resilience and strength of its business model.

Revenue Growth

In Q2 2025, International Business Machines Corp achieved $17.0 billion in revenue, reflecting a growth of over 5% at constant currency. The software division saw an 8% increase, with annual recurring revenue reaching $22.7 billion, up 10% year-over-year. Red Hat alone contributed a 14% growth, highlighting strong demand for hybrid cloud solutions.

Profitability and Earnings

The company reported an Adjusted EBITDA of $4.7 billion and an operating pre-tax income of $3.2 billion. Operating earnings per share stood at $2.80, with the first half of the year generating $4.8 billion in free cash flow, marking the highest first-half free cash flow margin in many years.

Software and Infrastructure Performance

Software revenue grew by 8%, driven by high-value, annual recurring revenue and strong performance from Red Hat and HashiCorp. The infrastructure segment increased by 11%, powered by the successful launch of the new z17 mainframe, which enhances hybrid cloud and AI capabilities.

Advancements in Artificial Intelligence

International Business Machines Corp continued to strengthen its AI portfolio, with the GenAI business reaching over $7.5 billion. Innovations such as watsonx Orchestrate and watsonx.data were introduced, and strategic partnerships with major technology firms expanded the company's AI ecosystem, positioning IBM as a leader in AI-driven transformation.

Free Cash Flow Outlook

The company raised its expectations for free cash flow for the year, now anticipating it to exceed $13.5 billion. This upward revision reflects confidence in continued revenue growth and efficient capital management, supporting sustainable and profitable long-term growth.