What were the main drivers of revenue growth in the second quarter of 2025?

Revenue growth was primarily driven by the Software and Infrastructure segments. Software revenue saw strong performance across Hybrid Cloud, Automation, and Data offerings, while Infrastructure benefited significantly from the launch and early adoption of the new IBM z17 platform.

How did the HashiCorp acquisition impact IBM's financial results?

The acquisition of HashiCorp, completed in the first quarter of 2025, contributed to the growth in the Software segment's revenue and Automation offerings. It also led to an increase in goodwill and intangible assets on the balance sheet, contributing to the rise in total assets and non-current assets.

What is the outlook for IBM's hybrid cloud and AI strategy?

IBM views its hybrid cloud and AI strategy as central to its future growth. The company continues to invest in R&D, strategic acquisitions, and product innovation, such as the IBM z17 and Power11 platforms, and AI offerings like watsonx, to support this strategy for both its clients and its own operations.

How is IBM managing its debt levels?

IBM's total debt increased by $9.2 billion in the first half of 2025, primarily due to debt issuances to increase financial liquidity and plan for future maturities. The company maintains that its debt levels are managed to support its business investments and capital allocation priorities while maintaining financial flexibility and a strong liquidity position.

IBM 10-Q Quarterly Report Q2 FY2025 — Revenue, Net Income, EPS

Summary

IBM reported a strong second quarter of 2025, with total revenue increasing by 7.7% year-over-year to $16.98 billion, and income from continuing operations rising by 19.8% to $2.19 billion. The company's hybrid cloud and AI strategy continues to be a key driver of growth, particularly within the Software and Infrastructure segments. Software revenue saw a robust 9.6% increase, fueled by strong performance in Hybrid Cloud, Automation, and Data offerings, while Infrastructure revenue surged 13.6%, benefiting from the early success of the new IBM z17 platform. The company also highlighted continued investment in research and development and strategic acquisitions, including HashiCorp, to bolster its AI and hybrid cloud capabilities.

Financial Highlights

49 data points

Beta

Revenue

$16.98B

0.6% Gross Margin

Net Income

$2.19B

0.1% Net Margin

EPS (Diluted)

$2.31

Total Assets

$148.59B

Cash & Equivalents

$11.94B

Free Cash Flow

$1.49B

Financial Statements

Beta

Revenue	$16.98B
Cost of Revenue	$7.00B
Gross Profit	$9.98B
R&D Expenses	$2.10B
SG&A Expenses	$5.03B
Operating Income	$3.25B
Interest Expense	$510.00M
Net Income	$2.19B
EPS (Basic)	$2.36
EPS (Diluted)	$2.31
Shares Outstanding (Basic)	930.81M
Shares Outstanding (Diluted)	947.96M

Key Highlights

1Total revenue grew 7.7% year-over-year to $16.98 billion, with 5.3% growth adjusted for currency.
2Income from continuing operations increased by 19.8% to $2.19 billion, and diluted earnings per share from continuing operations rose 17.9% to $2.31.
3Software segment revenue increased 9.6% to $7.39 billion, driven by Hybrid Cloud, Automation, and Data offerings.
4Infrastructure segment revenue surged 13.6% to $4.14 billion, significantly boosted by the new IBM z17 platform.
5The company completed six acquisitions in the first six months of 2025, including the significant HashiCorp acquisition, to enhance its hybrid cloud and AI strategy.
6Free cash flow increased to $4.8 billion for the first six months of 2025, up from $4.5 billion in the prior-year period.
7Operating (non-GAAP) earnings increased by 16.6% for the quarter and 8.6% for the first six months of the year, demonstrating strong underlying operational performance.

INTERNATIONAL BUSINESS MACHINES CORP Quarterly Report for Q2 Ended Jun 30, 2025

Summary

Financial Highlights

Key Highlights

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