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
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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.
Frequently Asked Questions
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.
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.
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.
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.