IBM reported its financial results for the fourth quarter of 2025, showing growth across several business segments. The company announced revenue of $19.7 billion for the quarter, an increase of 12 percent compared to the same period last year, and up 9 percent when adjusted for currency fluctuations. Software revenue rose by 14 percent, consulting revenue increased by 3 percent, and infrastructure revenue grew by 21 percent.
“In the fourth quarter, we delivered strong revenue growth, with double-digit Software performance. Additionally, Infrastructure continued its double-digit revenue growth with the robust adoption of the next generation of our mainframe platform. Our generative AI book of business now stands at more than $12.5 billion. This capped a strong 2025 for IBM where we exceeded expectations for revenue, profit and free cash flow,” said Arvind Krishna, IBM chairman, president and chief executive officer. “We enter 2026 with momentum and in a position of strength, giving us confidence in our full-year expectations of more than 5 percent constant currency revenue growth and an increase of about $1 billion in year-over-year free cash flow.”
For the full year 2025, IBM posted total revenue of $67.5 billion—an increase of 8 percent from the previous year—and a gross profit margin (GAAP) of 58.2 percent. The company generated net cash from operating activities totaling $13.2 billion for the year and reported free cash flow at $14.7 billion.
James Kavanaugh, IBM senior vice president and chief financial officer, commented on these results: “2025 put IBM’s durability, resilience and differentiation on display. Our portfolio mix, integrated value and rapid innovation drove higher revenue growth and double-digit profit and free cash flow growth.” He added: “We are excited about our prospects for 2026 as our disciplined execution and unwavering focus on productivity will continue to enable us to invest in the future while returning value to shareholders.”
In segment details for the fourth quarter:
– Software revenues reached $9.0 billion—a rise driven by increases in hybrid cloud (Red Hat), automation solutions, data offerings, and transaction processing.
– Consulting brought in $5.3 billion.
– Infrastructure revenues were $5.1 billion.
– Financing contributed $0.2 billion.
The company ended the quarter with $14.5 billion in cash and marketable securities but saw its total debt rise to $61.3 billion.
IBM’s board approved a quarterly dividend payment of $1.68 per share to be paid on March 10, 2026; this continues a record of consecutive quarterly dividends since 1916.
Looking ahead to full-year 2026 expectations, IBM projects constant currency revenue growth above five percent with an anticipated increase in free cash flow by about $1 billion compared to last year.
The company cautioned that forward-looking statements involve risks related to economic conditions, innovation initiatives, integration challenges from acquisitions or divestitures, cybersecurity concerns—including those tied to AI—and other factors outlined in filings with the U.S. Securities and Exchange Commission.
A conference call discussing these results is scheduled for January 28 at https://www.ibm.com/investor/events/earnings-4q25.
