IBM, headquartered in Armonk, New York, reported robust second-quarter results for 2025, underscoring its role as a global leader in software, infrastructure, and consulting services.
The company posted $17 billion in revenue, up 8% year-on-year, driven by double-digit growth in software and infrastructure. This was above the consensus estimate of $16.59 billion. Adjusted earnings per share were recorded at $2.80, while analysts had expected $2.65.
Gross profit margin rose to 58.8%, while operating margin reached 60.1%, reflecting an improved portfolio mix and productivity.
“We once again exceeded expectations for revenue, profit and free cash flow in the quarter. IBM remains highly differentiated in the market because of our deep innovation and domain expertise, both crucial [to] helping clients deploy and scale AI. Our generative AI book of business continues to accelerate and now stands at more than $7.5 billion," said Arvind Krishna, IBM chairman, president and chief executive officer. "With our strong first-half performance, we are raising our full-year outlook for free cash flow, which we expect to exceed $13.5 billion.”
IBM controls a wide array of enterprise technologies, including hybrid cloud, automation, and mainframe systems.
Software revenue climbed 10% to $7.4 billion, with standout gains in Hybrid Cloud and Automation, both up 16%.
Infrastructure revenue surged 14% to $4.1 billion, led by a 70% spike in IBM Z sales.
Consulting revenue rose modestly by 3%, while Distributed Infrastructure declined 15%.
The company generated $2.8 billion in free cash flow for the quarter, contributing to a year-to-date total of $4.8 billion.
Net cash from operations reached $6.1 billion, supporting continued investment and shareholder returns.
Buoyed by a strong first-half performance, IBM raised its full-year guidance.
It now expects constant currency revenue growth of at least 5% and free cash flow to exceed $13.5 billion.
The company’s generative AI business has grown to over $7.5 billion, reflecting rising enterprise demand for scalable AI solutions.
Executives cited innovation and domain expertise as key differentiators in helping clients deploy and expand AI capabilities.
IBM’s board declared a quarterly dividend of $1.68 per share payable on 10 September, continuing a streak of uninterrupted quarterly payouts since 1916.
The company returned $1.6 billion to shareholders in Q2 and ended the quarter with $15.5 billion in cash and marketable securities.
At the time of writing, IBM Common Stock (NYSE: IBM) was trading at $282.01 at the close, up 5 cents (0.018%) today. In after-hours trade it was $266.90, down $15.11 (5.36%). IBM has a market cap of around $262.1 billion.
All financials in U.S. dollars.
