Companies /Technology

International Business Machines Corp

NYSE: IBM Information Technology Services
$238.79
â–² $8.92 (+3.88%) today
Markets closed · 4:40am ET

Q4 2025 Earnings

Reported Jan 28, 2026, 4:10pm ET · SEC source
$4.52
Beat +5.40%
EPS · est. $4.29
$19.7B
Beat +2.48%
Revenue · est. $19.2B
−18.7%
Trailing market
IBM vs S&P since report
1 quarter
Consecutive EPS misses

Market Reaction

% change · around the report
−6%−3%0+3%Jan 28Jan 29report 4:10pm ETearnings−0.4%−2.1%
−6%−3%0+3%Jan 28Jan 29earnings−0.4%−2.1%
IBM −2.1%S&P 500 −0.4%
−6%−3%0+3%Jan 28Jan 29report 4:10pm ETearnings−1.0%−2.1%
−6%−3%0+3%Jan 28Jan 29earnings−1.0%−2.1%
IBM −2.1%NASDAQ −1.0%
−12%−8%−4%0Jan 27Feb 5report 4:10pm ETearnings−3.2%−9.3%
−12%−8%−4%0Jan 27Feb 5earnings−3.2%−9.3%
IBM −9.3%S&P 500 −3.2%
−12%−8%−4%0Jan 27Feb 5report 4:10pm ETearnings−7.0%−9.3%
−12%−8%−4%0Jan 27Feb 5earnings−7.0%−9.3%
IBM −9.3%NASDAQ −7.0%
+5.13%
Day of report
−0.82%
Next session
−6.26%
One week
−20.68%
30 days

S&P 500 over the same 30 days: −1.98%.

Did IBM Beat Earnings? Q4 2025 Results

IBM closed out 2025 with a standout fourth quarter, beating Wall Street expectations on both the top and bottom lines as robust demand for software and mainframe infrastructure drove broad-based growth. The company posted Q4 earnings per share of $4.52, clearing the $4.29 consensus estimate by 5.36%, while revenue climbed 12.2% year over year to $19.69 billion, ahead of the $19.19 billion analysts had anticipated. The single most compelling driver behind the outperformance was a 67% surge in IBM Z mainframe revenue, which powered the Infrastructure segment to 21% growth and underscored the durability of IBM's hardware refresh cycle. Software was equally impressive, with Data products up 22% and Automation up 18%, while IBM's generative AI book of business crossed $12.50 billion on an inception-to-date basis, signaling meaningful commercial traction. Operating gross margin expanded 120 basis points to 61.8%, and full-year free cash flow reached $14.73 billion. Looking ahead, IBM expects constant currency revenue growth of more than 5% in 2026, with free cash flow increasing by roughly $1.00 billion year over year.

Key Takeaways
  • Double-digit Software revenue growth led by Data (up 22%) and Automation (up 18%)
  • IBM Z mainframe revenue surged 67% driven by next-generation platform adoption
  • Operating gross profit margin expanded 120 basis points to 61.8%
  • Generative AI book of business exceeded $12.5 billion
  • Portfolio mix shift toward higher-margin Software and Infrastructure

“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. 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.”

IBM CEO, on the earnings call

Forward Guidance & Outlook

For full-year 2026, IBM expects constant currency revenue growth of more than 5%, with currency expected to be about a half-point tailwind to growth at current foreign exchange rates. The company expects full-year free cash flow to increase by about $1 billion year-over-year.

IBM YoY Financials

Q4 2025 vs Q4 2024 · SEC filings Q4 2024 Q4 2025
$0$6.0B$12.0B$18.0B$17.6B$19.7BRevenue$10.4B$11.9BGross Profit$3.9B$4.1BOperating Income$2.9B$5.6BNet Income
$0$6.0B$12.0B$18.0BRevenueGross ProfitOperating IncomeNet Income

IBM Revenue by Segment

Software$9.0B+14.0%
Consulting$5.3B+3.4%
Infrastructure$5.1B+20.6%
Financing$179.0M+5.3%

Figures from SEC filings and company reports. Not investment advice.