IBM reported a strong fourth quarter and full year 2025, driven by robust double-digit growth in Software and Infrastructure, exceeding expectations for revenue, profit, and free cash flow. The company enters 2026 with momentum, confident in its ability to achieve significant revenue growth and a substantial increase in free cash flow.
Fourth-quarter revenue of $19.7 billion, up 12 percent year-over-year (9 percent at constant currency).
positiveFull-year revenue of $67.5 billion, up 8 percent year-over-year (6 percent at constant currency).
positiveFull-year profit and free cash flow growth exceeded expectations, with free cash flow up $2.0 billion year-to-year.
positiveSoftware revenue grew 14% in Q4 (11% constant currency) and 11% for the full year (9% constant currency).
positiveInfrastructure revenue grew 21% in Q4 (17% constant currency) and 12% for the full year (10% constant currency).
positiveGAAP Gross Profit Margin improved by 110 bps in Q4 and 150 bps for the full year.
positiveNet cash from operating activities was down $0.3 billion year-to-year for both the fourth quarter and the full year.
attentionInventories increased to $1.220 billion at year-end 2025, up from $1.289 billion in the prior year, indicating a slight decrease but still a significant level.
attentionTotal debt, including IBM Financing debt, increased by $6.3 billion since year-end 2024 to $61.3 billion.
attentionConsulting revenue growth was modest at 3% in Q4 (1% constant currency) and 2% for the full year (flat at constant currency).
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
| Segment | Current | Prior Yr | YoY | % Total | CC |
|---|---|---|---|---|---|
Software | N/A | — | — | — | +11.0% |
Consulting | N/A | — | — | — | +1.0% |
Infrastructure | N/A | — | — | — | +10.4% |
Financing | N/A | — | — | — | +2.5% |
| Total Revenue | $0.00M | — | — | 100.0% | — |
Segment performance shows business unit health and growth drivers. Constant currency (CC) removes FX impact for like-for-like comparison.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
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.
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