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Mar 31
IBM Q1 2025 Earnings Report
IBM reported solid results driven by growth in Software and margin expansion.
Key Takeaways
IBM exceeded expectations in Q1 2025 with strong revenue, high free cash flow, and continued momentum in generative AI demand.
Revenue reached $14,541,000,000 driven by strong Software performance.
GAAP EPS was $1.12 while adjusted EPS came in at $1.60.
Net income was $1,055,000,000, down from the prior year due to one-time tax benefits in 2024.
Free cash flow totaled $1,962,000,000, supporting acquisitions and shareholder returns.
IBM
IBM
IBM Revenue by Segment
Revenue by Segment
Software Revenue
CapyFin.comConsulting Revenue
CapyFin.comInfrastructure Revenue
CapyFin.comFinancing Revenue
CapyFin.com Forward Guidance
IBM reaffirmed its full-year revenue growth and free cash flow guidance, supported by Software strength and AI momentum.
Positive Outlook
- Maintains full-year constant currency revenue growth of at least 5%.
- Expects approximately $13.5 billion in free cash flow for FY25.
- Q2 revenue projected between $16.4 billion and $16.75 billion.
- Currency expected to be a 1 to 1.5 point tailwind for the year.
- Strong demand continues for generative AI offerings.
Challenges Ahead
- Macroeconomic environment remains fluid and uncertain.
- Consulting revenue declined 2% year-over-year.
- Infrastructure revenue fell 6% compared to last year.
- Net income dropped 34% year-over-year due to prior tax benefits.
- Total debt rose by $8.3 billion year-to-date to $63.3 billion.
Revenue & Expenses
Visualization of income flow from segment revenue to net income