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Jun 30, 2025
IBM Q2 2025 Earnings Report
IBM reported strong revenue and profit growth in Q2 2025, driven by software and infrastructure segments.
Key Takeaways
IBM exceeded expectations in Q2 2025 with robust revenue growth, margin expansion, and strong free cash flow, boosted by accelerating generative AI demand.
Revenue rose to $17.0B, driven by software and infrastructure growth
Net income increased to $2.2B with EPS of $2.31
Free cash flow improved to $2.8B for the quarter
Generative AI business now exceeds $7.5B in total bookings
Forward Guidance
IBM raised its full-year outlook, expecting free cash flow to exceed $13.5B, supported by AI demand and margin expansion.
Positive Outlook
- Raised full-year free cash flow guidance to exceed $13.5B
- Strong software and infrastructure revenue momentum
- Continued growth in generative AI demand
- Margin expansion driven by portfolio mix and productivity
- Strong cash position of $15.5B in cash and marketable securities
Challenges Ahead
- Consulting revenue growth remained modest
- Financing revenue slightly declined year over year
- Operating cash flow decreased from last year
- Debt increased to $64.2B, up $9.2B year to date
- Economic uncertainties may impact client spending
Historical Earnings Impact
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Avg. Return Before/After Earnings
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