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Sep 30, 2025
IBM Q3 2025 Earnings Report
IBM reported strong third-quarter 2025 earnings, exceeding expectations for revenue, profit, and free cash flow, driven by accelerated performance across all segments and significant growth in its AI book of business.
Key Takeaways
IBM delivered a robust third-quarter performance in 2025, with total revenue reaching $16.331 billion, a 9% increase year-over-year. The company reported GAAP diluted EPS of $1.84 and non-GAAP diluted EPS of $2.65, alongside a net income of $1.744 billion. All segments showed accelerated growth, contributing to strong free cash flow and an increased full-year outlook.
Total revenue for Q3 2025 was $16.331 billion, up 9% year-over-year (7% at constant currency).
GAAP diluted earnings per share from continuing operations was $1.84, while operating (non-GAAP) diluted EPS was $2.65.
Net cash from operating activities reached $3.1 billion, and free cash flow was $2.4 billion, both showing year-over-year increases.
IBM's generative AI book of business now exceeds $9.5 billion, highlighting strong client adoption of AI technologies.
Revenue by Segment
Forward Guidance
IBM is raising its full-year 2025 outlook for revenue growth and free cash flow, reflecting confidence in its business strength and continued performance acceleration.
Positive Outlook
- Raised full-year outlook for revenue growth.
- Raised full-year outlook for free cash flow.
- Accelerated performance across all segments.
- Strong client leverage of technology and domain expertise.
- Significant growth in the AI book of business, exceeding $9.5 billion.
Challenges Ahead
- No specific negative forward guidance was provided in the report.
- The report does not detail potential macroeconomic headwinds.
- No specific challenges in market competition were highlighted.
- No specific risks related to technological shifts were mentioned.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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