IBM has reported its financial results for the first quarter of 2025, reflecting strength across its business segments. The company's revenue reached $14.5 billion, representing a 1% increase from the previous year. In constant currency terms, the growth was 2%. Segments such as software saw a 7% revenue hike, with an increase to 9% at constant currency, demonstrating solid performance in the sector.
Arvind Krishna, IBM's Chairman, President, and CEO, stated, "We exceeded expectations for revenue, profitability and free cash flow in the quarter, led by strength across our Software portfolio. There continues to be strong demand for generative AI and our book of business stands at more than $6 billion inception-to-date, up more than $1 billion in the quarter." He expressed confidence in the broader technology landscape and economy, noting the fluid macroeconomic environment but reasserted IBM's forecast for revenue growth and free cash flow for the year.
The company's gross profit margin increased to 55.2% GAAP and 56.6% non-GAAP. James Kavanaugh, IBM's Senior Vice President and Chief Financial Officer, remarked, "Revenue growth, once again led by Software, combined with our productivity initiatives, drove significant gross margin expansion and operating leverage in the quarter."
IBM's cash flow from operating activities totaled $4.4 billion, and the free cash flow was $2.0 billion. The company returned $1.5 billion in dividends to shareholders and invested $7.1 billion in acquisitions, including the acquisition of HashiCorp, indicating a commitment to growth and shareholder value.
In its outlook, IBM expects at least 5% constant currency growth in revenue for the year, with currency tailwinds boosting growth slightly. Expected Q2 revenue is projected to fall between $16.40 billion and $16.75 billion. Full-year free cash flow remains anticipated at approximately $13.5 billion.
In addition to its performance figures, IBM reiterated the risks and forward-looking statements described under the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve several potential risks and uncertainties that could affect IBM's actual performance.
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