IBM has announced its second-quarter earnings for 2025, revealing strong financial performance and an optimistic outlook for the remainder of the year. The company reported revenue of $17 billion, marking an 8% increase, or 5% at constant currency. Software revenue saw a 10% rise, while consulting and infrastructure revenues grew by 3% and 14%, respectively.
Arvind Krishna, IBM's chairman, president, and CEO, stated that the company exceeded expectations in revenue, profit, and free cash flow. He highlighted IBM's differentiation in AI deployment as a key factor in their success. "With our strong first-half performance, we are raising our full-year outlook for free cash flow," Krishna said.
James Kavanaugh, IBM's senior vice president and CFO, emphasized the company's innovation across its portfolio as a driver for significant margin expansion and profit growth. "This combination delivered solid free cash flow," he noted.
The software segment achieved revenues of $7.4 billion with notable growth in hybrid cloud and automation services. Consulting revenues reached $5.3 billion with modest gains in strategy and technology services. Infrastructure revenues were reported at $4.1 billion with substantial growth in hybrid infrastructure.
In terms of cash flow, IBM generated net cash from operating activities of $1.7 billion during the quarter but saw a decrease compared to last year. Free cash flow increased to $2.8 billion.
Looking ahead to the full year of 2025, IBM expects constant currency revenue growth of at least 5%, with a positive impact from current foreign exchange rates. The company anticipates exceeding $13.5 billion in free cash flow.
IBM's board approved a quarterly dividend of $1.68 per share payable on September 10th to shareholders recorded by August 8th.
The release also contained forward-looking statements highlighting potential risks such as economic downturns or failures in innovation initiatives that could affect future results.
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