- IBM (IBM, Financial) reported Q2 2025 revenue of $17.0 billion, marking an 8% increase year-over-year.
- The company's generative AI business surged to $7.5 billion, indicating strong momentum in AI adoption.
- IBM increased its 2025 full-year free cash flow guidance to exceed $13.5 billion.
IBM (IBM) has announced robust second-quarter results for 2025, with revenue climbing to $17.0 billion, an 8% rise from the previous year and a 5% increase at constant currency. The company continues to demonstrate strong performance across its key segments. Software revenues rose by 10%, infrastructure reported a 14% increase, and consulting grew by 3%.
One of the standout highlights is IBM's generative AI business, which accelerated significantly to over $7.5 billion, reflecting increased adoption of AI among enterprise clients. This growth in AI is complemented by a notable 16% increase in Red Hat revenue, underscoring the success of IBM's hybrid cloud strategy.
IBM's gross profit margin expanded by 200 basis points to 58.8% on a GAAP basis and 230 basis points to 60.1% on a non-GAAP basis. This margin expansion contributed to a 17% increase in pre-tax income and an 18% rise in earnings per share, reaching $2.31.
The company reported a year-to-date free cash flow of $4.8 billion, which is up $0.3 billion year-over-year. IBM has increased its full-year free cash flow guidance to over $13.5 billion, maintaining its revenue growth outlook of at least 5% at constant currency.
In terms of infrastructure, IBM Z revenue skyrocketed by 70%, suggesting a new mainframe cycle is underway. However, this was partially mitigated by a 15% decline in distributed infrastructure revenue.
IBM remains committed to shareholder returns, declaring a quarterly dividend of $1.68 per share, continuing their long streak of consecutive quarterly dividends since 1916. The company's financial position remains strong, with $15.5 billion in cash and marketable securities, providing flexibility for future strategic investments.
