IBM Reports Strong Q3 2025 Results, Raises Outlook

International Business Machines Corporation ( (IBM) ) has released its Q3 earnings. Here is a breakdown of the information International Business Machines Corporation presented to its investors.

International Business Machines Corporation (IBM) is a global technology and consulting company, operating in the information technology sector, known for its extensive portfolio of software, consulting, and infrastructure services, as well as its pioneering work in artificial intelligence (AI).

IBM has reported a robust third-quarter performance for 2025, showcasing acceleration in revenue growth and profitability across all its segments. The company has exceeded expectations in revenue, profit, and free cash flow, prompting an upward revision of its full-year outlook for revenue growth and free cash flow.

Key highlights from the third quarter include a 9% increase in total revenue, reaching $16.3 billion, with software revenue up by 10% and infrastructure revenue soaring by 17%. The company’s gross profit margin improved to 57.3% on a GAAP basis, while operating (non-GAAP) pre-tax income margin rose to 18.6%. IBM’s free cash flow for the year to date stands at $7.2 billion, reflecting strong operational performance.

Segment-wise, IBM’s software division saw a 10% revenue increase, driven by strong growth in hybrid cloud and automation. The infrastructure segment experienced a significant boost, with IBM Z revenue up by 61%. Consulting revenue also grew, albeit at a modest pace of 3%. The company returned $1.6 billion to shareholders in dividends during the quarter, maintaining its long-standing tradition of consistent dividend payments.

Looking ahead, IBM has raised its full-year expectations, now anticipating more than 5% revenue growth at constant currency and approximately $14 billion in free cash flow. This optimistic outlook is supported by the company’s continued focus on innovation and strategic execution in the evolving technology landscape.