IBM has reported third-quarter 2025 (Q3 2025) revenue of $16.3bn, reflecting a 9% year-on-year increase, compared to $14.9bn in the same period last year.
Net income for the reported period ended 30 September 2025 reached $1.7bn, compared to net loss of $330m in the third quarter of 2024 (Q3 2024). Gross profit stood at $9.3bn, compared to $8.4bn a year earlier.
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IBM generated $3.1bn in net cash from operating activities in Q3 2025, an increase of $200m compared to the same period of the previous year.
Free cash flow was reported at $2.4bn for the quarter, an increase of $300m over the previous year.
Segment results show software revenue at $7.2bn, up 10%. Hybrid cloud, including Red Hat, increased by 14%.
Automation revenue grew by 24%, while data revenue rose 8%, and transaction processing declined 1%.
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By GlobalDataConsulting revenue reached $5.3bn, a 3% rise, with intelligent operations up 5%, and strategy and technology up 2%.
Infrastructure revenue totalled $3.6bn, marking a 17% gain. This was driven by hybrid infrastructure’s 28% increase, including IBM Z up 61%, and distributed infrastructure up 10%.
Cash, restricted cash, and marketable securities at the end of the third quarter totalled $14.9bn. IBM’s debt reached $63.1bn, including $11.3bn in IBM Financing debt, up $8.1bn since year-end 2024.
The company returned $1.6bn to shareholders through dividends in the quarter.
IBM chairman, president, and CEO Arvind Krishna said: “This quarter we accelerated performance across all of our segments, and again exceeded expectations for revenue, profit and free cash flow.
“Clients globally continue to leverage our technology and domain expertise to drive productivity in their operations and deliver real business value with AI.”
For the first nine months of 2025, net cash from operating activities totalled $9.2bn, matching last year’s figure, while free cash flow reached $7.2bn, up $600m.
IBM now projects constant currency revenue growth above 5% for the year. The forecast for full-year free cash flow is approximately $14bn.
Recently, IBM and Groq partnered to give businesses direct access to GroqCloud inference through the watsonx Orchestrate.
