IBM reported a net income of $5.6bn for the fourth quarter of 2025 (Q4 2025), representing a 93.1% increase from $2.9bn in the same period of the previous year.

The company’s revenue for the fourth quarter ended 31 December 2025 was $19.7bn, marking a 12% increase compared to $17.6bn in Q4 2024.

For the full year 2025, the company’s net income reached $10.6bn, a 76.7% increase compared to $6bn in 2024.

IBM’s revenue for the full year 2025 reached $67.5bn, an 8% rise compared to $62.7bn in the previous year.

Its net cash from operating activities in 2025 was $13.2bn, with a free cash flow of $14.7bn.

The company anticipates more than 5% revenue growth at constant currency for 2026, with a currency tailwind expected to add about half a point to growth. Free cash flow is projected to rise by approximately $1bn year-over-year.

In the fourth quarter, IBM’s Software segment reported revenues of $9bn, marking a 14% increase, or 11% at constant currency compared to the previous year quarter. This growth was driven by several key areas, with Hybrid Cloud (Red Hat) growing by 10%, Automation seeing an 18% increase, Data surging by 22%, and Transaction Processing rising by 8%.

The Consulting segment achieved revenues of $5.3bn, reflecting a 3% growth, or 1% at constant currency. Within this segment, Strategy & Technology experienced a 2% increase, while Intelligent Operations grew by 5%.

IBM’s Infrastructure segment reported revenues of $5.1bn, a 21% increase, or 17% at constant currency. This was largely fueled by a 29% rise in Hybrid Infrastructure, with IBM Z showing a 67% growth.

Distributed Infrastructure saw a 3% increase, while Infrastructure Support experienced a 1% growth.

IBM generated $4bn in net cash from operating activities during the fourth quarter, with free cash flow at $7.6bn. At the end of the quarter, IBM held $14.5bn in cash and marketable securities, with total debt at $61.3bn.

Arvind Krishna, IBM’s chairman, president, and CEO, highlighted the company’s robust performance in 2025, emphasising a 6% revenue growth and $14.7bn in free cash flow, marking significant achievements in IBM’s recent history.

He noted that the company is strategically advancing as a software-led hybrid cloud and AI platform, with software now constituting 45% of its business, up from 25% in 2018. This segment saw a 9% growth, the highest annual rate in IBM’s history, with notable performance in IBM Z in 2025, which increased by 48%.

Krishna stated that IBM’s strategy is aligned with the structural trends in technology investments, focusing on hybrid cloud, AI, and mission-critical infrastructure. These areas are seen as essential platforms for business operations, driving productivity and resilience.

The breadth of IBM’s AI offerings, including its GenAI book of business, is a key differentiator, according to Krishna. The acquisition of Confluent is set to enhance IBM’s hybrid cloud and automation solutions, providing real-time data value.

Meanwhile, IBM’s productivity initiatives are said to have resulted in $4.5bn in annual run-rate savings, enabling further investment in innovation and strategic acquisitions.

Krishna highlighted IBM’s focus on organic innovation, exemplified by Project Bob, an AI-based software development system that enhances developer productivity. He added that strategic partnerships with major tech companies and advancements in quantum computing are further strengthening IBM’s position.

The company is said to be on track to deliver a large-scale, fault-tolerant quantum computer by 2029.

Krishna said: “In the fourth quarter, we delivered strong revenue growth, with double-digit Software performance. Additionally, Infrastructure continued its double-digit revenue growth with the robust adoption of the next generation of our mainframe platform.

“Our generative AI book of business now stands at more than $12.5bn. This capped a strong 2025 for IBM where we exceeded expectations for revenue, profit and free cash flow.

“We enter 2026 with momentum and in a position of strength, giving us confidence in our full-year expectations of more than 5% constant currency revenue growth and an increase of about $1bn in year-over-year free cash flow.”