AI Takeaway
IBM delivered strong FY2025 results with revenue growing 7.6% to $67.5B and net income surging 75.9% to $10.6B, driven by gross margin expansion to 58.2% and likely boosted by the HashiCorp acquisition, though elevated debt and a current ratio below 1.0 warrant monitoring.
Revenue
$67.53B
++7.62% YoY
EPS (Basic)
$11.36
++73.97% YoY
Gross Margin
58.2%
++1.54% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
IBM grew total revenue 7.6% year-over-year to $67.5B in FY2025, up from $62.8B in the prior year, marking a meaningful acceleration that suggests strong demand across its software and consulting segments, likely aided by the HashiCorp acquisition completed in 2024.
Source: Source: 10-K Income Statement
Gross profit rose 10.5% to $39.3B, with gross margin improving approximately 153 basis points to 58.2% from 56.7% in the prior year. This outpaced revenue growth, indicating a favorable mix shift toward higher-margin software and AI-related offerings.
Source: Source: 10-K Income Statement
Net income surged 75.9% to $10.6B from $6.0B in the prior year, with diluted EPS rising 73.7% to $11.17. This dramatic improvement reflects both operational leverage and potentially significant non-recurring items or reduced restructuring charges compared to the prior period.
Source: Source: 10-K Income Statement
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Upgrade to unlockIBM carries $54.8B in long-term debt, up 9.9% year-over-year, resulting in a debt-to-equity ratio of 3.65x. This elevated leverage limits financial flexibility and increases vulnerability to interest rate changes or economic downturns that could pressure cash flows needed for debt service.
Source: Source: 10-K Balance Sheet
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Upgrade to unlockReported EPS of $4.52 versus the $4.36 analyst consensus — a +3.6% beat for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $67.53B | $62.75B | +7.62% |
Cost of Revenue | $28.24B | $27.2B | +3.82% |
Gross Profit | $39.3B | $35.55B | +10.54% |
Net Income | $10.59B | $6.02B | +75.88% |
EPS (Basic) | $11.36 | $6.53 | +73.97% |
EPS (Diluted) | $11.17 | $6.43 | +73.72% |
R&D Expense | $8.32B | $7.48B | +11.19% |
SG&A Expense | $20.12B | $19.69B | +2.21% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $151.88B | $137.18B | +10.72% |
Current Assets | $36.94B | $34.48B | +7.14% |
Total Liabilities | $119.14B | $109.78B | +8.52% |
Current Liabilities | $38.66B | $33.14B | +16.64% |
Stockholders' Equity | $32.65B | $27.31B | +19.56% |
Cash & Equivalents | $13.59B | $13.95B | -2.58% |
Long-Term Debt | $54.84B | $49.88B | +9.93% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $13.19B | $13.45B | -1.87% |
Investing Cash Flow | $-10.3B | $-4.94B | -108.67% |
Financing Cash Flow | $-3.83B | $-7.08B | +45.91% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 58.2% | 56.7% | +1.54% |
Net Margin | 15.7% | — | — |
ROE | 32.4% | — | — |
ROA | 7.0% | — | — |
Current Ratio | $0.956 | — | — |
Debt to Equity | $3.649 | — | — |
IBM delivered strong Q1 2026 results with revenue of $15.9B (+9.5% YoY) and net income of $1.2B (+15.3% YoY), driven by gross margin expansion to 56.2% and robust operating cash flow growth of 18.3%.
IBM delivered a strong Q1 2024 with net income surging 73.1% YoY to $1.6B on modest 1.5% revenue growth to $14.5B, driven by improved margins and significantly higher operating cash flow.
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IBM's revenue grew 7.6% year-over-year to $67.5B in FY2025, up from $62.8B in the prior year. This growth rate reflects accelerating momentum in IBM's software and AI-related businesses, likely supported by the HashiCorp acquisition.
The standout result in IBM's FY2025 10-K was net income surging 75.9% to $10.6B, with diluted EPS rising to $11.17 from $6.43. Gross margin also expanded to 58.2%, signaling a favorable shift toward higher-margin software and AI offerings, though the current ratio fell below 1.0 and long-term debt rose to $54.8B.
Yes, IBM was highly profitable in FY2025, reporting net income of $10.6B and a net margin of 15.7%. The company also generated $13.2B in operating cash flow, confirming that profitability is backed by real cash generation.
Based on the financial data, key risks include IBM's high leverage with a debt-to-equity ratio of 3.65x and $54.8B in long-term debt, a current ratio below 1.0 indicating near-term liquidity pressure, and integration risks from significant M&A activity reflected in investing outflows more than doubling to -$10.3B. These financial risk signals are notable even without the full risk factor text.
IBM's financial health in FY2025 is mixed: the company shows strong profitability with $10.6B in net income and robust operating cash flow of $13.2B, but carries significant debt of $54.8B (D/E of 3.65x) and a current ratio of 0.956, meaning current liabilities slightly exceed current assets. Investors should weigh IBM's strong earnings power against its elevated leverage when assessing overall financial health.