Q1 25 EPS
$1.60
BEAT +12.04%
Est. $1.43
Q1 25 Revenue
$14.54B
BEAT +1.05%
Est. $14.39B
vs S&P Since Q1 25
-27.7%
TRAILING MARKET
IBM +4.1% vs S&P +31.8%
Market Reaction
Did IBM Beat Earnings? Q1 2025 Results
IBM kicked off 2025 on solid footing, posting first-quarter earnings that cleared Wall Street expectations on both the top and bottom lines. Operating diluted EPS came in at $1.60, beating the $1.43 consensus by 12.04%, while revenue of $14.54 billio… Read more IBM kicked off 2025 on solid footing, posting first-quarter earnings that cleared Wall Street expectations on both the top and bottom lines. Operating diluted EPS came in at $1.60, beating the $1.43 consensus by 12.04%, while revenue of $14.54 billion edged past the $1.43 billion estimate by 1.05%, representing a modest 0.6% gain year over year. The primary engine behind the upside was a resurgent Software segment, which grew 7% to $6.34 billion, with Red Hat surging 12% and Automation up 14%, more than offsetting a 6% decline in Infrastructure and a 2% dip in Consulting. GAAP gross margin expanded 170 basis points to 55.2%, reflecting a favorable revenue mix shift toward higher-margin software. IBM's generative AI book of business also crossed $6.00 billion inception-to-date, adding over $1.00 billion in the quarter alone, underscoring accelerating enterprise adoption. The company maintained its full-year outlook for at least 5% constant-currency revenue growth and approximately $13.50 billion in free cash flow, while introducing Q2 revenue guidance of $16.40 billion to $16.75 billion.
Key Takeaways
- • Strong Software revenue growth of 7% (9% at constant currency) led by Red Hat, Automation, and Data
- • Significant gross margin expansion of 170 basis points GAAP and 190 basis points operating
- • Productivity initiatives driving operating leverage
- • Free cash flow of $2.0 billion, up $0.1 billion year over year
- • Generative AI demand continuing to drive book of business growth
IBM YoY Financials
Q1 2025 vs Q1 2024, source: SEC Filings
IBM Revenue by Segment
With YoY comparisons, source: SEC Filings
“We exceeded expectations for revenue, profitability and free cash flow in the quarter, led by strength across our Software portfolio. There continues to be strong demand for generative AI and our book of business stands at more than $6 billion inception-to-date, up more than $1 billion in the quarter.”
— Arvind Krishna, Q1 2025 Earnings Press Release
IBM Earnings Trends
IBM vs Market 30 Day Price Reactions
30-day stock return vs benchmark after each earnings
IBM EPS Trend
Earnings per share: estimate vs actual
IBM Revenue Trend
Quarterly revenue: estimate vs actual
IBM Quarterly Results
5 quarters of earnings data
| Quarter | EPS Est. | EPS Act. | Surprise | Revenue | Rev. Surprise |
|---|---|---|---|---|---|
| Q1 26 | — | $1.91 | — | $15.92B | +1.70% |
| Q4 25 BEAT FY | $4.29 | $4.52 | +5.36% | $19.69B | +2.57% |
| FY Full Year | $11.35 | $11.59 | +2.11% | $67.54B | +0.74% |
| Q3 25 BEAT | $2.45 | $2.65 | +8.31% | $16.33B | +1.45% |
| Q2 25 BEAT | $2.65 | $2.80 | +5.47% | $16.98B | +2.32% |
| Q1 25 BEAT | $1.43 | $1.60 | +12.04% | $14.54B | +1.05% |