Q2 25 EPS
$2.80
BEAT +5.47%
Est. $2.65
Q2 25 Revenue
$16.98B
BEAT +2.32%
Est. $16.59B
vs S&P Since Q2 25
-25.2%
TRAILING MARKET
IBM -11.6% vs S&P +13.6%
Market Reaction
Did IBM Beat Earnings? Q2 2025 Results
IBM delivered a broad-based beat in Q2 2025, with revenue climbing 7.7% year over year to $16.98 billion against a consensus estimate of $16.59 billion, while non-GAAP diluted EPS of $2.80 topped the $2.65 consensus by 5.47%, underlining the company'… Read more IBM delivered a broad-based beat in Q2 2025, with revenue climbing 7.7% year over year to $16.98 billion against a consensus estimate of $16.59 billion, while non-GAAP diluted EPS of $2.80 topped the $2.65 consensus by 5.47%, underlining the company's strongest quarterly execution in recent memory. The single most material driver was a 70% surge in IBM Z mainframe revenue, which powered the Infrastructure segment to $4.14 billion and provided substantial lift to gross margins, with GAAP gross profit margin expanding 200 basis points to 58.8%. Software remained a structural growth engine at $7.39 billion, up 10%, as Red Hat and Automation each grew 16%, though slightly softer organic software momentum triggered a notable share price decline that some analysts characterized as a buying opportunity. IBM's generative AI book of business crossed $7.50 billion on an inception-to-date basis, adding a forward-looking dimension to the results. Management raised its full-year free cash flow outlook to more than $13.50 billion while maintaining its constant currency revenue growth target of at least 5%.
Key Takeaways
- • Software and Infrastructure revenue growth led results
- • Hybrid Cloud (Red Hat) revenue up 16% driven by enterprise hybrid cloud adoption
- • IBM Z mainframe revenue surged 70% on product cycle strength
- • Automation revenue grew 16%
- • Revenue growth, portfolio mix, and ongoing productivity initiatives drove significant margin expansion
- • GAAP gross profit margin expanded 200 basis points to 58.8%
- • Operating (non-GAAP) gross profit margin expanded 230 basis points to 60.1%
IBM YoY Financials
Q2 2025 vs Q2 2024, source: SEC Filings
IBM Revenue by Segment
With YoY comparisons, source: SEC Filings
“We once again exceeded expectations for revenue, profit and free cash flow in the quarter. IBM remains highly differentiated in the market because of our deep innovation and domain expertise, both crucial in helping clients deploy and scale AI. Our generative AI book of business continues to accelerate and now stands at more than $7.5 billion. With our strong first-half performance, we are raising our full-year outlook for free cash flow, which we expect to exceed $13.5 billion.”
— Arvind Krishna, Q2 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% |