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International Business Machines (IBM) Q1 2025 earnings results (first quarter 2025)
10-Q filed Apr 24, 2025
International Business Machines (IBM) reported revenue of $14.5B for the first quarter 2025 (Q1 2025), +0.5% from a year earlier and -17% from the quarter before. Operating margin was 8.0%, net earnings $1.1B (7.3% of revenue).
International Business Machines, Q1 2025: revenue $14.5B (+0.5% year over year), operating margin 8.0%, net earnings $1.1B, operating cash flow $4.4B. The chart follows the revenue to costs, profit and cash.
| Q1 2025 | Amount | Q/Q | Y/Y |
|---|---|---|---|
| Revenue | $14.5B | -17% | +0.5% |
| Gross profit | $8.0B | -23% | +4% |
| Operating profit | $1.2B | -65% | +5% |
| Net earnings | $1.1B | -64% | -34% |
| Operating cash flow | $4.4B | +0.9% | +5% |
| Free cash flow | $4.1B | +2% | +5% |
What changed
Revenue was $14.5B in Q1 2025, up 1% year over year and down 17% from the previous quarter. Services was the largest line at 50% of revenue. Sales added $0.27B year over year (up 4%), 343% of the total change. Services declined 3%.
Gross margin was 55.2%, up 1.7 points from a year earlier. Operating profit was $1.2B, a 8.0% margin (up 0.3 points year over year). Of the extra revenue versus a year earlier, 70% reached operating profit, above the 8% margin then. Operating expenses grew 4% against revenue growth of 1%. Net earnings were $1.1B, down 34% year over year. The effective tax rate was 8.9%.
Operating cash flow was $4.4B (up 5% year over year), 414% of net earnings. Non-cash charges added back $1.2B of depreciation and amortization and $0.40B of share-based compensation. Working capital and other items added $1.7B. Capital expenditures of $0.24B left free cash flow of $4.1B.
Questions
What was International Business Machines' revenue in the first quarter 2025?
International Business Machines (IBM) reported revenue of $14.5B for the first quarter 2025 (Q1 2025), +0.5% from a year earlier and -17% from the quarter before.
Was International Business Machines profitable in the first quarter 2025?
Operating profit was $1.2B (8.0% of revenue) and net earnings $1.1B.