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International Business Machines (IBM) Q3 2025 earnings results (third quarter 2025)
10-Q filed Oct 23, 2025
International Business Machines (IBM) reported revenue of $16.3B for the third quarter 2025 (Q3 2025), +9% from a year earlier and -4% from the quarter before. Operating margin was 14.9%, net earnings $1.7B (10.7% of revenue).
International Business Machines, Q3 2025: revenue $16.3B (+9% year over year), operating margin 14.9%, net earnings $1.7B, operating cash flow $3.1B. The chart follows the revenue to costs, profit and cash.
| Q3 2025 | Amount | Q/Q | Y/Y |
|---|---|---|---|
| Revenue | $16.3B | -4% | +9% |
| Gross profit | $9.4B | -6% | +11% |
| Operating profit | $2.4B | -6% | — |
| Net earnings | $1.7B | -21% | — |
| Operating cash flow | $3.1B | +81% | +7% |
| Free cash flow | $2.8B | +90% | +9% |
What changed
Revenue was $16.3B in Q3 2025, up 9% year over year and down 4% from the previous quarter. Sales was the largest line at 51% of revenue. Sales added $1.1B year over year (up 15%), 79% of the total change.
Gross margin was 57.3%, up 1.1 points from a year earlier. Operating profit was $2.4B, a 14.9% margin (up 20.3 points year over year). Operating expenses fell 25% while revenue rose 9%. The fastest-growing cost line was Research & development (+11%). Net earnings were $1.7B. The effective tax rate was 28.2%.
Operating cash flow was $3.1B (up 7% year over year), 177% of net earnings. Non-cash charges added back $1.3B of depreciation and amortization and $0.44B of share-based compensation. Working capital and other items used $0.39B. Capital expenditures of $0.26B left free cash flow of $2.8B.
Questions
What was International Business Machines' revenue in the third quarter 2025?
International Business Machines (IBM) reported revenue of $16.3B for the third quarter 2025 (Q3 2025), +9% from a year earlier and -4% from the quarter before.
Was International Business Machines profitable in the third quarter 2025?
Operating profit was $2.4B (14.9% of revenue) and net earnings $1.7B.