IBM Reports 9% Revenue Growth in Q3 2025, Reaching $16.3 Billion

IBM (NYSE: IBM) has announced its financial results for the third quarter of 2025, reporting a 9% year-over-year revenue increase to $16.3 billion, compared to $14.9 billion in the same period last year.

The company achieved a net income of $1.7 billion for the quarter ending September 30, 2025, a significant turnaround from the $330 million net loss reported in Q3 2024. Gross profit also rose to $9.3 billion, up from $8.4 billion a year earlier.

IBM generated $3.1 billion in net cash from operating activities during the quarter, reflecting a $200 million increase compared to the same period in 2024. Free cash flow for Q3 2025 was $2.4 billion, up $300 million year-over-year.

Segment Highlights:

• Software: Revenue reached $7.2 billion, a 10% increase, with hybrid cloud (including Red Hat) growing by 14%. Automation revenue surged 24%, while data revenue rose 8%. Transaction processing saw a slight decline of 1%.
• Consulting: Revenue totaled $5.3 billion, up 3%, driven by a 5% increase in intelligent operations and a 2% rise in strategy and technology.
• Infrastructure: Revenue climbed to $3.6 billion, a 17% increase. Hybrid infrastructure led the growth with a 28% rise, including a 61% surge in IBM Z and a 10% increase in distributed infrastructure.

At the end of the quarter, IBM reported $14.9 billion in cash, restricted cash, and marketable securities. The company’s total debt stood at $63.1 billion, including $11.3 billion in IBM Financing debt, reflecting an $8.1 billion increase since the end of 2024.

IBM returned $1.6 billion to shareholders through dividends during the quarter.

Arvind Krishna, IBM’s chairman, president, and CEO, commented: “This quarter we accelerated performance across all of our segments, and again exceeded expectations for revenue, profit, and free cash flow. Clients globally continue to leverage our technology and domain expertise to drive productivity in their operations and deliver real business value with AI.”

For the first nine months of 2025, IBM reported $9.2 billion in net cash from operating activities, consistent with the prior year, and $7.2 billion in free cash flow, a $600 million increase.

Looking ahead, IBM projects constant currency revenue growth above 5% for the full year and expects free cash flow to reach approximately $14 billion.

In a recent development, IBM partnered with Groq to provide businesses with direct access to GroqCloud inference through the watsonx Orchestrate platform.