IBM has demonstrated a strong performance in its fourth-quarter earnings results for 2025, released on January 28, 2026. The company reported a revenue growth of 12%, with particular strengths in its Software and Infrastructure divisions.
"In the fourth quarter, we delivered strong revenue growth, with double-digit Software performance," said Arvind Krishna, IBM chairman, president, and chief executive officer. He highlighted the impressive adoption of IBM’s next-generation mainframe platform, which contributed to ongoing success across the board.
Total revenue reached $19.7 billion, climbing by 9% when adjusted for constant currency. The growth within Software was particularly notable, increasing by 14%, while Infrastructure surged by a remarkable 21%. Consulting revenues, although growing slower at 3%, still showed positive momentum.
Krishna expressed confidence in IBM's trajectory, stating, "We enter 2026 with momentum and in a position of strength, giving us confidence in our full-year expectations of more than 5 percent constant currency revenue growth and an increase of about $1 billion in year-over-year free cash flow."
Looking back over the full year, IBM's earnings report reflects a net cash from operating activities of $13.2 billion and a free cash flow of $14.7 billion.
"2025 put IBM's durability, resilience, and differentiation on display. Our portfolio mix, integrated value, and rapid innovation drove higher revenue growth and double-digit profit and free cash flow growth," said James Kavanaugh, IBM senior vice president and chief financial officer.
Kavanaugh highlighted the importance of productivity in maintaining IBM's growth momentum heading into 2026. "We are excited about our prospects for 2026 as our disciplined execution and unwavering focus on productivity will continue to enable us to invest in the future while returning value to shareholders," he added.
The detailed breakdown of revenues in the fourth quarter showed varying growth across segments. The Infrastructure sector alone generated $5.1 billion in revenue, a 21% increase, reflecting a 29% rise in Hybrid Infrastructure and a staggering 67% growth in IBM Z systems.
On the Software side, the segment recorded $9.0 billion in revenues, with significant contributions from Automation and Data sectors, which experienced growth rates of 18% and 22%, respectively.
Consulting revenues amounted to $5.3 billion, with subcategories like Intelligent Operations achieving a 5% increase, showcasing the diverse avenues of growth within IBM's operational structure.
As IBM heads into 2026, expectations are high. The company anticipates full-year free cash flow to increase by approximately $1 billion year-over-year, with constant currency revenue growth projected at over 5%. Factors like favorable foreign exchange rates are expected to contribute positively, giving IBM a competitive edge in a challenging market.
