IBM Tops Q1 2025 Expectations with Strong Software Growth

Published 2 hours agoIBM

IBM Tops Q1 2025 Expectations with Strong Software Growth

IBM reported impressive first-quarter 2025 results, surpassing market expectations. The tech giant achieved an adjusted earnings per share (EPS) of $1.60, compared to the anticipated $1.40, while revenue reached $14.54 billion, above the forecasted $14.4 billion, according to Insider Monkey.

IBM's revenue saw a slight increase of approximately 0.5% to 2% year-over-year, driven by robust performance in its software segment, which grew 9% in constant currency terms and hit about $6 billion. This segment accounts for roughly 45% of IBM's operations, benefiting from an 80% recurring revenue rate. Notably, its hybrid cloud business, spearheaded by Red Hat, soared by 13% for its seventh consecutive quarter of mid-teens percentage growth.

Looking ahead, IBM maintains its full-year guidance for at least 5% revenue growth on a constant currency basis and aims for $13.5 billion in free cash flow. CEO Arvind Krishna expressed optimism in technology's long-term potential and global economic growth. The company remains committed to expanding its generative AI operations, now boasting a business pipeline exceeding $6 billion, despite some market reservations that resulted in a marginal decline in its stock during after-hours trading.

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