IBM(US:IBM) ZACKSยท2025-11-21 17:31Core Viewpoint - IBM reported strong third-quarter 2025 results, surpassing earnings estimates with solid revenue growth driven by demand for hybrid cloud and AI solutions [3][4]. Financial Performance - Net income on a GAAP basis was $1.74 billion or $1.84 per share, a significant improvement from a net loss of $0.33 billion or a loss of $0.36 per share in the prior year [5]. - Non-GAAP net income from continuing operations was $2.65 per share, up from $2.30 in the previous year, beating the Zacks Consensus Estimate by 21 cents [6]. - Total revenues increased to $16.33 billion from $14.97 billion, with a year-over-year growth of 7% on a constant currency basis, exceeding the consensus estimate of $16.1 billion [7]. Segment Performance - Software segment revenues rose to $7.21 billion, driven by hybrid cloud (up 12%), automation (22%), and data (7%), although it fell short of the estimate of $7.35 billion [9]. - Consulting segment revenues increased to $5.32 billion, surpassing the estimate of $5.19 billion, with segment profit rising to $686 million [10]. - Infrastructure segment revenues grew to $3.56 billion, reflecting higher demand for hybrid and distributed infrastructure, with segment profit increasing to $644 million [11]. - Financing segment revenues improved to $200 million, with segment profit up to $123 million [12]. Cash Flow & Liquidity - IBM generated $3.08 billion in cash from operations, compared to $2.88 billion in the prior year, with free cash flow at $2.37 billion, up from $2.06 billion [13]. - As of September 30, 2025, the company had $11.57 billion in cash and cash equivalents against $55.17 billion of long-term debt [13]. Outlook - For 2025, IBM expects revenue growth of more than 5% on a constant currency basis, with free cash flow projected to be around $14 billion [14]. - Estimates for the stock have trended upward, indicating a promising outlook, with a Zacks Rank of 3 (Hold) suggesting an in-line return in the coming months [15][17].