Core Viewpoint - IBM reported strong revenue growth in Q4 2025, driven by significant performance in its software and infrastructure segments, with generative AI business exceeding $12.5 billion [1] Q4 2025 Performance Highlights - Total revenue for Q4 reached $19.7 billion, a 12% increase, with a 9% increase at constant currency [1] - Software business revenue grew by 14%, with a constant currency growth of 11% [1] - Consulting business revenue increased by 3%, with a constant currency growth of 1% [1] - Infrastructure business revenue rose by 21%, with a constant currency growth of 17% [1] - GAAP gross margin was 60.6%, up 110 basis points; non-GAAP operating margin was 61.8%, up 120 basis points [1] Full Year 2025 Performance Highlights - Total revenue for the year was $67.5 billion, an 8% increase, with a 6% increase at constant currency [2] - Software business revenue grew by 11%, with a constant currency growth of 9% [2] - Consulting business revenue increased by 2%, remaining flat year-over-year at constant currency [2] - Infrastructure business revenue rose by 12%, with a constant currency growth of 10% [2] - GAAP gross margin was 58.2%, up 150 basis points; non-GAAP operating margin was 59.5%, up 170 basis points [2] Cash Flow - Operating cash flow generated was $13.2 billion for the year; free cash flow was $14.7 billion [3] - In Q4, operating cash flow was $4 billion, a decrease of $300 million year-over-year; free cash flow was $7.6 billion, an increase of $1.4 billion year-over-year [9] 2026 Outlook - IBM expects revenue growth of over 5% in 2026 at constant currency, with current exchange rates expected to impact revenue growth by half a percentage point [4] - Free cash flow is projected to increase by approximately $1 billion year-over-year in 2026 [5] Segment Performance in Q4 - Software business revenue was $9 billion, a 14% increase, with a constant currency growth of 11% [6] - Consulting business revenue was $5.3 billion, a 3% increase, with a constant currency growth of 1% [6] - Infrastructure business revenue was $5.1 billion, a 21% increase, with a constant currency growth of 17% [7] - Global Financing revenue was $200 million, a 5% increase, with a constant currency growth of 2% [8] Cash Position - As of the end of Q4, IBM held $14.5 billion in cash (including convertible bonds), a decrease of $300 million from the end of 2024 [10]