v3.25.2
Segments
 6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Segments Segments:
The following tables reflect the results of continuing operations of the company’s segments consistent with the management and measurement system utilized within the company. Performance measurement is based on segment profit. The chief operating decision maker (CODM) considers budget-to-actual results of segment profit, both when evaluating the performance of and allocating resources to each of the segments as well as in developing certain compensation recommendations. The CODM reviews segment revenue, cost and profit information related to each segment, which is included in the tables below, but does not regularly review total assets by segment and therefore, such information is not presented.
Management System Segment View
(Dollars in millions)SoftwareConsultingInfrastructureFinancingTotal
Segments
For the three months ended June 30, 2025:
     
Revenue$7,387 $5,314 $4,142 $166 $17,009 
Segment cost1,190 3,854 1,593 90 6,727 
Other expenses and (income) (1)
3,900 898 1,583 (103)6,278 
Segment profit
$2,296 $562 $965 $179 $4,003 
Revenue year-to-year change9.6 %2.6 %13.6 %(1.7)%8.1 %
Segment profit year-to-year change8.7 %21.3 %47.6 %134.2 %21.1 %
Segment profit margin31.1 %10.6 %23.3 %107.9 %23.5 %
For the three months ended June 30, 2024:
     
Revenue$6,739 $5,179 $3,645 $169 $15,732 
Segment cost1,105 3,816 1,585 86 6,592 
Other expenses and (income) (1)
3,522 899 1,406 6 5,833 
Segment profit
$2,113 $463 $654 $77 $3,306 
Segment profit margin31.3 %8.9 %17.9 %45.3 %21.0 %
(1)Other expenses and (income) by segment primarily includes:
Software – Selling, general and administrative (SG&A) expense, Research and development (R&D) expense, Other income and expense
Consulting – SG&A expense
Infrastructure – SG&A expense, R&D expense, Other expense, Intellectual property and custom development income
Financing – Intercompany financing net other income which reflects IBM Z product cycle dynamics, SG&A expense
Reconciliations to IBM as Reported:
(Dollars in millions)  
For the three months ended June 30:20252024
Revenue:  
Total reportable segments$17,009 $15,732 
Other‒divested businesses(1)0 
Other revenue (1)
(30)38 
Total revenue from continuing operations$16,977 $15,770 
Pre-tax income from continuing operations:  
Total reportable segment profit
$4,003 $3,306 
Amortization of acquired intangible assets(549)(439)
Acquisition-related charges (2)
(26)(36)
Non-operating retirement-related (costs)/income
(25)(98)
Stock-based compensation (3)
(424)(316)
Net interest excluding the Financing segment (343)(218)
Workforce rebalancing charges (3)
(17)(18)
Other‒divested businesses
(20)(4)
Unallocated corporate amounts and other
(2)41 
Total pre-tax income from continuing operations
$2,597 $2,219 
(1)Includes reductions in revenue for the estimated residual value less related unearned income on sales-type leases, which reflects the new z17 launch in June 2025. Refer to note A, “Significant Accounting Policies,” in the company’s 2024 Annual Report for additional information.
(2)2024 includes the impact of foreign exchange derivative contracts entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG. Refer to note 16, "Derivative Financial Instruments," for additional information.
(3)Excludes certain acquisition-related charges.
Management System Segment View
(Dollars in millions)SoftwareConsultingInfrastructureFinancingTotal
Segments
For the six months ended June 30, 2025:     
Revenue$13,722 $10,382 $7,027 $357 $31,489 
Segment cost2,232 7,540 2,957 194 12,923 
Other expenses and (income) (1)
7,347 1,721 2,858 (84)11,842 
Segment profit
$4,143 $1,121 $1,213 $248 $6,725 
Revenue year-to-year change8.6 %0.2 %4.6 %(1.2)%4.7 %
Segment profit year-to-year change14.7 %26.2 %25.7 %47.1 %19.4 %
Segment profit margin30.2 %10.8 %17.3 %69.3 %21.4 %
For the six months ended June 30, 2024:     
Revenue$12,637 $10,365 $6,721 $362 $30,085 
Segment cost2,144 7,689 2,995 186 13,013 
Other expenses and (income) (1)
6,882 1,788 2,761 8 11,439 
Segment profit
$3,612 $888 $965 $168 $5,633 
Segment profit margin28.6 %8.6 %14.4 %46.5 %18.7 %
(1)Other expenses and (income) by segment primarily includes:
Software – SG&A expense, R&D expense, Other income
Consulting – SG&A expense
Infrastructure – R&D expense, SG&A expense, Other expense, Intellectual property and custom development income
Financing – Intercompany financing net other income which reflects IBM Z product cycle dynamics, SG&A expense
Reconciliations to IBM as Reported:
(Dollars in millions)  
For the six months ended June 30:20252024
Revenue:  
Total reportable segments$31,489 $30,085 
Other‒divested businesses
(1)35 
Other revenue (1)
31 111 
Total revenue from continuing operations$31,519 $30,231 
Pre-tax income from continuing operations:
Total reportable segment profit
$6,725 $5,633 
Amortization of acquired intangible assets(1,044)(866)
Acquisition-related charges (2)
(88)(96)
Non-operating retirement-related (costs)/income
(48)(194)
Stock-based compensation (3)
(825)(636)
Net interest excluding the Financing segment (608)(442)
Workforce rebalancing charges (3)
(333)(392)
Other‒divested businesses (4)
(28)235 
Unallocated corporate amounts and other
3 50 
Total pre-tax income from continuing operations
$3,755 $3,293 
(1)Includes reductions in revenue for the estimated residual value less related unearned income on sales-type leases, which reflects the new z17 launch in June 2025. Refer to note A, “Significant Accounting Policies,” in the company’s 2024 Annual Report for additional information.
(2)2024 includes the impact of foreign exchange derivative contracts entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG. Refer to note 16, "Derivative Financial Instruments," for additional information.
(3)Excludes certain acquisition-related charges.
(4)2024 includes a gain from the divestiture of The Weather Company assets.
Other Reportable Segment Items
(Dollars in millions)SoftwareConsultingInfrastructureFinancingTotal
Segments
For the three months ended June 30, 2025:
Depreciation (1) /amortization of non-acquired intangibles
$134 $20 $278 $0 $433 
Interest Income— — — 162 162 
Interest Expense— — — 84 84 
For the three months ended June 30, 2024:
Depreciation (1) /amortization of non-acquired intangibles
$135 $26 $269 $3 $432 
Interest Income— — — 163 163 
Interest Expense— — — 95 95 
(Dollars in millions)SoftwareConsultingInfrastructureFinancingTotal
Segments
For the six months ended June 30, 2025:
Depreciation (1) /amortization of non-acquired intangibles
$255 $40 $544 $2 $842 
Interest Income— — — 338 338 
Interest Expense— — — 173 173 
For the six months ended June 30, 2024:
Depreciation (1) /amortization of non-acquired intangibles
$263 $53 $535 $5 $856 
Interest Income— — — 343 343 
Interest Expense— — — 197 197 
(1)Where several segments share the use of leased or owned assets, a landlord's ownership of these assets is assigned to one segment. While depreciation expense is allocated to each user segment, it is presented consistently with the landlord's ownership; therefore, there will not be a precise correlation between segment profit and the segment depreciation reported above.
Immaterial Items
The resulting gains and (losses) from equity method investments that are attributable to the segments did not have a material effect on the financial results of the segments.