International Business Machines Corp.

Strong Q1 Revenue Performance: IBM reported $14.5 billion in revenue for Q1 2025, demonstrating a 2% growth at constant currency. Software revenue increased by 9%, significantly contributing to the overall growth, particularly driven by strong performances in automation (up 15%), Red Hat (up 13%), and data (up 7%).

Consulting and Infrastructure Challenges: Consulting revenue was flat, with some negative impact from discretionary spending reductions related to government contracts (Doge-related initiatives). Infrastructure revenue decreased by 4%, influenced by the end of the z16 program, highlighting potential volatility in this segment as it transitions to the new z17 system.

Firm Full-Year Guidance: IBM maintains its full-year revenue growth target of at least 5% and expects to generate over $13.5 billion in free cash flow. This guidance remains based on a solid foundation of recurring revenue (80% in software) and is supported by ongoing infrastructure improvements and the successful integration of recent acquisitions, notably HashiCorp.