NYSE: IBM · IT Consulting & Other Services
IBM
IBM (International Business Machines), incorporated in New York in 1911 and based in Armonk, sells hybrid cloud and AI software, IT consulting, and servers and storage including mainframes. In 2025 Software was its largest segment ($29,962 million of revenue, +10.6%, gross margin 83.5%), followed by Consulting ($21,055 million), Infrastructure ($15,718 million, +12.1%) and Financing ($737 million). Total revenue rose 7.6% to $67,535 million and net income was $10,593 million (diluted EPS $11.17). IBM spun off its managed infrastructure business as Kyndryl on November 3, 2021. It bought HashiCorp in February 2025 and completed the $11.6 billion purchase of Confluent (data streaming) on March 17, 2026.
Last updated
Analysis last edited: October 25, 2026 · Financial data fetched: October 25, 2026 09:41 (SEC EDGAR) · Source 10-K filed: February 24, 2026
Built on10-K FY2025 · filed 2026-02-2410-Q (quarter ended 2026-09-30) · filed 2026-10-22Proxy statement (2026)
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
01
At a glanceFrom SEC data
Eight headline measures, each placed among the companies covered on this site.
- Revenue growthCAGRSmooths out year-to-year swings into "grew X% a year on average." Makes growth pace comparable across companies of very different sizes.
- 4.2%
- Operating marginOperating marginHow many cents of operating profit are left per dollar of revenue. Reflects pricing power and cost structure.
- —
- ROIC minus WACCROIC − WACC spreadThe difference between ROIC and WACC. Consistently positive implies value creation; consistently negative implies value destruction.
- —
- Net debt ÷ EBITDAEBITDAOperating income with D&A added back. A rough proxy for cash-generating power that’s less distorted by capital intensity, depreciation method, or financing/tax differences than net income.
- —
- Cash conversionOperating CF ÷ net income (cash conversion)How much of reported profit shows up as actual cash. 1x or higher means profit is backed by cash.
- 1.25x
- Dividend raisesDividend per shareTotal annual dividend paid per share (sum of all declared payments for the year).
- 4 of 5
- P/E todayP/EShare price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing.
- 21.5x
- Betaβ (beta)How much a stock moves, on average, for a 1% move in the overall market. Above 1 means more volatile than the market, which raises the return shareholders require. This site computes it from about 2.5 years (roughly 130 weeks) of weekly returns, built from Yahoo Finance daily prices, regressed against an S&P 500 ETF (SPY) as the market proxy, then applies the well-known long-run mean-reversion adjustment (0.67 × β + 0.33) as the WACC default.
- 0.90
Higher than 19% of 372 non-financial companies
Average yearly growth over the years shown
Latest fiscal year (FY2025)
Return on capital above (or below) its estimated cost
Below 0 means more cash than debt
Higher than 29% of 349 non-financial companies
Operating cash flow ÷ net income
Years the dividend per share rose, of the last 5
Latest close 2026-11-04; trailing 12 months to 2026-09-30
Above 1 = moves more than the market
Each marker shows where this company sits among the non-financial companies covered on this site, not all listed companies (left = lowest, right = highest). A high position is not automatically good — for net debt ÷ EBITDA, higher means more debt. Details and formulas are in the sections below and in How to read this.
02
Valuation todayFrom SEC data
Price-based measures at the latest close, next to the same measures at the last fiscal year-end.
Share price$256.80close on 2026-11-04
Market cap$240.61B
- P/EP/EShare price ÷ EPS — how many years of current earnings the stock price represents. This site uses the period-end figure as reported in the filing. today
- 21.5x
- P/BP/BShare price ÷ book value per share. Below 1x means the market values the company below its accounting net worth. This site uses the closing price nearest the fiscal year-end and highlights sub-1x readings. today
- 7.4x
- EV/EBITDAEV/EBITDAEnterprise value (≈ market cap + interest-bearing debt − cash) as a multiple of EBITDA — roughly, "how many years of EBITDA to buy the whole company." Lower is generally viewed as cheaper, and it’s more comparable than P/E across companies with different debt loads or depreciation policies. This site excludes noncontrolling interests from the EV calculation. today
- —
- FCF yieldFree cash flow (FCF)Operating CF minus capital expenditures — cash generated by the business after funding its own investment, available for dividends, buybacks, acquisitions, or debt paydown. Acquisitions and securities purchases (also in investing CF) are not subtracted, so FCF can be positive in a year when total investing CF exceeds operating CF. today
- 5.0%
- Dividend yieldDividend per shareTotal annual dividend paid per share (sum of all declared payments for the year). today
- 2.6%
At FY2025 year-end: 26.5x
Earnings: trailing 12 months to 2026-09-30
At FY2025 year-end: 8.5x
Book value at FY2025 year-end
At FY2025 year-end: —
EBITDA for FY2025
At FY2025 year-end: 4.4%
Free cash flow for FY2025
Dividends per share for FY2025
“Today” uses the latest closing price (2026-11-04, Yahoo Finance daily closing prices) and shares outstanding at the last fiscal year-end. The rest of this page — including the financial table and ROIC vs. WACC — uses fiscal year-end prices. These are reference figures, not a judgment of whether the stock is cheap or expensive.
03
What changed since last earningsFrom SEC data
The latest reported quarter against the same quarter a year earlier, the balance sheet against the previous quarter-end, and what management said in its latest earnings release.
Quarter ended Sep 30, 2026.
- Revenue$16.33B → $17.1B (vs. a year earlier)↑ +4.7%$16.33B → $17.1B (vs. a year earlier)
- Net income$1.74B → $2.19B (vs. a year earlier)↑ +25.6%$1.74B → $2.19B (vs. a year earlier)
- Diluted EPS$1.84 → $2.30 (vs. a year earlier)↑ +25.0%$1.84 → $2.30 (vs. a year earlier)
- Cash$7.17B → $9.23B (vs. previous quarter-end)↑ +28.7%$7.17B → $9.23B (vs. previous quarter-end)
- Long-term debt$56.21B → $56.8B (vs. previous quarter-end)↑ +1.1%$56.21B → $56.8B (vs. previous quarter-end)
Source: Form 10-Q ↗ (SEC XBRL). Long-term debt is the tagged long-term debt figure and leaves out short-term borrowings.
From the earnings release of Oct 21, 2026.
Management outlook ↑ Raised
Raised full-year free cash flow outlook. Source sentence
Raises outlook for full-year free cash flow
Key changes
Q3 revenue $17.1B, up 5%. Source sentence
Revenue of $17.1 billion, up 5 percent, up 6 percent at constant currency
Software revenue up 8%. Source sentence
Software revenue up 8 percent, up 9 percent at constant currency
GAAP gross margin 56.8%, down 50 basis points. Source sentence
Gross Profit Margin: GAAP: 56.8 percent, down 50 basis points;
Written by AI. A line appears only if its figures and direction match the quoted sentence, which an automatic check confirms. Companies' outlooks are their own and may not be met. Read the release ↗
04
Company profileFrom SEC dataShow
- Legal name
- INTERNATIONAL BUSINESS MACHINES CORP
- Headquarters
- ARMONK, NY
- Incorporated in
- New York
- Fiscal year end
- 12/31
- Exchange & ticker
- NYSE: IBM
- Industry
- IT Consulting & Other Services
- CIK
- 51143
- Website
- https://www.ibm.com/ ↗
Workforce (as of FY2025 year-end)
Employees
273,000
Source: Form 10-K (FY2025) cover page and business description
05
Earnings calendarFrom SEC dataShow
When the company reports each quarter: the quarter-end date, the day results were released, and when the 10-Q or 10-K was filed.
Next report
Q4 FY2026
Quarter end: December 2026. In past years, Q4 results were released 24–29 days after quarter end (Jan 28, 2026; Jan 29, 2025; Jan 24, 2024). No date has been announced in the sources this site uses.
Reporting pattern
- Fiscal year ends around December 31.
- Reports four times a year: three quarterly reports (10-Q) and an annual report (10-K) for Q4.
- Earnings releases came 21–29 days after quarter end over the last 12 quarters.
| Quarter | Quarter ended | Earnings release (8-K) | Report filed (10-Q / 10-K) |
|---|---|---|---|
| Q3 FY2026 | Sep 30, 2026 | Oct 21, 2026 (+21 days) | Oct 22, 2026 10-Q (+22 days) |
| Q2 FY2026 | Jun 30, 2026 | Jul 22, 2026 (+22 days) | Jul 23, 2026 10-Q (+23 days) |
| Q1 FY2026 | Mar 31, 2026 | Apr 22, 2026 (+22 days) | Apr 23, 2026 10-Q (+23 days) |
| Q4 FY2025 | Dec 31, 2025 | Jan 28, 2026 (+28 days) | Feb 24, 2026 10-K (+55 days) |
| Q3 FY2025 | Sep 30, 2025 | Oct 22, 2025 (+22 days) | Oct 23, 2025 10-Q (+23 days) |
| Q2 FY2025 | Jun 30, 2025 | Jul 23, 2025 (+23 days) | Jul 24, 2025 10-Q (+24 days) |
| Q1 FY2025 | Mar 31, 2025 | Apr 23, 2025 (+23 days) | Apr 24, 2025 10-Q (+24 days) |
| Q4 FY2024 | Dec 31, 2024 | Jan 29, 2025 (+29 days) | Feb 25, 2025 10-K (+56 days) |
| Q3 FY2024 | Sep 30, 2024 | Oct 23, 2024 (+23 days) | Oct 30, 2024 10-Q (+30 days) |
| Q2 FY2024 | Jun 30, 2024 | Jul 24, 2024 (+24 days) | Jul 30, 2024 10-Q (+30 days) |
| Q1 FY2024 | Mar 31, 2024 | Apr 24, 2024 (+24 days) | Apr 30, 2024 10-Q (+30 days) |
| Q4 FY2023 | Dec 31, 2023 | Jan 24, 2024 (+24 days) | Feb 26, 2024 10-K (+57 days) |
Source: SEC EDGAR filing history. Release dates are the dates the earnings release was furnished to the SEC on Form 8-K (Item 2.02), which is normally the day results are announced. For a quarter whose 10-Q or 10-K isn’t filed yet, the date is the latest Item 2.02 8-K since the previous report, which may be a preliminary or other results-related update. Fiscal years are labeled by the calendar year in which they end.
06
Flagship products & servicesSite analysis
Software
Hybrid Cloud (Red Hat)
Red Hat Enterprise Linux, OpenShift and related hybrid cloud platforms.
Software
Automation, Data and Transaction Processing
Automation and infrastructure software (including HashiCorp), data and AI software (including watsonx and, from 2026, Confluent) and mainframe transaction-processing software.
Consulting
Strategy and Technology; Intelligent Operations
Business and technology consulting, systems integration, application management and business process outsourcing.
Infrastructure
IBM Z, Power and storage
Mainframes, Power servers and storage for hybrid cloud and AI workloads, plus infrastructure support services.
Financing
IBM Financing
Leases, installment plans and loans to clients and short-term financing to business partners, mainly for IBM products.
From the Form 10-K, FY2025.
U.S., worldwide and country/regional share of flagship products/services
Only shares the company itself states (in its filings or press releases, sometimes citing a research firm) are shown. Scope and timing vary by figure — treat these as approximate.
All segments
Software, consulting and infrastructure
U.S. share
—
Not disclosedWorldwide share
Leader or among the leaders
Company-disclosed“Overall, the company is the leader or among the leaders in each of our business segments.”
07
Recent strategic focusSite analysis
Recent developments.
2025 results
Revenue $67,535M (+7.6%); Software +10.6%, Infrastructure +12.1%; net income $10,593M; diluted EPS $11.17.
Source: Form 10-K (FY2025) — Exhibit 13, 2025 Annual Report
Q3 2026
Revenue $17,103M versus $16,331M; Software $7,804M versus $7,209M; net income $2,190M versus $1,744M; diluted EPS from continuing operations $2.31.
Source: Form 10-Q (quarter ended 2026-09-30)
Confluent acquisition
Completed March 17, 2026; total purchase price $11,602M; goodwill $7,247M.
Source: Form 10-Q (quarter ended 2026-09-30)
HashiCorp
Acquired February 27, 2025.
Source: Proxy statement (2026)
Capex ÷ D&A (FY2025)
0.48x
Below depreciation — investment is being pared back
formulacapital expenditures ÷ depreciation & amortization
e.g.$1,091M ÷ $2,284M = 0.48x
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
R&D-to-revenue ratio (FY2025)
12.3%
formularesearch & development expense ÷ revenue × 100
e.g.$8,316M ÷ $67,535M × 100 = 12.3%
M&A spend (5-year total)
$22.31B
Latest year: $8.29B
Cash-flow-statement spending on acquisitions, net of cash acquired
Where the money goes, over time
Unit: $M. Capex went from $2.06B in FY2021 to $1.09B in FY2025
- Capex
- R&D
- M&A spend
formulacapital expenditures ÷ depreciation & amortization
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
08
Key figures at a glanceFrom SEC data
FY2021–FY2025, 5 years.
Revenue (FY2025)
$67.54B
As reported in the 10-K
Revenue CAGR (4 years)
+4.2%
formula(last-period revenue ÷ first-period revenue) ^ (1 ÷ years) − 1
e.g.($67,535M ÷ $57,350M) ^ (1÷4) − 1 = 4.2%
termsCAGR · ^ (exponent) · Revenue (net sales)
Operating margin (FY2025)
—
formulaoperating income ÷ revenue × 100
ROE (FY2025)
35.3%▲favorable
5-year average: 26.1%
As reported in the 10-K
P/B (FY2025 end)
8.50x
formulafiscal year-end closing price ÷ book value per share
e.g.$296.21 ÷ $34.84 = 8.50x
Period-end (fiscal year-end) value, not today's P/B
EV/EBITDA (FY2025 end)
—
formula(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization)
termsEV/EBITDA · Market capitalization · Interest-bearing debt · EBITDA · Depreciation & amortization (D&A)
Period-end (fiscal year-end) value, not today's multiple
- ―
Revenue grew +4.2% a year over 4 years (modest growth)
From $57.35B in FY2021 to $67.54B in FY2025. The annualized rate (CAGR) makes it possible to compare growth pace across companies of different sizes.
- ▼
Equity ratio is 21.5% (relatively heavy reliance on debt)
The share of total assets funded by equity rather than debt. 50%+ is often read as low bankruptcy risk, though the right level varies by industry (real estate and leasing run lower, for instance).
- ▲
Free cash flow was positive in 5 of 5 years
Operating cash flow minus capital expenditures: the cash left over after funding the business’s own investment, available for dividends, buybacks, acquisitions, or debt paydown. A negative year can mean heavy investment, or weak core earnings — worth distinguishing.
- ▲
ROE averaged 26.1% over 5 years (latest: 35.3%)
How much profit was generated on shareholders’ equity. Roughly 10%+ is often cited as solid for a U.S. company, though this varies a lot by industry and capital intensity.
09
Business modelSite analysis
Business Model Canvas
The whole company in nine blocks. Left side: how it delivers (partners, activities, resources, costs). Right side: who it serves and how it earns. Every entry comes from the company’s filings shown on this page.
08 · who helps
Key partners
- Confluent, Inc.
- HashiCorp, Inc.
- Adobe, AWS, Microsoft, Oracle, Palo Alto Networks, Salesforce, Samsung Electronics, SAP
07 · what it does
Key activities
- Software: Hybrid Cloud (Red Hat), Automation, Data, Transaction Processing
- Consulting: Strategy and Technology, Intelligent Operations
- Infrastructure: Hybrid Infrastructure (IBM Z, Power, storage), Infrastructure Support
- Financing: client and commercial financing
06 · what it draws on
Key resources
- About 264,300 employees at IBM and wholly owned subsidiaries, 8,700 at less-than-wholly owned subsidiaries and 13,800 complementary workers
- Research and IP portfolio
- Partner ecosystem (AWS, Microsoft, Oracle, Salesforce, SAP and others)
02 · why customers buy
Value propositions
- Hybrid cloud and AI software (including Red Hat), consulting and mainframe infrastructure, built for security, scalability and reliability.
04 · how it keeps them
Customer relationships
- Software subscriptions, multi-year outsourcing and support contracts.
03 · how it reaches them
Channels
- Direct sales to large enterprises and governments in more than 175 countries; business partners.
01 · who it serves
Customer segments
- Large enterprises and governments in more than 175 countries
09 · where money goes
Cost structure
FY2025, share of revenue ($67.54B)
- Cost of revenue41.8%
- Research & development12.3%
- Selling, general & administrative29.8%
Depreciation & amortization (inside the costs above): $2.28B. Capital spending: $1.09B.
Source: Form 10-K income statement and cash-flow statement (SEC XBRL).
05 · how money comes in
Revenue streams
- Software $29,962M
- Consulting $21,055M
- Infrastructure $15,718M
- Financing $737M (2025)
Value propositions, channels and customer relationships: Form 10-K (FY2025)
Sells software subscriptions and licenses (including Red Hat), consulting and outsourcing services, and mainframe, server and storage systems to large enterprises and governments, plus financing for IBM products.
01 what it draws on
Inputs & resources
- About 264,300 employees at IBM and wholly owned subsidiaries, 8,700 at less-than-wholly owned subsidiaries and 13,800 complementary workers
- Research and IP portfolio
- Partner ecosystem (AWS, Microsoft, Oracle, Salesforce, SAP and others)
02 what it does
Activities
- Software: Hybrid Cloud (Red Hat), Automation, Data, Transaction Processing
- Consulting: Strategy and Technology, Intelligent Operations
- Infrastructure: Hybrid Infrastructure (IBM Z, Power, storage), Infrastructure Support
- Financing: client and commercial financing
03 who it serves
Customers
- Large enterprises and governments in more than 175 countries
04 how money comes in
How it earns
- Software $29,962M
- Consulting $21,055M
- Infrastructure $15,718M
- Financing $737M (2025)
How the business makes money
- Gross margin 2025: Software 83.5%, Consulting 28.1%, Infrastructure 58.6%, Financing 45.3%.
- Share repurchases suspended since the 2019 Red Hat acquisition; $2,008M authorization remains.
- Dividends per share rose every year, from $6.51 (2020) to $6.71 (2025).
Government & regulation around the business
Non-market factors from the company’s filings: what governments and regulators fund, buy, set, approve or restrict, and which part of the flow above each one touches.
IBM faces environmental and climate costs and trade controls.
Environmental rules
Climate and environmental costs
Could incur substantial costs related to climate change and environmental matters, including cleanup.
Constrains the businessTouches: ActivitiesSource: Form 10-K (FY2025)
Revenue by segment (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue
Software
29,962 (44%)Consulting
21,055 (31%)Infrastructure
15,718 (23%)Financing
737 (1%)
Source: Form 10-K (FY2025) — Exhibit 13, 2025 Annual Report Segment revenue; total revenue $67,535M including other.
10
Where it earnsSite analysis
Many U.S.-listed companies earn most of their revenue outside the U.S. — this breaks down revenue by country/region so it's clear where the business actually makes its money.
Largest market (FY2025)
Americas — 49% of revenue
Revenue by country / region (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue
Americas
33,342 (49%)Europe/Middle East/Africa
22,189 (33%)Asia Pacific
12,004 (18%)
Source: Form 10-K (FY2025) — Exhibit 13, 2025 Annual Report Geographic revenue.
11
Contract structureSite analysisShow
Short-term or spot sales carry different earnings quality than long-term or auto-renewing contracts — this shows how the company actually contracts with its customers.
12
Alliances & capital tiesSite analysisShow
Equity stakes, joint ventures, and strategic partnerships disclosed across the 10-K, 8-Ks, and proxy statement.
Pending or recent acquisition
Confluent, Inc.
Acquired March 17, 2026; total purchase price $11,602M.
Pending or recent acquisition
HashiCorp, Inc.
Acquired February 27, 2025.
Source: Proxy statement (2026)
Business partnership
Adobe, AWS, Microsoft, Oracle, Palo Alto Networks, Salesforce, Samsung Electronics, SAP
Named strategic partners; some are competitors in other areas.
Source: Form 10-K (FY2025)
13
Customers & suppliersSite analysis
Who the company sells to and buys from. Companies rarely name either, so named counterparties come only from the company's own filings and press releases; otherwise this lists the concentration figures the 10-K discloses.
Customers
Large enterprises and governments in more than 175 countries.
Named by the company
The 10-K names no material customer.
Suppliers
Component suppliers and technology partners.
Named by the company
No single supplier is named as material.
14
Competitors & peersSite analysis
Competitors the 10-K names, and the peer group the company itself chose in its proxy statement. Nothing here is this site's own pick.
IBM recognizes hundreds of competitors. It names, by segment: Software — Alphabet, Amazon, BMC, Broadcom, Microsoft, Oracle, Salesforce, SAP and Splunk (Cisco); Consulting — Accenture, Capgemini, India-based providers and accounting-firm consultancies; Infrastructure — Dell, HPE, Intel, NetApp, Pure Storage and ODMs.
Competitors named in the 10-K
Peer group the company chose
Compensation benchmark group (22 companies), from the proxy statement. Peers are companies the board considers comparable — for example when setting executive pay — not necessarily direct competitors.
Technology competitors and large companies of similar size; Broadcom and Elevance Health were added and VMware and GE removed for 2025.
- Accenturesite ↗
- Boeingsite ↗
- Intelsite ↗
- Salesforcesite ↗
- Adobesite ↗
- Broadcomsite ↗
- Microsoftsite ↗
- UPSsite ↗
- Alphabet (Google)site ↗
- Cisco Systemssite ↗
- Oraclesite ↗
- Verizonsite ↗
- Amazonsite ↗
- Elevance Healthsite ↗
- PepsiCosite ↗
- Visasite ↗
- AT&Tsite ↗
- Hewlett Packard Enterprisesite ↗
- Qualcommsite ↗
- Bank of Americasite ↗
- Honeywellsite ↗
- RTXsite ↗
Company names link to this site’s analysis where one exists; “site ↗” opens the company’s own website.
15
Six years of financialsFrom SEC data
Each chart's axis holds a single unit (never mixing dollars, %, and $/share). The table's per-period header links to the filing the numbers came from.
Revenue over time
Unit: $M
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
Profit over time (operating → net)
Unit: $M
- Pretax income
- Net income
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
Margins over time
Unit: %
- Operating margin
- Net margin
formulaoperating income ÷ revenue × 100
formulanet income attributable to the company ÷ revenue × 100
Cash flow over time
Unit: $M (below zero = cash went out)
- Operating CF
- Investing CF
- Free CF
formulacash flow from operations − capital expenditures
termsFree cash flow (FCF) · Cash flow from operations (operating CF) · Capital expenditures (capex)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
Financial stability & capital efficiency
Unit: %
- Equity ratio
- ROE
formulatotal equity ÷ total assets × 100 (as reported in the 10-K)
termsStockholders’ equity · Total assets
formulanet income ÷ average equity (beginning + ending, ÷2) × 100 (as reported in the 10-K)
termsNet income (attributable to the company) · Stockholders’ equity
Earnings per share (EPS) and dividend per share
Unit: $
- EPS
- Dividend per share
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
| Line item | FY202110-K on EDGAR ↗ | FY202210-K on EDGAR ↗ | FY202310-K on EDGAR ↗ | FY202410-K on EDGAR ↗ | FY202510-K on EDGAR ↗ |
|---|---|---|---|---|---|
| Income statement ($M) | |||||
| Revenue | 57,350 | 60,530 | 61,860 | 62,753 | 67,535 |
| Pretax income | 4,837 | 1,156 | 8,690 | 5,797 | 10,328 |
| Net income (attributable) | 5,743 | 1,639 | 7,502 | 6,023 | 10,593 |
| Revenue growthcalc(this year’s revenue − last year’s revenue) ÷ last year’s revenue × 100 | — | 5.5% | 2.2% | 1.4% | 7.6% |
| Net margincalcnet income attributable to the company ÷ revenue × 100 | 10.0% | 2.7% | 12.1% | 9.6% | 15.7% |
| Balance sheet ($M) | |||||
| Total assets | 132,001 | 127,243 | 135,241 | 137,175 | 151,880 |
| Total equity | 18,996 | 22,021 | 22,613 | 27,393 | 32,740 |
| Interest-bearing debtSum of short- and long-term borrowings, notes/bonds payable | 51,704 | 50,949 | 56,547 | 54,973 | 61,260 |
| Equity ratio | 14.3% | 17.2% | 16.7% | 19.9% | 21.5% |
| ROE | 29.1% | 8.0% | 33.7% | 24.2% | 35.3% |
| Cash flow ($M) | |||||
| Operating CF | 12,796 | 10,435 | 13,931 | 13,445 | 13,193 |
| Investing CF | -5,975 | -4,202 | -7,070 | -4,937 | -10,302 |
| Financing CF | -13,354 | -4,958 | -1,769 | -7,079 | -3,829 |
| Free cash flowcalccash flow from operations − capital expenditures | 10,734 | 9,089 | 12,686 | 12,397 | 12,102 |
| Cash and equivalents | 6,650 | 7,886 | 13,068 | 13,947 | 13,587 |
| Per share & other | |||||
| EPS ($) | 6.35 | 1.80 | 8.14 | 6.43 | 11.17 |
| BVPS ($) | 21.05 | 24.22 | 24.63 | 29.48 | 34.84 |
| Dividend per share ($) | 6.55 | 6.59 | 6.63 | 6.67 | 6.71 |
| Payout ratiocalcdividend per share ÷ diluted EPS × 100 | 103.1% | 366.1% | 81.4% | 103.7% | 60.1% |
| P/E (x) | 21.1 | 78.3 | 20.1 | 34.2 | 26.5 |
| P/B (x)calcfiscal year-end closing price ÷ book value per share | 6.35 | 5.82 | 6.64 | 7.46 | 8.50 |
P/B and EV/EBITDA use each period’s period-end (fiscal year-end) figures, not the current share price. Figures without a "calc" tag are as reported in the Form 10-K (the consolidated financial statements and, for older years, earlier 10-Ks), pulled automatically from SEC EDGAR. Where a later filing restated a prior period, the restated figure is used.
Last 8 quarters
Three-month figures from 10-Q filings. Change is versus the same quarter a year earlier. Newest quarter on top.
| Quarter ended | Revenue | Net income | Diluted EPS |
|---|---|---|---|
| 2026-09-30 | $17.1B+4.7% | $2.19B+25.6% | $2.30 |
| 2026-06-30 | $17.16B+1.1% | $2.17B-1.3% | $2.27 |
| 2026-03-31 | $15.92B+9.5% | $1.22B+15.3% | $1.28 |
| 2025-12-31 † | $19.69B+12.2% | $5.6B+92.2% | — |
| 2025-09-30 | $16.33B | $1.74B | $1.84 |
| 2025-06-30 | $16.98B | $2.19B | $2.31 |
| 2025-03-31 | $14.54B | $1.06B | $1.12 |
| 2024-12-31 † | $17.55B | $2.91B | — |
† Fourth quarter = the 10-K’s annual figure minus the first three quarters; quarterly EPS isn’t derived this way because share counts change during the year.
Data left out of this analysis
- FY2020: FY2020 balance sheet and earnings include the managed infrastructure business that IBM spun off as Kyndryl on November 3, 2021, so the year is not comparable.
16
Is ROIC above WACC?From SEC data
ROIC (the return on money invested in the business) above WACC (the cost of raising that money) means the company is creating value. WACC is an estimate, so its assumptions can be adjusted below.
Not enough data (operating income, equity, etc.) to compute ROIC/WACC.
17
What the price implies (DCF)From SEC data
A company's value can be written as its free cash flow divided by (cost of capital − perpetual growth). Working that backwards from the market's valuation shows how much growth the share price assumed — compared here with the company's actual past growth.
Growth the price implies (price on 2026-11-04)
4.5%
Perpetual FCF growth: g = r − FCF ÷ EV = 8.7% − 4.2%
Past FCF growth (FY2021–FY2025)
+3.0%
Compound annual rate, 4 years
Past revenue growth (FY2021–FY2025)
+4.2%
Compound annual rate, 4 years
Inputs (FY2025): free cash flow $12.1B (operating CF − capex); enterprise value $288.28B = market cap $240.61B (latest close, 2026-11-04) + debt $61.26B − cash and short-term investments $13.59B; r = WACC of 8.7% using this page’s default assumptions (β 0.90, risk-free 5.0%, market premium 5.5%).
Three WACC scenarios
The same calculation under cautious, base and optimistic cost-of-capital assumptions (risk-free rate fixed at the 10-year Treasury yield). Pick one to load it into the sliders below.
Try your own assumptions
V = FCF ÷ (r − g). It starts at the implied growth rate, where the theoretical value equals today’s enterprise value.
Theoretical enterprise value
$288.14B
FCF $12.1B ÷ (8.7% − 4.5%)
Theoretical ÷ actual enterprise value
1.00x
Below 1x: these assumptions value the business below the market did
How sensitive the answer is
Theoretical ÷ actual enterprise value for each combination of r and g.
| g \ r | 6.7% | 7.7% | 8.7% | 9.7% | 10.7% |
|---|---|---|---|---|---|
| 0% | 0.63x | 0.55x | 0.48x | 0.43x | 0.39x |
| 2% | 0.89x | 0.74x | 0.63x | 0.55x | 0.48x |
| 4% | 1.55x | 1.13x | 0.89x | 0.74x | 0.63x |
| 6% | 6.00x | 2.47x | 1.55x | 1.13x | 0.89x |
| 8% | — | — | 6.00x | 2.47x | 1.55x |
A simplified model for seeing what the market price assumes, not a forecast or a target price. It treats free cash flow as growing at one constant rate forever; the result swings widely with small changes in r and g, and is undefined when g reaches r. Free cash flow here is operating cash flow minus capex, which is after interest — a full DCF of enterprise value would use cash flow before interest. Market cap uses the latest close (2026-11-04) × shares at fiscal year-end; free cash flow and WACC inputs are from the latest fiscal year.
18
Earnings qualityFrom SEC dataShow
The same reported profit can mean different things depending on whether it's backed by cash, driven by the core business, or the result of a one-off item. Four checks below.
- ✓
Operating CF ÷ net income: averages 2.79x
Profit is backed by cash coming in.
- ✓
Accrual ratio (latest): -1.8%
A small share of profit rests on accounting estimates.
- ✓
Days sales outstanding: 43 → 40 days
No major slowdown in collecting on sales.
Operating CF vs. net income
Unit: $M — operating CF above net income means profit is backed by cash
- Operating CF
- Net income
formulacash flow from operations ÷ net income attributable to the company
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formula(net income − operating CF) ÷ average total assets × 100
termsNet income (attributable to the company) · Cash flow from operations (operating CF) · Total assets
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-24
Receivables & inventory days
Unit: days — days grow when receivables or inventory build up faster than sales
- Days sales outstanding
- Days inventory outstanding
formulaaverage receivables (opening + closing ÷ 2) ÷ revenue × 365
formulaaverage inventory (opening + closing ÷ 2) ÷ cost of revenue × 365
termsInventory · Cost of revenue (COGS)
Worked examples (latest period)
formulacash flow from operations ÷ net income attributable to the company
e.g.$13,193M ÷ $10,593M = 1.25x
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formulaoperating income ÷ income before income taxes × 100
termsOperating income · Income before income taxes (pretax income)
formulaaverage receivables (opening + closing ÷ 2) ÷ revenue × 365
e.g.($6,804M + $8,112M) ÷ 2 ÷ $67,535M × 365 = 40 days
formulaaverage inventory (opening + closing ÷ 2) ÷ cost of revenue × 365
e.g.($1,289M + $1,220M) ÷ 2 ÷ $28,239M × 365 = 16 days
termsInventory · Cost of revenue (COGS)
19
Who holds the sharesFrom SEC dataShow
How much of the stock large institutional investors report owning on SEC Form 13F, how much the directors and executive officers hold (and how much of the vote they control), and roughly how much is left for individual investors. Shown next to beta so the holder mix can be read alongside how much the stock swings.
Institutions, insiders and everyone else, 13F holdings as of 2026-06-30
“Everyone else” is what remains after shares reported on Form 13F and shares held by directors and executive officers: mostly individual investors, plus non-insider families or foundations and smaller or foreign institutions. The figures have different dates and 13F reports count some shares twice — read it as an approximate split.
- Held by 13F filers
- 65.1%
- Directors & officers (shares)
- <1%
- Everyone else (est.)
- 34.9%
- Directors & officers (voting power)
- <1%
- Institutional-ownership rank
- 396 of 416
- Beta (adjusted)
- 0.90
individuals and other non-13F holders
no separate voting figure; shown as shares
1 = most institutional; 95% of covered companies have more
above 1 = swings more than the market
- 613.5M shares reported by 3,626 13F filers ÷ 942.1M shares outstanding on 2026-06-30. Option positions are excluded.
- Directors and executive officers as a group, from the proxy statement’s beneficial-ownership table (percentage computed from the group’s share count ÷ shares outstanding); includes shares they can acquire within 60 days.
- A large “everyone else” share can still reflect a family, trust or foundation stake held outside the board; check the proxy statement’s 5% holders.
Sources: SEC Form 13F data set (holdings as of 2026-06-30) · Form DEF 14A filed 2026-03-10 (beneficial ownership table) · Form 10-Q cover page (shares outstanding as of 2026-06-30)
20
Strengths & weaknessesSite analysis
Strengths
1. High-margin software
Software was 44% of 2025 revenue with an 83.5% gross margin, and grew 10.6%.
Evidence: Form 10-K (FY2025) — Exhibit 13, 2025 Annual Report
2. Leadership positions
IBM says it is the leader or among the leaders in each of its business segments.
Evidence: Form 10-K (FY2025)
3. Steady dividend
Dividend per share raised every year 2020–2025.
Evidence: Form 10-K (FY2025)
Weaknesses
1. Slow consulting growth
Consulting revenue grew 1.8% in 2025; Q3 2026 Consulting revenue $5,335M versus $5,324M.
Evidence: Form 10-Q (quarter ended 2026-09-30)
2. High debt
Interest-bearing debt was about $61.3B at end-2025.
Evidence: Form 10-K (FY2025)
3. Pension charges
Pension settlement charges cut net income in 2022 ($4.4B net of tax) and 2024 ($2.4B net of tax).
Evidence: Proxy statement (2026)
21
What draws investors to itSite analysis
Why the stock can look attractive to investors — each point paired with what has to hold for it to stay true, and the opposing view. This is this site's analysis, not a recommendation to buy or sell.
P/E (FY2025)
26.5x
Price at fiscal year-end ÷ diluted EPS
Dividend yield (FY2025)
2.27%
Dividends per share ÷ fiscal year-end price
Payout ratio (FY2025)
60%
Dividends per share ÷ diluted EPS
FCF yield (FY2025)
4.4%
(Operating CF − capex) ÷ market cap
1. Software mix shift
Software is growing and has very high gross margins.
- What has to hold
- Red Hat and AI software keep growing.
- The other side
- Competition from hyperscalers.
Evidence: Form 10-K (FY2025) — Exhibit 13, 2025 Annual Report
2. Dividend history
Dividend per share raised every year in the period.
- What has to hold
- Free cash flow stays strong.
- The other side
- Debt from acquisitions.
Evidence: Form 10-K (FY2025)
FY2020 is left out because it includes the managed infrastructure business spun off as Kyndryl in November 2021. FY2021 net income includes Kyndryl until the spin-off (continuing operations: $4,712M); revenue for 2021 is continuing operations.
22
ResilienceSite analysisShow
How well the company could absorb a bad year: its financial buffer, how its revenue and profit held up in the worst year on record, and what the 10-K says about the business's exposure to shocks. Figures and filing statements only — no overall rating.
1. Financial buffer (FY2025)
Cash & short-term investments ÷ debt due within a year
1.1x
$13.59B vs. $12.85B
Interest coverage (operating income ÷ interest expense)
Not disclosed
The income statement has no operating income line.
Free cash flow ÷ dividends paid
1.9x
$12.1B vs. $6.26B (FCF = operating CF − capex)
2. Worst year in the record, and the recovery
| Figure | Worst year-over-year change | Back to the prior level? |
|---|---|---|
| Revenue | No decline in the record | — |
Covers only the 5 fiscal years on record (FY2021–FY2025), which may not include a full recession — the worst year here isn’t necessarily how the company would fare in a severe downturn.
3. Business resilience (from the 10-K)
Profitable every year
Net income stayed positive every year 2021–2025, even in 2022 when a $4.4B net-of-tax pension charge cut it to $1.6B.
Source: Proxy statement (2026)
23
Legal & regulatory mattersSite analysisShow
Lawsuits, government investigations, enforcement actions and settlements the company discloses — where each stands, what is at stake, and what comes next. From the 10-K's Legal Proceedings and contingencies note, the latest 10-Q, and 8-Ks.
IBM says recorded legal liabilities were not material in 2023–2025. Its one significant matter, a pension class action, was settled in December 2025; it is also involved in Superfund environmental proceedings.
1 open matter · 1 settled or closed
Superfund and environmental remediation
PendingEnvironmentalU.S. federal and state environmental agencies
IBM is a party to CERCLA (Superfund) proceedings and is investigating or remediating several current and former operating sites.
Source: Form 10-K (FY2025) — Exhibit 13, 2025 Annual Report — Note on Contingencies
Pension annuity class action
SettledClass actionPlan participants v. IBM, Plan Administrator Committee, IBM Pension Plan
A 2022 suit alleged the IBM Pension Plan miscalculated joint and survivor annuity benefits using outdated actuarial tables (ERISA). After the Second Circuit revived it in April 2025, the parties settled and the case was dismissed with prejudice on December 11, 2025, with no material financial impact.
Source: Form 10-K (FY2025) — Exhibit 13, 2025 Annual Report — Note on Contingencies
Company statement: Other proceedings are described as ordinary-course and not expected to be material.
Based on Form 10-K (FY2025) — Exhibit 13, 2025 Annual Report — Note on Contingencies, reviewed 2026-10-25. Routine ordinary-course claims are not listed. “Major” is this site’s judgment of which matters could materially affect results.
24
Risks (including geopolitical)Site analysis
Starting from the 10-K's Risk Factors section, organized by category — geopolitical, currency, raw materials, regulatory, disaster, and more — with impact and likelihood assessed by this site.
Risk map
Vertical = impact on results, horizontal = likelihood. Upper right = most severe. Numbers match the list below (placement is this site’s own assessment).
Likelihood →
"Company disclosure" vs. "this site’s assessment"
The description and mitigation for each risk are this site’s summary of the 10-K’s "Risk Factors" section. Impact and likelihood are this site’s own assessment, not the company’s — where the company discloses its own likelihood assessment, that is noted in the summary.
Impact is judged from how large the affected business is relative to total revenue/profit, and from the risk’s track record of moving results in the past. Likelihood is judged from the filing’s wording and the current business environment (already occurring, or recurring). See the rating criteria.
- 1Competition & technology shift
Competition from hyperscalers and software firms
- Company disclosure (summarized from the 10-K)
- Software competitors include Alphabet, Amazon, Microsoft, Oracle, Salesforce and SAP; cloud providers compete with traditional infrastructure.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact High / Likelihood High
- 2M&A & integration
Acquisition integration
- Company disclosure (summarized from the 10-K)
- HashiCorp (2025) and Confluent ($11.6B, 2026) must be integrated.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood Med
- 3Labor & workforce
Skilled employees
- Company disclosure (summarized from the 10-K)
- Future success depends on skilled employees; competition for talent is intense.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood Med
- 4FX & interest rates
Currency
- Company disclosure (summarized from the 10-K)
- About half of revenue is outside the Americas.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood High
- 5Law & regulation
IP, privacy and AI regulation
- Company disclosure (summarized from the 10-K)
- IBM faces IP claims and fast-changing AI, cybersecurity and privacy laws.
- Company’s stated mitigation
- Not stated in the filings.
- This site’s assessment
- Impact Med / Likelihood Med
25
What to watch going forwardSite analysis
- Software growth, especially Red Hat and data/AI with Confluent.
- Infrastructure product cycles (IBM Z).
- Consulting demand.
- Debt reduction after the Confluent purchase.
26
Source documentsShow
This page's financial figures come from the Form 10-Ks listed below. Check the original filings for full detail.
Other sources referenced in the analysis
Last updated
Analysis last edited: October 25, 2026 · Financial data fetched: October 25, 2026 09:41 (SEC EDGAR) · Source 10-K filed: February 24, 2026
Built on10-K FY2025 · filed 2026-02-24Proxy statement (2026)
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
This page is this site’s own analysis based on public information, and does not represent IBM’s views. It is not a recommendation to buy or sell any security, and this site does not guarantee the accuracy of any figure or statement here. Always verify against the original source documents before making an investment decision.