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International Business Machines (NYSE:IBM) delivered Q2 2025 results exceeding management’s expectations for revenue, profitability, and cash flow, driven by double-digit growth in both its software (up 8%) and infrastructure (up 11%) segments. The Gen AI book of business surpassed $7.5 billion inception-to-date, while the consulting segment stabilized with a growing backlog despite flat revenue in the first half of 2025, supported by healthy new client acquisition and higher Gen AI penetration. Management underscored its confidence in future growth by raising full-year free cash flow guidance to above $13.5 billion for 2025 and targeting run-rate productivity savings of $4.5 billion by year-end. Margin expansion across key profit lines was attributed to both portfolio mix and efficiency gains, with continued investment in AI-driven platforms, including the z17 mainframe and expanded Watson x offerings, highlighted as drivers of ongoing value creation.

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Source Fool.com