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Strong performance in enterprise software and IT services drives Q4 2025 revenue past $19.6 billion, as acquisitions and automation solutions boost growth despite hybrid cloud slowdown.
IBM announced better-than-expected fourth-quarter 2025 revenue and profit in the United States on January 2026, due to an increase in demand for its IT software services and enterprise solutions. This is a result of the company’s increasing importance in enterprise software solutions and data management services, as enterprises continue to adopt more sophisticated digital solutions.
IBM’s revenue for the December quarter was $19.69 billion, beating analysts’ predictions of $19.23 billion, while its adjusted earnings per share increased to $4.52, beating estimates of $4.32. The company’s software business generated $9.03 billion in revenue, led by the Automation business (up 18%) and Data business (up 22%). The company is also finalizing significant acquisitions, including HashiCorp for $6.4 billion and Confluent for $11 billion, to enhance its cloud and hybrid IT services offerings. IBM CFO Jim Kavanaugh stated that the Confluent acquisition may result in 2026 dilution of $600 million due to stock-based compensation and interest expenses.
CFO Kavanaugh told Reuters, “The growth in our hybrid cloud business was impacted by the U.S. government shutdown, which represents about 15% of bookings. We hope that any future impacts will be short-term.” The company also stated that it will discontinue the reporting of the “AI book of business” starting from Q1 2026, as it reached $12.5 billion in Q4.
The positive Q4 performance indicates that IBM is focusing on software and IT services, as the demand for enterprise automation solutions and high-performance data infrastructure is increasing. Although the growth in the hybrid cloud business slowed down to 10% due to government shutdowns, IBM’s overall software strategy is poised for future growth.
IBM will continue to integrate its acquisitions and enhance its enterprise services, indicating that further changes are expected in the software and cloud business in 2026.
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