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IBM — 4q25 charts (company IR deck)
IBM (IBM) · 40 slides · Filed Oct 21, 2026
Every slide of this earnings presentation, with the text as published. Open the original deck ↗ · All IBM deck slides
Slide 1 — 4Q 2025
January 28, 2026 ibm.com/investor 4Q 2025 Earnings
Slide 2 — Forward-looking statements and non-GAAP information
Forward-looking statements and non-GAAP information Certain comments made in this presentation may be characterized as forward looking under the Private Securities Litigation Reform Act of 1995. Forward- looking statements are based on the company’s current assumptions regarding future business and financial performance. Those statements by their nature address matters that are uncertain to different degrees. Those statements involve a number of factors that could cause actual results to differ materially. Additional information concerning these factors is contained in the Company’s filings with the SEC. Copies are available from the SEC, from the IBM website, or from IBM Investor Relations. Any forward-looking statement made during this presentation speaks only as of the date on which it is made. The company assumes no obligation to update or revise any forward-looking statements except as required by law; these charts and the associated remarks and comments are integrally related and are intended to be presented and understood together. In an effort to provide additional and useful information regarding the company’s financial results and other financial information as determined by generally accepted accounting principles (GAAP), the company also discusses, in its earnings press release and presentation materials, certain non-GAAP information including operating earnings and other “operating” financial measures, free cash flow, net cash from operating activities excluding IBM Financing receivables, adjusted EBITDA and adjustments for currency. The rationale for management’s use of this non-GAAP information is included as Exhibit 99.2 to the company’s Form 8-K submitted to the SEC on January 28, 2026. The reconciliation of non- GAAP information to GAAP is included in the press release within Exhibit 99.1 to the company’s Form 8-K submitted to the SEC on January 28, 2026, as well as on the slides entitled “Non-GAAP supplemental materials” in this presentation. To provide better transparency, the company also discusses management performance metrics including annual recurring revenue, annual bookings, signings, GenAI book of business, and book-to-bill. The metrics are used to monitor the performance of the business and are viewed as useful decision- making information for management and stakeholders. The rationale for management’s use of these performance metrics and their calculation, are included in Exhibit 99.2 to the company’s Form 8-K submitted to the SEC on January 28, 2026, or in the Management Discussion section of the company’s 2024 Annual Report, which is Exhibit 13 to the Form 10-K submitted with the SEC on February 25, 2025. For other related information please visit the Company’s investor relations website at: https://www.ibm.com/investor/events/earnings-4q25 2
Slide 3 — Arvind Krishna
3 Arvind Krishna Chairman, President and Chief Executive Officer James Kavanaugh SVP, Finance & Operations and Chief Financial Officer
Slide 4 — CEO perspective
4 CEO perspective “In the fourth quarter, we delivered strong revenue growth, with double-digit Software performance. Additionally, Infrastructure continued its double-digit revenue growth with the robust adoption of the next generation of our mainframe platform. Our generative AI book of business now stands at more than $12.5 billion. This capped a strong 2025 for IBM where we exceeded expectations for revenue, profit and free cash flow. We enter 2026 with momentum and in a position of strength, giving us confidence in our full-year expectations of more than 5 percent constant currency revenue growth and an increase of about $1 billion in year-over-year free cash flow.” Arvind Krishna IBM Chairman, President and CEO
Slide 5 — 16%
Financial highlights 5 Revenue growth rates @CC “2025 put IBM’s durability, resilience and differentiation on display. Our portfolio mix, integrated value and rapid innovation drove higher revenue growth and double-digit profit and free cash flow growth. We are excited about our prospects for 2026 as our disciplined execution and unwavering focus on productivity will continue to enable us to invest in the future while returning value to shareholders.” James Kavanaugh IBM SVP & CFO $19.7B Revenue 9% growth $67.5B Revenue 6% growth 4Q25 FY25 16% FY free cash flow growth 17% FY adjusted EBITDA growth 12% FY diluted EPS growth (operating) $14.7B FY free cash flow ~230bps FY adjusted EBITDA margin expansion $4.5B Productivity savings (2025 exit run rate)
Slide 6 — +11%
6 Revenue categories-4Q25 Software 4Q25 results; revenue growth rates @CC Growth accelerated to 11% with over 7pts of organic growth Solid ARR of $23.6B, up more than $2B from the end of 2024 Strong performance across AI offerings, with GenAI book of business north of $2B ITD Exceeded Rule of 40 Automation +14% yr/yr Hybrid Cloud +8% yr/yr Transaction Processing +4% yr/yr Data +19% yr/yr +11% 4Q25 revenue growth $9.0B revenue +9% FY25 revenue growth $30.0B revenue
Slide 7 — +1%
7 Consulting 4Q25 results; revenue growth rates @CC Revenue categories-4Q25 Revenue returned to growth in the second half of 2025 Delivered the largest GenAI bookings quarter to date, exceeding $2B, now more than $10.5B ITD $32B backlog, up 2% at actual rates Continued segment profit margin expansion, with FY margins at a 3-year high Strategy and Technology Flat yr/yr Intelligent Operations +3% yr/yr +1% 4Q25 revenue growth $5.3B revenue +0.4% FY25 revenue growth $21.1B revenue
Slide 8 — +17%
8 Infrastructure 4Q25 results; revenue growth rates @CC Revenue categories-4Q25 IBM Z +61% Distributed Infrastructure Flat Infrastructure Support (2%) yr/yr Hybrid Infrastructure +24% yr/yr Record revenue quarter for IBM Z, reflecting strong demand for z17’s AI-led innovation IBM Z remains a key contributor to IBM’s profit and free cash flow Distributed Infrastructure stable, with new Power adoption offset by storage product-cycle dynamics FY segment profit margin expansion of 450bps +17% 4Q25 revenue growth $5.1B revenue +10% FY25 revenue growth $15.7B revenue
Slide 9 — Summary
9 Summary 2026 Expectations Revenue growth @CC sustaining 5% plus Software revenue growth accelerating to 10%, led by organic growth Operating PTI margin to expand by about a point Free cash flow up about $1 billion year over year, growing high single digits 2025 Summary Exceeded expectations across revenue, profitability, and free cash flow Highest revenue growth in many years, with the highest annual Software growth in history* Portfolio mix and productivity drove 17% adjusted EBITDA growth Generated $14.7 billion of free cash flow, the highest level in over a decade Significant momentum in GenAI book of business at over $12.5 billion inception-to-date *Revenue growth @CC, comparison includes Software growth excluding Kyndryl contribution of ~6pts,~8pts,~7pts,~8pts in FY 22, 1Q 22, 2Q 22 and 3Q 22, respectively
Slide 10 — ibm.com/investor
ibm.com/investor
Slide 11 — Supplemental material
Supplemental material 11 Some columns and rows in these materials, including the supplemental exhibits, may not add due to rounding Revenue and P&L highlights Revenue and P&L highlights – FY 2025 Adjusted EBITDA performance Cash flow and balance sheet highlights Currency impact on revenue growth Software segment details – 4Q & FY 2025 Infrastructure segment details – 4Q & FY 2025 Consulting segment details – 4Q & FY 2025 Expense summary Expense summary – FY 2025 Balance sheet summary Free cash flow summary Cash flow (ASC 230) Retirement-related summary Software segment categories Consulting segment categories Infrastructure segment categories Non-GAAP supplemental materials
Slide 12 — Revenue and P&L highlights
Revenue and P&L highlights 12 Revenue growth rates @CC, $ in billions Revenue highlights 4Q25 B/(W) Yr/Yr Revenue $19.7 9% Americas $9.5 11% Europe/ME/Africa $7.0 11% Asia Pacific $3.2 Flat Operating P&L highlights $ 4Q25 B/(W) Yr/Yr Gross profit $12.2 14% Expense $7.4 (17%) Pre-tax income $4.7 11% Net income $4.3 17% Earnings per share $4.52 15% Adjusted EBITDA $6.5 17% Operating P&L highlights % 4Q25 B/(W) Yr/Yr Gross profit margin 61.8% 1.2 pts Expense E/R 37.7% (1.4 pts) Pre-tax income margin 24.1% (0.2 pts) Net income margin 21.9% 0.9 pts Tax rate 9.2% 4.4 pts
Slide 13 — Revenue and P&L highlights – FY 2025
Revenue and P&L highlights – FY 2025 13 Revenue growth rates @CC, $ in billions Revenue highlights FY25 B/(W) Yr/Yr Revenue $67.5 6% Americas $33.3 7% Europe/ME/Africa $22.2 9% Asia Pacific $12.0 (1%) Operating P&L highlights $ FY25 B/(W) Yr/Yr Gross profit $40.2 11% Expense $27.5 (10%) Pre-tax income $12.7 13% Net income $11.0 14% Earnings per share $11.59 12% Adjusted EBITDA $19.2 17% Operating P&L highlights % FY25 B/(W) Yr/Yr Gross profit margin 59.5% 1.7 pts Expense E/R 40.7% (0.7 pts) Pre-tax income margin 18.8% 1.0 pts Net income margin 16.3% 0.8 pts Tax rate 13.5% 0.1 pts
Slide 14 — Adjusted EBITDA performance
Adjusted EBITDA performance 14 $ in billions *Corporate (gains) and charges primarily consists of unique corporate actions such as gains on divestitures and asset sales (e.g., certain QRadar SaaS assets in 2024) 4Q25 Yr/Yr FY25 Yr/Yr Operating (non-GAAP) pre-tax income from continuing operations $4.7 $0.5 $12.7 $1.5 Net interest expense $0.3 $0.1 $1.3 $0.3 Depreciation/Amortization of non-acquired intangible assets $0.7 $0.0 $2.9 $0.0 Stock-based compensation $0.4 $0.1 $1.7 $0.4 Workforce rebalancing charges $0.3 $0.3 $0.7 $0.0 Corporate (gains) and charges* $0.0 $0.0 $0.0 $0.6 Adjusted EBITDA $6.5 $1.0 $19.2 $2.8
Slide 15 — Cash flow and balance sheet highlights
Cash flow and balance sheet highlights 15 $ in billions *Non-GAAP financial measure; excludes Financing receivables **Non-GAAP financial measure; adjusts for Financing receivables and net capital expenditures Cash flow FY25 Yr/Yr Net cash from operations* $16.4 $2.5 Free cash flow** $14.7 $2.0 Select uses of cash FY25 Yr/Yr Net capital expenditures $1.6 $0.5 Acquisitions $8.3 $5.0 Dividends $6.3 $0.1 Balance sheet Dec 25 Dec 24 Cash & marketable securities $14.5 $14.8 Total debt $61.3 $55.0 Select debt measures Dec 25 Dec 24 IBM Financing debt $15.1 $12.1 Core (non-IBM Financing) debt $46.2 $42.9
Slide 16 — Currency impact on revenue growth
Currency impact on revenue growth 16 Quarterly averages per US $ 4Q25 Yr/Yr Spot 1Q26 2Q26 3Q26 4Q26 FY26 Assumed* Euro 0.86 8% 0.85 10% 3% 0% 1% 4% Pound 0.75 4% 0.74 6% 1% (0%) 1% 2% Yen 154 (1%) 158.19 (4%) (9%) (7%) (3%) (6%) Revenue impact, future @assumed spot* 3. 2 pts ~3 pts ~0 pts ~(1 pts) ~0 pts ~0.5 pts Prior view ~3 pts ~3 pts ~0 pts ~0.5 pts US $B Yr/Yr Revenue as reported $19.7 12% Currency impact $0.6 3. 2 pts Revenue @CC 9% *Spot Rates as of January 21, 2026
Slide 17 — Software segment details – 4Q & FY 2025
Software segment details – 4Q & FY 2025 17 $ in billions Revenue growth rates @CC Software segment 4Q25 B/(W) FY25 B/(W) Yr/Yr Yr/Yr Revenue $9.0 11% $30.0 9% Hybrid Cloud $2.0 8% $7.3 12% Automation $2.3 14% $7.7 16% Data $2.1 19% $6.3 11% Transaction Processing $2.6 4% $8.6 Flat Segment profit $3.4 10% $9.9 14% Segment profit margin 37.7% (1.5 pts) 33.1% 1.0 pts Annual recurring revenue $23.6
Slide 18 — Consulting segment details – 4Q & FY 2025
Consulting segment details – 4Q & FY 2025 18 Revenue & signings growth rates @CC, $ in billions Consulting segment 4Q25 B/(W) FY25 B/(W) Yr/Yr Yr/Yr Revenue $5.3 1% $21.1 Flat Strategy and Technology $2.9 Flat $11.5 (1%) Intelligent Operations $2.4 3% $9.5 2% Gross profit margin 28.4% 0.4 pts 28.1% 1.1 pts Segment profit $0.7 8% $2.5 20% Segment profit margin 12.3% 0.6 pts 11.7% 1.8 pts Signings $6.8 (22%) $21.8 (15%) Book-to-bill ratio (FY) 1.03
Slide 19 — Infrastructure segment details – 4Q & FY 2025
Infrastructure segment details – 4Q & FY 2025 19 $ in billions Revenue growth rates @CC Infrastructure segment 4Q25 B/(W) FY25 B/(W) Yr/Yr Yr/Yr Revenue $5.1 17% $15.7 10% Hybrid Infrastructure $3.8 24% $10.6 17% IBM Z 61% 48% Distributed Infrastructure Flat (3%) Infrastructure Support $1.3 (2%) $5.1 (1%) Segment profit $1.6 51% $3.5 41% Segment profit margin 31.2% 6.2 pts 22.0% 4.5 pts
Slide 20 — Expense summary
Expense summary 20 $ in billions *Includes acquisitions in the last twelve months net of non-operating acquisition-related charges and includes impact of closed divested businesses **Represents the percentage change after excluding the impact of currency translation & hedges, acquisitions and divestitures Expense 4Q25 B/(W) Acq/ Yr/Yr Currency Divest* Base** Operating expense & other income $7.4 (17%) (5 pts) (4 pts) (7 pts) impact of workforce rebalancing $0.3 (5 pts) SG&A – operating $5.1 (12%) (2 pts) (3 pts) (6 pts) impact of workforce rebalancing $0.3 (6 pts) R&D $2.2 (11%) (1 pts) (6 pts) (5 pts) IP and custom development income ($0.3) (8%) Other (income)/expense - operating ($0.1) (74%) Interest expense $0.5 (13%)
Slide 21 — Expense summary – FY 2025
Expense summary – FY 2025 21 $ in billions *2024 includes a gain from the sale of certain QRadar SaaS assets and Weather divestiture dynamics **Includes acquisitions in the last twelve months net of non-operating acquisition-related charges and includes impact of closed divested businesses ***Represents the percentage change after excluding the impact of currency translation & hedges, acquisitions and divestitures Expense FY25 B/(W) Acq/ Yr/Yr Currency Divest** Base*** Operating expense & other income $27.5 (10%) (2 pts) (5 pts) (2 pts) SG&A – operating $18.7 (1%) (1 pts) (4 pts) 4 pts R&D $8.3 (11%) 0 pts (5 pts) (6 pts) IP and custom development income ($1.0) (3%) Other (income)/expense - operating* ($0.5) (69%) Interest expense $1.9 (13%)
Slide 22 — Balance sheet summary
Balance sheet summary 22 $ in billions *Includes eliminations of inter-company activity Dec 25 Dec 24 Cash & marketable securities $14.5 $14.8 Core (non-IBM Financing) assets* $120.4 $108.9 IBM Financing assets $17.0 $13.5 Total assets $151.9 $137.2 Other liabilities $57.9 $54.8 Core (non-IBM Financing) debt* $46.2 $42.9 IBM Financing debt $15.1 $12.1 Total debt $61.3 $55.0 Total liabilities $119.1 $109.8 Equity $32.7 $27.4
Slide 23 — Free cash flow summary
Free cash flow summary 23 $ in billions B/(W) B/(W) 4Q25 Yr/Yr FY25 Yr/Yr Net cash from operations $4.0 ($0.3) $13.2 ($0.3) Less: IBM Financing receivables ($4.1) ($1.8) ($3.2) ($2.7) Net cash from operations (excluding IBM Financing receivables) $8.1 $1.5 $16.4 $2.5 Net capital expenditures ($0.6) ($0.1) ($1.6) ($0.5) Free cash flow (excluding IBM Financing receivables) $7.6 $1.4 $14.7 $2.0
Slide 24 — Cash flow (ASC230)
Cash flow (ASC230) 24 $ in billions *Includes operating lease right-of-use assets amortization **2025 includes a benefit from income taxes primarily driven by the resolution of certain tax audit matters; FY 24 includes the impact of a pension settlement charge 4Q25 4Q24 FY25 FY24 Net income from operations $5.6 $2.9 $10.6 $6.0 Pension settlement charges — $0.4 — $3.1 Depreciation / amortization of intangibles* $1.3 $1.1 $5.0 $4.7 Stock-based compensation $0.4 $0.3 $1.7 $1.3 Operating assets and liabilities / other, net** $0.8 $1.8 ($1.0) ($1.2) IBM Financing A/R ($4.1) ($2.3) ($3.2) ($0.4) Net cash provided by operating activities $4.0 $4.3 $13.2 $13.4 Capital expenditures, net of payments & proceeds ($0.6) ($0.4) ($1.6) ($1.1) Divestitures, net of cash transferred — ($0.0) ($0.0) $0.7 Acquisitions, net of cash acquired ($0.4) ($0.5) ($8.3) ($3.3) Marketable securities / other investments, net $2.4 ($0.4) ($0.4) ($1.2) Net cash provided by/(used in) investing activities $1.4 ($1.4) ($10.3) ($4.9) Debt, net of payments & proceeds ($1.8) ($0.1) $2.9 ($0.9) Dividends ($1.6) ($1.5) ($6.3) ($6.1) Financing - other ($0.0) ($0.0) ($0.4) ($0.1) Net cash provided by/(used in) financing activities ($3.4) ($1.7) ($3.8) ($7.1) Effect of exchange rate changes on cash ($0.0) ($0.3) $0.4 ($0.4) Net change in cash, cash equivalents & restricted cash $2.0 $0.9 ($0.5) $1.1
Slide 25 — Retirement-related summary
Retirement-related summary 25 $ in billions *Qualified defined benefit plans **Includes cash and non-cash contributions Key assumptions and metrics 2024 2025 2026 Funded status at year end* US 136% 137% WW 116% 116% Discount rate at year end US 5.5% 5.2% WW 4.2% 4.4% Expected ROA at prior year end US 5.1% 5.5% 5.8% WW 4.9% 5.1% 5.3% Actual ROA US 2.6% 8.8% WW 2.0% 5.4% Expected Cost and contributions 2025 2026 Operating cost 1.0 1.0 Non-operating cost 0.1 0.5 Total cost 1.1 1.5 Contributions** 1.3 1.4
Slide 26 — Software segment categories
Software segment categories Revenue categories – FY 2025 Revenue categories 26 The Software portfolio delivers end-to-end enterprise capabilities for Hybrid Cloud and AI: Hybrid Cloud incl. RHEL, OpenShift, Ansible, Red Hat AI Automation incl. application development & integration, infrastructure lifecycle management incl. HashiCorp, network management, security software for identity access management and threat management, observability, FinOps, IT financial management, asset lifecycle management Data incl. AI assistants and agents, AI tools and governance, databases, data intelligence, data integration, data security Transaction Processing incl. Customer Information Control System and storage software, analytics and integration software on IBM operating systems, AI assistants for Z, security software for Z Hybrid Cloud Transaction Processing Data Automation
Slide 27 — Consulting segment categories
Consulting segment categories Revenue categories – FY 2025 27 Revenue categories Strategy and Technology Provides advice on strategy, process design, system implementation, cloud architecture and implementation services for complex end-to-end business transformations with hybrid cloud and AI, and modernize applications, data and technology. By leveraging IBM technology - including Red Hat – and an ecosystem of partners - including Adobe, AWS, Microsoft, Oracle, Palo Alto Networks, Salesforce and SAP, among others - we enable clients to drive innovation and achieve business outcomes Intelligent Operations Operates application workflows and business processes, manage application data, AI, and hybrid cloud workflows, and integrate security solutions to de-risk and prevent threats. By leveraging AI-powered solutions, we deliver faster, more efficient outcomes that help clients scale and innovate securely Intelligent Operations Strategy and Technology
Slide 28 — Infrastructure segment categories
Infrastructure segment categories Hybrid Infrastructure Innovative infrastructure platforms to help meet the new requirements of hybrid multi-cloud and enterprise AI workloads leveraging flexible and as-a-service consumption models: – IBM Z: incl. hardware and operating system – Distributed Infrastructure: incl. Power hardware and operating system, storage hardware, IBM Cloud IaaS, OEM asset recovery service Infrastructure Support Comprehensive, proactive and AI enabled services to maintain and improve the availability and value of clients’ IT infrastructure (hardware and software) both on-premises and in the cloud incl. maintenance for IBM products and other technology platforms Hybrid Infrastructure Infrastructure Support Revenue categories – FY 2025 28 Revenue categories IBM Z Distributed Infrastructure
Slide 29 — Non-GAAP supplemental materials
Non-GAAP supplemental materials Reconciliation of revenue performance – 4Q 2025, 4Q 2024 & FY 2025 29 The above reconciles the non-GAAP financial information contained in the “Financial highlights”, “Revenue and P&L highlights”, “Revenue and P&L highlights – FY 2025”, and “Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of these non-GAAP financial measures. GAAP @CC Total revenue 8% 6% Americas 7% 7% Europe/ME/Africa 14% 9% Asia Pacific Flat (1%) FY25 Yr/Yr GAAP @CC Total revenue 12% 9% Americas 12% 11% Europe/ME/Africa 20% 11% Asia Pacific (1%) Flat GAAP @CC Software 10.4% 11.5% 4Q24 Yr/Yr 4Q25 Yr/Yr
Slide 30 — Non-GAAP supplemental materials
Non-GAAP supplemental materials Reconciliation of segment revenue performance – 4Q 2025 30 The above reconciles the non-GAAP financial information contained in the “Software”, “Consulting”, “Infrastructure”, “Software segment details – 4Q & FY 2025”, “Infrastructure segment details – 4Q & FY 2025”, “Consulting segment details – 4Q & FY 2025” and “Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of these non-GAAP financial measures. GAAP @CC Consulting 3% 1% Strategy and Technology 2% Flat Intelligent Operations 5% 3% Infrastructure 21% 17% Hybrid Infrastructure 29% 24% IBM Z 67% 61% Distributed Infrastructure 3% Flat Infrastructure Support 1% (2%) 4Q25 Yr/Yr GAAP @CC Software 14% 11% Hybrid Cloud 10% 8% Automation 18% 14% Data 22% 19% Transaction Processing 8% 4% 4Q25 Yr/Yr
Slide 31 — Non-GAAP supplemental materials
Non-GAAP supplemental materials Reconciliation of segment revenue performance – FY 2025 31 The above reconciles the non-GAAP financial information contained in the “Software”, “Consulting”, “Infrastructure”, “Software segment details – 4Q & FY 2025”, “Infrastructure segment details – 4Q & FY 2025”, “Consulting segment details – 4Q & FY 2025” and “Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of these non-GAAP financial measures. GAAP @CC Software 11% 9% Hybrid Cloud 13% 12% Automation 18% 16% Data 12% 11% Transaction Processing 2% Flat FY25 Yr/Yr GAAP @CC Consulting 2% Flat Strategy and Technology Flat (1%) Intelligent Operations 3% 2% Infrastructure 12% 10% Hybrid Infrastructure 19% 17% IBM Z 52% 48% Distributed Infrastructure (2%) (3%) Infrastructure Support Flat (1%) FY25 Yr/Yr
Slide 32 — Non-GAAP supplemental materials
Non-GAAP supplemental materials Reconciliation of expense summary – 4Q 2025 32 *Represents the percentage change after excluding the impact of currency translation & hedges, acquisitions and divestitures **2024 includes the impact related to a pension settlement charge The above reconciles the non-GAAP financial information contained in the “Expense summary” discussion in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of these non-GAAP financial measures. Non-GAAP Operating GAAP adjustments (non-GAAP) SG&A Currency (2 pts) 0 pts (2 pts) Acquisitions/divestitures (3 pts) 0 pts (3 pts) Base* (7 pts) 1 pts (6 pts) R&D Currency (1 pts) 0 pts (1 pts) Acquisitions/divestitures (6 pts) 0 pts (6 pts) Base* (5 pts) 0 pts (5 pts) Operating expense & other income Currency (4 pts) (1 pts) (5 pts) Acquisitions/divestitures (4 pts) 0 pts (4 pts) Base*,** (1 pts) (6 pts) (7 pts) 4Q25
Slide 33 — Non-GAAP supplemental materials
Non-GAAP supplemental materials Reconciliation of expense summary – FY 2025 33 *Represents the percentage change after excluding the impact of currency translation & hedges, acquisitions and divestitures **2024 includes the impact related to the pension settlement charges The above reconciles the non-GAAP financial information contained in the “Expense summary – FY 2025” discussion in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of these non-GAAP financial measures. Non-GAAP Operating GAAP adjustments (Non-GAAP) SG&A Currency (1 pts) 0 pts (1 pts) Acquisitions/divestitures (4 pts) 0 pts (4 pts) Base* 2 pts 1 pts 4 pts R&D Currency 0 pts 0 pts 0 pts Acquisitions/divestitures (5 pts) 0 pts (5 pts) Base* (6 pts) 0 pts (6 pts) Operating expense & other income Currency (2 pts) (1 pts) (2 pts) Acquisitions/divestitures (5 pts) (1 pts) (5 pts) Base*,** 9 pts (11 pts) (2 pts) FY25
Slide 34 — Non-GAAP supplemental materials
Non-GAAP supplemental materials Reconciliation of continuing operations – 4Q 2025 34 $ in millions (except EPS which is in whole dollars) *2025 includes a benefit from income taxes primarily driven by the resolution of certain tax audit matters The above reconciles the non-GAAP financial information contained in the “Revenue and P&L highlights”, “Expense summary” and “Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of these non- GAAP financial measures. GAAP Acquisition- related adjustments Retirement- related adjustments Tax reform impacts* Operating (non-GAAP) Gross profit $11,928 $231 — — $12,159 Gross profit margin 60.6% 1.2 pts — — 61.8% SG&A 5,462 (362) — — 5,100 Other (income) & expense (66) (5) (4) — (74) Total expense & other (income) 7,784 (366) (4) — 7,414 Pre-tax income 4,144 597 4 — 4,745 Pre-tax income margin 21.0% 3.0 pts 0.0 pts — 24.1% Effective tax rate (34.6%) 12.6 pts 0.4 pts 30.9 pts 9.2% Income from cont. ops. 5,579 208 (11) (1,468) 4,307 Income margin from cont. ops. 28.3% 1.1 pts (0.1 pts) (7.5 pts) 21.9% Diluted earnings per share $5.86 $0.22 ($0.01) ($1.54) $4.52 4Q25
Slide 35 — Non-GAAP supplemental materials
Non-GAAP supplemental materials Reconciliation of continuing operations – FY 2025 35 $ in millions (except EPS which is in whole dollars) *2025 includes a benefit from income taxes primarily driven by the resolution of certain tax audit matters The above reconciles the non-GAAP financial information contained in the “Revenue and P&L highlights – FY 2025”, “Expense summary – FY 2025” and “Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of these non-GAAP financial measures. GAAP Acquisition- related adjustments Retirement- related adjustments Tax reform impacts* Operating (non-GAAP) Gross profit $39,297 $888 — — $40,184 Gross profit margin 58.2% 1.3 pts — — 59.5% SG&A 20,123 (1,417) — — 18,706 Other (income) & expense (442) (11) (65) — (518) Total expense & other (income) 28,968 (1,432) (65) — 27,472 Pre-tax income 10,328 2,320 65 — 12,713 Pre-tax income margin 15.3% 3.4 pts 0.1 pts — 18.8% Effective tax rate (2.3%) 6.6 pts 0.1 pts 9.1 pts 13.5% Income from cont. ops. 10,571 1,534 49 (1,161) 10,993 Income margin from cont. ops. 15.7% 2.3 pts 0.1 pts (1.7 pts) 16.3% Diluted earnings per share $11.14 $1.62 $0.05 ($1.22) $11.59 FY25
Slide 36 — Non-GAAP supplemental materials
4Q25 Yr/Yr FY25 Yr/Yr Net income as reported (GAAP)* $5.6 $2.7 $10.6 $4.6 Less: income/(loss) from discontinued operations, net of tax $0.0 $0.0 $0.0 $0.0 Income from continuing operations $5.6 $2.7 $10.6 $4.6 Provision for/(Benefit from) income taxes from continuing operations* ($1.4) ($1.8) ($0.2) $0.0 Pre-tax income from continuing operations (GAAP) $4.1 $0.8 $10.3 $4.5 Non-operating adjustments (before tax) Acquisition-related charges** $0.6 $0.1 $2.3 $0.4 Non-operating retirement-related costs/(income) $0.0 ($0.5) $0.1 ($3.4) Operating (non-GAAP) pre-tax income from continuing operations $4.7 $0.5 $12.7 $1.5 Net interest expense $0.3 $0.1 $1.3 $0.3 Depreciation/Amortization of non-acquired intangible assets $0.7 $0.0 $2.9 $0.0 Stock-based compensation $0.4 $0.1 $1.7 $0.4 Workforce rebalancing charges $0.3 $0.3 $0.7 $0.0 Corporate (gains) and charges*** $0.0 $0.0 $0.0 $0.6 Adjusted EBITDA $6.5 $1.0 $19.2 $2.8 Non-GAAP supplemental materials Reconciliation of GAAP net income to adjusted EBITDA 36 $ in billions *2025 includes a benefit from income taxes primarily driven by the resolution of certain tax audit matters **Primarily consists of amortization of acquired intangible assets ***Corporate (gains) and charges primarily consists of unique corporate actions such as gains on divestitures and asset sales (e.g., certain QRadar SaaS assets in 2024) Adjusted EBITDA margin utilized in the “Financial highlights” discussion in the company’s earnings presentation is calculated by dividing Adjusted EBITDA by total revenue The above reconciles the non-GAAP financial information contained in the “Summary”, “Financial highlights”, “Revenue and P&L highlights", “Revenue and P&L highlights – FY 2025”, “Adjusted EBITDA performance” and "Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of these non-GAAP financial measures.
Slide 37 — Non-GAAP supplemental materials
Non-GAAP supplemental materials Reconciliation of net cash from operations to adjusted EBITDA 37 $ in billions *2025 includes a benefit from income taxes primarily driven by the resolution of certain tax audit matters **Other assets and liabilities/other, net mainly consists of operating assets and liabilities/other, net in the “Cash flow (ASC230)” discussion, workforce rebalancing charges, non-operating impacts and corporate (gains) and charges The above reconciles the non-GAAP financial information contained in the “Prepared remarks” discussion in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of this non-GAAP financial measure. 4Q25 4Q24 FY25 FY24 Net cash provided by operating activities $4.0 $4.3 $13.2 $13.4 Add: Net interest expense $0.3 $0.3 $1.3 $1.0 Provision for/(Benefit from) income taxes from continuing operations* ($1.4) $0.4 ($0.2) ($0.2) Less change in: Financing receivables ($4.1) ($2.3) ($3.2) ($0.4) Other assets and liabilities/other, net** $0.5 $1.7 ($1.8) ($1.8) Adjusted EBITDA $6.5 $5.6 $19.2 $16.4
Slide 38 — Non-GAAP supplemental materials
Non-GAAP supplemental materials Reconciliation of pre-tax income margin – FY 2025 *Excludes the effects of certain acquisition-related charges, non-operating retirement related (income)/expense and tax reform impact. For details on these adjustments, see slide entitled “Reconciliation of continuing operations – FY 2025” in this presentation The above reconciles the non-GAAP financial information contained in the “Prepared remarks” discussion in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of this non-GAAP financial measures. 38 Pre-tax margin yr/yr B/(W) GAAP 6.1 Pts Non-operating adjustments* 5.1 Pts Operating (non-GAAP) 1.0 Pts Adjustment for 4Q25 workforce rebalancing 0.4 Pts Operating (non-GAAP) excl. impacts of workforce rebalancing 1.4 Pts
Slide 39 — Non-GAAP supplemental materials
Non-GAAP supplemental materials Reconciliation of pre-tax income margin – FY 2026 expectations The above reconciles the non-GAAP financial information contained in the “Summary” and “Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated January 28, 2026, for additional information on the use of this non-GAAP financial measure. The reconciliation of IBM’s historical operating pre-tax income guidance to GAAP is included in the company's 8-K furnished on April 24. 2025. 39 GAAP Operating (non-GAAP) Pre-tax income margin B/(W) B/(W) Pre-tax income margin Yr/Yr Flat ~1 Pt
Slide 40 — ibm.com/investor
ibm.com/investor