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v3.25.1

Segments | 3 Months Ended
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Mar. 31, 2025
Segment Reporting [Abstract] |
Segments | Segments: In the first quarter of 2025, the company made changes to the reported revenue categories within its Software and Consulting reportable segments. These changes did not impact the company's Consolidated Financial Statements or its reportable segments. The following tables reflect the results of continuing operations of the company’s segments consistent with the management and measurement system utilized within the company. Performance measurement is based on segment profit. The chief operating decision maker (CODM) considers budget-to-actual results of segment profit, both when evaluating the performance of and allocating resources to each of the segments as well as in developing certain compensation recommendations. The CODM reviews segment revenue, cost and profit information related to each segment, which is included in the tables below, but does not regularly review total assets by segment and therefore, such information is not presented. Management System Segment View
(Dollars in millions) |  | Software |  | Consulting |  | Infrastructure |  | Financing |  | Total Segments
For the three months ended March 31, 2025: |  |  |  |  |  |  |  |  |  |
Revenue |  | $ | 6,336 |  |  | $ | 5,068 |  |  | $ | 2,886 |  |  | $ | 191 |  |  | $ | 14,480 |
Segment cost |  | 1,042 |  |  | 3,686 |  |  | 1,363 |  |  | 104 |  |  | 6,195 |
Other expenses and (income) (1) |  | 3,447 |  |  | 823 |  |  | 1,275 |  |  | 19 |  |  | 5,564 |
Segment profit |  | $ | 1,847 |  |  | $ | 558 |  |  | $ | 248 |  |  | $ | 69 |  |  | $ | 2,721 |
Revenue year-to-year change |  | 7.4 | % |  | (2.3) | % |  | (6.2) | % |  | (0.8) | % |  | 0.9 | %
Segment profit year-to-year change |  | 23.2 | % |  | 31.6 | % |  | (20.3) | % |  | (25.5) | % |  | 17.0 | %
Segment profit margin |  | 29.1 | % |  | 11.0 | % |  | 8.6 | % |  | 35.8 | % |  | 18.8 | %
For the three months ended March 31, 2024: |  |  |  |  |  |  |  |  |  |
Revenue |  | $ | 5,899 |  |  | $ | 5,186 |  |  | $ | 3,076 |  |  | $ | 193 |  |  | $ | 14,354 |
Segment cost |  | 1,039 |  |  | 3,872 |  |  | 1,410 |  |  | 99 |  |  | 6,421 |
Other expenses and (income) (1) |  | 3,360 |  |  | 889 |  |  | 1,355 |  |  | 2 |  |  | 5,606 |
Segment profit |  | $ | 1,500 |  |  | $ | 424 |  |  | $ | 311 |  |  | $ | 92 |  |  | $ | 2,327 |
Segment profit margin |  | 25.4 | % |  | 8.2 | % |  | 10.1 | % |  | 47.7 | % |  | 16.2 | %
(1)Other expenses and (income) by segment primarily includes: Software – Selling, general and administrative (SG&A) expense, Research and development (R&D) expense Consulting – SG&A expense Infrastructure – R&D expense, SG&A expense, Intellectual property and custom development income Financing – SG&A expense, Intercompany financing net other income Reconciliations to IBM as Reported:
(Dollars in millions) |  |  |  |
For the three months ended March 31: |  | 2025 |  | 2024
Revenue: |  |  |  |
Total reportable segments |  | $ | 14,480 |  |  | $ | 14,354 |
Other‒divested businesses |  | 0 |  |  | 35 |
Other revenue |  | 61 |  |  | 73 |
Total revenue from continuing operations |  | $ | 14,541 |  |  | $ | 14,462 |
Pre-tax income from continuing operations: |  |  |  |
Total reportable segment profit |  | $ | 2,721 |  |  | $ | 2,327 |
Amortization of acquired intangible assets |  | (495) |  |  | (428) |
Acquisition-related charges |  | (63) |  |  | (60) |
Non-operating retirement-related (costs)/income |  | (23) |  |  | (96) |
Stock-based compensation |  | (401) |  |  | (320) |
Net interest excluding the Financing segment |  | (265) |  |  | (223) |
Workforce rebalancing charges |  | (316) |  |  | (374) |
Other‒divested businesses (1) |  | (7) |  |  | 239 |
Unallocated corporate amounts and other |  | 5 |  |  | 9 |
Total pre-tax income from continuing operations |  | $ | 1,158 |  |  | $ | 1,074 |
(1)2024 includes a gain from the divestiture of The Weather Company assets. Other Reportable Segment Items
(Dollars in millions) |  | Software |  | Consulting |  | Infrastructure |  | Financing |  | Total Segments
For the three months ended March 31, 2025: |  |  |  |  |  |  |  |  |  |
Depreciation (1) /amortization of non-acquired intangibles |  | $ | 121 |  |  | $ | 21 |  |  | $ | 266 |  |  | $ | 1 |  |  | $ | 409 |
Interest Income |  | — |  |  | — |  |  | — |  |  | 176 |  |  | 176 |
Interest Expense |  | — |  |  | — |  |  | — |  |  | 90 |  |  | 90 |
For the three months ended March 31, 2024: |  |  |  |  |  |  |  |  |  |
Depreciation (1) /amortization of non-acquired intangibles |  | $ | 128 |  |  | $ | 27 |  |  | $ | 267 |  |  | $ | 2 |  |  | $ | 424 |
Interest Income |  | — |  |  | — |  |  | — |  |  | 180 |  |  | 180 |
Interest Expense |  | — |  |  | — |  |  | — |  |  | 102 |  |  | 102 |
(1)Where several segments share the use of leased or owned assets, a landlord's ownership of these assets is assigned to one segment. While depreciation expense is allocated to each user segment, it is presented consistently with the landlord's ownership; therefore, there will not be a precise correlation between segment profit and the segment depreciation reported above. Immaterial Items The resulting gains and (losses) from equity method investments that are attributable to the segments did not have a material effect on the financial results of the segments.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 48 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482785/280-10-55-48 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards 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