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Acquisitions & Divestitures | 6 Months Ended
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Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
Acquisitions & Divestitures | Acquisitions & Divestitures: Acquisitions Purchase price consideration for all acquisitions was paid primarily in cash. All acquisitions, unless otherwise stated, were for 100 percent of the acquired business and are reported in the Consolidated Statement of Cash Flows, net of acquired cash and cash equivalents. During the six months ended June 30, 2025, the company completed four acquisitions within the Software segment and two acquisitions within the Consulting segment at an aggregate total purchase price of $8,887 million. These acquisitions are expected to enhance the company’s portfolio of products and services capabilities and further advance IBM’s hybrid cloud and AI strategy. At June 30, 2025, the remaining cash to be remitted by the company related to certain first-half 2025 acquisitions was $152 million, of which $63 million was classified as restricted cash in the Consolidated Balance Sheet. The remaining cash amount is primarily expected to be paid in 2026 and will be presented as financing activity in the Consolidated Statement of Cash Flows at settlement. The following table reflects the purchase price related to these acquisitions and the resulting purchase price allocations as of June 30, 2025.
(Dollars in millions) |  | Amortization Life (in years) |  |  |  | HashiCorp, Inc. (HashiCorp) |  | Other Acquisitions
Current assets (1) |  |  |  |  |  | $ | 1,451 |  |  | $ | 151 |
Property, plant and equipment/noncurrent assets |  |  |  |  |  | 457 |  |  | 104 |
Intangible assets: |  |  |  |  |  |  |  |
Goodwill |  | N/A |  |  |  | 4,675 |  |  | 945 |
Client relationships |  | 5-13 |  |  |  | 980 |  |  | 295 |
Completed technology |  | 5-7 |  |  |  | 770 |  |  | 193 |
Trademarks |  | 1-7 |  |  |  | 85 |  |  | 6 |
Total assets acquired |  |  |  |  |  | $ | 8,418 |  |  | $ | 1,694 |
Current liabilities |  |  |  |  |  | 478 |  |  | 137 |
Noncurrent liabilities |  |  |  |  |  | 507 |  |  | 104 |
Total liabilities assumed |  |  |  |  |  | $ | 985 |  |  | $ | 241 |
Total purchase price |  |  |  |  |  | $ | 7,433 |  |  | $ | 1,453 |
(1)Includes $929 million of cash and cash equivalents and $331 million of short-term marketable securities acquired from HashiCorp at the acquisition date. N/A – not applicable The goodwill generated from these acquisitions is primarily attributable to the assembled workforce and the expected synergies from the integration of the acquired businesses. The identified intangible assets are amortized on a straight-line basis over their useful life which approximates the economic life of the assets. The valuation of the assets acquired and liabilities assumed is subject to revision. If additional information becomes available, the company may further revise the purchase price allocation as soon as practical, but no later than one year from the acquisition date. HashiCorp — On February 27, 2025, the company completed the acquisition of all of the outstanding shares of HashiCorp. The combined IBM and HashiCorp portfolios help clients manage growing application and infrastructure complexity and create a comprehensive end-to-end hybrid cloud platform designed for the AI era. HashiCorp's shareholders on record immediately prior to the effective time on the closing date received $35 per share in cash, representing a total equity value of approximately $7.2 billion. The following table reflects the consideration paid related to the acquisition.
(Dollars in millions) |  |  |  | Total Consideration (1)
Cash paid for outstanding HashiCorp common stock |  |  |  | $ | 7,212 |
Cash paid for HashiCorp equity awards |  |  |  | 178 |
Cash consideration |  |  |  | $ | 7,390 |
Fair value of stock-based compensation awards attributable to pre-acquisition services |  |  |  | 40 |
Settlement of pre-existing relationships |  |  |  | 3 |
Total consideration |  |  |  | $ | 7,433 |
(1)As part of the assets acquired, the company received $929 million of cash and cash equivalents and $331 million of short-term marketable securities from HashiCorp. Goodwill of $4,532 million and $143 million was assigned to the Software and Consulting segments, respectively. It is expected that none of the goodwill will be deductible for tax purposes. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 9.8 years. In connection with the acquisition, the company issued and assumed 1.7 million stock awards with a fair value of $381 million. Refer to note 17, "Stock-Based Compensation," for additional information. The acquisition was integrated into the Software segment. Other Acquisitions — Goodwill of $482 million and $463 million was assigned to the Consulting and Software segments, respectively. It is expected that 2 percent of the goodwill will be deductible for tax purposes. The overall weighted-average useful life of the identified amortizable intangible assets acquired was 6.6 years.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 205 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/205-20/tableOfContent Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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