Technology major IBM has posted 1 percent increase in revenue to $14.5 billion during the first-quarter of 2025.
IBM has revealed first-quarter segment results with Software revenue at $6.3 billion, reflecting a 7 percent increase. Within Software, Hybrid Cloud (Red Hat) rose 12 percent, Automation grew 14 percent, Data increased 5 percent, while Transaction Processing was flat.
IBM’s Consulting revenue was $5.1 billion, marking a 2 percent decline, with Strategy and Technology down 3 percent and Intelligent Operations down 2 percent.
IBM’s Infrastructure revenue fell to $2.9 billion, a 6 percent drop, driven by a 9 percent decline in Hybrid Infrastructure — IBM Z down 15 percent and Distributed Infrastructure down 5 percent — while Infrastructure Support decreased 3 percent.
IBM AI
Despite IBM’s repeated assertions of leadership in artificial intelligence, the company’s latest earnings paint a less convincing picture of AI translating into tangible financial performance.
While executives tout a $6 billion book of business in generative AI, the overall revenue growth remains tepid — up only 1 percent year over year to $14.5 billion. This marginal increase hardly reflects the transformative impact AI is supposed to have, especially for a company trying to position itself at the forefront of technological innovation.
“There continues to be strong demand for generative AI and our book of business stands at more than $6 billion inception-to-date, up more than $1 billion in the first quarter of 2025,” said Arvind Krishna, IBM chairman, president and chief executive officer, in the company’s earnings report.
The strongest revenue driver was the Software segment, yet even here, the numbers suggest incremental rather than exponential growth. Gains in hybrid cloud, automation, and data are notable but not groundbreaking in the context of today’s highly competitive tech landscape. Consulting revenues declined, and infrastructure — a historically core business for IBM — saw a significant downturn, particularly in its flagship IBM Z line, which dropped 15 percent.
Arvind Krishna’s optimism about long-term growth opportunities and the potential of generative AI rings hollow when the financial results reveal stagnation or decline in key areas. The infrastructure business, still vital for IBM’s enterprise clientele, is shrinking. Consulting is flat, despite the AI boom that should, in theory, drive demand for advisory services. The modest uptick in software revenues is not enough to offset weaknesses elsewhere, nor does it demonstrate that AI investments are yielding the kind of returns investors would expect from a company claiming leadership in this space.
IBM’s continued focus on fundamentals and free cash flow may reassure some stakeholders, but it also reflects a defensive posture rather than a bold AI-led transformation. The company’s AI messaging seems increasingly disconnected from its financial reality — raising questions about whether IBM is truly capturing the value of the technology it so heavily promotes.
Baburajan Kizhakedath
