INTERNATIONAL BUSINESS MACHINES CORPIBM
INTERNATIONAL BUSINESS MACHINES CORP Segments Disclosure
SEGMENTS
The segments represent components of the company for which separate financial information is available that is utilized on a regular basis by the chief operating decision maker (Chairman, President and Chief Executive Officer) in determining how to allocate resources and evaluate performance. The segments are determined based on several factors, including client base, homogeneity of products, technology, delivery channels and similar economic characteristics.
Certain transactions between the segments are recorded to other (income) and expense and are reflected in segment profit. The company utilizes globally integrated support organizations to realize economies of scale and efficient use of resources. As a result, a considerable amount of expense is shared by all of the segments. This shared expense includes sales coverage, certain marketing functions and support functions such as Accounting, Treasury, Procurement, Legal, Human Resources, Chief Information Office, and Billing and Collections. Where practical, shared expenses are allocated based on measurable drivers of expense, e.g., headcount. When a clear and measurable driver cannot be identified, shared expenses are allocated on a financial basis that is consistent with the company’s management system, e.g., advertising expense is allocated based on the gross profits of the segments. A portion of the shared expenses, which are recorded in net income, are not allocated to the segments. These expenses are associated with the elimination of internal transactions and other miscellaneous items.
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 assets by segment and therefore, such information is not presented.
Management System Segment View
| ($ in millions) | ||||||||||||||||||||||||||||||||
| For the year ended December 31: | Software | Consulting | Infrastructure | Financing (1) | Segments | |||||||||||||||||||||||||||
| 2025 | ||||||||||||||||||||||||||||||||
| Revenue | $ | 29,962 | $ | 21,055 | $ | 15,718 | $ | 737 | $ | 67,472 | ||||||||||||||||||||||
| Segment cost | 4,951 | 15,134 | 6,502 | 403 | 26,990 | |||||||||||||||||||||||||||
Other expense and (income) (2) | 15,091 | 3,457 | 5,757 | (187) | 24,118 | |||||||||||||||||||||||||||
| Segment profit | 9,920 | 2,464 | 3,458 | 521 | 16,364 | |||||||||||||||||||||||||||
| Revenue year-to-year change | 10.6 | % | 1.8 | % | 12.1 | % | 3.3 | % | 7.9 | % | ||||||||||||||||||||||
| Segment profit year-to-year change | 14.2 | % | 20.0 | % | 41.2 | % | 49.6 | % | 20.9 | % | ||||||||||||||||||||||
| Segment profit margin | 33.1 | % | 11.7 | % | 22.0 | % | 70.7 | % | 24.3 | % | ||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||||||||
| Revenue | $ | 27,085 | $ | 20,692 | $ | 14,020 | $ | 713 | $ | 62,510 | ||||||||||||||||||||||
| Segment cost | 4,428 | 15,103 | 6,201 | 372 | 26,103 | |||||||||||||||||||||||||||
Other expense and (income) (2) | 13,974 | 3,535 | 5,369 | (6) | 22,872 | |||||||||||||||||||||||||||
| Segment profit | 8,684 | 2,054 | 2,450 | 348 | 13,535 | |||||||||||||||||||||||||||
| Revenue year-to-year change | 8.3 | % | (0.9) | % | (3.9) | % | (3.7) | % | 2.1 | % | ||||||||||||||||||||||
| Segment profit year-to-year change | 15.8 | % | (3.6) | % | (13.4) | % | (6.6) | % | 5.5 | % | ||||||||||||||||||||||
| Segment profit margin | 32.1 | % | 9.9 | % | 17.5 | % | 48.8 | % | 21.7 | % | ||||||||||||||||||||||
| 2023 | ||||||||||||||||||||||||||||||||
| Revenue | $ | 25,011 | $ | 20,884 | $ | 14,593 | $ | 741 | $ | 61,229 | ||||||||||||||||||||||
| Segment cost | 4,289 | 15,297 | 6,406 | 384 | 26,376 | |||||||||||||||||||||||||||
Other expense and (income) (2) | 13,222 | 3,458 | 5,359 | (16) | 22,023 | |||||||||||||||||||||||||||
| Segment profit | 7,499 | 2,130 | 2,828 | 373 | 12,829 | |||||||||||||||||||||||||||
(1)Refer to “Other Reportable Segment Items” section below for additional information on financing interest income and expense.
(2)Other expense and (income) by segment primarily includes:
Software - SG&A expense, R&D expense
Consulting - SG&A expense
Infrastructure - R&D expense, SG&A expense, Other expense, IP and custom development income
Financing - Intercompany financing net other income which reflects IBM Z product cycle dynamics, SG&A expense
Reconciliations of IBM as Reported
| ($ in millions) | ||||||||||||||||||||
| For the year ended December 31: | 2025 | 2024 | 2023 | |||||||||||||||||
| Revenue | ||||||||||||||||||||
| Total reportable segments | $ | 67,472 | $ | 62,510 | $ | 61,229 | ||||||||||||||
| Other—divested businesses | (2) | 35 | 397 | |||||||||||||||||
Other revenue (1) | 65 | 207 | 235 | |||||||||||||||||
| Total revenue | $ | 67,535 | $ | 62,753 | $ | 61,860 | ||||||||||||||
| ($ in millions) | ||||||||||||||||||||
| For the year ended December 31: | 2025 | 2024 | 2023 | |||||||||||||||||
| Pre-tax income from continuing operations | ||||||||||||||||||||
| Total reportable segment profit | $ | 16,364 | $ | 13,535 | $ | 12,829 | ||||||||||||||
| Amortization of acquired intangible assets | (2,166) | (1,830) | (1,627) | |||||||||||||||||
| Acquisition-related charges | (154) | (122) | (33) | |||||||||||||||||
Non-operating retirement-related (costs)/income (2) | (65) | (3,457) | 39 | |||||||||||||||||
Stock-based compensation (3) | (1,685) | (1,311) | (1,133) | |||||||||||||||||
| Net interest excluding the Financing segment | (1,312) | (984) | (973) | |||||||||||||||||
Workforce rebalancing charges (3) | (653) | (692) | (435) | |||||||||||||||||
Other—divested businesses (4) | (33) | 234 | 83 | |||||||||||||||||
Unallocated corporate amounts and other (5) | 31 | 425 | (59) | |||||||||||||||||
| Total pre-tax income from continuing operations | $ | 10,328 | $ | 5,797 | $ | 8,690 | ||||||||||||||
(1)Includes reduction in revenue for the estimated residual value less related unearned income on sales-type leases, which reflects the z17 launch in June 2025. Refer to note A, "Significant Accounting Policies," for additional information.
(2)2024 includes the impact of pension settlement charges of $3.1 billion. Refer to note U, “Retirement-Related Benefits,” for additional information.
(3)Excludes certain acquisition-related charges.
(4)2024 includes a gain from the divestiture of The Weather Company assets. Refer to note E, “Acquisitions & Divestitures,” for additional information.
(5)2024 includes a gain from the sale of certain QRadar SaaS assets. Refer to note E, “Acquisitions & Divestitures,” for additional information.
Other Reportable Segment Items
To ensure the efficient use of the company’s space and equipment, several segments may share leased or owned plant, property and equipment assets. Where assets are shared, landlord ownership of the assets is assigned to one segment. Depreciation expense in the table below is presented consistently with this ownership view. However, from a segment profit perspective, depreciation expense is allocated to each user segment. Therefore, there is no precise correlation between the depreciation expense presented below and segment profit.
Financing interest income reflects the income associated with Financing's external client transactions. Financing interest expense reflects the expense associated with intercompany loans set to substantially match the term, currency and interest rate variability underlying the financing receivables and secured borrowings both supporting Financing’s external client transactions. These secured borrowings are included in note O, “Borrowings.” Financing segment cost primarily reflects the cost of financing presented in IBM’s Consolidated Income Statement. Intercompany financing activities are recorded to other (income) and expense and are reflected in segment profit. These intercompany transactions are eliminated in IBM’s consolidated financial results.
Management System Segment View
| ($ in millions) | ||||||||||||||||||||||||||||||||
| For the year ended December 31: | Software | Consulting | Infrastructure | Financing | Total Segments | |||||||||||||||||||||||||||
| 2025 | ||||||||||||||||||||||||||||||||
| Depreciation/amortization of non-acquired intangibles | $ | 532 | $ | 78 | $ | 1,130 | $ | 3 | $ | 1,743 | ||||||||||||||||||||||
| Interest Income | — | — | — | 705 | 705 | |||||||||||||||||||||||||||
| Interest Expense | — | — | — | 365 | 365 | |||||||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||||||||
| Depreciation/amortization of non-acquired intangibles | $ | 495 | $ | 100 | $ | 1,103 | $ | 9 | $ | 1,708 | ||||||||||||||||||||||
| Interest Income | — | — | — | 681 | 681 | |||||||||||||||||||||||||||
| Interest Expense | — | — | — | 369 | 369 | |||||||||||||||||||||||||||
| 2023 | ||||||||||||||||||||||||||||||||
| Depreciation/amortization of non-acquired intangibles | $ | 510 | $ | 109 | $ | 1,018 | $ | 8 | $ | 1,646 | ||||||||||||||||||||||
| Interest Income | — | — | — | 680 | 680 | |||||||||||||||||||||||||||
| Interest Expense | — | — | — | 298 | 298 | |||||||||||||||||||||||||||
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 position or the financial results of the segments.
Major Clients
No single client represented 10 percent or more of the company’s total revenue in 2025, 2024 or 2023.
Geographic Information
The following tables provide information for those countries that are 10 percent or more of the specific category.
Revenue (1)
| ($ in millions) | ||||||||||||||||||||
| For the year ended December 31: | 2025 | 2024 | 2023 | |||||||||||||||||
| United States | $ | 26,892 | $ | 25,144 | $ | 25,309 | ||||||||||||||
| Other countries | 40,643 | 37,609 | 36,551 | |||||||||||||||||
| Total revenue | $ | 67,535 | $ | 62,753 | $ | 61,860 | ||||||||||||||
(1)Revenues are attributed to countries based on the location of the client.
Plant and Other Property–Net (1)
| ($ in millions) | ||||||||||||||||||||
| At December 31: | 2025 | 2024 | 2023 | |||||||||||||||||
| United States | $ | 4,097 | $ | 4,009 | $ | 3,466 | ||||||||||||||
| Other countries | 1,797 | 1,717 | 2,027 | |||||||||||||||||
| Total | $ | 5,894 | $ | 5,726 | $ | 5,492 | ||||||||||||||
(1)Excludes rental machines.
Operating Right-of-Use Assets–Net
| ($ in millions) | ||||||||||||||||||||
| At December 31: | 2025 | 2024 | 2023 | |||||||||||||||||
| United States | $ | 1,016 | $ | 1,154 | $ | 1,249 | ||||||||||||||
| India | 428 | 365 | 218 | |||||||||||||||||
| Japan | 258 | 324 | 340 | |||||||||||||||||
| Other countries | 1,426 | 1,355 | 1,413 | |||||||||||||||||
| Total | $ | 3,129 | $ | 3,197 | $ | 3,220 | ||||||||||||||
Revenue by Classes of Similar Products or Services
The following table presents external revenue for similar classes of products or services within the company’s reportable segments. Client solutions often include IBM software and systems and other suppliers’ products if the client solution requires it. For each of the segments that include services, SaaS, consulting, education, training and other product-related services are included as services. For each of these segments, software includes product license charges and ongoing subscriptions.
| ($ in millions) | ||||||||||||||||||||
| For the year ended December 31: | 2025 | 2024 | 2023 | |||||||||||||||||
| Software | ||||||||||||||||||||
| Software | $ | 26,493 | $ | 24,055 | $ | 22,409 | ||||||||||||||
| Services | 3,444 | 3,002 | 2,562 | |||||||||||||||||
| Systems | 25 | 29 | 40 | |||||||||||||||||
| Consulting | ||||||||||||||||||||
| Services | $ | 20,801 | $ | 20,277 | $ | 20,515 | ||||||||||||||
| Software | 169 | 324 | 272 | |||||||||||||||||
| Systems | 85 | 91 | 98 | |||||||||||||||||
| Infrastructure | ||||||||||||||||||||
| Servers | $ | 5,410 | $ | 3,693 | $ | 4,253 | ||||||||||||||
| Maintenance | 3,926 | 3,951 | 4,138 | |||||||||||||||||
| Storage | 2,371 | 2,360 | 2,081 | |||||||||||||||||
| Services | 2,216 | 2,262 | 2,463 | |||||||||||||||||
| Software | 1,795 | 1,753 | 1,658 | |||||||||||||||||
| Financing | ||||||||||||||||||||
| Financing | $ | 705 | $ | 681 | $ | 680 | ||||||||||||||
| Used equipment sales | 32 | 32 | 60 | |||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 28, 2017 | |
| 2015 | Feb 23, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.