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Revenue Recognition
 9 Months Ended
Sep. 30, 2025
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition:
Disaggregation of Revenue
In the first quarter of 2025, the company made changes to the reported revenue categories within its Software and Consulting reportable segments to better reflect the market opportunities and how IBM addresses them. Beginning January 1, 2025, the company reports revenue for Hybrid Cloud (Red Hat), Automation, Data and Transaction Processing within Software; and it no longer reports revenue for Hybrid Platform & Solutions. Within Consulting, the company reports revenue for Strategy and Technology and Intelligent Operations. These changes did not impact the company's Consolidated Financial Statements or its reportable segments.
The following tables provide details of revenue by major products/service offerings and revenue by geography.
Revenue by Major Products/Service Offerings
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)2025
2024 (1)
2025
2024 (1)
Hybrid Cloud$1,886 $1,659 $5,369 $4,716 
Automation
1,934 1,563 5,401 4,574 
Data
1,459 1,352 4,194 3,902 
Transaction Processing
1,930 1,951 5,967 5,970 
Total Software$7,209 $6,524 $20,932 $19,162 
Strategy and Technology
2,905 2,856 8,607 8,613 
Intelligent Operations
2,419 2,297 7,100 6,904 
Total Consulting$5,324 $5,152 $15,706 $15,517 
Hybrid Infrastructure2,263 1,765 6,775 5,928 
Infrastructure Support1,296 1,277 3,811 3,835 
Total Infrastructure$3,559 $3,042 $10,586 $9,764 
Financing (2)
200 181 557 543 
Other (3)
38 68 68 214 
Total revenue$16,331 $14,968 $47,849 $45,199 
(1)Prior-year amounts recast to reflect January 2025 changes to the reported revenue categories within Software and Consulting segments.
(2)Contains lease and loan financing arrangements which are not subject to the guidance on revenue from contracts with customers.
(3)Includes reductions in revenue for estimated residual value less related unearned income on sales-type leases, which reflects the new z17 launch in June 2025. Refer to note A, "Significant Accounting Policies," in the company's 2024 Annual Report for additional information.
Revenue by Geography
Three Months Ended September 30,Nine Months Ended September 30,
(Dollars in millions)20252024 20252024
Americas$8,143 $7,453 $23,811 $22,727 
Europe/Middle East/Africa5,251 4,584 15,216 13,619 
Asia Pacific2,936 2,932 8,822 8,853 
Total$16,331 $14,968 $47,849 $45,199 
Remaining Performance Obligations
The remaining performance obligation (RPO) disclosure provides the aggregate amount of the transaction price yet to be recognized as of the end of the reporting period and an explanation as to when the company expects to recognize these amounts in revenue. It is intended to be a statement of overall work under contract that has not yet been performed and does not include contracts in which the customer is not committed, such as certain as-a-service, governmental, term software license and services offerings. The customer is not considered committed when they are able to terminate for
convenience without payment of a substantive penalty. The disclosure includes estimates of variable consideration, except when the variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property. Additionally, as a practical expedient, the company does not include contracts that have an original duration of one year or less. RPO estimates are subject to change and are affected by several factors, including terminations, changes in the scope of contracts, periodic revalidations, adjustment for revenue that has not materialized and adjustments for currency.
At September 30, 2025, the aggregate amount of the transaction price allocated to RPO related to customer contracts that are unsatisfied or partially unsatisfied was approximately $64 billion. Approximately 68 percent of the amount is expected to be recognized as revenue in the subsequent two years, approximately 29 percent in the subsequent three to five years and the balance thereafter.
Revenue Recognized for Performance Obligations Satisfied (or Partially Satisfied) in Prior Periods
For the three and nine months ended September 30, 2025, revenue recognized for performance obligations satisfied or partially satisfied in prior periods was immaterial.
Reconciliation of Contract Balances
The following table provides information about notes and accounts receivable — trade, contract assets and deferred income balances.
(Dollars in millions)At September 30, 2025At December 31, 2024
Notes and accounts receivable — trade (net of allowances of $116 in 2025 and $114 in 2024)
$5,532 $6,804 
Contract assets (1)
$533 $433 
Deferred income (current)$13,878 $13,907 
Deferred income (noncurrent)$3,863 $3,622 
(1)Included within prepaid expenses and other current assets in the Consolidated Balance Sheet.
The amount of revenue recognized during the nine months ended September 30, 2025 that was included within the deferred income balance at December 31, 2024 was $10.3 billion and was primarily related to software and services.
The following table provides roll forwards of the notes and accounts receivable–trade allowance for expected credit losses for the nine months ended September 30, 2025 and the year ended December 31, 2024.
(Dollars in millions)    
January 1, 2025Additions / (Releases)
Write-offs (1)
Foreign currency and otherSeptember 30, 2025
$114$8$(19)$13$116
January 1, 2024Additions / (Releases)
Write-offs (1)
Foreign currency and otherDecember 31, 2024
$192$(2)$(78)$2$114
(1)The majority of the write-offs during the period related to receivables which had been previously reserved.
The contract assets allowance for expected credit losses was not material in any of the periods presented.