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Segments
 12 Months Ended
Dec. 31, 2025
Segment Reporting [Abstract]  
Segments 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:SoftwareConsultingInfrastructure
Financing (1)
Segments
2025
Revenue$29,962 $21,055 $15,718 $737 $67,472 
Segment cost4,951 15,134 6,502 403 26,990 
Other expense and (income) (2)
15,091 3,457 5,757 (187)24,118 
Segment profit9,920 2,464 3,458 521 16,364 
Revenue year-to-year change10.6%1.8 %12.1 %3.3 %7.9%
Segment profit year-to-year change14.2%20.0 %41.2 %49.6 %20.9%
Segment profit margin33.1%11.7 %22.0 %70.7 %24.3%
2024
Revenue$27,085 $20,692 $14,020 $713 $62,510 
Segment cost4,428 15,103 6,201 372 26,103 
Other expense and (income) (2)
13,974 3,535 5,369 (6)22,872 
Segment profit8,684 2,054 2,450 348 13,535 
Revenue year-to-year change8.3%(0.9)%(3.9)%(3.7)%2.1%
Segment profit year-to-year change15.8%(3.6)%(13.4)%(6.6)%5.5%
Segment profit margin32.1%9.9 %17.5 %48.8 %21.7%
2023
Revenue$25,011 $20,884 $14,593 $741 $61,229 
Segment cost4,289 15,297 6,406 384 26,376 
Other expense and (income) (2)
13,222 3,458 5,359 (16)22,023 
Segment profit7,499 2,130 2,828 373 12,829 
(1)Refer to “Other Reportable Segment Items” section below for additional information on financing interest income and expense.
(2)Other expense and (income) by segment primarily includes:
Software - SG&A expense, R&D expense
Consulting - SG&A expense
Infrastructure - R&D expense, SG&A expense, Other expense, IP and custom development income
Financing - Intercompany financing net other income which reflects IBM Z product cycle dynamics, SG&A expense
Reconciliations of IBM as Reported
($ in millions) 
For the year ended December 31:202520242023
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 20242023
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:SoftwareConsultingInfrastructureFinancingTotal
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 31:202520242023
United States$26,892 $25,144 $25,309 
Other countries40,643 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 31:202520242023
United States$4,097 $4,009 $3,466 
Other countries1,797 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 31:202520242023
United States$1,016 $1,154 $1,249 
India428 365 218 
Japan258 324 340 
Other countries1,426 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 31:202520242023
Software
Software$26,493 $24,055 $22,409 
Services3,444 3,002 2,562 
Systems25 29 40 
Consulting
Services$20,801 $20,277 $20,515 
Software169 324 272 
Systems85 91 98 
Infrastructure
Servers$5,410 $3,693 $4,253 
Maintenance3,926 3,951 4,138 
Storage2,371 2,360 2,081 
Services2,216 2,262 2,463 
Software1,795 1,753 1,658 
Financing
Financing$705 $681 $680 
Used equipment sales32 32 60