IBM, the technology giant headquartered in Armonk, north of New York City, capped what executives called its best year in two decades, reporting fourth-quarter 2025 revenue of $19.69 billion — up 12% year-over-year and comfortably ahead of the roughly $19.23 billion Wall Street expected. The results, released January 28, 2026, were driven by a surging mainframe business and a generative-AI franchise that has grown into one of the largest in the industry.

The quarter

IBM’s three core segments all posted gains, according to the company’s earnings release filed with the Securities and Exchange Commission:

  • Software revenue of about $9.0 billion, up 14% year-over-year.
  • Infrastructure revenue of about $5.1 billion, up 21%.
  • Consulting revenue of about $5.3 billion, up 3%.

The standout was Infrastructure, fueled by the z17 mainframe IBM launched earlier in 2025. IBM Z delivered its highest fourth-quarter revenue in more than two decades, up sharply year-over-year. Chief Executive Arvind Krishna said the z17 had experienced “the strongest start” of any mainframe generation in the three quarters since its debut.

The mainframe is not the legacy relic many assume. IBM says the z17 processes roughly 50% more daily AI inferencing operations than its z16 predecessor, pushing real-time AI processing into the core transaction systems that banks, insurers and governments run on Big Iron.

The AI book

The clearest sign of IBM’s repositioning is its generative-AI book of business, which the company said now stands at more than $12.5 billion — counting both consulting engagements and software. Generative AI accounts for about 25% of IBM’s consulting order backlog and roughly 15% of consulting revenue, the company said.

That mix matters for a company that spent the 2010s struggling to find growth. Under Krishna, IBM has reoriented around hybrid cloud and AI, anchored by its 2019 acquisition of Red Hat and its watsonx AI platform. The Q4 results suggest that bet is now translating into double-digit top-line growth.

A New York employer in transition

For the New York region, IBM remains a major presence — a Fortune 500 anchor with a Westchester headquarters and a long history in the metropolitan economy. But the company’s growth has come alongside continued workforce reductions.

Even as revenue climbed, IBM has cut thousands of U.S. positions since 2024 across units including its older cloud operations, consulting and Red Hat engineering, as it redirects spending toward software and AI and leans on automation internally. The pattern mirrors a broader trend across the technology sector, where strong financial results and headcount cuts have increasingly gone hand in hand.

What it signals

IBM’s quarter lands as one of the first major earnings reports of the 2026 cycle from a New York-area corporate heavyweight, and it points to a theme likely to recur: AI demand lifting revenue, mainframe and software franchises proving durable, and companies trimming staff even in growth. For the regional economy, IBM’s results are a reminder that the area’s corporate base extends well beyond Wall Street and into the enterprise-technology core of Westchester.

Verification

Frequently Asked Questions

How much did IBM earn in the fourth quarter of 2025?
IBM reported revenue of $19.69 billion for the fourth quarter of 2025, up 12% year-over-year and ahead of the roughly $19.23 billion analysts expected. Results were released January 28, 2026.
Where is IBM headquartered?
IBM is headquartered in Armonk, in Westchester County, New York, just north of New York City. It remains one of the largest technology employers in the New York metropolitan area.
What drove IBM's growth?
Software grew 14% and Infrastructure 21%, the latter powered by the z17 mainframe, which CEO Arvind Krishna said had the strongest start of any IBM mainframe generation. IBM Z delivered its highest fourth-quarter revenue in more than 20 years.
How big is IBM's AI business?
IBM said its generative-AI book of business now exceeds $12.5 billion. Generative AI accounts for about 25% of its consulting order backlog and roughly 15% of consulting revenue.
Is IBM still cutting jobs?
Yes. Even amid strong results, IBM has continued workforce reductions, cutting thousands of U.S. positions since 2024 across units including consulting and Red Hat as it shifts resources toward higher-growth software and AI.