International Business Machines Corporation stock research
FY2025 Q1
International Business Machines (IBM) Gross Margin — Quarter Ended Mar 31, 2025
Revenue was unchanged from the same quarter one year earlier, while gross profit increased and cost of revenue decreased, resulting in an improved gross margin. Compared with the immediately preceding quarter, revenue, gross profit, and gross margin were all lower, and cost of revenue was also lower.
Gross margin takeaway
Quarter ended Mar 31, 2025 · FY2025 Q1
Revenue was unchanged from the same quarter one year earlier, while gross profit increased and cost of revenue decreased, resulting in an improved gross margin. Compared with the immediately preceding quarter, revenue, gross profit, and gross margin were all lower, and cost of revenue was also lower.
- Gross margin improved relative to the same quarter one year earlier, driven by a combination of higher gross profit and lower cost of revenue. The sequential decline from the prior quarter reflects a proportionally larger decrease in gross profit relative to the reduction in cost of revenue.
- Compared with the immediately preceding quarter, gross margin weakened, as gross profit fell more sharply than cost of revenue. Versus the same quarter one year earlier, gross margin strengthened, supported by higher gross profit on flat revenue.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
55.2%
Gross profit
$8.0B
Revenue
$14.5B
Cost of revenue
$6.5B
Quarter-over-quarter change
-4.2 pts
Year-over-year change
+1.7 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jun 30, 2024 | $15.8B | $8.9B | $6.8B | 56.8% |
| Sep 30, 2024 | $15.0B | $8.4B | $6.5B | 56.3% |
| Dec 31, 2024 | $17.6B | $10.4B | $7.1B | 59.5% |
| Mar 31, 2025 | $14.5B | $8.0B | $6.5B | 55.2% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2024
-4.2 pts
Year-over-year change
Mar 31, 2024
+1.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross margin improved relative to the same quarter one year earlier, driven by a combination of higher gross profit and lower cost of revenue. The sequential decline from the prior quarter reflects a proportionally larger decrease in gross profit relative to the reduction in cost of revenue.
Compared with the immediately preceding quarter, gross margin weakened, as gross profit fell more sharply than cost of revenue. Versus the same quarter one year earlier, gross margin strengthened, supported by higher gross profit on flat revenue.
Monitor the trajectory of cost of revenue relative to revenue, as its decline contributed to the year-over-year margin improvement.