International Business Machines Corporation stock research
FY2025 Q3
International Business Machines (IBM) Gross Margin — Quarter Ended Sep 30, 2025
Revenue decreased from the prior quarter, while gross profit declined at a slightly faster pace, causing gross margin to weaken. Compared with the same quarter a year earlier, revenue and gross profit both rose, with gross margin improving.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2025 Q3
Revenue decreased from the prior quarter, while gross profit declined at a slightly faster pace, causing gross margin to weaken. Compared with the same quarter a year earlier, revenue and gross profit both rose, with gross margin improving.
- Gross margin was strongest relative to the year-ago quarter, driven by proportionally higher gross profit compared with revenue growth. The current quarter's margin, though lower than the preceding quarter, remained above the year-ago level.
- Compared with the immediate prior quarter, revenue was lower and gross profit was lower, resulting in a weakened gross margin. Versus the same quarter one year earlier, revenue and gross profit were higher, and gross margin improved.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
57.3%
Gross profit
$9.4B
Revenue
$16.3B
Cost of revenue
$7.0B
Quarter-over-quarter change
-1.5 pts
Year-over-year change
+1.1 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 |
|---|---|---|---|---|
| Dec 31, 2024 | $17.6B | $10.4B | $7.1B | 59.5% |
| Mar 31, 2025 | $14.5B | $8.0B | $6.5B | 55.2% |
| Jun 30, 2025 | $17.0B | $10.0B | $7.0B | 58.8% |
| Sep 30, 2025 | $16.3B | $9.4B | $7.0B | 57.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
-1.5 pts
Year-over-year change
Sep 30, 2024
+1.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Gross margin was strongest relative to the year-ago quarter, driven by proportionally higher gross profit compared with revenue growth. The current quarter's margin, though lower than the preceding quarter, remained above the year-ago level.
Compared with the immediate prior quarter, revenue was lower and gross profit was lower, resulting in a weakened gross margin. Versus the same quarter one year earlier, revenue and gross profit were higher, and gross margin improved.
Monitor the relationship between revenue and cost of revenue, as cost of revenue remained stable quarter over quarter despite a revenue decline.