IBM (NYSE:IBM) posted solid Q1 FY2025 results, beating both revenue and EPS expectations. The Software segment continued to deliver strong growth, with revenue up 9% year-over-year, driven largely by AI. However, sequential growth in Red Hat decelerated.
Concerns remain around the Consulting and Infrastructure segments. Consulting revenue was flat year-over-year, and management flagged macroeconomic headwinds as a risk, with a noted softness in new signings. Infrastructure revenue declined 4% year-over-year, driven by weakness in Hybrid Infrastructure and IBM Z. A couple of bright spots in the segment were the continued growth in Storage and the upcoming z17 mainframe launch later this year.
There were a few inconsistencies between management’s commentary during the call and the printed materials, which made parts of the update difficult to follow. While likely minor, such inconsistencies could suggest either financial engineering or a lack of attention to detail by the management team.
For more details, key highlights, and commentary, check out the high-level earnings summary.
