Connect with us

Technology

Charter Announces First Quarter 2025 Results

Published

on

STAMFORD, Conn., April 25, 2025 /PRNewswire/ — Charter Communications, Inc. (along with its subsidiaries, the “Company” or “Charter”), which operates the Spectrum brand, today reported financial and operating results for the three months ended March 31, 2025.

First quarter total Internet customers decreased by 60,000. As of March 31, 2025, Charter served 30.0 million Internet customers.First quarter total mobile lines increased by 514,000. As of March 31, 2025, Charter served 10.4 million mobile lines.As of March 31, 2025, Charter had a total of 31.4 million customer relationships, excluding mobile-only relationships.First quarter revenue of $13.7 billion grew by 0.4% year-over-year, driven by residential mobile service revenue growth of 33.5%, residential Internet revenue growth of 1.8% and other revenue growth of 13.4%.Net income attributable to Charter shareholders totaled $1.2 billion in the first quarter.First quarter Adjusted EBITDA1 of $5.8 billion grew by 4.8% year-over-year.First quarter capital expenditures totaled $2.4 billion and included $878 million of line extensions.First quarter net cash flows from operating activities totaled $4.2 billion, compared to $3.2 billion in the prior year.First quarter free cash flow1 of $1.6 billion increased from $358 million in the prior year, primarily due to lower capital expenditures, higher Adjusted EBITDA and lower cash paid for interest.During the first quarter, Charter purchased 2.1 million shares of Charter Class A common stock and Charter Communications Holdings, LLC (“Charter Holdings”) common units for approximately $751 million.

“We continue to execute on our long-held strategy of delivering the best network and products, at the best value, combined with unmatched service,” said Chris Winfrey, President and CEO of Charter. “That strategy is working, as evidenced by our first quarter results. We remain on track to deliver customer, EBITDA and robust free cash flow results for many years to come, driving outstanding shareholder value.”

1.

Adjusted EBITDA and free cash flow are non-GAAP measures defined in the “Use of Adjusted EBITDA and Free Cash Flow Information” section and are reconciled to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, in the addendum of this news release.

Key Operating Results

Approximate as of

March 31, 2025 (c)

March 31, 2024 (c)

Y/Y Change

Footprint

Estimated Passings (d)

57,167

55,687

2.7 %

Customer Relationships (e)

Residential

29,160

29,797

(2.1) %

Small Business*

2,209

2,219

(0.4) %

         Total Customer Relationships

31,369

32,016

(2.0) %

Residential

(98)

(107)

9

Small Business*

(6)

(3)

(3)

          Total Customer Relationships Quarterly Net Additions

(104)

(110)

6

          Total Customer Relationship Penetration of Estimated Passings (f)

54.9 %

57.5 %

(2.6) ppts

Monthly Residential Revenue per Residential Customer (g)

$               123.06

$               120.48

2.1 %

Monthly Small Business Revenue per Small Business Customer* (h)

$               163.68

$               163.44

0.1 %

Residential Customer Relationships Penetration

One Product Penetration (i)

47.6 %

47.3 %

0.3 ppts

Two Product Penetration (i)

34.3 %

33.0 %

1.3 ppts

Three or More Product Penetration (i)

18.1 %

19.7 %

(1.6) ppts

% Residential Non-Video Customer Relationships

58.3 %

56.0 %

2.3 ppts

Internet

Residential

27,979

28,472

(1.7) %

Small Business*

2,041

2,044

(0.1) %

          Total Internet Customers

30,020

30,516

(1.6) %

Residential

(55)

(72)

17

Small Business*

(5)

(5)

          Total Internet Quarterly Net Additions

(60)

(72)

12

Video

Residential

12,160

13,111

(7.3) %

Small Business*

551

606

(9.0) %

          Total Video Customers

12,711

13,717

(7.3) %

Residential

(167)

(392)

225

Small Business*

(14)

(13)

(1)

          Total Video Quarterly Net Additions

(181)

(405)

224

Mobile Lines (j)

Residential

10,063

7,992

25.9 %

Small Business*

334

260

28.7 %

          Total Mobile Lines

10,397

8,252

26.0 %

Residential

495

473

22

Small Business*

19

13

6

          Total Mobile Lines Quarterly Net Additions

514

486

28

Voice

Residential

5,372

6,438

(16.6) %

Small Business*

1,234

1,288

(4.2) %

          Total Voice Customers

6,606

7,726

(14.5) %

Residential

(264)

(274)

10

Small Business*

(14)

(5)

(9)

          Total Voice Quarterly Net Additions

(278)

(279)

1

Mid-Market & Large Business* (k)

Mid-Market & Large Business Primary Service Units (“PSUs”)*

324

308

5.4 %

Mid-Market & Large Business Quarterly Net Additions*

5

5

* In connection with the launch of our Spectrum Business brand, the previously reported “Small and Medium Business (“SMB”)” and “Enterprise” line items have been renamed to “Small Business” and “Mid-Market & Large Business,” respectively. The new terminology did not result in any changes to previously reported customer data.

In thousands, except per customer and penetration data. See footnotes to unaudited summary of operating statistics on page 7 of the addendum of this news release. The footnotes contain important disclosures regarding the definitions used for these operating statistics.  All percentages are calculated using whole numbers. Minor differences may exist due to rounding. 

In September 2024, Spectrum launched a new brand platform, Life Unlimited, which emphasizes the power of Spectrum’s advanced network and cutting-edge connectivity products and services to create opportunities and remove barriers to help customers live their best lives. As part of its new brand platform, Spectrum launched a new and simplified pricing and packaging strategy that better utilizes its seamless connectivity and entertainment products to offer lower promotional and persistent bundled pricing to drive growth. Additionally, Spectrum announced new customer commitments focused on reliable connectivity, transparency, exceptional service and a focus on always improving.

First quarter total Internet customers decreased by 60,000, including approximately 9,000 customer disconnects related to the wildfires in California in January, compared to a decline of 72,000 during the first quarter of 2024. Spectrum Internet® delivers the fastest Internet speeds1 in the nation. Spectrum is evolving its connectivity network to offer symmetrical and multi-gigabit Internet speeds across its entire footprint and has launched symmetrical Internet service in eight markets. In January 2025, Spectrum launched 2×1 Gbps service in two markets. In the coming months, Spectrum will launch 2×1 Gbps service in additional markets. Unlike competitors, Spectrum upgrades its network to serve all of its passings and can do so at a much lower cost. Spectrum Advanced WiFi provides customers an optimized home network while providing greater control of connected devices with enhanced security and privacy.

Total video customers decreased by 181,000 in the first quarter of 2025, compared to a decline of 405,000 in the first quarter of 2024, with the improvement driven by new and simplified pricing and packaging launched in September 2024. As of March 31, 2025, Charter had 12.7 million total video customers. Spectrum TV Select video customers now receive up to approximately $70 per month (soon to be approximately $80 per month) of programmers’ streaming application retail value at no extra cost, including the ad-supported versions of Max, Disney+, ESPN+, Paramount+, Peacock, AMC+, ViX, Tennis Channel Plus, Discovery+ and BET+. This programmer streaming application inclusion is part of Charter’s broader video evolution strategy to provide flexible packages with enhanced value, whether through full packages with seamless entertainment, smaller video packages or a suite of a-la-carte programmer application options for broadband customers.

During the first quarter of 2025, Charter added 514,000 total mobile lines, compared to growth of 486,000 during the first quarter of 2024. Spectrum MobileTM is available to all new and existing Spectrum Internet customers and offers the fastest overall speeds,2 with plans that include 5G access, do not require contracts and include taxes and fees in the price. In March 2025, Spectrum Mobile launched satellite-based services through a collaboration with Skylo, a non-terrestrial network service provider. Spectrum Mobile is central to Charter’s converged network strategy to provide consumers a differentiated connectivity experience with highly competitive, simple data plans and pricing.

During the first quarter of 2025, total wireline voice customers declined by 278,000, compared to a decline of 279,000 in the first quarter of 2024. As of March 31, 2025, Charter had 6.6 million total wireline voice customers.

Charter continues to work with federal, state and local governments to bring Spectrum Internet to unserved and underserved communities. During the first quarter of 2025, Charter activated 89,000 subsidized rural passings. Within Charter’s subsidized rural footprint, total customer relationships increased by 39,000 in the first quarter of 2025.

1.

Based on Broadband Download Speed among the top 5 national providers in Opensignal USA: Fixed Broadband Experience Report — National View, May 2024. Based on Opensignal independent analysis of mean download speed. © 2025 Opensignal Limited.

2.

Based on analysis by Spectrum of Ookla® Speedtest Intelligence® data for overall Mobile WiFi and Cellular performance for Q3-Q4 2024 in Spectrum’s cable footprint. Ookla trademarks used under license and reprinted with permission.

First Quarter Financial Results
(in millions)

Three Months Ended March 31,

2025

2024

% Change

Revenues:

Internet

$      5,930

$      5,826

1.8 %

Video

3,580

3,908

(8.4) %

Mobile service

914

685

33.5 %

Voice

356

374

(5.0) %

Residential revenue

10,780

10,793

(0.1) %

Small business1

1,086

1,088

(0.2) %

Mid-market & large business1

736

708

3.9 %

Commercial revenue

1,822

1,796

1.4 %

Advertising sales

340

391

(12.9) %

Other

793

699

13.4 %

Total Revenues

$    13,735

$    13,679

0.4 %

Net income attributable to Charter shareholders

$      1,217

$      1,106

10.0 %

Net income attributable to Charter shareholders margin

8.9 %

8.1 %

Adjusted EBITDA2

$      5,763

$      5,497

4.8 %

Adjusted EBITDA margin

42.0 %

40.2 %

Capital expenditures

$      2,399

$      2,791

(14.1) %

Net cash flows from operating activities

$      4,236

$      3,212

31.9 %

Free cash flow2

$      1,564

$         358

336.9 %

All percentages are calculated using whole numbers. Minor differences may exist due to rounding.

1.

In connection with the launch of our Spectrum Business brand, the previously reported “SMB” and “Enterprise” line items have been renamed to “Small Business” and “Mid-Market & Large Business,” respectively. The new terminology did not result in any changes to previously reported revenue data.

2.

Adjusted EBITDA and free cash flow are non-GAAP measures defined in the “Use of Adjusted EBITDA and Free Cash Flow Information” section and are reconciled to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, in the addendum of this news release. 

Revenues

First quarter revenue increased by 0.4% year-over-year to $13.7 billion, driven by growth in residential mobile service, residential Internet and other revenues, partly offset by lower residential video and advertising sales revenues.

Residential revenue totaled $10.8 billion in the first quarter, a decrease of 0.1% year-over-year.

First quarter 2025 monthly residential revenue per residential customer totaled $123.06, an increase of 2.1% compared to the prior year period. The growth was driven by promotional rate step-ups, rate adjustments and the growth of Spectrum Mobile, partly offset by a lower mix of video customer relationships, a higher mix of lower priced video packages within Charter’s video customer base and $47 million of costs allocated to programmer streaming applications and netted within video revenue.

Internet revenue grew by 1.8% year-over-year to $5.9 billion, driven by promotional rate step-ups, rate adjustments and less unfavorable bundled revenue allocation year-over-year, partly offset by a decline in Internet customers year-over-year.

Video revenue totaled $3.6 billion in the first quarter, a decrease of 8.4% compared to the prior year period, driven by a decline in video customers during the last year, a higher mix of lower priced video packages within Charter’s video customer base, $47 million of costs allocated to programmer streaming applications and netted within video revenue and more unfavorable bundled revenue allocation year-over-year, partly offset by promotional rate step-ups and video rate adjustments that pass through programmer rate increases.

First quarter mobile service revenue totaled $914 million, an increase of 33.5% year-over-year, driven by mobile line growth and mobile service revenue per line growth.

Voice revenue decreased by 5.0% year-over-year to $356 million, driven by a decline in wireline voice customers, partly offset by voice rate adjustments.

Commercial revenue increased by 1.4% year-over-year to $1.8 billion, driven by mid-market and large business growth of 3.9% year-over-year, partly offset by a decline in small business revenue of 0.2%.1 Mid-market and large business revenue excluding wholesale increased by 4.4% year-over-year, mostly reflecting PSU growth. The year-over-year decrease in first quarter 2025 small business revenue was driven by a decline in small business customer relationships year-over-year, partly offset by higher monthly small business revenue per small business customer.

First quarter advertising sales revenue of $340 million decreased by 12.9% compared to the year-ago quarter, primarily driven by lower political revenue. Excluding political revenue in both periods, advertising sales revenue decreased by 5.1% year-over-year due to a more challenged local and national advertising market.

Other revenue totaled $793 million in the first quarter, an increase of 13.4% compared to the first quarter of 2024, primarily driven by higher mobile device sales.

Operating Costs and Expenses2

First quarter programming costs decreased by $268 million, or 10.4% as compared to the first quarter of 2024, reflecting fewer video customers, a higher mix of lower cost packages within Charter’s video customer base and $47 million of costs allocated to programmer streaming applications and netted within video revenue, partly offset by contractual programming rate increases and renewals. First quarter 2025 programming costs include $12 million of favorable adjustments compared to $28 million of favorable adjustments in the prior year period.

Other costs of revenue increased by $126 million, or 8.7% year-over-year, primarily driven by higher mobile device sales and mobile service direct costs.

Field and technology operations decreased by $8 million, or 0.7% year-over-year.

Customer operations decreased by $38 million, or 4.5% year-over-year, primarily due to lower labor costs, given an increasingly efficient service infrastructure.

Marketing and residential sales expenses increased by $68 million, or 7.7% year-over-year, given Spectrum’s continued focus on driving growth and the launch of its new brand platform, Life Unlimited.

Other expenses decreased by $90 million, or 7.8% as compared to the first quarter of 2024, mostly driven by one-time benefits of $75 million.

1.

In connection with the launch of our Spectrum Business brand, the previously reported “SMB” and “Enterprise” line items have been renamed to “Small Business” and “Mid-Market & Large Business,” respectively. The new terminology did not result in any changes to previously reported revenue data.

2.

Certain expense reclassifications were also made to reflect changes in how we manage our business in connection with the launch of our Spectrum Business brand in 2025. The reclassifications did not result in any changes to total operating expenses or Adjusted EBITDA for any period presented. See the 1Q25 Trending Schedule at ir.charter.com for more information.

Net Income Attributable to Charter Shareholders

Net income attributable to Charter shareholders totaled $1.2 billion in the first quarter of 2025, compared to $1.1 billion in the first quarter of 2024, due to higher Adjusted EBITDA and lower interest expense, partly offset by an increase in other operating expenses due to a non-strategic asset impairment charge this quarter versus a gain on sale of assets in the first quarter of 2024.

Net income per basic common share attributable to Charter shareholders totaled $8.59 in the first quarter of 2025 compared to $7.66 during the same period last year. The increase was primarily the result of the factors described above in addition to a 2.0% decrease in basic weighted average common shares outstanding versus the prior year period.

Adjusted EBITDA

First quarter Adjusted EBITDA of $5.8 billion grew by 4.8% year-over-year, reflecting growth in revenue of 0.4% and a decline in operating expenses of 2.6%.

Capital Expenditures

Capital expenditures totaled $2.4 billion in the first quarter of 2025, a decrease of $392 million compared to the first quarter of 2024, driven by timing of CPE, upgrade/rebuild (primarily network evolution) and line extensions.

Charter continues to expect full year 2025 capital expenditures to total approximately $12 billion, including line extensions capital expenditures of approximately $4.2 billion and network evolution spend of approximately $1.5 billion. The actual amount of capital expenditures in 2025 will depend on a number of factors including, but not limited to, the pace of Charter’s network evolution and expansion initiatives, supply chain timing and growth rates in Charter’s residential and commercial businesses.

Cash Flow and Free Cash Flow

During the first quarter of 2025, net cash flows from operating activities totaled $4.2 billion, an increase from $3.2 billion in the prior year. The year-over-year increase was primarily due to higher Adjusted EBITDA, lower cash paid for interest and a less unfavorable change in working capital.

Free cash flow in the first quarter of 2025 totaled $1.6 billion, an increase of $1.2 billion compared to the first quarter of 2024. The year-over-year increase in free cash flow was primarily driven by higher net cash flows from operating activities and lower capital expenditures, partly offset by a more unfavorable change in accrued expenses related to capital expenditures.

Liquidity & Financing

As of March 31, 2025, total principal amount of debt was $93.6 billion and Charter’s credit facilities provided approximately $6.4 billion of additional liquidity in excess of Charter’s $796 million cash position.

Share Repurchases

During the three months ended March 31, 2025, Charter purchased 2.1 million shares of Charter Class A common stock and Charter Holdings common units for $751 million.

Webcast

Charter will host a webcast on Friday, April 25, 2025 at 8:30 a.m. Eastern Time (ET) related to the contents of this release.

The webcast can be accessed live via the Company’s investor relations website at ir.charter.com. Participants should go to the webcast link no later than 10 minutes prior to the start time to register. The webcast will be archived at ir.charter.com two hours after completion of the webcast.

Additional Information Available on Website

The information in this press release should be read in conjunction with the financial statements and footnotes contained in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2025, which will be posted on the “Results & SEC Filings” section of the Company’s investor relations website at ir.charter.com, when it is filed with the Securities and Exchange Commission (the “SEC”). A slide presentation to accompany the conference call and a trending schedule containing historical customer and financial data will also be available in the “Results & SEC Filings” section.

Use of Adjusted EBITDA and Free Cash Flow Information

The Company uses certain measures that are not defined by U.S. generally accepted accounting principles (“GAAP”) to evaluate various aspects of its business. Adjusted EBITDA and free cash flow are non-GAAP financial measures and should be considered in addition to, not as a substitute for, net income attributable to Charter shareholders and net cash flows from operating activities reported in accordance with GAAP. These terms, as defined by Charter, may not be comparable to similarly titled measures used by other companies. Adjusted EBITDA and free cash flow are reconciled to net income attributable to Charter shareholders and net cash flows from operating activities, respectively, in the Addendum to this release.

Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, net interest expense, income taxes, depreciation and amortization, stock compensation expense, other income (expenses), net and other operating (income) expenses, net, such as special charges and (gain) loss on sale or retirement of assets. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of the Company’s businesses as well as other non-cash or special items, and is unaffected by the Company’s capital structure or investment activities. However, this measure is limited in that it does not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues and the cash cost of financing. These costs are evaluated through other financial measures.     

Free cash flow is defined as net cash flows from operating activities, less capital expenditures and changes in accrued expenses related to capital expenditures.   

Management and Charter’s board of directors use Adjusted EBITDA and free cash flow to assess Charter’s performance and its ability to service its debt, fund operations and make additional investments with internally generated funds. In addition, Adjusted EBITDA generally correlates to the leverage ratio calculation under the Company’s credit facilities or outstanding notes to determine compliance with the covenants contained in the facilities and notes (all such documents have been previously filed with the SEC). For the purpose of calculating compliance with leverage covenants, the Company uses Adjusted EBITDA, as presented, excluding certain expenses paid by its operating subsidiaries to other Charter entities. The Company’s debt covenants refer to these expenses as management fees, which were $366 million and $371 million for the three months ended March 31, 2025 and 2024, respectively.

About Charter

Charter Communications, Inc. (NASDAQ:CHTR) is a leading broadband connectivity company and cable operator with services available to more than 57 million homes and businesses in 41 states through its Spectrum brand. Over an advanced communications network, supported by a 100% US-based workforce, the Company offers a full range of state-of-the-art residential and business services including Spectrum Internet®, TV, Mobile and Voice.

More information about Charter can be found at corporate.charter.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This communication includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies and prospects, both business and financial.  Although we believe that our plans, intentions and expectations as reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions or expectations.  Forward-looking statements are inherently subject to risks, uncertainties and assumptions including, without limitation, the factors described under “Risk Factors” from time to time in our filings with the SEC.  Many of the forward-looking statements contained in this communication may be identified by the use of forward-looking words such as “believe,” “expect,” “anticipate,” “should,” “planned,” “will,” “may,” “intend,” “estimated,” “aim,” “on track,” “target,” “opportunity,” “tentative,” “positioning,” “designed,” “create,” “predict,” “project,” “initiatives,” “seek,” “would,” “could,” “continue,” “ongoing,” “upside,” “increases,” “grow,” “focused on” and “potential,” among others.  Important factors that could cause actual results to differ materially from the forward-looking statements we make in this communication are set forth in our annual report on Form 10-K, and in other reports or documents that we file from time to time with the SEC, and include, but are not limited to:

our ability to sustain and grow revenues and cash flow from operations by offering Internet, video, mobile, voice, advertising and other services to residential and commercial customers, to adequately meet the customer experience demands in our service areas and to maintain and grow our customer base, particularly in the face of increasingly aggressive competition, the need for innovation and the related capital expenditures;the impact of competition from other market participants, including but not limited to incumbent telephone companies, direct broadcast satellite (“DBS”) operators, wireless broadband and telephone providers, digital subscriber line (“DSL”) providers, fiber to the home providers and providers of video content over broadband Internet connections;general business conditions, unemployment levels and the level of activity in the housing sector and economic uncertainty or downturn;our ability to develop and deploy new products and technologies including consumer services and service platforms;any events that disrupt our networks, information systems or properties and impair our operating activities or our reputation;the effects of governmental regulation on our business including subsidies to consumers, subsidies and incentives for competitors, costs, disruptions and possible limitations on operating flexibility related to, and our ability to comply with, regulatory conditions applicable to us;our ability to procure necessary services and equipment from our vendors in a timely manner and at reasonable costs including in connection with our network evolution and rural construction initiatives;our ability to obtain programming at reasonable prices or to raise prices to offset, in whole or in part, the effects of higher programming costs (including retransmission consents and distribution requirements);the ability to hire and retain key personnel;the availability and access, in general, of funds to meet our debt obligations prior to or when they become due and to fund our operations and necessary capital expenditures, either through (i) cash on hand, (ii) free cash flow, or (iii) access to the capital or credit markets;our ability to comply with all covenants in our indentures and credit facilities, any violation of which, if not cured in a timely manner, could trigger a default of our other obligations under cross-default provisions;our ability to satisfy the conditions to consummate the Liberty Broadband combination and/or to consummate the Liberty Broadband combination in a timely manner or at all;the risks related to us being restricted in the operation of our business while the Liberty Broadband merger agreement is in effect; andother risks related to the Liberty Broadband combination as described in the definitive joint proxy statement/prospectus with respect to the combination, filed by Charter on January 22, 2025, including the sections entitled “Risk Factors” and “Where You Can Find More Information” included therein.

All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement.  We are under no duty or obligation to update any of the forward-looking statements after the date of this communication.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES TO GAAP MEASURES 
(dollars in millions) 

Three Months Ended March 31,

Last Twelve Months Ended
March 31,

2025

2024

2025

2024

Net income attributable to Charter shareholders

$             1,217

$             1,106

$             5,194

$             4,642

Plus:  Net income attributable to noncontrolling interest

192

174

788

716

Interest expense, net

1,241

1,316

5,154

5,239

Income tax expense

445

446

1,648

1,665

Depreciation and amortization

2,181

2,190

8,664

8,680

Stock compensation expense

222

214

659

698

Other, net

265

51

728

401

Adjusted EBITDA (a)

$             5,763

$             5,497

$           22,835

$           22,041

Net cash flows from operating activities

$             4,236

$             3,212

$           15,454

$           14,322

Less:  Purchases of property, plant and equipment

(2,399)

(2,791)

(10,877)

(11,442)

Change in accrued expenses related to capital expenditures

(273)

(63)

886

304

Free cash flow (a)

$             1,564

$                358

$             5,463

$             3,184

The above schedule is presented in order to reconcile Adjusted EBITDA and free cash flow, non-GAAP measures, to the most directly comparable GAAP measures in accordance with Section 401(b) of the Sarbanes-Oxley Act.

 

UNAUDITED ALTERNATIVE PRESENTATION OF ADJUSTED EBITDA 
(dollars in millions) 

Three Months Ended March 31,

2025

2024

% Change

REVENUES:

Internet

$             5,930

$             5,826

1.8 %

Video

3,580

3,908

(8.4) %

Mobile service

914

685

33.5 %

Voice

356

374

(5.0) %

Residential revenue

10,780

10,793

(0.1) %

Small business*

1,086

1,088

(0.2) %

Mid-market & large business*

736

708

3.9 %

Commercial revenue

1,822

1,796

1.4 %

Advertising sales

340

391

(12.9) %

Other

793

699

13.4 %

Total Revenues

13,735

13,679

0.4 %

COSTS AND EXPENSES:

Programming

2,302

2,570

(10.4) %

Other costs of revenue

1,584

1,458

8.7 %

Field and technology operations*

1,290

1,298

(0.7) %

Customer operations

786

824

(4.5) %

Marketing and residential sales*

949

881

7.7 %

Other expense* (b)

1,061

1,151

(7.8) %

Total operating costs and expenses (b)

7,972

8,182

(2.6) %

Adjusted EBITDA (a)

$             5,763

$             5,497

4.8 %

* In connection with the launch of our Spectrum Business brand, the previously reported “SMB” and “Enterprise” line items have been renamed to “Small Business” and “Mid-Market & Large Business,” respectively.  The new terminology did not result in any changes to previously reported revenue data.  Certain expense reclassifications were also made to reflect changes in how we manage our business in connection with the launch of our Spectrum Business brand in 2025.  The reclassifications did not result in any changes to total operating expenses or Adjusted EBITDA for any period presented.  See the 1Q25 Trending Schedule at ir.charter.com for more information.

All percentages are calculated using whole numbers. Minor differences may exist due to rounding.  See footnotes on page 7.

 

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in millions, except per share data)

Three Months Ended March 31,

2025

2024

REVENUES

$           13,735

$           13,679

COSTS AND EXPENSES:

Operating costs and expenses (exclusive of items shown separately below)

8,194

8,396

Depreciation and amortization

2,181

2,190

Other operating (income) expenses, net

123

(38)

10,498

10,548

Income from operations

3,237

3,131

OTHER INCOME (EXPENSES):

Interest expense, net

(1,241)

(1,316)

Other expenses, net

(142)

(89)

(1,383)

(1,405)

Income before income taxes

1,854

1,726

Income tax expense

(445)

(446)

Consolidated net income

1,409

1,280

Less: Net income attributable to noncontrolling interests

(192)

(174)

Net income attributable to Charter shareholders

$             1,217

$             1,106

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHARTER SHAREHOLDERS:

Basic

$               8.59

$               7.66

Diluted

$               8.42

$               7.55

Weighted average common shares outstanding, basic

141,591,396

144,510,317

Weighted average common shares outstanding, diluted

144,574,684

146,643,199

 

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in millions) 

March 31,

December 31,

2025

2024

ASSETS

(unaudited)

CURRENT ASSETS:

Cash and cash equivalents

$                    796

$                    459

Accounts receivable, net

3,311

3,097

Prepaid expenses and other current assets

861

677

Total current assets

4,968

4,233

INVESTMENT IN CABLE PROPERTIES:

Property, plant and equipment, net

43,359

42,913

Customer relationships, net

818

975

Franchises

67,468

67,462

Goodwill

29,674

29,674

Total investment in cable properties, net

141,319

141,024

OTHER NONCURRENT ASSETS

4,667

4,763

Total assets

$              150,954

$              150,020

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable, accrued and other current liabilities

$               11,873

$               11,687

Current portion of long-term debt

1,799

1,799

Total current liabilities

13,672

13,486

LONG-TERM DEBT

91,970

92,134

EQUIPMENT INSTALLMENT PLAN FINANCING FACILITY

1,194

1,072

DEFERRED INCOME TAXES

18,822

18,845

OTHER LONG-TERM LIABILITIES

4,774

4,776

SHAREHOLDERS’ EQUITY:

Controlling interest

16,247

15,587

Noncontrolling interests

4,275

4,120

Total shareholders’ equity

20,522

19,707

Total liabilities and shareholders’ equity

$              150,954

$              150,020

 

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in millions) 

Three Months Ended March 31,

2025

2024

CASH FLOWS FROM OPERATING ACTIVITIES:

Consolidated net income

$             1,409

$             1,280

Adjustments to reconcile consolidated net income to net cash flows from operating activities:

Depreciation and amortization

2,181

2,190

Stock compensation expense

222

214

Noncash interest, net

8

8

Deferred income taxes

(27)

21

Other, net

233

15

Changes in operating assets and liabilities, net of effects from acquisitions and dispositions:

Accounts receivable

(48)

(39)

Prepaid expenses and other assets

(235)

(366)

Accounts payable, accrued liabilities and other

493

(111)

Net cash flows from operating activities

4,236

3,212

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

(2,399)

(2,791)

Change in accrued expenses related to capital expenditures

(273)

(63)

Other, net

(132)

(53)

Net cash flows from investing activities

(2,804)

(2,907)

CASH FLOWS FROM FINANCING ACTIVITIES:

Borrowings of long-term debt

1,393

5,921

Borrowings of equipment installment plan financing facility

121

Repayments of long-term debt

(1,609)

(5,716)

Payments for debt issuance costs

(2)

Purchase of treasury stock

(802)

(516)

Proceeds from exercise of stock options

17

2

Purchase of noncontrolling interest

(20)

(95)

Distributions to noncontrolling interest

(3)

(3)

Other, net

(169)

56

Net cash flows from financing activities

(1,072)

(353)

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

360

(48)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period

506

709

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period

$                866

$                661

CASH PAID FOR INTEREST

$                995

$             1,236

CASH PAID FOR INCOME TAXES

$                  56

$                  78

As of March 31, 2025 and December 31, 2024, cash, cash equivalents and restricted cash includes $70 million and $47 million of restricted cash included in prepaid expenses and other current assets in the consolidated balance sheets, respectively.

 

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES
UNAUDITED SUMMARY OF OPERATING STATISTICS
(in thousands, except per customer and penetration data)

Approximate as of

March 31,
2025 (c)

December 31,
2024 (c)

March 31,
2024 (c)

Footprint

Estimated Passings (d)

57,167

56,861

55,687

Customer Relationships (e)

Residential

29,160

29,258

29,797

Small Business*

2,209

2,215

2,219

Total Customer Relationships

31,369

31,473

32,016

Residential

(98)

(207)

(107)

Small Business*

(6)

(8)

(3)

Total Customer Relationships Quarterly Net Additions

(104)

(215)

(110)

Total Customer Relationship Penetration of Estimated Passings (f)

54.9 %

55.4 %

57.5 %

Monthly Residential Revenue per Residential Customer (g)

$        123.06

$        121.40

$        120.48

Monthly Small Business Revenue per Small Business Customer* (h)

$        163.68

$        163.14

$        163.44

Residential Customer Relationships Penetration

One Product Penetration (i)

47.6 %

47.6 %

47.3 %

Two Product Penetration (i)

34.3 %

33.9 %

33.0 %

Three or More Product Penetration (i)

18.1 %

18.5 %

19.7 %

% Residential Non-Video Customer Relationships

58.3 %

57.9 %

56.0 %

Internet

Residential

27,979

28,034

28,472

Small Business*

2,041

2,046

2,044

Total Internet Customers

30,020

30,080

30,516

Residential

(55)

(171)

(72)

Small Business*

(5)

(6)

Total Internet Quarterly Net Additions

(60)

(177)

(72)

Video

Residential

12,160

12,327

13,111

Small Business*

551

565

606

Total Video Customers

12,711

12,892

13,717

Residential

(167)

(110)

(392)

Small Business*

(14)

(13)

(13)

Total Video Quarterly Net Additions

(181)

(123)

(405)

Mobile Lines (j)

Residential

10,063

9,568

7,992

Small Business*

334

315

260

Total Mobile Lines

10,397

9,883

8,252

Residential

495

511

473

Small Business*

19

18

13

Total Mobile Lines Quarterly Net Additions

514

529

486

Voice

Residential

5,372

5,636

6,438

Small Business*

1,234

1,248

1,288

Total Voice Customers

6,606

6,884

7,726

Residential

(264)

(259)

(274)

Small Business*

(14)

(15)

(5)

Total Voice Quarterly Net Additions

(278)

(274)

(279)

Mid-Market & Large Business* (k)

Mid-Market & Large Business Primary Service Units (“PSUs”)*

324

319

308

Mid-Market & Large Business Quarterly Net Additions*

5

4

5

* In connection with the launch of our Spectrum Business brand, the previously reported “SMB” and “Enterprise” line items have been renamed to “Small Business” and “Mid-Market & Large Business,” respectively. The new terminology did not result in any changes to previously reported customer data. 

See footnotes on page 7.

 

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 
UNAUDITED CAPITAL EXPENDITURES
(dollars in millions) 

Three Months Ended March 31,

2025

2024

Customer premise equipment (l)

$                473

$                635

Scalable infrastructure (m)

293

328

Upgrade/rebuild (n)

395

481

Support capital (o)

360

388

Capital expenditures, excluding line extensions

1,521

1,832

Subsidized rural construction line extensions

467

427

Other line extensions

411

532

Total line extensions (p)

878

959

Total capital expenditures

$             2,399

$             2,791

Capital expenditures included in total related to:

Commercial services

$                273

$                375

Subsidized rural construction initiative (q)

$                468

$                427

Mobile

$                  53

$                  59

See footnotes on page 7.

CHARTER COMMUNICATIONS, INC. AND SUBSIDIARIES 
FOOTNOTES

(a)

Adjusted EBITDA is defined as net income attributable to Charter shareholders plus net income attributable to noncontrolling interest, net interest expense, income taxes, depreciation and amortization, stock compensation expense, other (income) expenses, net and other operating (income) expenses, net such as special charges and (gain) loss on sale or retirement of assets. As such, it eliminates the significant non-cash depreciation and amortization expense that results from the capital-intensive nature of our businesses as well as other non-cash or special items, and is unaffected by our capital structure or investment activities.  Free cash flow is defined as net cash flows from operating activities, less capital expenditures and changes in accrued expenses related to capital expenditures.

(b) 

Other expense excludes stock compensation expense.  Total operating costs and expenses excludes stock compensation expense, depreciation and amortization and other operating (income) expenses, net.

(c) 

We calculate the aging of customer accounts based on the monthly billing cycle for each account in accordance with our collection policies.  On that basis, at March 31, 2025, December 31, 2024 and March 31, 2024, customers included approximately 92,200, 102,500 and 110,000 customers, respectively, whose accounts were over 60 days past due, approximately 10,700, 12,100 and 42,600 customers, respectively, whose accounts were over 90 days past due and approximately 17,000, 13,600 and 283,100 customers, respectively, whose accounts were over 120 days past due.  The decrease in accounts past due since March 31, 2024 is predominately due to revisions to customer account balances associated with the end of the Federal Communications Commission’s Affordable Connectivity Program, including balance write-offs and conversion to payment plans. 

(d) 

Passings represent our estimate of the number of units, such as single family homes, apartment and condominium units and small business and mid-market & large business sites passed by our cable distribution network in the areas where we offer the service indicated.  These estimates are based upon the information available at this time and are updated for all periods presented when new information becomes available.  In the fourth quarter of 2024, we completed a review of our passings which resulted in a net reduction of approximately 1.7 million passings for all periods presented.

(e)   

Customer relationships include the number of customers that receive one or more levels of service, encompassing Internet, video, mobile and voice services, without regard to which service(s) such customers receive.  Customers who reside in residential multiple dwelling units (“MDUs”) and that are billed under bulk contracts are counted based on the number of billed units within each bulk MDU.  Total customer relationships exclude mid-market & large business and mobile-only customer relationships.

(f)

Penetration represents residential and small business customers as a percentage of estimated passings.  Penetration excludes mobile-only customers. 

(g) 

Monthly residential revenue per residential customer is calculated as total residential quarterly revenue divided by three divided by average residential customer relationships during the respective quarter and excludes mobile-only customer relationships.

(h) 

Monthly small business revenue per small business customer is calculated as total small business quarterly revenue divided by three divided by average small business customer relationships during the respective quarter and excludes mobile-only customer relationships.

(i)

One product, two product and three or more product penetration represents the number of residential customers that subscribe to one product, two products or three or more products, respectively, as a percentage of residential customer relationships, excluding mobile-only customers.

(j)

Mobile lines include phones and tablets which require one of our standard rate plans (e.g., “Unlimited” or “By the Gig”).  Mobile lines exclude wearables and other devices that do not require standard phone rate plans.

(k) 

Mid-market & large business PSUs represents the aggregate number of fiber service offerings counting each separate service offering at each customer location as an individual PSU.

(l)

Customer premise equipment includes equipment and devices located at the customer’s premise used to deliver our Internet, video and voice services (e.g., modems, routers and set-top boxes), as well as installation costs.

(m)

Scalable infrastructure includes costs, not related to customer premise equipment or our network, to secure growth of new customers or provide service enhancements (e.g., headend equipment).

(n) 

Upgrade/rebuild includes costs to modify or replace existing fiber/coaxial cable networks, including our network evolution initiative.

(o) 

Support capital includes costs associated with the replacement or enhancement of non-network assets (e.g., back-office systems, non-network equipment, land and buildings, vehicles, tools and test equipment).

(p) 

Line extensions include network costs associated with entering new service areas (e.g., fiber/coaxial cable, amplifiers, electronic equipment, make-ready and design engineering).

(q) 

The subsidized rural construction initiative subcategory includes projects for which we are receiving subsidies from federal, state and local governments, excluding customer premise equipment and installation.

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/charter-announces-first-quarter-2025-results-302438108.html

SOURCE Charter Communications, Inc.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Technology

Resideo To Release Second Quarter 2026 Financial Results on August 12, 2026

Published

on

By

SCOTTSDALE, Ariz., July 22, 2026 /PRNewswire/ — Resideo Technologies, Inc. (NYSE: REZI), a leading global manufacturer, developer, and distributor of technology-driven sensing and controls products and solutions for residential and commercial end-markets, will release second quarter 2026 financial results after the close of the New York Stock Exchange on Wednesday, August 12, 2026. A webcast to discuss the results will be held on Wednesday, August 12, 2026, at 5:00 p.m. EDT.

Event: Resideo Second Quarter 2026 Financial Results Conference Call
Date: Wednesday, August 12, 2026
Time: 5:00 p.m. EDT / 2:00 p.m. PDT
Webcast link: REZI Q2’26 Call

About Resideo
Resideo is a leading global manufacturer, developer, and distributor of technology-driven sensing and controls products and solutions for residential and commercial end-markets. We are a leader in the home heating, ventilation, and air conditioning controls markets, smoke and carbon monoxide detection home safety and fire suppression products markets, and security products markets. Our solutions and services can be found in over 150 million residential and commercial spaces globally, with tens of millions new devices sold annually. For more information about Resideo and our trusted, well-established brands including First Alert, Honeywell Home, BRK, Control4, and others, visit www.resideo.com.

Contacts:

Investors:

Media:

Christopher T. Lee

Garrett Terry

Global Head of Strategic Finance

Corporate Communications Manager

chris.lee@resideo.com

garrett.terry@resideo.com

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/resideo-to-release-second-quarter-2026-financial-results-on-august-12-2026-302832376.html

SOURCE Resideo Technologies, Inc.

Continue Reading

Technology

Synopsys Announces Earnings Release Date for Third Quarter Fiscal Year 2026

Published

on

By

Registration Now Open for September Investor Day

SUNNYVALE, Calif., July 22, 2026 /PRNewswire/ — Synopsys, Inc. (Nasdaq: SNPS) today announced it will report results for the third quarter fiscal year 2026 on Wednesday, August 26, 2026, after market close. The company will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to review its financial results and business outlook.

Financial and other statistical information to be discussed on this conference call will be available on the corporate website at www.investor.synopsys.com immediately before the call. A live webcast will also be available on this site. Participants should access the live webcast at least 10 minutes prior to the start of the call. A webcast replay will be available beginning August 26, 2026, at approximately 5:00 p.m. PT. The replay will be available until Synopsys announces its fourth quarter and fiscal year 2026 results.

The company will hold an Investor Day in New York City on September 30, 2026, featuring presentations and a question-and-answer session. Registration for in-person and virtual attendance is now available on the corporate website at www.investor.synopsys.com. 

About Synopsys

Synopsys, Inc. (Nasdaq: SNPS) is the leader in engineering solutions from silicon to systems, enabling customers to rapidly innovate AI-powered products. We deliver industry-leading silicon design, IP, simulation and analysis solutions, and design services. We partner closely with our customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com

© 2026 Synopsys, Inc. All rights reserved. Synopsys, Ansys, the Synopsys and Ansys logos, and other Synopsys trademarks are available at https://www.synopsys.com/company/legal/trademarks-brands.html. Other company or product names may be trademarks of their respective owners.

Investor Contact:
Christine Salvi-Sullivan
Synopsys, Inc.
(650) 584-1901

Editorial Contact:
Cara Walker
Synopsys, Inc.
650-584-5000
corp-pr@synopsys.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/synopsys-announces-earnings-release-date-for-third-quarter-fiscal-year-2026-302832399.html

SOURCE Synopsys, Inc.

Continue Reading

Technology

IBM RELEASES SECOND-QUARTER RESULTS

Published

on

By

Company provides updated full-year expectations

ARMONK, N.Y., July 22, 2026 /PRNewswire/ — IBM (NYSE: IBM) today announced second-quarter 2026 earnings results.

“We are confident in IBM’s strategy and portfolio, and in our ability to capture growth opportunities ahead. We fundamentally believe that we are in the early innings of a structural shift for business, and that our portfolio – across software, infrastructure, and consulting – is well-positioned to help our clients tap the value, and manage the challenges, of an AI-driven future,” said Arvind Krishna, IBM chairman, president and chief executive officer. “In addition, we are taking action to accelerate our revenue growth and profitability, driving productivity across the company with AI and automation, and heavily investing in commercializing innovation at speed and scale. We now expect constant currency revenue growth in the range of four-to-five percent, and we continue to expect free cash flow to increase by about $1 billion year-over-year for the full year.”

Full-Year 2026 Expectations

Revenue: The company now expects full-year constant currency revenue growth in the range of four-to-five percent. At current foreign exchange rates, currency is expected to be neutral to growth for the year
Free cash flow: The company continues to expect full-year free cash flow to increase by about $1 billion year-over-year

Operational Focus Areas

High-Growth Portfolio: Areas of IBM’s software business that help clients manage, deploy and build AI-ready solutions, like Red Hat, the watsonx portfolio, HashiCorp, and Confluent continue to deliver strong performance. Within Distributed Infrastructure, Power and Storage grew at a record pace in the second quarter, now having built up an order backlog of nearly $500 million. Together, these offerings closely map to where client demand is strongest. To capture these growth opportunities, IBM is accelerating changes to its go-to-market model by expanding sales coverage across thousands of additional clients where there is significant opportunity. As AI adoption moves from experimentation to enterprise-scale deployment, the company is also investing in more specialized technical and client-facing talent, including Forward Deployed Engineers.

Rapid Innovation at Scale: IBM is acting decisively to capture new opportunities as they arise. Lightwell, a new capability to address open source security vulnerabilities, leverages IBM and Red Hat’s trust within the open source community, unique approach to AI, and global scale. In the first two weeks of availability, Lightwell has already made more than 7,500 open source patches available to help clients secure vulnerabilities. Additionally, quantum computing continues to be an investment priority for the company. In May, with the U.S. Department of Commerce, IBM announced a letter of intent to build Anderon, the world’s first pure-play quantum wafer foundry. IBM will invest more than $10 billion in quantum over the next five years, and remains on track to deliver the first large-scale fault-tolerant quantum computer by 2029.

Productivity Enables Investment and Value: IBM is accelerating productivity by scaling software development leveraging AI, increasing the effectiveness of its sales and marketing organization, and optimizing its supply chain. These efforts help enhance margin and free cash flow, and strengthen the company’s ability to capture significant growth opportunities. The company now expects improved pre-tax income margin expansion for the full year.

“Although we faced revenue headwinds late in the second quarter, we continued to focus on the fundamentals of our business, including driving productivity, strengthening our portfolio, and generating free cash flow,” said James Kavanaugh, IBM senior vice president and chief financial officer. “In a quarter like this, it is critical that our financial and operational discipline remains strong and that we continue to invest for growth while returning value to shareholders through our dividend.”

 

SECOND-QUARTER 2026 INCOME STATEMENT SUMMARY

 

Revenue

 

Gross

Profit

 
 

Gross

Profit

Margin

 
 

Pre-tax

Income

 

Pre-tax

Income

Margin

 

Net

Income

 

Diluted

Earnings

Per Share

GAAP from

Continuing

Operations

$ 17.2 B

 
 

$  9.9  B

 
 

57.7

%

 

$  2.5  B

 
 

14.4

%

 

$  2.2  B

 
 

$   2.27

 

Year/Year

1

%

 

(1)

%

 

(1.0)

Pts

 

(5)

%

 

(0.9)

Pts

 

(1)

%

 

(2)

%

Operating

(Non-GAAP)

 
 
 

$ 10.2 B

 
 

59.4

%

 

$  3.3  B

 
 

19.2

%

 

$  2.8  B

 
 

$   2.93

 

Year/Year

 
 
 

0

%

 

(0.7)

Pts

 

3

%

 

0.3

Pts

 

5

%

 

5

%

Segment Results for Second Quarter

Software — revenues of $7.8 billion, up 5 percent:
– Hybrid Cloud (Red Hat) up 11 percent
– Automation up 4 percent, up 3 percent at constant currency
– Data up 19 percent, up 18 percent at constant currency
– Transaction Processing down 8 percent, down 9 percent at constant currency

Consulting — revenues of $5.3 billion, flat, up 1 percent at constant currency:
– Strategy and Technology flat, up 1 percent at constant currency
– Intelligent Operations flat, up 1 percent at constant currency

Infrastructure — revenues of $3.8 billion, down 7 percent:
– Hybrid Infrastructure down 10 percent
      — IBM Z down 42 percent
      — Distributed Infrastructure up 37 percent
– Infrastructure Support down 1 percent

Financing — revenues of $0.2 billion, up 12 percent, up 11 percent at constant currency

Cash Flow and Balance Sheet

In the second quarter, the company generated net cash from operating activities of $2.6 billion, up $0.9 billion year to year. IBM’s free cash flow was $2.5 billion, down $0.3 billion year to year. The company returned $1.6 billion to shareholders in dividends in the second quarter.

For the first six months of the year, the company generated net cash from operating activities of $7.8 billion, up $1.7 billion year to year. IBM’s free cash flow was $4.8 billion, flat year to year.

IBM ended the second quarter with $8.2 billion of cash, restricted cash and marketable securities, down $6.3 billion from year-end 2025. The company invested $10.5 billion in acquisitions this year. Debt, including IBM Financing debt of $13.0 billion, totaled $62.0 billion, up $0.7 billion year to date.

Dividend Declaration

The IBM board of directors approved a regular quarterly cash dividend of $1.69 per common share, to stockholders of record on August 10, 2026. With payment of the September 10, 2026 dividend, IBM will have paid consecutive quarterly dividends every year since 1916.

Forward-Looking and Cautionary Statements

Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company’s current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including, but not limited to, the following: a downturn in economic environment and client spending budgets; a failure of the company’s innovation initiatives; damage to the company’s reputation; risks from investing in growth opportunities; failure of the company’s intellectual property portfolio to prevent competitive offerings and the failure of the company to obtain necessary licenses; the company’s ability to successfully manage acquisitions, alliances and divestitures, including integration challenges, failure to achieve objectives, the assumption or retention of liabilities and higher debt levels; fluctuations in financial results; impact of local legal, economic, political, health and other conditions; the company’s failure to meet growth and productivity objectives; ineffective internal controls; the company’s use of accounting estimates; impairment of the company’s goodwill or amortizable intangible assets; the company’s ability to attract and retain key employees and its reliance on critical skills; impacts of relationships with critical suppliers; product and service quality issues; the development and use of AI, including the company’s increased AI solutions and use of AI technologies; impacts of business with government clients; reliance on third party distribution channels and ecosystems; cybersecurity and data protection considerations; adverse effects related to climate change and other environmental matters; tax matters; legal proceedings and investigatory risks; the company’s pension plans; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; risk factors related to IBM securities; and other risks, uncertainties and factors discussed in the company’s Form 10-Qs, Form 10-K and in the company’s other filings with the U.S. Securities and Exchange Commission or in materials incorporated therein by reference.

Any forward-looking statement in this release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.

Presentation of Information in this Press Release

In an effort to provide investors with additional information regarding the company’s results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release the following non-GAAP information, which management believes provides useful information to investors:

adjusting for currency (i.e., at constant currency);
presenting operating (non-GAAP) earnings per share amounts and related income statement items;
free cash flow;
net cash from operating activities excluding IBM Financing receivables;
adjusted EBITDA;
adjusted EBITDA margin.

The rationale for management’s use of these non-GAAP measures is included in Exhibit 99.2 in the Form 8-K that includes this press release and is being submitted today to the SEC.

Conference Call and Webcast

IBM’s regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. ET, today. The Webcast may be accessed via a link at https://www.ibm.com/investor/events/earnings-2q26. Presentation charts will be available shortly before the Webcast.

Financial Results Below (certain amounts may not add due to use of rounded numbers; percentages presented are calculated from the underlying whole-dollar amounts).

Contact:      IBM
                    Tim Davidson, 914-844-7847
                    tfdavids@us.ibm.com 
    
                    Erin McElwee, 347-920-6825
                    erin.mcelwee@ibm.com

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

COMPARATIVE FINANCIAL RESULTS

(Unaudited; $ in millions except per share amounts)

 
 

Three Months Ended
June 30,

 
 

Six Months Ended
June 30,

 
 

2026

 
 

2025

 
 

2026

 
 

2025

 

REVENUE BY SEGMENT

 
 
 
 
 
 
 
 
 
 
 

Software

$        7,761

 
 

$        7,387

 
 

$       14,813

 
 

$       13,722

 

Consulting

5,327

 
 

5,314

 
 

10,599

 
 

10,382

 

Infrastructure

3,835

 
 

4,142

 
 

7,161

 
 

7,027

 

Financing

186

 
 

166

 
 

406

 
 

357

 

Other

52

 
 

(31)

 
 

100

 
 

30

 

TOTAL REVENUE

17,162

 
 

16,977

 
 

33,079

 
 

31,519

 
 
 
 
 
 
 
 
 
 
 
 
 

GROSS PROFIT

9,907

 
 

9,977

 
 

18,857

 
 

18,008

 
 
 
 
 
 
 
 
 
 
 
 
 

GROSS PROFIT MARGIN

 
 
 
 
 
 
 
 
 
 
 

Software

82.6

%

 

83.9

%

 

82.7

%

 

83.7

%

Consulting

28.9

%

 

27.5

%

 

28.2

%

 

27.4

%

Infrastructure

58.4

%

 

61.5

%

 

57.7

%

 

57.9

%

Financing

42.5

%

 

45.7

%

 

43.0

%

 

45.8

%

 
 
 
 
 
 
 
 
 
 
 
 

TOTAL GROSS PROFIT MARGIN

57.7

%

 

58.8

%

 

57.0

%

 

57.1

%

 
 
 
 
 
 
 
 
 
 
 
 

EXPENSE AND OTHER INCOME

 
 
 
 
 
 
 
 
 
 
 

SG&A

4,981

 
 

5,027

 
 

10,071

 
 

9,913

 

R&D

2,311

 
 

2,097

 
 

4,485

 
 

4,047

 

Intellectual property and custom development income

(166)

 
 

(215)

 
 

(338)

 
 

(468)

 

Other (income) and expense

(185)

 
 

(39)

 
 

(186)

 
 

(204)

 

Interest expense

486

 
 

510

 
 

959

 
 

965

 

TOTAL EXPENSE AND OTHER INCOME

7,428

 
 

7,380

 
 

14,991

 
 

14,253

 
 
 
 
 
 
 
 
 
 
 
 
 

INCOME FROM CONTINUING OPERATIONS

BEFORE INCOME TAXES

2,479

 
 

2,597

 
 

3,866

 
 

3,755

 

Pre-tax income margin

14.4

%

 

15.3

%

 

11.7

%

 

11.9

%

Provision for/(benefit from) income taxes

313

 
 

404

 
 

484

 
 

507

 

Effective tax rate

12.6

%

 

15.5

%

 

12.5

%

 

13.5

%

 
 
 
 
 
 
 
 
 
 
 
 

INCOME FROM CONTINUING OPERATIONS

$        2,166

 
 

$        2,193

 
 

$         3,382

 
 

$         3,248

 
 
 
 
 
 
 
 
 
 
 
 
 

DISCONTINUED OPERATIONS

 
 
 
 
 
 
 
 
 
 
 

Income/(loss)  from discontinued operations, net of

taxes

(1)

 
 

1

 
 

(1)

 
 

1

 
 
 
 
 
 
 
 
 
 
 
 
 

NET INCOME

$        2,165

 
 

$        2,194

 
 

$         3,381

 
 

$         3,249

 
 
 
 
 
 
 
 
 
 
 
 
 

EARNINGS PER SHARE OF COMMON STOCK

 
 
 
 
 
 
 
 
 
 
 

Assuming dilution

 
 
 
 
 
 
 
 
 
 
 

Continuing operations

$          2.27

 
 

$          2.31

 
 

$           3.55

 
 

$           3.43

 

Discontinued operations

$          0.00

 
 

$          0.00

 
 

$           0.00

 
 

$           0.00

 

TOTAL

$          2.27

 
 

$          2.31

 
 

$           3.55

 
 

$           3.43

 
 
 
 
 
 
 
 
 
 
 
 
 

Basic

 
 
 
 
 
 
 
 
 
 
 

Continuing operations

$          2.30

 
 

$          2.36

 
 

$           3.60

 
 

$           3.49

 

Discontinued operations

$          0.00

 
 

$          0.00

 
 

$           0.00

 
 

$           0.00

 

TOTAL

$          2.30

 
 

$          2.36

 
 

$           3.60

 
 

$           3.50

 
 
 
 
 
 
 
 
 
 
 
 
 

WEIGHTED-AVERAGE NUMBER OF COMMON

SHARES OUTSTANDING (M’s)

 
 
 
 
 
 
 
 
 
 
 

Assuming dilution

953.3

 
 

948.0

 
 

952.7

 
 

946.7

 

Basic

941.2

 
 

930.8

 
 

939.9

 
 

929.4

 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

 

($ in millions)

 

At June 30,
2026

 

At December 31,
2025

ASSETS:

 
 
 
 

Current assets:

 
 
 
 

Cash and cash equivalents

 

$             7,172

 

$              13,587

Restricted cash

 

45

 

54

Marketable securities

 

960

 

830

Notes and accounts receivable – trade, net

 

6,044

 

8,112

Short-term financing receivables

 
 
 
 

  Held for investment, net

 

5,782

 

7,344

  Held for sale

 

874

 

1,131

Other accounts receivable, net

 

1,348

 

1,052

Inventories

 

1,746

 

1,220

Deferred costs

 

1,238

 

1,084

Prepaid expenses and other current assets

 

3,188

 

2,530

Total current assets

 

28,398

 

36,944

 
 
 
 
 

Property, plant and equipment, net

 

5,736

 

5,899

Operating right-of-use assets, net

 

3,068

 

3,129

Long-term financing receivables, net

 

7,126

 

7,708

Prepaid pension assets

 

7,645

 

7,544

Deferred costs

 

835

 

825

Deferred taxes

 

8,709

 

8,610

Goodwill

 

74,599

 

67,717

Intangibles, net

 

13,955

 

11,391

Investments and sundry assets

 

2,028

 

2,112

Total assets

 

$          152,099

 

$            151,880

 
 
 
 
 

LIABILITIES:

 
 
 
 

Current Liabilities:

 
 
 
 

Taxes

 

$              2,023

 

$                2,347

Short-term debt

 

5,775

 

6,424

Accounts payable

 

4,395

 

4,756

Compensation and benefits

 

3,364

 

4,114

Deferred income

 

16,160

 

16,101

Operating lease liabilities

 

770

 

800

Other liabilities

 

3,425

 

4,116

Total current liabilities

 

35,912

 

38,658

 
 
 
 
 

Long-term debt

 

56,212

 

54,836

Retirement-related obligations

 

8,603

 

9,018

Deferred income

 

4,272

 

4,271

Operating lease liabilities

 

2,515

 

2,547

Other liabilities

 

10,044

 

9,810

Total liabilities

 

117,558

 

119,139

 
 
 
 
 

EQUITY:

 
 
 
 

IBM stockholders’ equity:

 
 
 
 

Common stock

 

64,600

 

63,318

Retained earnings

 

155,937

 

155,648

Treasury stock – at cost

 

(170,934)

 

(170,605)

Accumulated other comprehensive income/(loss)

 

(15,151)

 

(15,713)

Total IBM stockholders’ equity

 

34,452

 

32,648

 
 
 
 
 

Noncontrolling interests

 

89

 

93

Total equity

 

34,541

 

32,740

 
 
 
 
 

Total liabilities and equity

 

$          152,099

 

$            151,880

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

STATEMENT OF CASH FLOWS

(Unaudited)

 
 
 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

($ in millions)

 

2026

 

2025 (1)

 

2026

 

2025 (1)

Cash flows from operating activities:

 
 
 
 
 
 
 
 

Net income

 

$     2,165

 

$     2,194

 

$     3,381

 

$     3,249

Adjustments to reconcile net income to cash provided by operating

activities:

 
 
 
 
 
 
 
 

Depreciation (2)

 

533

 

578

 

1,088

 

1,114

Amortization of capitalized software and acquired intangible assets

 

817

 

687

 

1,535

 

1,328

Stock-based compensation

 

498

 

441

 

1,004

 

842

Net (gain)/loss on divestitures, asset sales and other

 

(67)

 

(18)

 

(78)

 

(40)

Changes in operating assets and liabilities, net of

acquisitions/divestitures

 

(1,349)

 

(2,180)

 

836

 

(421)

Net cash provided by operating activities

 

2,597

 

1,701

 

7,766

 

6,071

 
 
 
 
 
 
 
 
 

Cash flows from investing activities:

 
 
 
 
 
 
 
 

Payments for property, plant and equipment

 

(229)

 

(209)

 

(461)

 

(454)

Proceeds from disposition of property, plant and equipment/other

 

23

 

37

 

31

 

111

Investment in software

 

(154)

 

(164)

 

(313)

 

(314)

Purchases of marketable securities and other investments

 

(1,259)

 

(1,255)

 

(2,871)

 

(7,740)

Proceeds from disposition of marketable securities and other

investments

 

1,152

 

4,036

 

3,123

 

4,962

Acquisition of businesses, net of cash acquired

 

(15)

 

(747)

 

(10,480)

 

(7,845)

Divestiture of businesses, net of cash transferred

 

 

 

1

 

(1)

Net cash provided by/(used in) investing activities

 

(481)

 

1,698

 

(10,970)

 

(11,281)

 
 
 
 
 
 
 
 
 

Cash flows from financing activities:

 
 
 
 
 
 
 
 

Proceeds from new debt

 

0

 

7

 

7,437

 

8,385

Payments to settle debt

 

(4,213)

 

(1,308)

 

(7,141)

 

(2,565)

Short-term borrowings/(repayments) less than 90 days – net

 

1

 

0

 

0

 

(29)

Common stock repurchases for tax withholdings

 

(116)

 

(153)

 

(465)

 

(437)

Proceeds from issuance of shares

 

240

 

186

 

418

 

401

Financing – other

 

(49)

 

(22)

 

(91)

 

(54)

Cash dividends paid

 

(1,590)

 

(1,563)

 

(3,166)

 

(3,112)

Net cash provided by/(used in) financing activities

 

(5,728)

 

(2,855)

 

(3,008)

 

2,589

 
 
 
 
 
 
 
 
 

Effect of exchange rate changes on cash, cash equivalents and restricted

cash

 

(35)

 

320

 

(211)

 

487

Net change in cash, cash equivalents and restricted cash

 

(3,646)

 

865

 

(6,423)

 

(2,134)

 
 
 
 
 
 
 
 
 

Cash, cash equivalents and restricted cash at the beginning of the period

 

10,864

 

11,161

 

13,640

 

14,160

Cash, cash equivalents and restricted cash at the end of the period

 

$     7,217

 

$   12,026

 

$     7,217

 

$   12,026

_____________________

(1) Reclassified to align with the Consolidated Statement of Cash Flows presentation.

(2) Includes operating lease right-of-use assets amortization.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

 
 
 

Three Months Ended

June 30,

 

Six Months Ended

June 30,

($ in billions)

 

2026

2025

Yr/Yr

 

2026

2025

Yr/Yr

Net income as reported (GAAP)

 

$   2.2

$   2.2

$  0.0

 

$   3.4

$   3.2

$  0.1

Less: income from discontinued operations, net of tax

 

0.0

0.0

0.0

 

0.0

0.0

0.0

Income from continuing operations

 

2.2

2.2

0.0

 

3.4

3.2

0.1

Provision for/(benefit from) income taxes from continuing ops.

 

0.3

0.4

(0.1)

 

0.5

0.5

0.0

Pre-tax income from continuing operations (GAAP)

 

2.5

2.6

(0.1)

 

3.9

3.8

0.1

Non-operating adjustments (before tax)

 
 
 
 
 
 
 
 

Acquisition-related charges (1)

 

0.7

0.6

0.1

 

1.4

1.1

0.2

Non-operating retirement-related costs/(income)

 

0.1

0.0

0.1

 

0.2

0.0

0.1

 
 
 
 
 
 
 
 
 

Operating (non-GAAP) pre-tax income from continuing ops.

 

3.3

3.2

0.1

 

5.4

4.9

0.5

 
 
 
 
 
 
 
 
 

Net interest expense

 

0.4

0.3

0.1

 

0.7

0.6

0.1

Depreciation/amortization of non-acquired intangible assets

 

0.7

0.7

0.0

 

1.4

1.4

0.0

Stock-based compensation

 

0.5

0.4

0.1

 

1.0

0.8

0.2

Workforce rebalancing charges

 

0.0

0.0

0.0

 

0.4

0.3

0.0

Corporate (gains) and charges (2)

 

(0.1)

0.0

(0.1)

 

(0.1)

0.0

(0.1)

 
 
 
 
 
 
 
 
 

Adjusted EBITDA

 

$   4.8

$   4.7

$  0.1

 

$   8.8

$   8.1

$  0.7

 
 
 
 
 
 
 
 
 

Revenue

 

$ 17.2

$ 17.0

1 %

 

$ 33.1

$ 31.5

5 %

GAAP net income margin

 

12.6 %

12.9 %

(0.3)pts

 

10.2 %

10.3 %

(0.1)pts

Adjusted EBITDA margin

 

27.8 %

27.6 %

0.2pts

 

26.5 %

25.7 %

0.8pts

___________________

(1) Primarily consists of amortization of acquired intangible assets.

(2) Primarily consists of unique corporate actions such as gains on divestitures and asset sales.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

SEGMENT DATA

(Unaudited)

 
 
 

Three Months Ended June 30, 2026

 
 
 
 
 
 
 
 
 
 
 
 
 
 

($ in millions)

 

Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$          7,761

 
 

$          5,327

 
 

$           3,835

 
 

$           186

 

Segment profit

 

$          2,502

 
 

$             647

 
 

$              835

 
 

$           108

 

Segment profit margin

 

32.2

%

 

12.1

%

 

21.8

%

 

58.0

%

Change YTY revenue

 

5.1

%

 

0.2

%

 

(7.4)

%

 

12.2

%

Change YTY revenue – constant currency

 

4.6

%

 

1.1

%

 

(7.4)

%

 

11.3

%

 
 
 

Three Months Ended June 30, 2025

 
 
 
 
 
 
 
 
 
 
 
 
 
 

($ in millions)

 

 Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$          7,387

 
 

$          5,314

 
 

$           4,142

 
 

$           166

 

Segment profit

 

$          2,296

 
 

$             562

 
 

$              965

 
 

$           179

 

Segment profit margin

 

31.1

%

 

10.6

%

 

23.3

%

 

107.9

%

 
 
 

Six Months Ended June 30, 2026

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$        14,813

 
 

$        10,599

 
 

$           7,161

 
 

$           406

 

Segment Profit

 

$          4,601

 
 

$          1,205

 
 

$           1,360

 
 

$           226

 

Segment Profit Margin

 

31.1

%

 

11.4

%

 

19.0

%

 

55.8

%

Change YTY Revenue

 

7.9

%

 

2.1

%

 

1.9

%

 

13.6

%

Change YTY Revenue – Constant Currency

 

6.1

%

 

1.0

%

 

0.5

%

 

10.7

%

 
 
 

Six Months Ended June 30, 2025

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

 Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$        13,722

 
 

$        10,382

 
 

$           7,027

 
 

$           357

 

Segment Profit

 

$          4,143

 
 

$          1,121

 
 

$           1,213

 
 

$           248

 

Segment Profit Margin

 

30.2

%

 

10.8

%

 

17.3

%

 

69.3

%

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; $ in millions except per share amounts)

 
 

Three Months Ended June 30, 2026

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-

GAAP)

 

Gross profit

$  9,907

 
 

$                    287

 
 

$                    —

 
 

$         —

 
 

$       10,194

 

Gross profit margin

57.7

%

 

1.7

pts

 

pts

 

pts

 

59.4

%

SG&A

$  4,981

 
 

$                   (421)

 
 

$                    —

 
 

$         —

 
 

$         4,560

 

Other (income) & expense

(185)

 
 

1

 
 

(96)

 
 

 
 

(280)

 

Total expense & other (income)

7,428

 
 

(429)

 
 

(96)

 
 

 
 

6,903

 

Pre-tax income from continuing operations

2,479

 
 

716

 
 

96

 
 

 
 

3,290

 

Pre-tax income margin from continuing

operations

14.4

%

 

4.2

pts

 

0.6

pts

 

pts

 

19.2

%

Provision for/(benefit from) income taxes (3)

$     313

 
 

$                    167

 
 

$                   20

 
 

$          (2)

 
 

$            498

 

Effective tax rate

12.6

%

 

2.3

pts

 

0.2

pts

 

(0.1)

pts

 

15.1

%

Income from continuing operations

$  2,166

 
 

$                    548

 
 

$                   76

 
 

$           2

 
 

$         2,792

 

Income margin from continuing operations

12.6

%

 

3.2

pts

 

0.4

pts

 

0.0

pts

 

16.3

%

Diluted earnings per share: continuing

operations

$    2.27

 
 

$                   0.58

 
 

$                0.08

 
 

$      0.00

 
 

$           2.93

 
 
 

Three Months Ended June 30, 2025

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-

GAAP)

 

Gross profit

$  9,977

 
 

$                    225

 
 

$                    —

 
 

$         —

 
 

$       10,202

 

Gross profit margin

58.8

%

 

1.3

pts

 

pts

 

pts

 

60.1

%

SG&A

$  5,027

 
 

$                   (348)

 
 

$                    —

 
 

$         —

 
 

$         4,679

 

Other (income) & expense

(39)

 
 

(1)

 
 

(25)

 
 

 
 

(65)

 

Total expense & other (income)

7,380

 
 

(350)

 
 

(25)

 
 

 
 

7,005

 

Pre-tax income from continuing operations

2,597

 
 

575

 
 

25

 
 

 
 

3,197

 

Pre-tax income margin from continuing

operations

15.3

%

 

3.4

pts

 

0.1

pts

 

pts

 

18.8

%

Provision for/(benefit from) income taxes (3)

$     404

 
 

$                    132

 
 

$                     9

 
 

$         —

 
 

$            545

 

Effective tax rate

15.5

%

 

1.3

pts

 

0.2

pts

 

pts

 

17.0

%

Income from continuing operations

$  2,193

 
 

$                    443

 
 

$                   17

 
 

$         —

 
 

$         2,652

 

Income margin from continuing operations

12.9

%

 

2.6

pts

 

0.1

pts

 

pts

 

15.6

%

Diluted earnings per share: continuing

operations

$    2.31

 
 

$                   0.47

 
 

$                0.02

 
 

$         —

 
 

$           2.80

 

____________________

(1) Includes amortization of acquired intangible assets and acquisition-related charges such as in-process research and development, transaction

      costs, applicable retention, restructuring and related expenses, tax charges related to acquisition integration, and pre-closing charges, such as

      financing costs.

(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan

      curtailments/settlements and pension insolvency costs and other costs.

(3) The tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to

      the GAAP pre-tax income.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; $ in millions except per share amounts)

 
 
 
 

Six Months Ended June 30, 2026

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 

Tax

Reform

Impacts

 
 

Operating

(Non-

GAAP)

 

Gross Profit

$ 18,857

 
 

$                  524

 
 

$                    —

 
 

$         —

 
 

$   19,380

 

Gross Profit Margin

57.0

%

 

1.6

pts

 

pts

 

pts

 

58.6

%

SG&A

$ 10,071

 
 

$                (829)

 
 

$                    —

 
 

$         —

 
 

$     9,242

 

Other (Income) & Expense

(186)

 
 

1

 
 

(192)

 
 

 
 

(378)

 

Total Expense & Other (Income)

14,991

 
 

(838)

 
 

(192)

 
 

 
 

13,961

 

Pre-tax Income from Continuing Operations

3,866

 
 

1,361

 
 

192

 
 

 
 

5,419

 

Pre-tax Income Margin from Continuing

Operations

11.7

%

 

4.1

pts

 

0.6

pts

 

pts

 

16.4

%

Provision for/(Benefit from) Income Taxes (3)

$      484

 
 

$                 305

 
 

$                   23

 
 

$         (6)

 
 

$        806

 

Effective Tax Rate

12.5

%

 

2.5

pts

 

0.0

pts

 

(0.1)

pts

 

14.9

%

Income from Continuing Operations

$   3,382

 
 

$              1,056

 
 

$                 169

 
 

$           6

 
 

$     4,613

 

Income Margin from Continuing Operations

10.2

%

 

3.2

pts

 

0.5

pts

 

0.0

pts

 

13.9

%

Diluted Earnings Per Share: Continuing

Operations

$     3.55

 
 

$                1.11

 
 

$                0.18

 
 

$     0.01

 
 

$       4.84

 
 
 

Six Months Ended June 30, 2025

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-

GAAP)

 

Gross Profit

$ 18,008

 
 

$                  426

 
 

$                    —

 
 

$         —

 
 

$   18,434

 

Gross Profit Margin

57.1

%

 

1.4

pts

 

pts

 

pts

 

58.5

%

SG&A

$   9,913

 
 

$                (701)

 
 

$                    —

 
 

$         —

 
 

$     9,212

 

Other (Income) & Expense

(204)

 
 

(1)

 
 

(48)

 
 

 
 

(253)

 

Total Expense & Other (Income)

14,253

 
 

(706)

 
 

(48)

 
 

 
 

13,499

 

Pre-tax Income from Continuing Operations

3,755

 
 

1,132

 
 

48

 
 

 
 

4,935

 

Pre-tax Income Margin from Continuing

Operations

11.9

%

 

3.6

pts

 

0.2

pts

 

pts

 

15.7

%

Provision for/(Benefit from) Income Taxes (3)

$      507

 
 

$                 260

 
 

$                    (3)

 
 

$           2

 
 

$        766

 

Effective Tax Rate

13.5

%

 

2.2

pts

 

(0.2)

pts

 

0.0

pts

 

15.5

%

Income from Continuing Operations

$   3,248

 
 

$                 872

 
 

$                   51

 
 

$         (2)

 
 

$     4,169

 

Income Margin from Continuing Operations

10.3

%

 

2.8

pts

 

0.2

pts

 

0.0

pts

 

13.2

%

Diluted Earnings Per Share: Continuing

Operations

$     3.43

 
 

$                0.92

 
 

$                0.05

 
 

$     0.00

 
 

$       4.40

 

____________________

(1) Includes amortization of acquired intangible assets, and acquisition-related charges such as in-process research and development, transaction

      costs, applicable retention, restructuring and related expenses, tax charges related to acquisition integration, and pre-closing charges, such as

      financing costs.

(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan

      curtailments/settlements and pension insolvency costs and other costs.

(3) The tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to

      the GAAP pre-tax income.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP OPERATING CASH FLOW TO FREE CASH FLOW RECONCILIATION

(Unaudited)

 
 
 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

($ in millions)

 

2026

 

2025

 

2026

 

2025

Net cash provided by operating activities per GAAP

 

$     2,597

 

$     1,701

 

$     7,766

 

$     6,071

 
 
 
 
 
 
 
 
 

Less: change in IBM Financing receivables

 

(302)

 

(1,480)

 

2,264

 

606

 
 
 
 
 
 
 
 
 

Net cash from operating activities excl. IBM Financing receivables

 

2,899

 

3,182

 

5,503

 

5,465

 
 
 
 
 
 
 
 
 

Capital expenditures, net

 

(359)

 

(336)

 

(743)

 

(657)

 
 
 
 
 
 
 
 
 

Free cash flow

 

$     2,540

 

$     2,845

 

$     4,760

 

$     4,808

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP OPERATING CASH FLOW TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

 
 
 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

($ in billions)

 

2026

 

2025

 

2026

 

2025

Net cash provided by operating activities

 

$   2.6

 

$   1.7

 

$   7.8

 

$   6.1

 
 
 
 
 
 
 
 
 

Add:

 
 
 
 
 
 
 
 

Net interest expense

 

0.4

 

0.3

 

0.7

 

0.6

Provision for/(benefit from) income taxes from continuing operations

 

0.3

 

0.4

 

0.5

 

0.5

 
 
 
 
 
 
 
 
 

Less change in:

 
 
 
 
 
 
 
 

Financing receivables

 

(0.3)

 

(1.5)

 

2.3

 

0.6

Net (gain)/loss on divestitures, assets sales and other (1)

 

(0.1)

 

0.0

 

(0.1)

 

0.0

Other assets and liabilities/other, net (1,2)

 

(1.1)

 

(0.7)

 

(2.0)

 

(1.5)

 
 
 
 
 
 
 
 
 

Adjusted EBITDA

 

$   4.8

 

$   4.7

 

$   8.8

 

$   8.1

 
 
 
 
 
 
 
 
 

Revenue

 

$ 17.2

 

$ 17.0

 

$ 33.1

 

$ 31.5

Net cash provided by operating activities margin

 

15.1 %

 

10.0 %

 

23.5 %

 

19.3 %

Adjusted EBITDA margin

 

27.8 %

 

27.6 %

 

26.5 %

 

25.7 %

____________________

(1) Reclassified to align with the presentation of similar line items in the Statement of Cash Flows.

(2) Mainly consists of Changes in operating assets and liabilities, net of acquisitions/divestitures in the Statement of Cash Flows chart,

      workforce rebalancing charges, non-operating impacts, and corporate (gains) and charges, less the change in Financing receivables.

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/ibm-releases-second-quarter-results-302832559.html

SOURCE IBM

Continue Reading

Trending