Free cash flow margins have shown high volatility, swinging from a low of 8.8% in 2025Q2 to a peak of 30.0% in 2026Q1, reflecting erratic cash conversion cycles.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Cash from Operations | 13.99B | 13.19B | 13.45B | 13.93B | 10.44B | 12.8B | 18.2B | 14.77B | 15.25B | 16.72B | 17.08B | 17.25B | 16.87B | 17.48B | 19.59B | 19.85B | 19.55B | 20.77B | 18.81B | 16.09B | 15.02B | 14.91B | 15.35B | 14.54B | 13.79B | 14.02B | 9.27B | 10.11B | 9.27B | 8.87B | 10.28B |
| Operating CF Margin % | - | 19.53% | 21.43% | 22.52% | 17.24% | 22.31% | 32.98% | 25.59% | 19.16% | 21.13% | 21.38% | 21.11% | 18.18% | 17.78% | 19.04% | 18.56% | 19.57% | 21.69% | 18.15% | 16.29% | 16.43% | 16.36% | 15.94% | 16.31% | 16.98% | 16.88% | 10.49% | 11.55% | 11.35% | 11.29% | 13.99% |
| Operating CF Growth % | 0.87% | -1.88% | -3.49% | 33.5% | -18.45% | -29.68% | 23.2% | -3.13% | -8.83% | -2.11% | -0.99% | 2.29% | -3.53% | -10.73% | -1.31% | 1.52% | -5.89% | 10.42% | 16.92% | 7.12% | 0.7% | -2.83% | 5.59% | 5.43% | -1.66% | 51.19% | -8.28% | 9.04% | 4.6% | -13.72% | -4.04% |
| Net Income | 10.75B | 10.57B | 6.02B | 7.5B | 1.64B | 5.74B | 5.59B | 9.43B | 8.73B | 5.75B | 11.87B | 13.19B | 12.02B | 16.48B | 16.6B | 15.86B | 14.83B | 13.43B | 12.33B | 10.42B | 9.49B | 7.93B | 7.48B | 6.56B | 5.33B | 8.15B | 8.09B | 7.71B | 6.33B | 6.09B | 5.43B |
| Depreciation & Amortization | 1.39B | 5.02B | 4.67B | 4.4B | 4.8B | 6.42B | 6.7B | 6.06B | 4.48B | 4.54B | 4.38B | 3.85B | 4.49B | 4.68B | 4.68B | 4.82B | 4.83B | 4.99B | 5.45B | 5.2B | 4.98B | 5.19B | 4.92B | 4.92B | 4.49B | 4.51B | 5B | 6.58B | 4.99B | 5B | 5.01B |
| Stock-Based Compensation | 105M | 0 | 1.31B | 1.13B | 987M | 982M | 937M | 679M | 510M | 534M | 544M | 468M | 512M | 614M | 688M | 697M | 629M | 558M | 659M | 713M | 846M | 1.04B | 1.58B | 1.57B | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | -2.33B | -1.11B | -2.73B | -2B | -3.2B | -1.53B | 853M | -931M | -1.13B | 1.39B | -237M | -1.61B | 797M | 1.21B | 1.29B | 1.77B | 1.9B | 740M | 1.72B | 2.19B | 1.79B | 790M | -67M | 664M | 29M | -713M | -606M | 358M | 11M |
| Other Non-Cash Items | 10.09B | 1.74B | 2.46B | -170M | 5.53B | -136M | -71M | -1.1B | 122M | 14M | 62M | 551M | 1.84B | -234M | -730M | -343M | -801M | -395M | -338M | -93M | -250M | -1.49B | -382M | -195M | 1.06B | 120M | -792M | -4.79B | -261M | -273M | -1.79B |
| Working Capital Changes | -3.34B | -4.14B | 1.31B | 2.18B | 202M | 1.79B | 8.25B | 1.23B | 554M | 6.81B | 1.36B | -2.2B | -1.77B | -2.45B | -2.45B | -2.39B | -1.24B | 418M | -1.19B | -890M | -1.78B | 57M | -35M | 895M | 2.96B | 585M | -3.05B | 1.32B | -1.18B | -2.31B | 1.61B |
| Change in Receivables | 0 | -3.16B | -374M | 725M | -539M | 1.37B | 5.3B | 502M | 1.01B | 1.3B | 712M | 812M | 1.27B | -1.41B | -2.23B | -1.28B | -489M | 2.13B | 274M | -1.41B | -512M | 2.22B | 2.61B | 2.02B | 4.13B | 2.84B | -4.72B | -1.68B | -2.74B | -3.73B | -650M |
| Change in Inventory | 0 | 0 | -166M | 390M | 71M | 138M | -209M | 67M | -127M | 18M | -14M | 133M | -39M | -57M | 280M | -163M | 92M | 263M | -102M | 182M | 112M | 202M | -291M | 293M | 793M | 287M | -55M | 301M | 73M | 432M | 196M |
| Change in Payables | 0 | 0 | -13M | 65M | 213M | 85M | 138M | -503M | 126M | 47M | 197M | 81M | -456M | -529M | -224M | 451M | 174M | 170M | -860M | -142M | 355M | -536M | 411M | 617M | -55M | 0 | 2.25B | -3M | 362M | 699M | 319M |
| Cash from Investing | -7.81B | -10.3B | -4.94B | -7.07B | -4.2B | -5.97B | -3.03B | -26.94B | -4.91B | -7.1B | -10.54B | -8.2B | -3B | -7.3B | -9B | -4.4B | -8.51B | -6.73B | -9.29B | -4.67B | -11.55B | -4.42B | -5.35B | -5.12B | -6.9B | -6.11B | -4.25B | -1.67B | -6.13B | -6.16B | -5.72B |
| Capital Expenditures | -1.05B | -1.62B | -1.05B | -1.25B | -1.35B | -2.06B | -2.62B | -2.29B | -3.4B | -3.23B | -3.57B | -3.58B | -3.74B | -3.62B | -4.08B | -4.11B | -4.18B | -3.45B | -4.17B | -4.63B | -4.36B | -3.84B | -4.37B | -4.39B | -4.75B | -5.4B | -5.62B | -5.96B | -6.52B | -6.79B | -5.88B |
| CapEx % of Revenue | 1.52% | 2.39% | 1.67% | 2.01% | 2.22% | 3.6% | 4.74% | 3.96% | 4.27% | 4.08% | 4.46% | 4.38% | 4.03% | 3.68% | 3.97% | 3.84% | 4.19% | 3.6% | 4.02% | 4.69% | 4.77% | 4.22% | 4.54% | 4.93% | 5.85% | 6.5% | 6.35% | 6.81% | 7.98% | 8.65% | 8.01% |
| Acquisitions | -3.87B | -8.29B | -2.59B | -5.09B | -1.08B | -3.18B | 167M | -31.55B | -139M | -701M | -6.15B | -3.75B | 1.7B | -2.76B | -3.12B | -1.8B | -5.87B | -794M | -6.24B | -699M | -3.8B | -550M | -1.71B | -1.74B | -1.93B | -916M | 565M | 4.88B | 0 | 0 | -716M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -17.33B | -2M | -80M | -243M | -515M | -320M | 51M | 6.64B | -825M | -2.11B | -1.05B | -599M | -1.12B | -1.21B | -832M | -242M | -203M | -483M | -382M | -213M | -375M | 315M | 623M | 458M | 178M | 494M | 1.05B | 743M | 655M | 816M | 1.02B |
| Cash from Financing | -6.55B | -3.83B | -7.08B | -1.77B | -4.96B | -13.35B | -9.72B | 9.04B | -10.47B | -6.42B | -5.92B | -9.41B | -15.45B | -9.88B | -11.98B | -13.7B | -12.43B | -14.7B | -11.83B | -4.74B | -8.2B | -7.15B | -7.56B | -7.77B | -7.26B | -5.31B | -6.36B | -8.63B | -4.99B | -3.09B | -3.95B |
| Debt Issued (Net) | -3.42B | 2.87B | -880M | 4.5B | 1.22B | -8.12B | -3.71B | 16.28B | -301M | 3.45B | 2.76B | 19M | 1.78B | 6.96B | 2.25B | 2.37B | 2.35B | -7.46B | -2.44B | 12.11B | -122M | 609M | -1.03B | -3.48B | -3.17B | -437M | 643M | -1.1B | 2.12B | 3.94B | 1.76B |
| Equity Issued (Net) | -70M | 0 | 745M | -402M | -407M | -319M | -302M | -1.63B | -4.61B | -4.53B | -3.63B | -4.86B | -13.68B | -13.86B | -11.99B | -15.05B | -15.38B | -7.43B | -6.8B | -18.83B | -6.4B | -6.51B | -5.36B | -3.2B | -3.09B | -3.91B | -6.07B | -6.64B | -6.28B | -6.25B | -5B |
| Dividends Paid | -6.28B | -6.25B | -6.15B | -6.04B | -5.95B | -5.87B | -5.8B | -5.71B | -5.67B | -5.51B | -5.26B | -4.9B | -4.3B | -4.1B | -3.77B | -3.47B | -3.18B | -2.86B | -2.58B | -2.15B | -1.68B | -1.25B | -1.17B | -1.08B | -1B | -966M | -929M | -879M | -834M | -783M | -706M |
| Share Repurchases | -350M | 0 | 0 | -402M | -407M | -319M | -302M | -1.63B | -4.61B | -4.53B | -3.63B | -4.86B | -13.68B | -13.86B | -11.99B | -15.05B | -15.38B | -7.43B | -10.58B | -18.83B | -8.08B | 0 | 0 | -3.23B | -3.09B | -3.91B | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 3.22B | -447M | -797M | 176M | 176M | 909M | 92M | 98M | 112M | 174M | 204M | 535M | 709M | 1.07B | 1.54B | 2.45B | 3.77B | 3.05B | -1M | 4.12B | 0 | 0 | 0 | -32M | 0 | 0 | 0 | 0 | -5M | -1M | 0 |
| Net Change in Cash | -297M | -520M | 1.07B | 5.1B | 1.03B | -6.72B | 5.36B | -3.29B | -630M | 4.15B | 140M | -800M | -2.2B | 300M | -1.5B | 1.26B | -1.52B | -558M | -2.25B | 6.97B | -4.55B | 2.52B | 2.76B | 1.91B | -948M | 2.77B | -1.48B | -332M | -1.73B | -581M | 428M |
| Free Cash Flow | 13.09B | 11.57B | 11.76B | 12.12B | 8.46B | 10.03B | 14.97B | 11.86B | 11.28B | 12.95B | 12.93B | 13.1B | 12.69B | 13.35B | 14.87B | 15.18B | 14.79B | 16.7B | 13.93B | 10.58B | 9.85B | 10.28B | 10.29B | 9.56B | 8.44B | 8.62B | 3.09B | 3.69B | 2.5B | 1.76B | 4.1B |
| FCF Margin % | 18.99% | 17.14% | 18.74% | 19.59% | 13.98% | 17.49% | 27.12% | 20.55% | 14.18% | 16.36% | 16.18% | 16.03% | 13.67% | 13.57% | 14.45% | 14.2% | 14.81% | 17.44% | 13.44% | 10.71% | 10.78% | 11.28% | 10.69% | 10.73% | 10.39% | 10.38% | 3.5% | 4.21% | 3.06% | 2.24% | 5.58% |
| FCF Growth % | 9.61% | -1.57% | -2.98% | 43.22% | -15.61% | -33% | 26.17% | 5.14% | -12.88% | 0.13% | -1.3% | 3.3% | -4.95% | -10.25% | -2.04% | 2.6% | -11.39% | 19.9% | 31.57% | 7.42% | -4.15% | -0.13% | 7.63% | 13.33% | -2.12% | 178.73% | -16.13% | 47.34% | 42.38% | -57.09% | -20.31% |
| FCF per Share | 13.75 | 12.20 | 12.55 | 13.15 | 9.28 | 11.09 | 16.69 | 13.29 | 12.31 | 13.82 | 13.49 | 13.33 | 12.56 | 12.10 | 12.87 | 12.51 | 11.49 | 12.45 | 10.08 | 7.30 | 6.34 | 6.32 | 6.02 | 5.45 | 4.87 | 4.86 | 1.71 | 1.97 | 1.30 | 0.87 | 1.92 |
| FCF Conversion (FCF/Net Income) | 1.22x | 1.25x | 2.23x | 1.86x | 6.36x | 2.23x | 3.26x | 1.57x | 1.75x | 2.91x | 1.44x | 1.31x | 1.40x | 1.06x | 1.18x | 1.25x | 1.32x | 1.55x | 1.53x | 1.54x | 1.58x | 1.88x | 2.05x | 2.22x | 3.85x | 1.82x | 1.15x | 1.31x | 1.47x | 1.45x | 1.89x |
| Interest Paid | 0 | 0 | 1.98B | 1.67B | 1.4B | 1.51B | 1.83B | 1.69B | 1.42B | 1.21B | 1.16B | 995M | 1.06B | 982M | 1.01B | 956M | 951M | 1.24B | 1.46B | 1.49B | 1.2B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 1.72B | 1.56B | 1.86B | 2.1B | 2.25B | 2.09B | 1.75B | 1.6B | 1.08B | 2.66B | 5.75B | 4.02B | 3.17B | 4.17B | 3.24B | 1.57B | 2.11B | 2.61B | 2.07B | 1.99B | 1.84B | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Inconsistent cash conversion cycles
According to the provided cash flow statements, IBM's OCF/NI ratio has fluctuated wildly, reaching an extreme 4.25x in 2026Q1 and a negative -8.73x in 2024Q3, which suggests that reported net income is a poor proxy for the company's actual cash-generating capacity in any given quarter.
The significant divergence between net income and operating cash flow indicates that non-cash charges and accounting adjustments are heavily influencing the bottom line. Investors should monitor whether this volatility stems from pension accounting or the timing of large-scale consulting project milestones, as it complicates the assessment of core earnings quality.
As reported in financial statements, IBM's free cash flow margins have demonstrated high variability, ranging from a low of 8.8% in 2025Q2 to a peak of 30.0% in 2026Q1, reflecting the company's ongoing struggle to maintain consistent cash conversion across its diverse business segments.
The trajectory of free cash flow appears tethered to the cyclical nature of mainframe hardware sales and the lumpy revenue recognition of large consulting engagements. This inconsistency suggests that while the company can generate significant cash, the predictability of these flows remains constrained by the underlying business mix.
Based on IBM's reported figures, working capital changes have been highly erratic, swinging from a $2.2 billion inflow in 2026Q1 to a $3.3 billion outflow in 2025Q4, which suggests that the company's cash position is frequently buffeted by the timing of client payments and inventory management.
These dramatic shifts in working capital indicate that IBM's cash flow is highly sensitive to the operational efficiency of its consulting and infrastructure divisions. Such fluctuations may imply that the company is frequently forced to absorb the impact of client-side payment delays, which warrants further investigation into the durability of its accounts receivable.
As indicated by recent filings, IBM has maintained a consistent dividend payout of approximately $1.5 billion to $1.6 billion per quarter while simultaneously deploying significant capital for acquisitions, such as the $10.5 billion net outflow observed in 2026Q1, highlighting a strategy of balancing shareholder returns with growth.
The company's commitment to dividends appears to be a structural priority, even during periods of heavy acquisition activity. However, the scale of recent acquisitions relative to operating cash flow suggests that the company is relying on its balance sheet to fund its strategic pivot, which may limit future flexibility if cash generation does not accelerate.
Quick answers to the most common questions about buying IBM stock.
International Business Machines Corporation (IBM) generated $13.19B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
International Business Machines Corporation (IBM) generated $11.57B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
International Business Machines Corporation (IBM) spent $1.62B on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, International Business Machines Corporation (IBM) returned $6.25B to shareholders via cash dividends. This shows the company's commitment to returning capital to its equity investors.