IBM Q2 2025 Results: Software & Infrastructure Revenue Growth

IBM Q2 2025 Results: Software & Infrastructure Revenue Growth

• 1. IBM RELEASES SECOND-QUARTER RESULTS Results led by Software and Infrastructure revenue growth; Strong margin expansion; Raises outlook for profit and free cash flow ARMONK, N.Y., July 23, 2025 . . . IBM (NYSE: IBM) today announced second-quarter 2025 earnings results. “We once again exceeded expectations for revenue, profit and free cash flow in the quarter. IBM remains highly differentiated in the market because of our deep innovation and domain expertise, both crucial in helping clients deploy and scale AI. Our generative AI book of business continues to accelerate and now stands at more than $7.5 billion," said Arvind Krishna, IBM chairman, president and chief executive officer. "With our strong first-half performance, we are raising our full-year outlook for free cash flow, which we expect to exceed $13.5 billion.” Second-Quarter Highlights • Revenue – Revenue of $17.0 billion, up 8 percent, up 5 percent at constant currency – Software revenue up 10 percent, up 8 percent at constant currency – Consulting revenue up 3 percent, flat at constant currency – Infrastructure revenue up 14 percent, up 11 percent at constant currency • Profit – Gross Profit Margin: GAAP: 58.8 percent, up 200 basis points; Operating (Non-GAAP): 60.1 percent, up 230 basis points – Pre-Tax Income Margin: GAAP: 15.3 percent, up 120 basis points; Operating (Non-GAAP): 18.8 percent, up 110 basis points • Cash Flow – Year to date, net cash from operating activities of $6.1 billion; free cash flow of $4.8 billion SECOND-QUARTER 2025 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 $ 17.0B $ 10.0B 58.8 % $ 2.6B 15.3 % $ 2.2B $ 2.31 Year/Year 8 %(1) 11 % 2.0 Pts 17 % 1.2 Pts 20 % 18 % Operating (Non-GAAP) $ 10.2B 60.1 % $ 3.2B 18.8 % $ 2.7B $ 2.80 Year/Year 12 % 2.3 Pts 15 % 1.1 Pts 17 % 15 % (1) 5% at constant currency. “The innovation we are bringing to market across the portfolio continues to resonate with clients as they scale their AI adoption and investments. As a result, revenue growth, portfolio mix and ongoing productivity initiatives drove significant margin expansion and double-digit profit growth," said James Kavanaugh, IBM senior vice president and chief financial officer. "This combination delivered solid free cash flow, fueling our ability to invest in the business and return value to shareholders through dividends.”

• 2. Segment Results for Second Quarter • Software — revenues of $7.4 billion, up 10 percent, up 8 percent at constant currency: – Hybrid Cloud (Red Hat) up 16 percent, up 14 percent at constant currency – Automation up 16 percent, up 14 percent at constant currency – Data up 9 percent, up 7 percent at constant currency – Transaction Processing up 1 percent, down 2 percent at constant currency • Consulting — revenues of $5.3 billion, up 3 percent, flat at constant currency: – Strategy and Technology up 1 percent, down 2 percent at constant currency – Intelligent Operations up 5 percent, up 2 percent at constant currency • Infrastructure — revenues of $4.1 billion, up 14 percent, up 11 percent at constant currency: – Hybrid Infrastructure up 21 percent, up 19 percent at constant currency • IBM Z up 70 percent, up 67 percent at constant currency • Distributed Infrastructure down 15 percent, down 17 percent at constant currency – Infrastructure Support down 1 percent, down 3 percent at constant currency • Financing — revenues of $0.2 billion, down 2 percent, down 3 percent at constant currency Cash Flow and Balance Sheet In the second quarter, the company generated net cash from operating activities of $1.7 billion, down $0.4 billion year to year. IBM’s free cash flow was $2.8 billion, up $0.2 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 $6.1 billion, down $0.2 billion year to year. IBM's free cash flow was $4.8 billion, up $0.3 billion year to year. IBM ended the second quarter with $15.5 billion of cash, restricted cash and marketable securities, up $0.7 billion from year-end 2024. Debt, including IBM Financing debt of $11.7 billion, totaled $64.2 billion, up $9.2 billion year to date. Full-Year 2025 Expectations • Revenue: The company continues to expect constant currency revenue growth of at least 5 percent. At current foreign exchange rates, currency is expected to be about a one-and-a-halfpoint tailwind to growth for the year. • Free cash flow: The company now expects more than $13.5 billion in free cash flow for the full year. Dividend Declaration On July 23, 2025, the IBM board of directors approved a regular quarterly cash dividend of $1.68 per common share, to stockholders of record on August 8, 2025. With payment of the September 10, 2025 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

• 3. 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 and generative AI, including the company's increased offerings and use of AI-based technologies; impacts of business with government clients; reliance on third party distribution channels and ecosystems; cybersecurity, privacy, and AI 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 forwardlooking statements. Presentation of Information in this Press Release For generative AI, book of business includes Software transactional revenue plus new SaaS Annual Contract Value and Consulting signings related to specific offerings. The generative AI book of business is further defined within Exhibit 99.2 in the Form 8-K that includes 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: IBM results — • 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. 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-2q25. Presentation charts will be available shortly before the Webcast.

• 4. 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 Sarah Meron, 347-891-1770 sarah.meron@ibm.com Tim Davidson, 914-844-7847 tfdavids@us.ibm.com

• 5. INTERNATIONAL BUSINESS MACHINES CORPORATION COMPARATIVE FINANCIAL RESULTS (Unaudited; Dollars in millions except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 REVENUE BY SEGMENT Software $ 7,387 $ 6,739 $ 13,722 $ 12,637 Consulting 5,314 5,179 10,382 10,365 Infrastructure 4,142 3,645 7,027 6,721 Financing 166 169 357 362 Other (31) 38 30 146 TOTAL REVENUE 16,977 15,770 31,519 30,231 GROSS PROFIT 9,977 8,950 18,008 16,692 GROSS PROFIT MARGIN Software 83.9 % 83.6 % 83.7 % 83.0 % Consulting 27.5 % 26.3 % 27.4 % 25.8 % Infrastructure 61.5 % 56.5 % 57.9 % 55.4 % Financing 45.7 % 48.9 % 45.8 % 48.7 % TOTAL GROSS PROFIT MARGIN 58.8 % 56.8 % 57.1 % 55.2 % EXPENSE AND OTHER INCOME SG&A 5,027 4,938 9,913 9,912 R&D 2,097 1,840 4,047 3,637 Intellectual property and custom development income (215) (241) (468) (458) Other (income) and expense (39) (233) (204) (550) Interest expense 510 427 965 859 TOTAL EXPENSE AND OTHER INCOME 7,380 6,730 14,253 13,399 INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 2,597 2,219 3,755 3,293 Pre-tax margin 15.3 % 14.1 % 11.9 % 10.9 % Provision for/(Benefit from) income taxes 404 389 507 (112) Effective tax rate 15.5 % 17.5 % 13.5 % (3.4) % INCOME FROM CONTINUING OPERATIONS $ 2,193 $ 1,830 $ 3,248 $ 3,405 DISCONTINUED OPERATIONS Income from discontinued operations, net of taxes 1 4 1 34 NET INCOME $ 2,194 $ 1,834 $ 3,249 $ 3,439 EARNINGS PER SHARE OF COMMON STOCK Assuming Dilution Continuing Operations $ 2.31 $ 1.96 $ 3.43 $ 3.65 Discontinued Operations $ 0.00 $ 0.00 $ 0.00 $ 0.04 TOTAL $ 2.31 $ 1.96 $ 3.43 $ 3.68 Basic Continuing Operations $ 2.36 $ 1.99 $ 3.49 $ 3.71 Discontinued Operations $ 0.00 $ 0.00 $ 0.00 $ 0.04 TOTAL $ 2.36 $ 1.99 $ 3.50 $ 3.74 WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M’s) Assuming Dilution 948.0 934.4 946.7 933.9 Basic 930.8 920.3 929.4 918.7

• 6. INTERNATIONAL BUSINESS MACHINES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Dollars in Millions) At June 30, 2025 At December 31, 2024 ASSETS: Current Assets: Cash and cash equivalents $ 11,943 $ 13,947 Restricted cash 83 214 Marketable securities 3,504 644 Notes and accounts receivable - trade, net 5,974 6,804 Short-term financing receivables Held for investment, net 5,586 6,259 Held for sale 746 900 Other accounts receivable, net 1,187 947 Inventories 1,251 1,289 Deferred costs 1,182 959 Prepaid expenses and other current assets 2,796 2,520 Total Current Assets 34,253 34,482 Property, plant and equipment, net 5,943 5,731 Operating right-of-use assets, net 3,315 3,197 Long-term financing receivables, net 6,171 5,353 Prepaid pension assets 7,983 7,492 Deferred costs 795 788 Deferred taxes 8,475 6,978 Goodwill 67,506 60,706 Intangibles, net 12,253 10,660 Investments and sundry assets 1,891 1,787 Total Assets $ 148,585 $ 137,175 LIABILITIES: Current Liabilities: Taxes $ 1,681 $ 2,033 Short-term debt 8,945 5,089 Accounts payable 3,974 4,032 Compensation and benefits 3,353 3,605 Deferred income 15,022 13,907 Operating lease liabilities 820 768 Other liabilities 3,932 3,709 Total Current Liabilities 37,726 33,142 Long-term debt 55,219 49,884 Retirement-related obligations 9,882 9,432 Deferred income 3,913 3,622 Operating lease liabilities 2,735 2,655 Other liabilities 11,522 11,048 Total Liabilities 120,998 109,783 EQUITY: IBM Stockholders’ Equity: Common stock 62,392 61,380 Retained earnings 151,367 151,163 Treasury stock - at cost (170,209) (169,968) Accumulated other comprehensive income/(loss) (16,041) (15,269) Total IBM Stockholders’ Equity 27,509 27,307 Noncontrolling interests 79 86 Total Equity 27,588 27,393 Total Liabilities and Equity $ 148,585 $ 137,175

• 7. INTERNATIONAL BUSINESS MACHINES CORPORATION CASH FLOW (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (Dollars in Millions) 2025 2024 2025 2024 Net Income from Operations $ 2,194 $ 1,834 $ 3,249 $ 3,439 Depreciation/Amortization of Intangibles (1) 1,265 1,155 2,442 2,287 Stock-based Compensation 441 316 842 636 Operating assets and liabilities/Other, net (717) (293) (1,067) (1,079) IBM Financing A/R (1,480) (946) 606 951 Net Cash Provided by Operating Activities $ 1,701 $ 2,066 $ 6,071 $ 6,234 Capital Expenditures, net of payments & proceeds (336) (399) (657) (761) Divestitures, net of cash transferred - - (1) 703 Acquisitions, net of cash acquired (747) (153) (7,845) (235) Marketable Securities / Other Investments, net 2,781 2,791 (2,778) (1,679) Net Cash Provided by/(Used in) Investing Activities $ 1,698 $ 2,239 $ (11,281) $ (1,971) Debt, net of payments & proceeds (1,301) (2,900) 5,791 481 Dividends (1,563) (1,537) (3,112) (3,058) Financing - Other 10 (78) (90) (61) Net Cash Provided by/(Used in) Financing Activities $ (2,855) $ (4,515) $ 2,589 $ (2,638) Effect of Exchange Rate changes on Cash 320 (76) 487 (236) Net Change in Cash, Cash Equivalents and Restricted Cash $ 865 $ (287) $ (2,134) $ 1,389 (1) Includes operating lease right-of-use assets amortization.

• 8. INTERNATIONAL BUSINESS MACHINES CORPORATION GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (Dollars in Billions) 2025 2024 Yr/Yr 2025 2024 Yr/Yr Net Income as reported (GAAP) $ 2.2 $ 1.8 $ 0.4 $ 3.2 $ 3.4 $ (0.2) 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 1.8 0.4 3.2 3.4 (0.2) Provision for/(Benefit from) income taxes from continuing ops. 0.4 0.4 0.0 0.5 (0.1) 0.6 Pre-tax income from continuing operations (GAAP) 2.6 2.2 0.4 3.8 3.3 0.5 Non-operating adjustments (before tax) Acquisition-related charges (1) 0.6 0.5 0.1 1.1 1.0 0.2 Non-operating retirement-related costs/(income) 0.0 0.1 (0.1) 0.0 0.2 (0.1) Operating (non-GAAP) pre-tax income from continuing ops. 3.2 2.8 0.4 4.9 4.4 0.5 Net interest expense 0.3 0.2 0.1 0.6 0.4 0.2 Depreciation/Amortization of non-acquired intangible assets 0.7 0.7 0.0 1.4 1.4 0.0 Stock-based compensation 0.4 0.3 0.1 0.8 0.6 0.2 Workforce rebalancing charges 0.0 0.0 0.0 0.3 0.4 (0.1) Corporate (gains) and charges (2) 0.0 0.0 0.0 0.0 (0.2) 0.3 Adjusted EBITDA $ 4.7 $ 4.0 $ 0.6 $ 8.1 $ 7.1 $ 1.0 (1) Primarily consists of amortization of acquired intangible assets. (2) Corporate (gains) and charges primarily consists of unique corporate actions such as gains on divestitures.

• 9. INTERNATIONAL BUSINESS MACHINES CORPORATION SEGMENT DATA (Unaudited) Three Months Ended June 30, 2025 (Dollars 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 % Change YTY Revenue 9.6 % 2.6 % 13.6 % (1.7) % Change YTY Revenue - Constant Currency 7.6 % (0.3) % 11.5 % (3.3) % Three Months Ended June 30, 2024 (Dollars in Millions) Software Consulting Infrastructure Financing Revenue $ 6,739 $ 5,179 $ 3,645 $ 169 Segment Profit $ 2,113 $ 463 $ 654 $ 77 Segment Profit Margin 31.3 % 8.9 % 17.9 % 45.3 % 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 % Change YTY Revenue 8.6 % 0.2 % 4.6 % (1.2) % Change YTY Revenue - Constant Currency 8.3 % (0.4) % 4.3 % (0.3) % Six Months Ended June 30, 2024 (Dollars in Millions) Software Consulting Infrastructure Financing Revenue $ 12,637 $ 10,365 $ 6,721 $ 362 Segment Profit $ 3,612 $ 888 $ 965 $ 168 Segment Profit Margin 28.6 % 8.6 % 14.4 % 46.5 %

• 10. INTERNATIONAL BUSINESS MACHINES CORPORATION U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION (Unaudited; Dollars in millions except per share amounts) Three Months Ended June 30, 2025 Continuing Operations GAAP AcquisitionRelated Adjustments (1) RetirementRelated Adjustments (2) Tax Reform Impacts Operating (NonGAAP) 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 $ 0.00 $ 2.80 Three Months Ended June 30, 2024 Continuing Operations GAAP AcquisitionRelated Adjustments (1) RetirementRelated Adjustments (2) Tax Reform Impacts Operating (NonGAAP) Gross Profit $ 8,950 $ 170 $ — $ — $ 9,120 Gross Profit Margin 56.8 % 1.1 pts — pts — pts 57.8 % SG&A $ 4,938 $ (286) $ — $ — $ 4,651 Other (Income) & Expense (233) (18) (98) — (349) Total Expense & Other (Income) 6,730 (304) (98) — 6,328 Pre-tax Income from Continuing Operations 2,219 474 98 — 2,792 Pre-tax Income Margin from Continuing Operations 14.1 % 3.0 pts 0.6 pts — pts 17.7 % Provision for/(Benefit from) Income Taxes (3) $ 389 $ 113 $ 26 $ (12) $ 516 Effective Tax Rate 17.5 % 1.1 pts 0.3 pts (0.4) pts 18.5 % Income from Continuing Operations $ 1,830 $ 362 $ 72 $ 12 $ 2,275 Income Margin from Continuing Operations 11.6 % 2.3 pts 0.5 pts 0.1 pts 14.4 % Diluted Earnings Per Share: Continuing Operations $ 1.96 $ 0.39 $ 0.08 $ 0.01 $ 2.43 (1) Includes amortization of acquired intangible assets, in-process R&D, transaction costs, applicable retention, restructuring and related expenses, tax charges related to acquisition integration and pre-closing charges, such as financing costs. 2024 also includes a loss of $18 million on foreign exchange derivative contracts entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG. (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.

• 11. INTERNATIONAL BUSINESS MACHINES CORPORATION U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION (Unaudited; Dollars in millions except per share amounts) Six Months Ended June 30, 2025 Continuing Operations GAAP AcquisitionRelated Adjustments (1) RetirementRelated Adjustments (2) Tax Reform Impacts Operating (NonGAAP) 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 R&D 4,047 (4) — — 4,043 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 Six Months Ended June 30, 2024 Continuing Operations GAAP AcquisitionRelated Adjustments (1) RetirementRelated Adjustments (2) Tax Reform Impacts (4) Operating (NonGAAP) Gross Profit $ 16,692 $ 341 $ — $ — $ 17,033 Gross Profit Margin 55.2 % 1.1 pts — pts — pts 56.3 % SG&A $ 9,912 $ (554) $ — $ — $ 9,358 Other (Income) & Expense (550) (68) (194) — (812) Total Expense & Other (Income) 13,399 (622) (194) — 12,584 Pre-tax Income from Continuing Operations 3,293 963 194 — 4,449 Pre-tax Income Margin from Continuing Operations 10.9 % 3.2 pts 0.6 pts — pts 14.7 % Provision for/(Benefit from) Income Taxes (3) $ (112) $ 255 $ 31 $ 436 $ 610 Effective Tax Rate (3.4) % 6.5 pts 0.9 pts 9.8 pts 13.7 % Income from Continuing Operations $ 3,405 $ 707 $ 163 $ (436) $ 3,839 Income Margin from Continuing Operations 11.3 % 2.3 pts 0.5 pts (1.4) pts 12.7 % Diluted Earnings Per Share: Continuing Operations $ 3.65 $ 0.76 $ 0.17 $ (0.47) $ 4.11 (1) Includes amortization of acquired intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax charges related to acquisition integration and pre-closing charges, such as financing costs. 2024 also includes a loss of $68 million on foreign exchange derivative contracts entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG. (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) 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. (4) 2024 includes a benefit from income taxes due to the resolution of certain tax audit matters in the first quarter.

• 12. INTERNATIONAL BUSINESS MACHINES CORPORATION GAAP OPERATING CASH FLOW TO FREE CASH FLOW RECONCILIATION (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (Dollars in Millions) 2025 2024 2025 2024 Net Cash from Operations per GAAP $ 1,701 $ 2,066 $ 6,071 $ 6,234 Less: change in IBM Financing receivables (1,480) (946) 606 951 Net cash from operating activities excl. IBM Financing receivables 3,182 3,012 5,465 5,283 Capital Expenditures, net (336) (399) (657) (761) Free Cash Flow $ 2,845 $ 2,612 $ 4,808 $ 4,522

• 13. INTERNATIONAL BUSINESS MACHINES CORPORATION GAAP OPERATING CASH FLOW TO ADJUSTED EBITDA RECONCILIATION (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (Dollars in Billions) 2025 2024 2025 2024 Net Cash Provided by Operating Activities $ 1.7 $ 2.1 $ 6.1 $ 6.2 Add: Net interest expense 0.3 0.2 0.6 0.4 Provision for/(Benefit from) income taxes from continuing operations 0.4 0.4 0.5 (0.1) Less change in: Financing receivables (1.5) (0.9) 0.6 1.0 Other assets and liabilities/other, net (1) (0.8) (0.4) (1.5) (1.5) Adjusted EBITDA $ 4.7 $ 4.0 $ 8.1 $ 7.1 (1) Other assets and liabilities/other, net mainly consists of Operating assets and liabilities/Other, net in the Cash Flow chart, workforce rebalancing charges, non-operating impacts and corporate (gains) and charges.