IBM's third-quarter 2025 financial report revealed that revenue in two key software areas fell short of expectations. Specifically, the hybrid cloud segment, which includes the highly watched Red Hat division, saw a 14% increase in third-quarter sales. This growth rate slowed from the previous quarter and fell below analysts' expectations of 16%, raising investor concerns. According to the financial report, IBM's third-quarter revenue reached $16.33 billion, up 9.1% year-on-year, surpassing expectations. Profit per share, excluding certain items, was $2.65, also exceeding market expectations. Despite overall robust performance, the slowdown in software business growth, particularly in the hybrid cloud segment, led to a roughly 5.5% decline in IBM's stock price in after-hours trading.
