IBM reported stronger-than-expected Q1 2025 earnings with revenues hitting $14.5 billion, yet its stock fell over 6% post-announcement. The decline is partially attributed to DOGE, a government initiative overseen by Elon Musk, which led to the cancellation or suspension of contracts—affecting IBM's consulting business significantly. CFO Jim Kavanaugh noted potential losses from these contract interruptions, while CEO Arvind Krishna pointed to broader uncertainties in government spending impacting future orders. Overall, revenue growth masks challenges within key business segments, particularly consulting and infrastructure.
IBM's revenue for Q1 2025 surpassed Wall Street expectations, yet the company's stock fell over 6% in after-hours trading due to government contract issues.
CFO Jim Kavanaugh reported DOGE's influence led to cancellations of government contracts worth nearly $100 million, highlighting the consulting business's vulnerability.
CEO Arvind Krishna noted uncertainty in government policies and discretionary spending impacts IBM's consulting performance, indicating future challenges in maintaining revenue growth.
Despite higher overall revenues of $14.5 billion, declines in consulting and infrastructure revenues reveal underlying weaknesses amidst changing market dynamics.
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