IBM faced notable challenges in Q1 2025, losing 15 federal contracts due to the Department of Government Efficiency's budget cuts, totaling $100 million in potential revenue. During an earnings call, CEO Arvind Krishna reassured investors that most of the remaining contracts are vital to government functions, like processing veterans' benefits and procurement. Despite a 2% decrease in overall consulting revenue, Kavanaugh mentioned the bulk of IBM's consulting backlog exceeds $30 billion, positioning the company well to navigate current industry conditions.
IBM's consulting division faced a significant setback with fifteen federal contracts being cancelled due to DOGE cuts, amounting to a $100 million loss in potential revenue.
CEO Arvind Krishna emphasized that despite the challenges, the majority of IBM's federal contracts focus on critical work, proving essential to their consulting operations.
CFO James Kavanaugh reassured stakeholders that the impact of DOGE cuts was minor compared to the overall consulting backlog of over $30 billion.
IBM's consulting revenue fell by 2% in the first quarter of 2025, reflecting broader industry challenges, yet the company's diverse business strategy is positioned to weather these changes.
Collection
[
|
...
]