Aureus
COkay

International Business Machines(IBM)

C

Financial data as of Dec 31, 2025Improving · Technology

FCF Margin14.4%Free Cash Flow / Revenue
Cash Conversion124.5%Operating CF / Net Income
Free Cash Flow$11.5B
Revenue$67.5B
Net Cash-$51.0BNet debt position
Debt / FCF6.6xElevated debt burden
Current Ratio0.96Tight short-term liquidity
YoY FCF Growth+19.5%5 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseC
→
-0.5Elevated debt-to-FCF ratio (6.6x)
→
+0.5Healthy FCF margin with manageable debt (14.4%, 6.6x)
→
-1Current ratio below 1.0 (0.96)
→
+1Strong YoY FCF growth (19.5% YoY)
→
FinalC

Analysis Summary

Strengths

  • Healthy FCF margin (14.4%)
  • Excellent cash conversion (125%)
  • FCF trend is improving

Concerns

  • Heavy debt position ($51.0B net debt, 6.6x FCF)
  • High debt-to-FCF ratio (6.6x)
  • Current ratio below 1.0 — tight short-term liquidity
SBC-adjusted FCF used — $1.7B stock-based compensation (15% of reported FCF) subtracted

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin14.4%
Net Margin15.7%
Operating CF Margin19.5%
CapEx Ratio2.6%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash-$51.0BNet debt position
Debt / FCF6.6xElevated debt burden
Current Ratio0.96Tight liquidity
Debt / Equity1.98Moderate leverage

Quarterly FCF Trend

+19.5% YoYImproving (+19.5%)

Free cash flow per quarter

Sector Comparison — Technology

FCF Margin ranked against sector peers

View all →

Detailed Metrics

Company NameInternational Business Machines
SectorTechnology
Free Cash Flow$11.5B
Revenue$67.5B
Net Income$10.6B
Operating Cash Flow$13.2B
Capital Expenditure$1.7B
FCF Margin14.4%
Cash Conversion Rate124.5%
Net Margin15.7%
Total Debt$64.6B
Total Cash$13.6B
Net Cash-$51.0B
Current Ratio0.96
Debt / Equity1.98
Debt / FCF6.6x
YoY FCF Growth+19.5%
Positive Quarters5 of 5
Trend DirectionImproving
Report DateDec 31, 2025
GradeC
Data SourceYahoo Finance