Stock Analysis on Net
Stock Analysis on Net

International Business Machines Corp. (NYSE:IBM)

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Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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International Business Machines Corp., consolidated cash flow statement

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Net income
Pension settlement charge
Depreciation, includes operating lease right-of-use assets amortization expense
Amortization of capitalized software and acquired intangible assets
Stock-based compensation
Deferred taxes
Net gain on divestitures, asset sales and other
Receivables, including financing receivables
Retirement related
Inventory
Other assets/other liabilities
Accounts payable
Change in operating assets and liabilities, net of acquisitions/divestitures
Adjustments to reconcile net income to cash provided by operating activities
Net cash provided by operating activities
Payments for property, plant and equipment
Proceeds from disposition of property, plant and equipment/other
Investment in software
Purchases of marketable securities and other investments
Proceeds from disposition of marketable securities and other investments
Acquisition of businesses, net of cash acquired
Divestiture of businesses, net of cash transferred
Net cash used in investing activities
Proceeds from new debt
Payments to settle debt
Short-term borrowings (repayments) less than 90 days, net
Common stock repurchases for tax withholdings
Proceeds from issuance of shares
Financing, other
Distribution from Kyndryl
Cash dividends paid
Net cash used in financing activities
Effect of exchange rate changes on cash, cash equivalents and restricted cash
Net change in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at January 1
Cash, cash equivalents and restricted cash at December 31

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

The cash flow profile reflects a period of significant volatility in net income countered by remarkably stable operational cash generation. While net income experienced sharp fluctuations, particularly between 2022 and 2025, the net cash provided by operating activities remained resilient, consistently exceeding 10 billion USD annually. This divergence suggests that non-cash adjustments and working capital management have played a critical role in maintaining liquidity despite earnings volatility.

Operating Cash Flow Dynamics
Net cash provided by operating activities remained strong, peaking at 13.9 billion USD in 2023. The stability of these flows is attributed to consistent non-cash charges, including depreciation and amortization, which collectively contributed several billion USD annually. Notably, pension settlement charges in 2022 and 2024 created significant downward pressure on net income but were neutralized in the operating cash flow calculation, illustrating a disconnect between accounting profit and cash liquidity.
Investment Strategy and Capital Expenditure
Investing activities are characterized by a strategic shift toward business acquisitions and a reduction in traditional capital expenditures. Payments for property, plant, and equipment trended downward from 2.06 billion USD in 2021 to 1.09 billion USD in 2025. Conversely, the acquisition of businesses has accelerated, with a substantial increase to 8.29 billion USD in 2025, indicating an aggressive inorganic growth strategy. The high volume of purchases and proceeds from marketable securities suggests active liquidity management within the investment portfolio.
Financing and Shareholder Returns
A disciplined approach to shareholder returns is evident through a highly consistent dividend policy, with annual payouts steadily increasing from 5.87 billion USD in 2021 to 6.26 billion USD in 2025. Financing activities show a recurring cycle of debt issuance and repayment to manage the balance sheet. The net cash used in financing activities fluctuated significantly, peaking in 2021 at 13.35 billion USD, largely driven by debt settlement and dividend obligations.
Liquidity and Cash Position
The overall cash and restricted cash position demonstrated a general upward trend through 2024, rising from 6.96 billion USD in 2021 to a peak of 14.16 billion USD. A slight contraction occurred in 2025, ending at 13.64 billion USD, primarily due to the surge in business acquisitions. The company maintains a robust liquidity buffer that supports both its operational needs and its strategic investment initiatives.