Thursday after reporting results that showed strong profit while also suggesting that economic uncertainty and US government cost cuts may dent the company’s business.First-quarter sales increased almost 1% to $14.

IBM had 15 of its federal contracts cancelled due to DOGE-related cuts during the first quarter of 2025, according to reporting from Reuters and Bloomberg. These cuts amount to $100 million in future payments, per Bloomberg. Federal contracts represent between 5% and just under 10% of IBM’s consulting practice.

The company's CFO, James Kavanaugh, told investors during IBM's Q1 2025 earnings call on Wednesday that the contracts represented around $100 million in future payments. In total, federal government contracts account for around 5 percent of IBM's annual revenue, and just under 10 percent of IBM's consulting business.