IBM New Zealand profit rises despite revenue decline
Mon, 1st Jun 2026 (Today)
IBM New Zealand increased its annual profit in 2025 despite a decline in revenue, as lower operating costs and improved margins helped offset weaker sales.
The company reported profit before income tax of NZD $28.4 million for the year ended 31 December 2025, up from NZD $21.3 million a year earlier. Net profit rose to NZD $23.4 million from NZD $9.8 million in 2024.
Revenue fell to NZD $111.9 million from NZD $129.2 million, a decrease of 13.4%. The decline came as the company recorded lower operating revenue than the previous year.
Revenue decline
The business, which provides information technology services, software, equipment maintenance and professional services across New Zealand, generated NZD $111.9 million in revenue during the year. This compares with NZD $129.2 million in 2024.
Despite lower sales, gross profit increased to NZD $43.7 million from NZD $40.0 million. Cost of services, sales and financing fell to NZD $68.3 million from NZD $89.2 million.
The improvement indicates that the company retained a larger share of revenue as profit, even as overall turnover declined.
Cost reductions
Selling, general and administrative expenses fell to NZD $18.7 million from NZD $24.3 million. Operating profit increased to NZD $24.4 million from NZD $16.0 million.
Finance income declined to NZD $4.1 million from NZD $5.4 million, reflecting lower returns from financing activities. Finance costs remained low at NZD $38,000.
Income tax expense fell to NZD $5.0 million from NZD $7.9 million, contributing to the increase in net profit.
The company had no discontinued operations in 2025. In 2024, it recorded a discontinued operations loss of NZD $3.6 million linked to the divestiture of its consulting business.
Balance sheet
Total assets increased to NZD $206.7 million at the end of 2025 from NZD $192.3 million a year earlier. Cash and cash equivalents rose to NZD $135.5 million from NZD $119.6 million.
Net assets increased to NZD $100.5 million from NZD $87.3 million. Retained earnings more than doubled to NZD $23.3 million from NZD $9.8 million.
Current liabilities rose to NZD $76.1 million from NZD $67.8 million, largely driven by an increase in deferred income to NZD $57.2 million from NZD $42.3 million. Deferred income reflects payments received for services that have not yet been recognised as revenue.
Cash position
Net cash generated from operating activities was NZD $23.1 million, down from NZD $47.7 million in 2024. Higher tax payments and changes in working capital influenced the decline.
Cash from investing activities totalled NZD $3.8 million, while financing activities used NZD $11.1 million, primarily due to dividend payments and lease obligations.
The company paid a dividend of NZD $10 million to its immediate parent, down from NZD $21 million in the previous year.
Acquisition activity
During the year, IBM New Zealand acquired 100% of Datastax New Zealand and its assets and liabilities from its parent company, Datastax Inc, for the New Zealand dollar equivalent of USD $1.144 million plus GST. The transaction was completed on 1 November 2025.
The acquisition was the most significant corporate transaction disclosed during the financial year. The company reported no significant events after the end of the reporting period.