Overview
- IBM beat expectations in the third quarter with $17.10 billion in revenue and $2.95 adjusted EPS, results reported on Wednesday that topped analyst estimates.
- Software revenue grew about 8% to $7.8 billion and management raised its annual software growth target to roughly 7%–8% after the quarter.
- CFO James Kavanaugh said roughly 25% of transaction-processing revenue reflected deals pushed from the prior quarter, and analysts estimated about $250 million of the software gain was timing-related.
- The company lifted its full-year free cash flow outlook to an increase of more than $1 billion and showed modest infrastructure gains led by a 31% rise in distributed servers and storage.
- Market response was mixed as some brokerages nudged up price targets while others warned organic software demand remains uncertain, leaving investor confidence tied to whether delayed deals turn into sustained growth.