Overview
- IBM beat Q3 expectations with $16.33 billion in revenue and adjusted EPS of $2.65.
- Management lifted full-year guidance to more than 5% constant-currency revenue growth and about $14 billion in free cash flow.
- Growth in the Red Hat hybrid cloud unit slowed to about 14% from 16% in the prior quarter as software revenue reached $7.21 billion, up 10%.
- Infrastructure revenue rose 17% to $3.56 billion, driven by strong demand for the AI-focused z17 mainframe, particularly among financial firms.
- Shares fell roughly 5%–8% in after-hours and premarket trading as analysts flagged the need for faster software growth next year even with a $9.5 billion AI book, and IBM emphasized deploying AI on partner clouds such as CoreWeave, AWS, Azure and GCP.