International Business Machines Corp (NYSE:IBM) shares surged after the software firm delivered an earnings beat and impressed investors with strong revenue guidance for the year.
For 2025, the company said it expects revenue growth of at least 5%, above Street expectations of 3.5% growth to about $64.9 billion.
It also guided free cash flow of $13.5 billion for the full year, above Street estimates of $12.9 billion.
For the fourth quarter, earnings per share (EPS) of $3.92 topped expectations of $3.78 with revenue of $17.6 billion in line with expectations.
Software revenue rose 10.4% to $7.9 billion, including a 16% increase in Red Hat and a 4% increase in data and AI.
“We closed the year with double-digit revenue growth in software for the quarter, led by further acceleration in Red Hat. Clients globally continue to turn to IBM to transform with AI,” IBM CEO Arvind Krishna said in a statement.
“Our generative AI book of business now stands at more than $5 billion inception-to-date, up nearly $2 billion quarter over quarter.”
Shares of IBM had added 14% at $260 mid-morning on Thursday.