International Business Machines Corp (NYSE:IBM) reported fourth-quarter revenue and profit that exceeded Wall Street expectations, fueled by strong software sales and growth in its generative AI business.
The company posted Q4 revenue of $19.69 billion, up 12% from a year earlier and above analysts’ estimate of $19.21 billion. Operating earnings per share came in at $4.52, beating the $4.28 forecast. Free cash flow rose to $7.55 billion, also above the $6.85 billion estimate.
IBM said that its generative AI book of business now exceeds $12.5 billion, reflecting growing demand for AI-powered software and services.
By segment, software revenue rose 14% to $9.03 billion, while consulting revenue edged up 3% to $5.35 billion. Infrastructure sales grew 21% to $5.1 billion, and financing revenue increased 5% to $0.2 billion. Non-GAAP gross margin expanded 120 basis points to 61.8%.
For the full year, IBM expects revenue growth of more than 5% in constant currency and a $1 billion increase in free cash flow. The company ended the quarter with $14.5 billion in cash and $61.3 billion in debt.
Shares rose 7.7% in aftermarket trading following the results.