IBM Surpasses Q2 Expectations with Strong AI Growth and Solid Financial Performance

Earnings Beat and AI Growth Lift IBM Stock

The company said its generative AI business has grown to $2 billion. International Business Machines (IBM) beat analysts' expectations on the top and bottom lines with its second-quarter results Wednesday, sending shares higher in aftermarket trading as CEO Arvind Krishna pointed to the company's expanding artificial intelligence (AI) business. The company posted diluted earnings per share of $1.96 on revenue of $15.8 billion, above projections of $1.74 per share on revenue of $15.6 billion, per Visible Alpha. Software revenue rose 7% to $6.7 billion. IBM reiterated its full-year projection of mid-single-digit revenue growth. "We continue to see that clients turn to IBM for our technology and our expertise in enterprise AI, and our book of business for generative AI has grown to more than $2 billion since the launch of watsonx one year ago," Krishna said. Shares of the company rose about 3% after the closing bell. As of Wednesday's close, IBM's stock was up about 13% in 2024.

IBM shares jump on earnings and revenue beat

Arvind Krishna, CEO of IBM, arrives for the Inaugural AI Insight Forum in Russell Building on Capitol Hill, on Wednesday, September 13, 2023. IBM shares rose 5% in extended trading on Wednesday, after the company reported second-quarter results that surpassed analysts' predictions. Here are the key numbers. Revenue increased 1.9% from $15.48 billion a year ago, IBM said in a statement. Net income of $1.83 billion, or $1.96 per share, was up from $1.58 billion, or $1.72 per share, a year earlier. The company, which provides hardware, software and consulting services, now expects 2024 free cash flow to come in above $12 billion. In April, executives were calling for about $12 billion. The company's book of business for generative artificial intelligence now stands above $2 billion, CEO Arvind Krishna was quoted as saying in the statement. The number was over $1 billion in April. IBM said its software business brought in revenue of $6.74 billion, up 7% and more than the StreetAccount consensus of $6.49 billion. The consulting unit contributed $5.18 billion in revenue. That was down 0.9% and below the $5.23 billion StreetAccount consensus. IBM's infrastructure segment that contains mainframe computers posted $3.65 billion in revenue, up 0.8% and higher than the $3.51 billion consensus. During the quarter, IBM announced its intent to acquire HashiCorp in a deal with a $6.4 billion enterprise value. IBM also said Palo Alto Networks had agreed to buy IBM's QRadar cloud software and migrate customers to the Cortex Xsiam product. Additionally, IBM announced plans for data center infrastructure in Montreal. Notwithstanding Wednesday's after-hours move, IBM shares are up 14% so far this year, in line with the S&P 500 index. Executives will discuss the results on a conference call with analysts starting at 5 p.m. ET. This is breaking news. Please check back for updates.

Increased AI bookings help IBM deliver solid earnings and revenue beat, pushing its stock higher - SiliconANGLE

Increased AI bookings help IBM deliver solid earnings and revenue beat, pushing its stock higher Shares of IBM Corp. were riding around 3% higher in extended trading today after the company reported solid second-quarter financial results that surpassed analysts' expectations, driven by increased artificial intelligence spending by its largest enterprise customers. The company reported earnings before certain costs such as stock compensation of $2.43 per share, comfortably ahead of the analyst's forecast of $2.20 per share. Revenue for the period rose 2% to $15.77 billion, easily beating the Street's target of $15.62 billion. All told, IBM showed a net profit of $1.83 billion, rising from the $1.58 billion profit it posted a year earlier. IBM Chief Executive Arvind Krishna (pictured) said in a statement that the company's book of business for generative AI has grown to more than $2 billion, boosted by the launch of its watsonx development platform one year ago. "Given our first-half results, we are raising our full-year view of free cash flow, which we now expect to be more than $12 billion," Krishna said. Three months earlier, during its previous earnings call, the company said it was expecting free cash flow of more or less $12 billion by the end of the year. "We remain confident in the positive macro outlook for technology spending," Krishna told analysts on a conference call. In recent months, IBM has focused on expanding the watsonx platform that enables companies to build and deploy AI chatbots and enhance the code for other AI programs. In addition, it recently open-sourced its Granite family of large language models in an effort to popularize some of its other AI services. Tejas Dessai, a research analyst at Global X, told Reuters that the "commercialization of generative AI is accelerating, positioning diversified enterprise technology companies like IBM to capitalize on the growing demand for AI integration" Krishna told analysts on the call that the company continues to suffer from the impact of higher interest rates and inflation, explaining that the "geopolitical uncertainty" caused by conflict in Ukraine and Israel has gone on for longer than many people had expected. "That weighs into people's heads, about what that might happen, and specifically the war in Europe, as well as the war in the Middle East," Krishna said. IBM's main business units continued to tick over nicely though, despite the uncertainty elsewhere in the world. The company reported revenue of $6.74 billion in its software business, up 7% from a year ago and ahead of the Street's forecast of $6.49 billion. Within that segment, Red Hat posted growth of 7%, which was another relatively slow quarter for the acquired software business that was once consistently growing at more than 20% per quarter. However, Krishna said bookings for Red Hat increased in the quarter, a promising sign for the remainder of the year. IBM's consulting unit bagged $5.18 billion in revenue, down 1% from a year earlier and just below the Street's target of $5.23 billion. Meanwhile, the infrastructure segment, which includes IBM's iconic mainframe computers, generated $3.65 billion in sales, up 0.8% and ahead of the Street's consensus estimate of $5.31 billion. IBM's chief financial officer Jim Kavanaugh said on the call that the current generation z16 mainframe computer continued to outperform previous sales cycles. The growing importance of IBM's software business is the culmination of a years-long transition that saw it pivot from being a legacy hardware company to one that's focused on high-growth software and services. IBM has been making efforts to accelerate that transition, and in April it announced plans to buy the "infrastructure-as-code" software giant HashiCorp Inc. for $6.4 billion In an update last week, HashiCorp revealed that regulators have requested more information about the planned acquisition. That suggests that the transaction approval process could be delayed by increased regulatory scrutiny, though there has been no indication of any opposition to the deal so far. Krishna told analysts that he remains "quite confident" the deal will close before the calendar year is out. During the quarter, IBM also announced a new partnership with Palo Alto Networks Inc. The security firm will acquire IBM's QRadar software-as-a-service assets and become IBM's preferred cybersecurity partner across network, cloud and security operations, it said. Prior to today's gains, IBM's stock was up 14% in the year to date, more or less in-line with the broader S&P 500 index.

IBM jumps as Q2 results, guidance top expectations (IBM)

IBM (NYSE:IBM) shares rose more than 4% in extended trading on Wednesday after the IT giant reported second-quarter results and guidance that topped expectations and upped its free cash flow forecast for the year. For the period ending June 30, IBM earned $1.99 per share as revenue rose 1.9% year-over-year to come in at $15.77B. Software revenue for the period was $6.74B, while consulting, infrastructure and financing generated sales of $5.18B, $3.65B and $169M, respectively. The company added free cash flow during the period was $2.61B, up 24% year-over-year. A consensus of analysts expected IBM to earn $2.17 per share on $15.62B in revenue. "We had a strong second quarter, exceeding our expectations, driven by growth in both revenue and free cash flow," said Arvind Krishna, IBM chairman and chief executive officer. "We continue to see that clients turn to IBM for our technology and our expertise in enterprise AI, and our book of business for generative AI has grown to more than two billion dollars since the launch of watsonx one year ago." Following the strong results, IBM raised its outlook for full-year free cash flow, as it now expects the widely watched metric to be above $12B, up from a prior view of about $12B. Analysts expect free cash flow for the year to be around $12.35B. The company also said that it expects revenue for the full-year to be up mid-single digits in constant currency. IBM (IBM) will hold a conference call at 5 p.m. EST to discuss the results. More on IBM Google, Tesla Amid Earnings Deluge, Trump Talks Crypto, And Paris Olympics IBM Is Poised To Move Higher (Technical Analysis) IBM: Quantum Computing, Growth And Dividends IBM's software growth, Gen AI bookings and consulting growth in focus during Q2 earnings Earnings week ahead: TSLA, GOOG, IBM, AAL, GM, F, VZ, T, and more

IBM Shares Climb On Strong Q2 Results: Here's The Details - IBM (NYSE:IBM)

Quarterly sales come in at $15.8 billion which beat the analyst consensus estimate of $15.616 billion by 1.18%. International Business Machines Corp. IBM reported its second-quarter financial results Wednesday. Here's a look at the key figures from the report. The Details: IBM reported quarterly earnings of $2.43 per share, which beat the analyst consensus estimate of $2.19 by 10.96%. Quarterly sales clocked in at $15.8 billion, which beat the analyst consensus estimate of $15.616 billion by 1.18% and represents a 2.10% increase over sales of $15.475 billion from the same period last year. Software revenue up 7%, 8% at constant currency, and consulting revenue was down 1% or up 2% at constant currency. Infrastructure revenue was up 1%, 3% at constant currency, for the quarter. Read Also: What's Going On With Meta Stock? "We had a strong second quarter, exceeding our expectations, driven by growth in both revenue and free cash flow. We continue to see that clients turn to IBM for our technology and our expertise in enterprise AI, and our book of business for generative AI has grown to more than two billion dollars since the launch of watsonx one year ago," said Arvind Krishna, CEO of IBM. "Given our first-half results, we are raising our full-year view of free cash flow, which we now expect to be more than $12 billion." Outlook: IBM continues to expect constant currency revenue growth consistent with its mid-single-digit model. At current foreign exchange rates, currency is expected to be about a one to two-point headwind to revenue growth. The company now expects more than $12 billion in free cash flow for the full year. IBM Price Action: According to Benzinga Pro, IBM shares are up 2.17% after-hours at $188 at the time of publication Wednesday. Read Next: What's Going On With Riot Platforms Stock? Image: Shutterstock Market News and Data brought to you by Benzinga APIs

IBM GAAP EPS of $1.99 beats by $0.19, revenue of $15.8B beats by $180M (NYSE:IBM)

IBM press release (NYSE:IBM): Q2 GAAP EPS of $1.99 beats by $0.19. Revenue of $15.8B (+1.9% Y/Y) beats by $180M. Software revenue up 7 percent, up 8 percent at constant currency Consulting revenue down 1 percent, up 2 percent at constant currency Infrastructure revenue up 1 percent, up 3 percent at constant currency Full-Year 2024 Expectations Revenue: The company continues to expect constant currency revenue growth consistent with its mid-single digit model. At current foreign exchange rates, currency is expected to be about a one to two-point headwind to revenue growth Free cash flow: The company now expects more than $12 billion in free cash flow Shares +4%. More on IBM Google, Tesla Amid Earnings Deluge, Trump Talks Crypto, And Paris Olympics IBM Is Poised To Move Higher (Technical Analysis) IBM: Quantum Computing, Growth And Dividends IBM's software growth, Gen AI bookings and consulting growth in focus during Q2 earnings Earnings week ahead: TSLA, GOOG, IBM, AAL, GM, F, VZ, T, and more