IBM CEO Arvind Krishna attends an event with US President Donald Trump in the Oval Office of the White House on June 22, 2026 in Washington, DC.
Andrew Harnik | Getty Images
IBM Shares rose in after-hours trading Wednesday after the technology vendor reported better-than-expected third-quarter results.
Here is the company’s performance compared to the LSEG consensus:
Revenue: $2.95 adjusted vs. $2.86 expected Revenue: $17.1 billion vs. $16.82 billion expected
According to the announcement, IBM’s revenue increased by about 5% from the previous year. Net income was $2.19 billion, or $2.30 per share, up from $1.74 billion, or $1.84 per share, in the year-ago period. Adjusted earnings do not include acquisition-related adjustments.
“Our customers are now deploying ‘superintelligence’ in ways that transform their entire operating models, rather than just addressing narrow or novel problems,” IBM CEO Arvind Krishna said in a statement.
Regarding guidance, IBM called for full-year free cash flow to increase by more than $1 billion. The forecast in July was for an increase of about $1 billion. IBM still expects constant currency revenue growth to be between 4% and 5% in 2026.
In the third quarter, IBM generated $7.8 billion in software revenue at $7.80, an increase of 8% and above the $7.66 billion consensus of analysts surveyed by StreetAccount.
Consulting revenue was flat at $5.34 billion, slightly below the Street account consensus of $5.37 billion.
Infrastructure revenue was $3.7 billion. This was an increase of 4% and beat the StreetAccount consensus of $3.57 billion.
The company’s adjusted gross margin was 58.5%, narrower than the StreetAccount consensus of 59.1%.
During the quarter, IBM announced that it had agreed to acquire Boeing and General Motors’ HRL Laboratories, formerly known as Hughes Aircraft’s research division, for an undisclosed sum.
As of Wednesday’s close, IBM stock was down 15%, while the S&P 500 index was up 13%.
Executives will discuss the results with analysts on a conference call beginning at 5 p.m. ET.
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