International Business Machines (NYSE:IBM) shares surged more than 13% intra-day today after the tech giant delivered fourth-quarter earnings that beat analyst expectations, fueled by strong software revenue growth and an upbeat outlook for 2025.
For the quarter, IBM reported revenue of $17.6 billion, edging just below Wall Street’s projection of $17.62 billion but reflecting a 1% increase from the prior year. The software segment was the primary driver, posting a 10% revenue gain, while the consulting division saw a slight decline of about 2% to $5.2 billion. Despite the dip in consulting revenue, demand for long-term AI integration projects remains robust, with benefits expected to materialize in future quarters.
IBM’s adjusted earnings per share came in at $3.92, exceeding analyst expectations of $3.80. Meanwhile, free cash flow for the quarter reached $6.16 billion, a key metric that outperformed forecasts and reinforced investor confidence in the company’s financial health.
Looking ahead, IBM provided an optimistic forecast for 2025, expecting revenue growth of at least 5% in constant currency, a notable acceleration from the 3% growth recorded in 2024. The company also projected free cash flow of approximately $13.5 billion, signaling continued momentum in its AI and cloud initiatives.