IBM has decisively exceeded market expectations for its fourth-quarter earnings, driven by explosive demand for its artificial intelligence and hybrid cloud solutions. The tech giant also provided an optimistic full-year revenue outlook that outpaces analyst projections. Furthermore, CEO Arvind Krishna announced a major milestone, revealing the company’s generative AI business has swelled to over $12.5 billion.
The company reported a significant 12% year-over-year revenue jump to $19.69 billion, solidly beating estimates. Adjusted earnings per share of $4.52 also came in well above consensus. This performance was fueled by remarkable growth across key divisions, with software revenue climbing 14% and infrastructure sales, led by the mainframe-focused Z Systems line, skyrocketing by 21%. Net income nearly doubled, underscoring a powerful combination of top-line growth and operational efficiency.
Looking ahead, IBM forecasts 2026 revenue growth to exceed 5%, a projection that modestly decelerates from the previous year but still surpasses current analyst expectations. In a signal of robust financial health, the company anticipates generating an additional $1 billion in free cash flow after a record $14.7 billion in 2025. The board reaffirmed its commitment to shareholder returns, declaring a quarterly dividend of $1.68 per share.
Strategic initiatives are central to this momentum. Krishna emphasized that the company’s success is rooted in a client-centric ecosystem strategy, accelerated through an enhanced IBM Partner Plus Program. The program is being recalibrated with new incentives and AI-driven tools to help partners deploy solutions faster and at scale. Concurrently, IBM is aligning its internal coverage model to improve partner-centricity and deal velocity, aiming to expand market reach. In a forward-looking statement, Krishna confirmed IBM remains on track to deliver its first large-scale quantum computer by 2029, positioning the company at the frontier of next-generation computing.
