IBM Q3 Revenue Up 5%, Software Sales Hit $7.80B; Raises Free Cash Flow Outlook

3.8 · 10d ago · US · FINANCE

The Facts

  • IBM reported third-quarter revenue growth of about 5% from a year earlier. CNBC only
  • IBM Q3 net income was $2.19 billion ($2.30 per share), up from $1.74 billion ($1.84 per share) a year earlier. CNBC only
  • Software revenue was $7.80 billion, up 8%, above the $7.66 billion StreetAccount consensus. CNBC only
  • Consulting revenue was $5.34 billion, flat, just below the $5.37 billion StreetAccount consensus; consulting gross margin was 27.4% versus 28.9% in Q2. CNBC only
  • Infrastructure revenue was $3.70 billion, up 4%, above the $3.57 billion StreetAccount consensus. CNBC only
Dive deeper · 5 more factsShow less
  • Adjusted gross margin was 58.5%, below the StreetAccount consensus of 59.1%. CNBC only
  • IBM now expects full-year free cash flow to rise by more than $1 billion, versus approximately $1 billion forecast in July; 2026 constant-currency revenue growth guidance remains 4% to 5%. CNBC only
  • CFO Jim Kavanaugh said AI represented about 30% of consulting revenue in the quarter and 35% of the consulting backlog. CNBC only
  • During the quarter IBM agreed to buy HRL Laboratories, owned by Boeing and General Motors, for an undisclosed sum. CNBC only
  • IBM shares rose in extended trading Wednesday; as of Wednesday's close the stock was down 15% year to date versus a 13% gain for the S&P 500. CNBC only

Context

IBM reported third-quarter results that CNBC said beat LSEG consensus expectations, with software and infrastructure revenue above analyst estimates and consulting slightly below. The company raised its full-year free cash flow outlook while keeping its revenue growth guidance unchanged.

CEO Arvind Krishna said clients are deploying what he called 'Super Intelligence' to transform operating models. Executives were scheduled to discuss results on a 5 p.m. ET conference call.

How the Agent Panel Scored This

Independent AI personas each scored importance 1–10; the story's score is a trimmed mean (highest and lowest votes dropped). Vote spread: 3.

6 Business Analyst IBM's quarterly earnings beat on software and infrastructure, a raised free cash flow outlook, and an acquisition of HRL Laboratories are concrete, market-relevant corporate actions for a large-cap stock, but the story is a single-company earnings report from one source with moderate broader economic impact.
5 Critical Reader A major public company's quarterly earnings beat with a raised free cash flow outlook is newsworthy for investors and the tech sector, but it is a single-company, routine earnings event with limited broader impact.
4 Policy Expert This is a corporate earnings report for a large company with a modest raised free cash flow outlook and an acquisition agreement, which is newsworthy for investors but has limited broad public or governmental impact.
4 News Editor This is a corporate earnings report for one large company, with concrete figures and a raised cash flow outlook, but its impact is limited mostly to investors and IBM stakeholders rather than the broad public.
3 Science & Tech Analyst This is a routine quarterly earnings report for a large company with modest revenue growth and a small acquisition of undisclosed size, affecting mainly investors rather than broadly impacting many people.
3 Informed Citizen This is a corporate earnings report for one company, with beats on software and infrastructure and a modest free cash flow raise, affecting mainly investors and limited consumer impact.
3 Global Affairs Analyst This is a corporate quarterly earnings report for a single company, with a modest beat and a raised free cash flow outlook, which has limited impact beyond IBM investors and does not rise to major geopolitical or broad economic significance.

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