IBM Outperforms Earnings Expectations Amid Rapid Growth of ‘Super Intelligence’
IBM CEO Arvind Krishna attended an event with U.S. 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 extended trading on Wednesday after the technology vendor reported stronger‑than‑expected third‑quarter results.
Here’s how the company performed relative to LSEG consensus:
- Earnings: $2.95 adjusted vs. $2.86 expected
- Revenue: $17.10 billion vs. $16.82 billion expected
IBM’s revenue increased about 5 % year‑over‑year, according to a statement. Net income, at $2.19 billion or $2.30 per share, up from $1.74 billion or $1.84 per share a year ago. Adjusted earnings exclude acquisition‑related adjustments.
“Our clients are now deploying ‘Super Intelligence’ in ways that transform entire operating models, rather than simply addressing narrow or novel problems,” IBM CEO Arvind Krishna was quoted as saying in a statement.
Regarding guidance, IBM called for full‑year free cash flow to rise by more than $1 billion. The July forecast projected roughly a $1 billion bump. IBM still anticipates constant‑currency revenue growth of 4 %–5 % through 2026.
In the third quarter, IBM generated $7.80 billion in software revenue, $7.80 billion growing 8 % and topping the StreetAccount consensus of $7.66 billion.
Consulting revenue reached $5.34 billion, flat against $5.37 billion consensus.
Infrastructure revenue came to $3.70 billion, up 4 % and exceeding the StreetAccount estimate of $3.57 billion.
The company’s adjusted gross margin stood at 58.5 %, narrower than the StreetAccount consensus of 59.1 %.
During the quarter, IBM 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 declined 15 %, while the S&P 500 gained 13 %.
Executives will discuss the results with analysts on a conference call at 5 p.m. ET.
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