IBM has defied the odds by reporting impressive third-quarter results. The company’s revenue and profit exceeded Wall Street expectations, sparking a 2% surge in its stock price following the announcement. Despite the challenges posed by a strong dollar, IBM’s Q3 revenue reached $14.8 billion, surpassing estimates, while adjusted quarterly profit per share stood at $2.20, exceeding expectations.
IBM’s success can be attributed to factors like steady demand for software solutions: IBM has managed to maintain steady demand for its software solutions, differentiating itself from competitors such as Accenture, who have faced declining consulting deal strength. In fact, according to James Kavanaugh, IBM’s finance chief, the company has even managed to capture market share in the consulting segment.
Also, IBM’s foray into generative artificial intelligence (AI) has also borne fruit, with Kavanaugh revealing that the company secured “low hundreds of millions of dollars” in AI sales and bookings during the third quarter. Notable clients include Ernst & Young and Truist Bank.
In addition, having ventured into AI and cloud applications long before the recent surge in interest, IBM is experiencing robust demand for its software and consulting services from a wide array of clients seeking to integrate technology into their operations. Thomas Monteiro, an analyst at Investing.com, praised IBM’s adaptability to market demands, particularly in the AI and cloud sectors.
IBM has reaffirmed its annual revenue growth and free-cash-flow generation targets. Furthermore, IBM’s software segment, which now incorporates Apptio, an IT budgeting software maker, witnessed an impressive 8% revenue increase, excluding currency impact.
The sources for this piece include an article in Reuters.