IBM Beats Q3 Forecasts and Raises Cash Flow Outlook

IBM reported third-quarter revenue of $17.1 billion and adjusted earnings of $2.95 per share, topping analyst expectations, and raised its free-cash-flow outlook while leaving its annual revenue-growth forecast unchanged. Revenue for the quarter rose 5% from a year earlier, or 6% at constant currency. Analysts had expected revenue of about $16.8 billion and adjusted earnings of $2.86 per share. Net income increased to $2.19 billion from $1.74 billion a year earlier. Software was IBM’s strongest major business, with revenue up 8% to $7.8 billion. The company said Red Hat hybrid-cloud revenue grew 11% and data-product revenue rose 19%. Infrastructure revenue increased 4% to about $3.7 billion, while consulting revenue was roughly flat at about $5.3 billion. Within infrastructure, distributed-infrastructure revenue rose 31%, while IBM Z mainframe revenue fell 20%. The company said more than two-thirds of delayed mainframe deals had closed during the quarter. Those delays had weighed on results in the previous quarter, when IBM had preannounced weaker-than-expected performance. IBM kept its 2026 forecast for constant-currency revenue growth at 4% to 5%. It raised its full-year...