IBM lifts software revenue growth outlook as delayed deals close
IBM said its postponed software contracts are now converting into sales, prompting the company to raise its full‑year software revenue growth target to about 7%‑8% from 6%‑8%. Third‑quarter revenue rose 4.7% to $17.10 billion, with software revenue up 8.3% to $7.80 billion. Hybrid‑cloud sales grew 11% and infrastructure revenue increased 4.2% to $3.71 billion. The CFO James Kavanaugh highlighted that roughly 25% of transaction‑processing revenue came from deals deferred from the prior quarter, while the remaining 75% was new business.
Why it matters
The higher software growth outlook signals stronger top‑line momentum for IBM, which could support its share price after a recent decline. The company also expects full‑year free cash flow to rise by more than $1 billion, an upgrade from its July guidance.
Key facts
- 1IBM now expects annual software revenue growth of about 7%‑8% (reported basis), up from the prior range of 6%‑8% (reported basis). marketscreener.com
- 2Third‑quarter revenue rose 4.7% (reported basis) to $17.10 billion, beating the LSEG consensus of $16.82 billion. marketscreener.com
- 3Software segment revenue grew 8.3% (reported basis) to $7.80 billion, above the $7.62 billion consensus. marketscreener.com
- 4Hybrid‑cloud sales grew 11% (reported basis) in the quarter. marketscreener.com
- 5Infrastructure revenue rose 4.2% (reported basis) to $3.71 billion. marketscreener.com
- 6Transaction‑processing revenue rose 9% (reported basis); about 25% of that revenue came from deals deferred from Q2, the rest representing new business. marketscreener.com
Summary written by AlphAI AI Desk from 3 of 3 sources. Not investment advice. Figures are as stated by the linked sources.