IBM CEO Arvind Krishna speaks at a panel session at the World Economic Forum in Davos, Switzerland on January 17, 2023.

Stefan Wermuth | Bloomberg | Getty Images

IBM shares rose in extended trading on Wednesday after the technology conglomerate reported revenue that beat analysts’ estimates.

Here’s how the company did it:

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  • income: $3.60 per share adjusted, according to Refinitiv, versus the $3.60 per share analysts had expected.
  • income: $16.69 billion versus the $16.4 billion analysts expected, according to Refinitiv.

Analysts had expected IBM’s total revenue to fall for the first time in two years, but it ended up flat, the statement said. Net income rose 16% to $2.71 billion.

IBM’s software segment posted $7.29 billion, up nearly 3% and beating the $7.12 billion consensus of analysts polled by StreetAccount.

The company reported $4.77 billion in advisory revenue, up 0.5% and slightly below the StreetAccount consensus of $4.8 billion.

IBM’s infrastructure segment brought in $4.48 billion, up nearly 2% from the StreetAccount consensus of $4.18 billion. Revenue from IBM’s Z Systems line of mainframes jumped 16% after the Z16 model became generally available last May.

In terms of guidance, IBM is calling for revenue growth in 2023 in constant currency and about $10.5 billion in free cash flow. In 2021, IBM announced a goal of $35 billion in free cash flow between 2022 and 2024, with free cash flow of $9.29 billion in 2022.

During the quarter, IBM revealed a plan to invest $20 billion in New York’s Hudson Valley over a decade. The company also announced a next-generation 433-qubit quantum computer and the acquisition of Octo, one of the few consulting companies IBM has absorbed since creating its managed infrastructure services division. Kindril in 2021.

IBM outperformed its tech peers in 2022, marking the Nasdaq’s worst year since 2008. IBM grew 11% last year and was one of only two US technology companies valued at $50 billion or more to increase growth. Another was VMware, which in May agreed to buy Broadcom for $61 billion.

Executives will discuss the results with analysts during a conference call beginning at 5:00 p.m. ET.

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