IBM reported stronger third-quarter results Wednesday as software and infrastructure growth accelerated and the company raised its full-year free-cash-flow outlook.
Revenue increased 5% from a year earlier to $17.1 billion, or 6% at constant currency.
Software revenue climbed 8%, while infrastructure revenue increased 4%. Consulting revenue was essentially unchanged from a year earlier.
The software performance is particularly important as investors assess whether enormous spending on artificial intelligence is displacing conventional enterprise technology investment or expanding the overall technology market.
IBM generated approximately $3 billion of free cash flow during the quarter. Through the first nine months of the year, free cash flow reached approximately $7.8 billion.
The company now expects full-year free cash flow to increase by more than $1 billion from the previous year.
IBM maintained its expectation for 2026 constant-currency revenue growth of between 4% and 5%.
The results provide another indication of how enterprise technology spending is evolving during the AI investment cycle.
Companies are directing enormous amounts of capital toward AI infrastructure, but IBM’s performance suggests spending on software, infrastructure and enterprise systems remains resilient.
The next test will be whether IBM can maintain that momentum into the fourth quarter while converting growing corporate interest in advanced AI systems into recurring revenue and cash flow.
