IBM Q3 Earnings: Software Revenue Jumps 10% On 'Great Momentum' In AI, But Consulting Revenue Comes In Flat, Infrastructure Revenue Falls 7%

International Business Machines Corp IBM reported third-quarter financial results Wednesday after the bell. Here's a look at the key metrics from the quarter.

Q3 Earnings: IBM reported third-quarter revenue of $14.968 billion, missing the consensus estimate of $15.07 billion, according to Benzinga Pro. The company reported quarterly loss from continuing operations of 34 cents per share.

Total revenue increased 1% year-over-year. Software revenue was up 10% year-over-year, consulting revenue was flat and infrastructure revenue was down 7%.

Cash flow from operations totaled $2.9 billion in the quarter. Free cash flow came in at $2.1 billion. IBM ended the quarter with $13.197 billion in cash and cash equivalents.

“Our third-quarter performance was led by double-digit growth in Software, including a re-acceleration in Red Hat. We continue to see great momentum in AI as our models are trusted, fit-for-purpose, and lower cost, with performance leadership. Our generative AI book of business now stands at more than $3 billion, up more than $1 billion quarter to quarter,” said Arvind Krishna, chairman and CEO of IBM.

Check This Out: IBM AI Momentum Meets Earnings Buzz: Is The Stock Ready For A Cloud-Powered Climb?

Outlook: IBM expects fourth-quarter constant currency revenue growth of approximately 2%. The company also reiterated expectations for generating $12 billion in free cash flow for full year 2024.

“Heading into the final quarter of 2024, we expect fourth-quarter constant currency revenue growth to be consistent with the third quarter, with continued strength in Software. We are confident in our ability to deliver more than $12 billion in free cash flow for the year, driven by continued expansion of our operating margins,” Krishna said.

IBM management will hold a conference call to discuss the company’s quarterly results at 5 p.m. ET.

IBM Price Action: IBM shares were down 4.62% after hours at $222 at the time of publication, according to Benzinga Pro.

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