IBM reported better-than-expected third quarter results as software revenue grew 8%.
The company reported third quarter earnings of $1.7 billion, or $1.86 a share, on revenue of $14.8 billion, up 4.65% from a year ago. Non-GAAP earnings for the quarter were $2.20 a share.
A consensus of Wall Street analysts estimated that the company would earn $2.13 per share on $14.73B in revenue.
Arvind Krishna, CEO of IBM, said the company was seeing clients adopt its watsonx AI and data platform. That adoption is also generating consulting revenue.
The company reported that third quarter consulting revenue was up 6% and infrastructure sales fell 2%.
- IBM buys Manta, adds data lineage tools to watsonx
- IBM, AWS expand partnership, watsonx headed to AWS Marketplace
- Research: IBM Delivers AI How It Is Meant to Be With Watsonx
- IBM watsonx launches COBOL to Java generative AI coding tools
- IBM launches Watsonx, an AI platform with open source models, governance
By the numbers:
- Red Hat revenue was up 9%.
- Automation revenue was up 145.
- Security revenue was down 2%.
- Data and AI revenue was up 6%.
- IBM zSystem revenue was up 9%.
As for the outlook, IBM said it expects 2023 revenue to be up 3% to 5% in constant currency.
In prepared remarks, Krishna said:
"AI is projected to add $16 trillion to the global economy by 2030. Keep in mind that AI for business is different than AI for consumers given their need for more accurate results, trusted data and governance tools. AI techniques such as foundation models, large language models and generative AI, give businesses the ability to create 100 AI models from a single data set. Early client engagements experience a 70 percent faster time to value. That is why we are seeing a
lot more interest from business in using AI to boost productivity and reduce cost. Productivity gains will come from enterprises turning their workflows into simpler, automated processes with AI."