IBM delivers strong Q1, maintains outlook

IBM reported a better-than-expected first quarter and said it saw strong sales of infrastructure due to hybrid cloud and IBM Z systems. Software revenue was up 11% in the first quarter.

The company reported first quarter earnings of $1.2 billion, or $1.28 a share, on revenue of $15.9 billion, up 9%. Non-GAAP earnings were $1.91 a share.

Wall Street was expecting IBM to report first quarter earnings of $1.81 a share on revenue of $15.65 billion.

"As clients scale use cases, AI continues to be a tailwind for our global business. IBM products and services are helping clients orchestrate, deploy and govern AI across hybrid environments," said IBM CEO Arvind Krishna.

Here's a look at IBM by unit in the first quarter.

• Infrastructure revenue in the first quarter was $3.3 billion, up 15%. Hybrid infrastructure was up 28% and IBM Z, the company's mainframe platform, was up 51%. Distributed infrastructure was up 17%.

• Software revenue was $7.1 billion, up 11% in the first quarter. Red Hat revenue was up 13% with automation up 10% and data up 19% due to the Confluent acquisition.

• Consulting revenue was $5.3 billion, up 4%.

As for the outlook, IBM projected full-year constant currency revenue growth of more than 5% and a $1 billion full year free cash flow increase.