IBM shares surged 5% in after‑hours trading, closing at $251.46 on the NYSE. Q3 revenue rose 5% YoY to $17.1 billion, while adjusted EPS hit $2.95, topping the $2.86 estimate.
The software division posted an 8.3% jump to $7.8 billion, eclipsing the $7.64 billion consensus, and the infrastructure segment grew 4% to $3.7 billion, helped by the reinstatement of two‑thirds of deferred mainframe contracts, CFO Jim Kavanaugh told Bloomberg.
AI‑driven supply constraints knocked mainframe sales earlier in the year, but the recent contract pickups have steadied the division. IBM’s free‑cash‑flow guidance now projects an increase of more than $1 billion compared to the prior $1 billion estimate, a lift that could balance the 15% YTD decline in share price.
Analysts note that the software growth is a positive sign amid a sector still wary of AI disruption, and they are watching the company’s Q4 results on December 15 for any signs of sustained momentum.
With the FY guidance in place, investors are curious whether IBM can maintain its rebound and whether the market will reward the company’s shift toward high‑growth software offerings.