IBM Raises Outlook As AI Momentum Builds

IBM IBM sounded confident on its latest earnings call, lifting its full-year outlook after delivering one of its strongest quarters in years. CEO Arvind Krishna said revenue grew 7% in Q3 the fastest pace in several years with every business segment showing momentum.

Software was the star performer, up 9%, led by a 22% surge in Automation and double-digit gains in Red Hat. Krishna said clients are increasingly turning to IBM to modernize their systems and embed AI across operations, with the company's GenAI business now surpassing $9.5 billion since launch.

CFO James Kavanaugh highlighted record free cash flow of $7.2 billion for the first nine months and strong operating leverage that drove 22% adjusted EBITDA growth. IBM also raised its full-year targets to more than 5% revenue growth and about $14 billion in free cash flow. IBM's AI and automation engines are running full speed ahead.