IBM CEO Arvind Krishna attends a Diwali celebration in the Oval Office of the White House on October 21, 2025 in Washington.
Alison Robert | Alison Robert Bloomberg | Getty Images
IBM Shares fell 8% in after-hours trading Wednesday after the hardware, software and consulting company reported better-than-expected first-quarter results but maintained its full-year outlook.
Here’s how the company performed compared to the LSEG consensus:
Earnings per share: $1.91 adjusted vs. $1.81 expected Revenue: $15.92 billion vs. $15.62 billion expected
IBM’s revenue for the quarter increased 9% from a year earlier, the statement said. Net income was $1.22 billion ($1.28 per share), up from $1.06 billion ($1.12 per share) in the fourth quarter of 2024. Adjusted earnings do not include acquisition-related adjustments.
Management reiterated its outlook for 2026, including revenue growth of more than 5% and free cash flow growth of $1 billion, excluding the impact of currency fluctuations.
IBM’s first-quarter software revenue rose 11% to $7.05 billion, beating the $7.02 billion consensus of analysts surveyed by StreetAccount. Consulting revenue rose 4% to $5.27 billion, slightly missing the Street consensus of $5.28 billion.
Infrastructure rose 15% to $3.33 billion, beating the StreetAccount consensus of $3.16 billion. IBM noted that Z mainframe hardware revenue increased 51%.
As of Wednesday’s close, IBM shares were down about 15% so far in 2026, compared with a 4% rise in the S&P 500 index over the same period.
In February, shares of artificial intelligence model-building company Anthropic fell 13% in one day after the company announced that AI could help companies modernize code written in the COBOL programming language. Applications written in COBOL can run on IBM mainframe computers. “AI strengthens the mainframe case, not weakens it,” Rob Thomas, IBM’s senior vice president of software, wrote in a LinkedIn post.
In mid-March, IBM completed its $11 billion acquisition of data streaming software company Confluent.
Executives will discuss the results with analysts on a conference call beginning at 5 p.m. ET.
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