International Business Machines Corporation (NYSE: IBM) released its fourth quarter financial performance following the market close on Wednesday, reporting results that surpassed analysts’ forecasts and energized investors. The technology giant's shares experienced a notable increase in after-hours trading as the financial data reflected strong operational momentum entering 2026.
IBM announced fourth-quarter revenue totaling $19.69 billion, a figure that exceeded the consensus analyst estimate of $19.23 billion, according to Benzinga Pro data. The company also reported adjusted earnings per share of $4.52, outperforming the anticipated $4.32 per share. Year-over-year, total revenue increased by 12%, highlighting a solid top-line expansion.
Breaking down revenue by segment reveals differentiated growth rates across IBM’s key business areas. The software division led with a 14% rise in revenue, underpinning the company’s strategic emphasis on software solutions. Consulting services showed a more modest increase of 3%, reflecting stable demand within client advisory domains. The infrastructure business posted impressive growth of 21%, driven by strong adoption of IBM's next-generation mainframe offerings.
Operational cash flow in the quarter amounted to $4 billion, complemented by free cash flow reaching $7.6 billion. IBM closed the period with a cash reserve—including restricted cash and marketable securities—totaling $14.5 billion, positioning the company with ample liquidity.
Chairman, President, and CEO Arvind Krishna commented on the performance, stating, "In the fourth quarter, we delivered strong revenue growth, with double-digit Software performance. Additionally, Infrastructure continued its double-digit revenue growth with the robust adoption of the next generation of our mainframe platform. Our generative AI book of business now stands at more than $12.5 billion." His remarks underscore the company’s strategic investments in AI technologies and mainframe innovation as primary growth drivers.
In alignment with its positive results, IBM’s Board of Directors approved a quarterly cash dividend of $1.68 per share, scheduled for payment on March 10, to shareholders recorded as of February 10. This dividend policy reflects IBM’s commitment to returning value to shareholders amid its growth trajectory.
Looking ahead, IBM has provided full-year 2026 financial guidance projecting revenue of $70.91 billion, slightly surpassing the estimated $70.14 billion. This projection corresponds to constant currency revenue growth exceeding 5%. Additionally, free cash flow is expected to increase by roughly $1 billion year over year.
Krishna expressed confidence in the company’s outlook, noting, "We enter 2026 with momentum and in a position of strength, giving us confidence in our full-year expectations." This statement highlights management’s assurance in sustained performance momentum and strategic positioning.
Following the release of earnings and outlook details, IBM’s stock demonstrated significant gains in extended trading sessions, rising by 8.22% to reach approximately $318.29 per share at the time of reporting, based on Benzinga Pro data. This positive market reaction indicates investor approval of the company’s recent performance and future plans.
The results emphasize IBM’s ongoing transformation, with particular strength in software and infrastructure areas, and a growing presence in the generative AI market segment. The company’s ability to leverage its technological assets and maintain strong cash flows suggests a strategic foundation that could support its objectives in the forthcoming fiscal year.