https://www.wsj.com/business/earnings/ibm-sales-rise-12-as-customers-appetite-for-ai-grows-ff8f8442
The tech company posted a fourth-quarter profit of $5.60 billion, up from $2.92 billion a year earlier
By: Katherine Hamilton
Jan. 28, 2026 4:33 pm ET
International Business Machines recorded higher revenue in the fiscal fourth quarter, as customers move to implement AI in more areas of their businesses.
IBM’s generative AI book of business now stands at more than $12.5 billion, up $3 billion from the third quarter. Chief Financial Officer Jim Kavanaugh said he anticipates that the AI book of business will continue to increase at a similar pace, with growth continuing through the next handful of years.
“What you’re seeing is the early indications of moving from what I’ll call industry experimentation to we are now beginning to the cycle of scaling,” Kavanaugh said.
The Armonk, N.Y., tech company on Wednesday posted a profit of $5.60 billion, or $5.88 a share, in the quarter ended Dec. 31, compared with $2.92 billion, or $3.09 a share, a year earlier.
Stripping out certain one-time items, adjusted per-share earnings were $4.52, ahead of the $4.31 anticipated by analysts, according to FactSet.
Revenue rose 12% to $19.69 billion. Analysts surveyed by FactSet forecast revenue of $19.21 billion. Sales were driven by software and infrastructure, which rose 14% and 21%, respectively.
Within IBM’s software business, data sales rose 22%, while automation was up 18% and hybrid cloud increased 10%. In infrastructure, IBM Z fueled most of the growth, with sales climbing 67%.
Consulting revenues were $5.3 billion, which was a hair below analysts’ expectations. Kavanaugh said businesses are feeling more confident about spending—which typically leads to stronger consulting results—as macroeconomic uncertainty has subsided compared with this time last year.
“While we’re still operating in a dynamic environment, we see pretty good green shoots about growth factors,” Kavanaugh said.
In 2026, IBM expects full-year revenue growth of more than 5%. That would be a slow-down from 2025, but higher than the previous two years. Wall Street was projecting 4.6% in annual sales growth.
IBM in December agreed to pay $31 a share for the data-infrastructure Confluent, which provides technology that helps manage streams of data using AI models. The bo-m in AI usage across industries has boosted the need for its capabilities.
The synergies with Confluent are expected to increase IBM’s total addressable market by more than $100 billion, adding real-time data streaming to the business for the first time, Kavanaugh said.
“It is the glue that brings together IBM’s portfolio,” Kavanaugh said of Confluent.