IBM Exceeds Expectations in Q3 2022, Company Raises Full-Year Projection

UTC by Ibukun Ogundare · 2 min read
IBM Exceeds Expectations in Q3 2022, Company Raises Full-Year Projection
Photo: Depositphotos

IBM recorded $4.70 billion in consulting revenue during Q3 2022. The figure is a 5.5% jump over the prediction of $4.51 billion.

American technology corporation IBM (NYSE: IBM) saw its shares jump 6% after-hours in reaction to the company’s impressive Q3 2022 performance. IBM exceeded analysts’ quarterly expectations and upped its full-year growth forecast. The company beat the top and bottom lines, with revenue at $14.11 billion and earnings per share (EPS) at $1.81. Analysts expected revenue to be $13.51 billion and EPS at $1.77.

IBM Surpasses Expectations in Q3 2022

According to IBM, the revenue growth represents a 6.5% growth YoY. Also, IBM secured $1.9 billion in net cash from operating activities during Q3 2022. Its free cash flow during the period was $0.8 billion. At the end of the quarter, IBM had $9.7 billion ash at hand, a significant increase from its end-of-the-year record in 2021. The company’s debt has also lessened by $0.8 billion since year-end 2021 to $50.9 billion.

Software revenues as $5.81 billion, representing almost a 7.5% YoY increase and surpassing the $5.54 billion analysts’ estimates. Specifically, a commercial relationship with Kyndryl, the company’s infrastructure services business, contributed around 8% of the revenue from software. Additionally, proceeds from transaction processing software added 23%.

Furthermore, IBM recorded $4.70 billion in consulting revenue during Q3 2022. The figure is a 5.5% jump over the prediction of $4.51 billion. Accounts from the infrastructure segment arrived at $3.35 billion, 14.8% higher than the $3.06 billion StreetAccount consensus.

Proud of the solid Q2 2022 earnings results, IBM chairman and chief executive officer Arvind Krishna said:

“IBM delivered strong revenue growth in the quarter, reflecting our continued focus on the execution of our strategy. Globally, clients view technology as an opportunity to enhance their business, which is evident in the results across our portfolio. With our year-to-date performance, we now expect full-year revenue growth above our mid-single digit model.”

Meanwhile, the company’s senior vice president and chief financial officer, James Kavanaugh, said the whole development gives room for continued growth. He said the technology corporation is able to invest further and give ale to shareholders through dividends.

IBM’s Full-Year Guidance

After an impressive quarter and solid YTD performance, IBM now expects a full-year revenue growth over its mid-single-digit model. The tech company said foreign exchange should lead to 7% less revenue than it would rather generate in the full year. On free cash flow, IBM noted that it expects around $10 billion in consolidated free cash flow.

At press time, IBM stock is up 2.74% to $125.87 in the pre-market trading session. The company’s stock has been declining over the past year, except for a 0.69% gain in the last five days.

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience. Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.

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