International Business Machines (NYSE:IBM) Posts Earnings Results, Beats Expectations By $0.19 EPS

International Business Machines (NYSE:IBM) released its quarterly earnings results on Wednesday. The technology company reported $4.52 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $4.33 by $0.19, FiscalAI reports. International Business Machines had a return on equity of 39.96% and a net margin of 15.69%.The firm had revenue of $19.69 billion for the quarter, compared to the consensus estimate of $19.23 billion. During the same quarter last year, the business posted $3.92 EPS. The firm’s quarterly revenue was up 12.2% compared to the same quarter last year.

Here are the key takeaways from International Business Machines’ conference call:

• IBM reported strong 2025 results with 6% revenue growth, Q4 revenue up 9%, record $14.7B free cash flow and margin expansion, beating the company’s Investor Day targets.
• The company says its strategic shift to a software-led model is working: software is ~45% of revenue, ARR is ~$23.6B, software grew 9% in 2025 and IBM guides to roughly 10% software growth in 2026.
• Momentum in AI and infrastructure is a key driver — IBM’s cumulative GenAI book of business exceeds $12.5B, and the new z17 mainframe (with ~50% more AI inferencing vs. z16) drove outsized Z performance and infrastructure growth.
• IBM expects short-term dilution from the announced Confluent acquisition (~$600M dilution in 2026 from stock comp and interest), though management expects EBITDA accretion in the first full year and FCF accretion in year two with ~$500M run-rate synergies by end of 2027.
• Near-term headwinds include product-cycle dynamics that should depress infrastructure revenue (guidance ~low-single-digit decline in 2026), memory/HBM price pressure for servers, and past U.S. federal deal delays that weighed on Red Hat bookings.

International Business Machines Price Performance

Shares of NYSE:IBM traded down $3.24 on Friday, reaching $306.00. 1,179,837 shares of the company were exchanged, compared to its average volume of 4,416,580. The company has a current ratio of 0.93, a quick ratio of 0.89 and a debt-to-equity ratio of 1.97. International Business Machines has a 1-year low of $214.50 and a 1-year high of $324.90. The company has a 50-day moving average of $302.67 and a 200-day moving average of $282.98. The firm has a market cap of $286.03 billion, a price-to-earnings ratio of 27.47, a price-to-earnings-growth ratio of 2.85 and a beta of 0.70.

International Business Machines Dividend Announcement

The business also recently announced a quarterly dividend, which will be paid on Tuesday, March 10th. Shareholders of record on Tuesday, February 10th will be given a dividend of $1.68 per share. This represents a $6.72 annualized dividend and a dividend yield of 2.2%. The ex-dividend date is Tuesday, February 10th. International Business Machines’s payout ratio is presently 80.38%.

Wall Street Analysts Forecast Growth

Several research analysts have issued reports on the stock. Sanford C. Bernstein reissued a “market perform” rating on shares of International Business Machines in a research report on Wednesday, December 10th. Erste Group Bank raised International Business Machines from a “hold” rating to a “buy” rating in a report on Friday, December 5th. Dbs Bank upgraded International Business Machines from a “hold” rating to a “moderate buy” rating in a research report on Monday, January 19th. Evercore ISI increased their price objective on International Business Machines from $330.00 to $345.00 and gave the stock an “outperform” rating in a research report on Thursday. Finally, UBS Group set a $317.00 target price on International Business Machines in a research note on Thursday. One investment analyst has rated the stock with a Strong Buy rating, twelve have issued a Buy rating, five have given a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus price target of $330.07.

Institutional Investors Weigh In On International Business Machines

Institutional investors have recently modified their holdings of the company. Amundi raised its holdings in International Business Machines by 17.9% during the third quarter. Amundi now owns 4,777,516 shares of the technology company’s stock worth $1,382,695,000 after purchasing an additional 725,191 shares during the last quarter. Raymond James Financial Inc. raised its stake in shares of International Business Machines by 3.6% during the 2nd quarter. Raymond James Financial Inc. now owns 3,094,667 shares of the technology company’s stock worth $912,245,000 after buying an additional 106,879 shares during the last quarter. California State Teachers Retirement System increased its holdings in International Business Machines by 0.6% during the 3rd quarter. California State Teachers Retirement System now owns 1,479,491 shares of the technology company’s stock valued at $417,453,000 after acquiring an additional 8,238 shares in the last quarter. CANADA LIFE ASSURANCE Co raised its position in International Business Machines by 2.9% during the third quarter. CANADA LIFE ASSURANCE Co now owns 1,211,264 shares of the technology company’s stock worth $338,964,000 after acquiring an additional 34,696 shares during the last quarter. Finally, AQR Capital Management LLC lifted its holdings in shares of International Business Machines by 15.9% in the third quarter. AQR Capital Management LLC now owns 1,099,347 shares of the technology company’s stock valued at $310,192,000 after purchasing an additional 150,758 shares in the last quarter. Hedge funds and other institutional investors own 58.96% of the company’s stock.

Key International Business Machines News

Here are the key news stories impacting International Business Machines this week:

• Positive Sentiment: Q4 beat and bullish 2026 outlook — IBM reported Q4 EPS $4.52 vs. $4.33 est. and revenue $19.69B, and guided to >5% revenue growth for 2026. Beats and raised forward visibility are the primary driver of the recent rally. Read More.
• Positive Sentiment: AI and software momentum — Generative AI/Watsonx and software/infrastructure sales showed double?digit growth and an AI book of business topping ~$12.5B, supporting higher margin mix and investor confidence. Read More.
• Positive Sentiment: Analyst upgrades and higher price targets — Multiple firms (Evercore, RBC, Bank of America and others) issued bullish notes or raised targets after the quarter, adding upside case and buy-side interest. Read More.
• Neutral Sentiment: Strategic M&A — Analysis of IBM’s planned Confluent acquisition (~$11B) frames it as a strategic move to boost real-time data/AI capabilities; it can be accretive long term but adds integration risk. Read More.
• Neutral Sentiment: Mixed analyst stance — JPMorgan raised its target but kept a neutral rating, underscoring that not all analysts view the upside the same way; expect divergent broker commentary to keep volatility elevated. Read More.
• Negative Sentiment: Large bond issuance — IBM launched a multi-part euro bond sale seeking north of $7B, which increases near-term debt supply and could temper sentiment among some investors focused on leverage or cost of capital. Read More.

International Business Machines Company Profile

International Business Machines Corporation (IBM) is a global technology and consulting company headquartered in Armonk, New York. Founded in 1911 as the Computing-Tabulating-Recording Company (CTR) and renamed IBM in 1924, the company has evolved from early electromechanical machines to a diversified technology provider serving enterprises and governments worldwide. IBM is publicly traded on the New York Stock Exchange under the ticker symbol IBM.

IBM’s principal businesses encompass cloud computing and software, infrastructure and systems, consulting and technology services, and research and development.