## IBM Delivers Strong Fourth Quarter, Eyes Generative AI and Quantum Leap
IBM has kicked off 2026 with a robust performance, announcing better-than-expected fourth-quarter earnings and projecting continued growth that has pleased investors. The tech giant reported adjusted earnings per share of $4.52, surpassing the LSEG consensus estimate of $4.32. Revenue for the quarter hit $19.69 billion, also exceeding expectations of $19.23 billion. This marks a significant 12% increase from the $17.6 billion recorded in the same period last year.
The company’s net income saw a substantial surge, climbing to $5.6 billion, or $5.88 per share, a notable jump from $2.92 billion, or $3.09 per share, in the prior year. This financial strength underscores IBM’s ongoing transformation and its ability to capitalize on emerging technology trends.
Looking ahead, IBM forecasts full-year revenue growth to exceed 5%, a slight deceleration from the 8% expansion seen in the past year, but still aligning with analyst expectations of 4.6% sales growth for 2026. The company also anticipates an increase of $1 billion in free cash flow, building upon the $14.7 billion generated in 2025.
A key driver of this positive outlook is IBM’s aggressive push into generative artificial intelligence. CEO Arvind Krishna highlighted the company’s generative AI “book of business” surpassing the $12.5 billion mark, signaling strong market adoption and significant revenue potential in this transformative field. Krishna expressed confidence in the company’s trajectory, stating, “This capped a strong 2025 for IBM where we exceeded expectations for revenue, profit and free cash flow.”
Beyond AI, IBM is charting an ambitious course in quantum computing. Krishna revealed that the company is on track to deliver its first large-scale quantum computer by 2029, a milestone that could revolutionize scientific research and complex problem-solving across industries. This long-term vision in quantum technology positions IBM at the forefront of a potentially groundbreaking technological frontier.
Drilling down into the revenue streams, IBM’s software segment demonstrated impressive momentum, with a 14% increase to $9 billion in the fourth quarter. This growth was bolstered by strong performance in automation, data analytics, and Red Hat products, showcasing IBM’s ability to integrate and monetize its diverse software portfolio. The infrastructure segment also experienced a significant upswing, rising 21% to $5.1 billion. Notably, the company’s IBM Z Systems line of mainframe computers saw a remarkable 67% year-over-year growth, indicating continued demand for high-performance computing solutions in critical enterprise applications.
In recognition of its financial performance and future prospects, IBM’s board of directors has approved a per-share dividend of $1.68, set to be paid on March 10. This dividend payout reflects the company’s commitment to shareholder returns while reinvesting in its strategic growth initiatives.
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