{"id":435664,"date":"2026-01-28T22:47:09","date_gmt":"2026-01-28T22:47:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/435664\/"},"modified":"2026-01-28T22:47:09","modified_gmt":"2026-01-28T22:47:09","slug":"ibm-beats-fourth-quarter-revenue-estimates-as-ai-boosts-software-demand","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/435664\/","title":{"rendered":"IBM beats fourth-quarter revenue estimates as AI boosts software demand"},"content":{"rendered":"\n

Jan 28 (Reuters) – IBM beat Wall Street estimates for fourth-quarter revenue and profit on Wednesday, as the rapid adoption of artificial intelligence<\/a> boosts demand for its software services, ranging \u200bfrom managing swaths of data to automating IT processes.<\/p>\n

Shares of the company rose nearly 6% \u200cin extended trading.<\/p>\n

Businesses have doubled down on upgrading their software suites to develop data-intensive AI technology, helping sales for IT service \u200cand software providers such as IBM.<\/p>\n

Big Blue reported December quarter revenue of $19.69 billion, beating analysts’ average estimate of $19.23 billion, according to data compiled by LSEG.<\/p>\n

Adjusted earnings of $4.52 per share also beat an estimate of profit of $4.32 per share.<\/p>\n

IBM has been boosting its software portfolio, turning to inorganic growth in a bid to better address \u2060the requirements of companies adopting AI, \u200cwith deals like its $6.4 billion acquisition of HashiCorp and ongoing $11 billion buyout of data infrastructure company Confluent.<\/p>\n

Sales in its software segment stood at $9.03 billion in the quarter \u200dended December 31, also beating an estimate of $8.77 billion.<\/p>\n

Within the software segment, its Automation unit grew 18% and sales in the Data unit grew 22% in the quarter.<\/p>\n

FEDERAL SHUTDOWN HITS HYBRID CLOUD<\/p>\n

However, sales growth in its high-margin hybrid \u200bcloud unit – known as Red Hat – decelerated to 10% in the fourth quarter, down from 14% \u200cin the third quarter and 16% in the second.<\/p>\n

Growth in the hybrid cloud unit was hurt by the longest U.S. government shutdown in history that occurred in the last quarter of 2025, IBM CFO Jim Kavanaugh told Reuters in an interview.<\/p>\n

The shutdown hurt Red Hat growth by “a couple points”, Kavanaugh said, adding that the federal government constitutes about 15% of its hybrid cloud bookings.<\/p>\n

The federal government also appeared headed \u2060for a partial government shutdown this week, with Republicans and \u200bDemocrats at odds over funding for President Donald Trump’s Department \u200bof Homeland Security.<\/p>\n

“We’re going to have to deal with that as we move forward. Hopefully that is a short-term disruption,” Kavanaugh said.<\/p>\n

“If the government approves the budget resolution and \u200dgets back to business \u2060and doesn’t go on a shutdown, we’ll have to wait and see how that plays out.”<\/p>\n

The company’s AI book of business grew to $12.5 billion in the fourth quarter, up $3 billion from \u2060the previous quarter.<\/p>\n

IBM’s consulting segment reported sales of $5.35 billion, missing an estimate of $5.38 billion, according to data compiled by LSEG, as \u200cbusinesses have prioritized spending on longer-term AI projects amid macroeconomic uncertainty.<\/p>\n

(Reporting by Arsheeya Bajwa \u200cin Bengaluru; Editing by Pooja Desai and Alan Barona)<\/p>\n","protected":false},"excerpt":{"rendered":"Jan 28 (Reuters) – IBM beat Wall Street estimates for fourth-quarter revenue and profit on Wednesday, as the…\n","protected":false},"author":2,"featured_media":435665,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,181,507,67829,206122,74],"class_list":{"0":"post-435664","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-fourth-quarter-revenue","12":"tag-software-segment","13":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/435664","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=435664"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/435664\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/435665"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=435664"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=435664"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=435664"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}