IBM Corporation (NYSE:IBM) reported solid Q2 results, beating Wall Street expectations on both revenue and earnings. Software Services remained the primary growth driver, with revenue rising 10% year-over-year, led by strength in Hybrid Cloud and Automation. The Infrastructure segment also posted strong results, with revenue up 14% thanks to the IBM Z launch—though there could be potential cannibalization from the newer z17 mainframe so its worth watching. Organic software growth continued to trend lower, and management struggled to offer a convincing explanation on the call.
Consulting remains a weak spot. While there was growth, it was limited to the low single digits. Commentary was cautious, citing macro uncertainty, though management noted signs that demand may be stabilizing, particularly with government and federal clients—a likely reason for the call’s opening nod to the current administration.
Despite the top-line beat and upbeat narrative, Q3 guidance came in light, raising eyebrows among analysts given their line of questioning. Management had a tough time defending the outlook, and their lack of clarity didn’t go unnoticed.
For more details, key highlights, and commentary, check out the high-level earnings summary.
