IBM beats on earnings and revenue, raises free cash flow outlook

Revenue came in at $17.10B against estimates of $16.99B, and the board held the dividend at $1.69 a share

IBM reported third-quarter earnings of $2.95 a share, $0.06 above estimates, on revenue of $17.10B, ahead of the $16.99B analysts had expected.

The company left its full-year outlook for constant currency revenue growth at 4% to 5%, with currency effects roughly neutral at current exchange rates. It raised its free cash flow outlook, and now expects the figure to grow by more than $1B this year compared with last.

Chief executive Arvind Krishna said disciplined execution drove the faster revenue growth and the free cash flow gain, pointing to clients using IBM's technology to redesign entire operating models. The board declared a quarterly dividend of $1.69 a share, payable December 10, 2026 to shareholders of record on November 10, 2026, unchanged from IBM's existing payout plan.

The combination of a revenue and earnings beat with a higher cash flow target, rather than a higher sales target, points to margin and efficiency gains doing the work this quarter rather than faster top-line growth. IBM's positioning around SAP readiness earlier this month fits the same pattern Krishna described, enterprise clients spending to transform their operations, and the unchanged dividend signals that the capital return plan was not affected either way by the quarter's results.