IBM this morning reported its second-quarter results, showing solid profits that exceeded Wall Street forecasts. In the meantime, the company introduced its next-gen z17 mainframe computer. They recently purchased Hakkoda, a consulting firm with deep data and artificial intelligence expertise. IBM’s year over year growth for the first quarter was less than 1%. As such, shares fell 5% in after-hours Wednesday trading.
In the second quarter, IBM said it earned a net income of $2.19 billion, or $2.31 a share. This spending figure adds in costs associated with the recent purchases. The company’s core software revenue jumped 10% organically, to $7.39 billion. Barely breaking a sweat, this growth was fueled by an astounding 83.9% gross margin in its software segment. Revenue from episodic consulting grew almost 3% to $5.31 billion.
IBM’s infrastructure revenue was the big winner too, surging 14% to $4.14 billion. Driven by these performance metrics, IBM is predicting at least 5% revenue growth for the full year. This projection is based on like-for-like currency conditions. As of 2025, the company’s stock has skyrocketed by an astounding 28%. This trend is consistent with the broader market, as the S&P 500 index increased by a similar 8% over that same short time frame.
IBM’s top brass will answer questions about the most recent earnings report from analysts on a conference call today. They’ve called the conference call for 5 p.m. ET, though results seem to point to contradictory conclusions. We’re looking forward to what this acquisition of Hakkoda means for retail. We’ll learn how the recent launch of the z17 mainframe and both initiatives will propel growth in the coming years.