IBM reported fourth-quarter earnings that exceeded expectations, driven by robust growth in its software division.

This growth is attributed to increased business spending on cloud infrastructure and generative AI technologies, resulting in a roughly 10% rise in shares during after-hours trading.

The software segment recorded its largest revenue increase in five years, spurred by a shift toward AI and cloud solutions.

IBM’s adjusted earnings per share reached US$3.92, surpassing analysts’ expectations of US$3.75, while revenue remained flat at US$17.55 billion, aligning with forecasts.

Additionally, IBM’s AI Book of Business—reflecting bookings and sales across its product range—grew to over US$5 billion, representing a US$2 billion increase since Q3.