IBM's earnings and revenue surpass expectations, causing share prices to rise.

• IBM's revenue and adjusted earnings per share were higher than expected.
• The company is slightly more positive on full-year free cash flow.
• IBM said it's seeing more business tied to generative artificial intelligence.

On Wednesday, the company's shares rose 5% in extended trading after its second-quarter results exceeded analysts' expectations.

Here are the key numbers.

• According to LSEG, the adjusted earnings per share were $2.43, higher than the expected $2.20.
• According to LSEG, the actual revenue was $15.77 billion, which exceeded the expected revenue of $15.62 billion.

IBM reported a 1.9% increase in revenue from $15.48 billion to $15.62 billion, and a net income of $1.83 billion, or $1.96 per share, compared to $1.58 billion, or $1.72 per share, in the previous year.

In April, executives predicted 2024 free cash flow to be around $12 billion. However, the company now expects it to come in above $12 billion.

The company's book of business for generative artificial intelligence has surpassed $2 billion, according to CEO Arvind Krishna, who stated this in a recent interview. This represents a significant increase from the $1 billion mark reached in April.

IBM reported that its software business generated $6.74 billion in revenue, which is a 7% increase and higher than the StreetAccount consensus of $6.49 billion.

The consulting unit generated $5.18 billion in revenue, which was 0.9% less than the $5.23 billion predicted by StreetAccount.

IBM's mainframe computer segment generated $3.65 billion in revenue, exceeding the $3.51 billion consensus forecast by 0.8%.

IBM declared its plans to acquire HashiCorp for $6.4 billion in a deal, and also announced that it had agreed to buy IBM's QRadar cloud software and migrate customers to the Cortex Xsiam product. Furthermore, IBM announced plans for data center infrastructure in Montreal.

Despite the after-hours move on Wednesday, IBM shares have risen 14% this year, in sync with the S&P 500 index.

Analysts will join a conference call with executives to discuss the results at 5 p.m. ET.

This is breaking news. Please check back for updates.

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