IBM Corp (IBM (IBM)) reported its second-quarter earnings after the bell on Wednesday, and the numbers were better than Wall Street expected. Here's what you need to know.

Q2 by the Numbers

Revenue came in at $17.16 billion, topping the consensus estimate of $16.86 billion, according to market data. Adjusted earnings per share were $2.93, beating the $2.86 analysts were looking for. Total revenue was up 1% compared to the same quarter last year.

Breaking it down by segment: Software revenue grew 5% year-over-year, consulting was up 1%, and infrastructure dropped 7%. Cash flow from operations was $2.6 billion in the quarter, with free cash flow at $2.5 billion. IBM ended the period with $8.2 billion in cash, restricted cash, and marketable securities.

What the CEO Said

"We are confident in IBM's strategy and portfolio, and in our ability to capture growth opportunities ahead. We fundamentally believe that we are in the early innings of a structural shift for business, and that our portfolio — across software, infrastructure and consulting — is well-positioned to help our clients tap the value, and manage the challenges, of an AI-driven future," said Arvind Krishna, IBM's chairman, president, and CEO.

He added: "We are taking action to accelerate our revenue growth and profitability, driving productivity across the company with AI and automation, and heavily investing in commercializing innovation at speed and scale."

Dividend and Outlook

IBM's board approved a quarterly cash dividend of $1.69 per share, payable on Sept. 10 to shareholders of record as of Aug. 10. For the full year 2026, IBM expects revenue of $70.24 billion to $70.91 billion, which would represent constant currency growth of 4% to 5%. That's roughly in line with the consensus estimate of $70.85 billion. Free cash flow is expected to increase by about $1 billion year-over-year.

Stock Reaction

IBM shares rose 2.42% in after-hours trading, changing hands at $211.08 at the time of publication.