IBM Revenue Disappoints Despite Software Optimism

3 months ago

Isabelle Lee

"IBM shares are also down by more than 4% in post market the company reported disappointing revenue in Red Hat. So this is a closely watched unit and of course it sparked concerns among investors who see that the software business is among the key to the company's growth. So sales in the hybrid cloud unit which includes Red Hat increased 14% which is a slowdown from the previous quarter and below estimates of 16%. The CFO Jim Kavanagh still said they feel very good about the growth opportunities and as context CEO Arvin Krishna has pushed for software to become IBM's largest business especially as their consulting unit is kind of shaky. So stock is down now but the stock has gained 31% this year through the close."

The commentary on IBM focuses on a disappointing revenue report for its Red Hat unit, with hybrid cloud growth coming in below estimates. Despite this, IBM executives express confidence in future software-driven growth, highlighting an internal pivot away from a troubled consulting unit.

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