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IBM (NYSE:IBM) shares fell 6% in extended-hours trading after the tech giant reported first-quarter sales that missed expectations and confirmed its deal to acquire HashiCorp (NASDAQ:HCP).
For the period ending March 31, IBM earned $1.68 per share on $14.46B revenue, as consulting revenue came in at $5.19B. Software revenue for the period was $5.9B, while infrastructure and financing comprised $3.08B and $193M, respectively.
The company added free cash flow during the period was $1.91B.
A consensus of analysts expected the company to earn $1.59 per share on $14.54B in revenue.
"We continue to capitalize on the excitement and demand for enterprise AI from our clients. Our book of business for watsonx and generative AI again showed strong momentum, growing quarter over quarter, and has now eclipsed one billion dollars since we launched watsonx in mid-2023," said IBM Chief Executive Officer and Chairman Arvind Krishna in a statement. "As a result, for the full year, we continue to expect revenue performance in line with our mid-single digit model and about $12 billion in free cash flow."
IBM also confirmed that it would acquire HashiCorp for $35 per cash following recent media reports.
Going forward, IBM (IBM) reaffirmed its outlook for 2024, as it expects constant currency revenue growth to be in the mid-single digits for fiscal 2024. Additionally, it expects full-year free cash flow to be about $12B.
IBM (IBM) will hold a conference call at 5 p.m. EST to discuss the results.