According to IBM’s CFO, the company’s z16 mainframe is outperforming previous generations of the system, as reflected in recent quarterly financial results.
The financial results for the past three months to the end of June 2024 showed it brought in $15.77 billion in revenue, up 1.9% year-on-year and more than the $15.62 billion predicted by analysts.
Its infrastructure segment, which includes mainframe computers, as well as hybrid cloud and other distributed infrastructure, reported $3.65 billion in revenue, up 0.8 percent and ahead of the expected $3.51 billion.
IBM CFO Jim Kavanaugh said the business has been buoyed by demand for the z16, which launched in 2022.
“We're now more than two years into the z16 cycle and the revenue performance continues to outperform prior cycles,” Kavanaugh said. “IBM Z remains an enduring platform for mission-critical workloads, driving both hardware and related software, storage, and services adoption.”
The company’s distributed infrastructure revenue grew 5%, which Kavanaugh said was “driven by strength in both power and storage,” with customers utilizing machines based on the company’s Power10 chips.
Indeed, the company confirmed AI was central to its overall revenue growth. CEO Arvind Krishna said the company’s AI order book had now topped $2 billion.
"We had a strong second quarter, exceeding our expectations, driven by growth in both revenue and free cash flow,” Krishna said. “We continue to see that clients turn to IBM for our technology and our expertise in enterprise AI, and our book of business for generative AI has grown to more than two billion dollars since the launch of watsonx one year ago.”
Watsonx is the company’s enterprise AI platform, offering access to a range of large language models.
IBM will be spending some of its newly garnered revenue on infrastructure management software vendor HashiCorp, which it plans to purchase for $6.4 billion. Krishna told analysts the deal is on track to close in the second half of the year.
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