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Investing.com-- International Business Machines Corp. (NYSE:IBM) reported fourth-quarter earnings that surpassed analyst expectations, driven by robust software revenue growth and continued momentum in artificial intelligence (AI).

The tech giant's shares jumped 5% in after-hours trading following the announcement.

IBM posted adjusted earnings per share of $3.92 for the quarter, beating the analyst consensus of $3.80. Revenue came in at $17.6 billion, slightly below the estimated $17.62 billion but up 1% YoY, or 2% at constant currency. The company's software segment led the growth, with revenue increasing 10% YoY, or 11% at constant currency.

CEO Arvind (NSE:ARVN) Krishna highlighted the company's progress in AI, stating, "Our generative AI book of business now stands at more than $5 billion inception-to-date, up nearly $2 billion quarter over quarter." This underscores IBM's growing presence in the rapidly expanding AI market.

For the full year 2023, IBM reported revenue of $62.8 billion, up 1% YoY, or 3% at constant currency. The company's free cash flow for the year reached $12.7 billion, demonstrating strong financial performance.

Looking ahead, IBM provided an optimistic outlook for 2025, projecting revenue growth of at least 5% at constant currency and free cash flow of about $13.5 billion. This guidance suggests continued momentum in the company's core businesses and AI initiatives.

Krishna expressed confidence in IBM's strategic direction, saying, "With our focused strategy, enhanced portfolio, and culture of innovation, we're well-positioned for 2025 and beyond."

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