Big blue reported second-quarter earnings of $2.18 per share on revenue of $18.12 billion. Analysts were expecting the company to report earnings of $2.07 per share on revenue of $17.72 billion.
"Our prudent financial management in these turbulent times enabled us to expand our gross profit margin, generate strong free cash flow and improve our liquidity," CFO James Kavanaugh said.
IBM saw revenue from its cloud division jump 30% year over year to $6.3 billion, with total cloud revenue of the last 12 months of $23.5 billion representing a 20% increase.
Revenue from its Red Hat acquisition rose 17% in the quarter. Though its overall revenue of $18.1 billion for the quarter was down 5.4%.
IBM has rallied about 40% off of its March lows and the company raised its dividend earlier this quarter to $1.63 per share, its 25th year in a row of increasing its quarterly cash dividend.
"We have the financial flexibility to continue to invest in our business and return value to our shareholders through our dividend policy," Kavanaugh said.
The technology company ended the quarter with $14.3 billion in cash on hand, up to $5.2 billion from the end of 2019. The company's debt load was $64.7 billion at the end of the quarter.
Last week, shares of Cloudera (CLDR) - Get Report rose nearly 20% after Bloomberg reported that the enterprise software firm is fielding takeover bids, although no deal has yet been reached. Trading was briefly halted in the stock after the news was reported.
IBM didn't mention Cloudera in its earnings release Monday.