**Revenue Growth and Performance**: IBM reported $15 billion in revenue for Q3 2024, reflecting a 2% increase at constant currency. Software revenue surged 10%, driven by accelerated growth in Red Hat (14% YoY) and strong performance in core areas such as transaction processing. However, consulting revenue was flat, impacted by an uncertain macroeconomic environment and a shift in client spending priorities.
**Consulting Challenges and Outlook**: The consulting segment is facing challenges with two consecutive quarters of declining signings, leading to cautious expectations for revenue growth in the short term. The macroeconomic uncertainties, including geopolitical tensions and economic conditions, have caused clients to reprioritize IT budgets, which could hamper growth in 2025. However, the Gen AI book of business showed promising growth, reaching over $3 billion, which could provide a longer-term uplift.
**Infrastructure Segment Dynamics**: Infrastructure revenue declined 7%, primarily due to ongoing product cycle dynamics with the z16 mainframe program nearing its cycle's end. The effect of this decline is expected to carry over into 2025, but the upcoming launch of new hardware (e.g., Z17) presents an opportunity for recovery in future quarters.