IBM’s CFO said its z16 mainframe is outperforming previous generations of the system as the company posted quarterly financial results ahead of market expectations.

Big Blue’s results for the three months to the end of June 2024 showed it brought $15.77 billion in revenue, up 1.9 percent 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.

Speaking on the company’s latest earnings, 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.

He continued: “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 five percent, which Kavanaugh said was “driven by strength in both power and storage,” with customers utilizing machines based on the company’s Power10 chips.

He said: “Power growth was fueled by demand for data-intensive workloads on Power10 led by SAP HANA. Storage delivered growth again this quarter, including growth in high-end storage tied to the z16 cycle and solutions tailored to protect, manage, and access data for scaling generative AI.”

Indeed, IBM said 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.