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(Bloomberg) -- International Business Machines Corp. gave a stronger-than-expected revenue growth outlook for the coming years led by the expansion in its software business.

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Long-term sales will increase more than 5% annually, IBM Chief Financial Officer Jim Kavanaugh said Tuesday during an presentation. Kavanaugh didn’t define the number of years included in the forecast, although analysts, on average, had projected growth of about 4% in constant currency for fiscal years 2026 and 2027.

IBM has been transforming itself from a conventional computer company into one focused on software and services. It has used acquisitions to expand products, including a proposed takeover of Hashicorp Inc. announced in April and the purchase of Apptio for $4.6 billion in 2023.

The shares rose 1.4% to $264.46 at the close in New York. The stock was at a record high leading into the event, including a 13% jump on Jan. 30 owing largely to enthusiasm over Big Blue’s strong fourth-quarter results, led by the software business, and a forecast for 2025 revenue to increase “at least 5%” in constant currency.

Long-term revenue from the software business will gain about 10% annually, Kavanaugh said. Analysts had expected growth of 7%-9% through 2027. The infrastructure unit will increase 1%-3%, Kavanaugh said. Later in the decade, this unit will see revenue from quantum computing, he added.

Consulting, a division that has struggled in recent quarters, will grow ahead of the market, Kavanaugh said. “The consulting market is going through a transition with the technological shift of GenAI.”

The sales outlook seems “cautious given its software strength,” wrote Anurag Rana, an analyst at Bloomberg Intelligence. Though the consulting outlook suggests gains in that segment “may not rebound in the near term.”

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