What happened Shares of IBM (NYSE: IBM) climbed 5.7% on Tuesday after the technology giant's fourth-quarter report gave investors hope that its growth strategy was taking hold. So what IBM's revenue from continuing operations rose 6.5% year over year to $16.7 billion. That was well above Wall Street's estimates, which had called for sales of just under $16 billion. The gains were driven by an 8.2% increase in IBM's software revenue, to $7.3 billion, and a 13.1% jump in its consulting revenue, to $4.7 billion. The company's hybrid cloud operations, which help businesses integrate their private computing resources with public cloud services, enjoyed particularly strong growth. Sales in this segment surged 16% to $6.2 billion. Image source: Getty Images. All told, IBM's adjusted earnings per share checked in at $3.35. That, too, surpassed the consensus estimate. Analysts had expected adjusted per-share profits of $3.30. Moreover, IBM continues to gush cash. Following the divestiture of its Kyndryl managed IT services business, the tech titan expects to generate more than $10 billion in annual free cash flow. IBM is using this cash to pay down debt, reward shareholders with a hefty 4.8% dividend yield, and fund its growth initiatives. "In 2021, we continued to invest for the future by increasing R&D spending, expanding our ecosystem, and acquiring 15 companies to strengthen our hybrid cloud and AI capabilities," chief financial officer James Kavanaugh said in a press release. Now what IBM's leadership team expects demand for its cloud services to remain strong in the coming year as more businesses seek to automate their operations and harness the power of artificial intelligence (AI). "Our fourth-quarter results give us confidence in our ability to deliver our objectives of sustained mid-single-digit revenue growth and strong free cash flow in 2022," CEO Arvind Krishna said. 10 stocks we like better than IBMWhen our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and IBM wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of January 10, 2022 Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source