Looking back on it services & consulting stocks’ Q4 earnings, we examine this quarter’s best and worst performers, including IBM (NYSE: IBM) and its peers.

IT Services & Consulting companies stand to benefit from increasing enterprise demand for digital transformation, AI-driven automation, and cybersecurity resilience. Many enterprises can't attack these topics alone and need IT services and consulting on everything from technical advice to implementation. Challenges in meeting these needs will include finding talent in specialized and evolving IT fields. While AI and automation can enhance productivity, they also threaten to commoditize certain consulting functions. Another ongoing challenge will be pricing pressures from offshore IT service providers, which have lower labor costs and increasingly equal access to advanced technology like AI.

The 7 it services & consulting stocks we track reported a mixed Q4. As a group, revenues beat analysts’ consensus estimates by 0.6% while next quarter’s revenue guidance was in line.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 26.6% since the latest earnings results.

Best Q4: IBM (NYSE: IBM)

With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE: IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.

IBM reported revenues of $19.69 billion, up 12.1% year on year. This print exceeded analysts’ expectations by 2.5%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

"In the fourth quarter, we delivered strong revenue growth, with double-digit Software performance. Additionally, Infrastructure continued its double-digit revenue growth with the robust adoption of the next generation of our mainframe platform. Our generative AI book of business now stands at more than $12.5 billion. This capped a strong 2025 for IBM where we exceeded expectations for revenue, profit and free cash flow," said Arvind Krishna, IBM chairman, president and chief executive officer.

IBM pulled off the biggest analyst estimates beat of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 19.2% since reporting and currently trades at $237.67.

Is now the time to buy IBM? Access our full analysis of the earnings results here, it’s free.

EPAM (NYSE: EPAM)

Founded in 1993 during the early days of offshore software development, EPAM Systems (NYSE: EPAM) provides digital engineering, cloud, and AI transformation services to help global enterprises and startups modernize their technology systems and create digital products.

EPAM reported revenues of $1.41 billion, up 12.8% year on year, outperforming analysts’ expectations by 1.1%. The business had a satisfactory quarter with a decent beat of analysts’ full-year EPS guidance estimates.

EPAM scored the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 22.5% since reporting. It currently trades at $129.90.

Is now the time to buy EPAM? Access our full analysis of the earnings results here, it’s free.

Weakest Q4: Kyndryl (NYSE: KD)

Born from IBM's managed infrastructure services business in a 2021 spinoff, Kyndryl (NYSE: KD) is the world's largest IT infrastructure services provider that designs, builds, and manages technology environments for enterprise customers.

Kyndryl reported revenues of $3.86 billion, up 3.1% year on year, falling short of analysts’ expectations by 1%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates and a slight miss of analysts’ revenue estimates.

Kyndryl delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 48.9% since the results and currently trades at $12.

Read our full analysis of Kyndryl’s results here.

ASGN (NYSE: ASGN)

Evolving from its roots in IT staffing to become a high-end technology consulting powerhouse, ASGN (NYSE: ASGN) provides specialized IT consulting services and staffing solutions to Fortune 1000 companies and U.S. federal government agencies.

ASGN reported revenues of $980.1 million, flat year on year. This number topped analysts’ expectations by 0.6%. Aside from that, it was a mixed quarter as it also logged a decent beat of analysts’ EPS guidance for next quarter estimates but a significant miss of analysts’ EPS estimates.

The stock is down 22.9% since reporting and currently trades at $41.06.

Read our full, actionable report on ASGN here, it’s free.

DXC (NYSE: DXC)

Born from the 2017 merger of Computer Sciences Corporation and HP Enterprise's services business, DXC Technology (NYSE: DXC) is a global IT services company that helps businesses transform their technology infrastructure, applications, and operations.

DXC reported revenues of $3.19 billion, flat year on year. This print met analysts’ expectations. Zooming out, it was a mixed quarter as it also recorded a beat of analysts’ EPS estimates but a significant miss of analysts’ EPS guidance for next quarter estimates.

DXC had the slowest revenue growth among its peers. The stock is down 15.9% since reporting and currently trades at $12.12.

Read our full, actionable report on DXC here, it’s free.

Market Update

In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.

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