IBM reported third-quarter results that topped Wall Street estimates and lifted its guidance, citing ongoing artificial intelligence tailwinds. Still, the stock dropped 5% in extended trading.

Here’s how the company performed versus LSEG estimates:

• Earnings per share: $2.65 adjusted vs. $2.45 expected
• Revenue: $16.33 billion vs. $16.09 billion expected.

Revenue increased 9% from about $15 billion in the year-ago period, IBM said. The company reported net income of $1.74 billion, or $1.84 per share, after recording a loss of $330 million, or 36 cents per share, a year earlier. The results from last year included the impact of a $2.7 billion pension settlement charge.

“Clients globally continue to leverage our technology and domain expertise to drive productivity in their operations and deliver real business value with AI,” CEO Arvind Krishna said in release.

IBM upped its revenue guidance and said it now expects “more than” 5% revenue growth, up from “at least” 5%. Free cash flow for the year is expected to hit $14 billion, up from a $13.5 billion estimate last quarter.

Krishna also said the company’s AI book of business has surpassed $9.5 million, up from $7.5 billion during the second quarter.

Like many technology companies, IBM has harnessed AI to streamline productivity and slash costs. In May, Krishna told the Wall Street Journal that it replaced 200 human resources roles.

IBM’s software revenue rose 10% to $7.21 billion, meeting a StreetAccount estimate. Consulting revenue totaled $5.3 billion, surpassing a $5.24 billion projection.

Infrastructure, which includes its mainframe computers business, jumped 17% to $3.6 billion.

IBM’s board also approved a $1.68 per share quarterly dividend.