IBM held its earnings call today, topping analysts’ average expectations at $25.4 billion in revenue. The tech industry veteran reported 12 percent year-over-year growth up to $26.7 billion in revenue, and also raised its full-year earnings forecast to at least $13.25 a share compared to analysts’ average estimate of $13.21.

“In the second quarter our long-term strategic investments in the company’s growth initiatives again helped drive strong revenue performance,” said Samuel J. Palmisano, IBM chairman, president and chief executive officer. “Hardware, software and services revenue grew at double digits, and we achieved strong profit and free cash flow growth.”

IBM’s software sales were up 17 percent in the second quarter, accounting for revenues of $6.2 billion and pre-tax income of e of $2.3 billion, or 12 percent more than the same time last year. The tech giant’s services division, its largest one, increased 10 percent to $15.1, and s pre-tax income increased to $2.2 billion.

Software and services are IBM’s biggest money makers accounting for 80 percent of the company’s sales this quarter, and are the key focus of chief executive Sam Palmisano. The Big Blue’s hardware business is not lagging behind however; it has reported $4.7 billion in revenue, or 17 percent more than last year. Pre-tax income was $393 million, an increase of 112 percent year over year.

IBM had a couple of notable developments this month aside from its successful Q2 earnings. It shut down its aging Newton center in New Zeeland in favor a new $80 million facility, presumably because it lost two major clients: Bank of New Zealand, and the nation’s Ministry of Education. IBM is also building two new datacenters in Japan to power its SmartCloud Enterprise and Lotus Live services for local clients. The first center will be located in the city of Makuhari, while the location of the second is still pending.