IBM published second quarter financial results on Monday, reporting its second straight quarter of revenue declines despite beating expectations. 

The business technology giant delivered non-GAAP EPS of $2.18 on revenue of $18.1 billion, down 5.4% year-over-year. Analysts were expecting earnings of $2.07 per share on revenue of $17.72 billion.

IBM said total cloud revenue was $6.3 billion for the quarter, up 30%.  

Broken down further, IBM said cloud and cognitive software revenue -- which includes Red Hat as well as Cognitive Applications and Transaction Processing Platforms -- was up 3% to $5.7 billion. Red Hat revenue up 17%.

Meanwhile, systems revenue climbed 6% to $1.9 billion led by the IBM Z, IBM's smaller footprint mainframe that utilizes design thinking. Storage systems showed growth but technology services revenue fell slightly this quarter. Global Business Services revenue (which includes Consulting, Application Management and Global Process Services) was  $3.9 billion, down 7%. 

"Our prudent financial management in these turbulent times enabled us to expand our gross profit margin, generate strong free cash flow and improve our liquidity position," said James Kavanaugh, IBM senior vice president and chief financial officer. "We have the financial flexibility to continue to invest in our business and return value to our shareholders through our dividend policy."

As for the outlook, Wall Street is looking for IBM to report third quarter non-GAAP earnings of $2.52 per share on revenue of $17.34 billion.