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IBM RELEASES FIRST-QUARTER RESULTS

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IBM reported strong first-quarter 2024 earnings results with accelerated software revenue growth, robust gross margin expansion, and solid cash generation. The company highlighted the strategic acquisition of HashiCorp, Inc. and emphasized the success of its hybrid cloud and AI strategy. IBM's enterprise AI offerings, including watsonx and generative AI, demonstrated significant momentum, surpassing one billion dollars in revenue since the launch of watsonx in mid-2023. The company projects continued revenue performance in line with its mid-single digit model for the full year.
IBM ha riportato risultati eccellenti per il primo trimestre del 2024, con una crescita accelerata dei ricavi derivanti dal software, un'espansione robusta del margine lordo e una solida generazione di cassa. La società ha messo in luce l'acquisizione strategica di HashiCorp, Inc. e ha sottolineato il successo della sua strategia per il cloud ibrido e l'IA. Le offerte di IA aziendale di IBM, inclusi watsonx e l'IA generativa, hanno mostrato un impeto significativo, superando il miliardo di dollari di ricavi dal lancio di watsonx a metà del 2023. L'azienda prevede di mantenere un rendimento dei ricavi in linea con il suo modello a cifra singola medio per l'intero anno.
IBM reportó fuertes resultados financieros para el primer trimestre de 2024, con un crecimiento acelerado en los ingresos de software, una considerable expansión del margen bruto y una sólida generación de efectivo. La compañía destacó la adquisición estratégica de HashiCorp, Inc. y enfatizó el éxito de su estrategia de nube híbrida e IA. Las ofertas de IA empresarial de IBM, incluyendo watsonx y la IA generativa, demostraron un impulso significativo, superando los mil millones de dólares en ingresos desde el lanzamiento de watsonx a mediados de 2023. La empresa proyecta un rendimiento continuo de los ingresos alineado con su modelo de dígito único medio para todo el año.
IBM은 2024년 1분기에 강력한 실적을 보고했으며, 소프트웨어 수익의 가속화된 성장, 견고한 총 마진 확장, 그리고 안정적인 현금 창출을 달성했습니다. 회사는 HashiCorp, Inc.의 전략적 인수를 강조하고 하이브리드 클라우드 및 AI 전략의 성공을 강조했습니다. IBM의 기업 AI 제품인 watsonx와 생성적 AI는 2023년 중반 watsonx가 출시된 이후 수익이 10억 달러를 넘어서며 중요한 모멘텀을 보였습니다. 회사는 연말까지 중단 자릿수 수준의 모델을 준수하는 지속적인 수익 성과를 전망하고 있습니다.
IBM a rapporté des résultats solides pour le premier trimestre de 2024, avec une croissance accélérée des revenus logiciels, une expansion robuste de la marge brute et une génération de trésorerie solide. L'entreprise a souligné l'acquisition stratégique de HashiCorp, Inc. et a mis en avant le succès de sa stratégie cloud hybride et IA. Les offres d'IA d'entreprise d'IBM, y compris watsonx et l'IA générative, ont manifesté un élan significatif, dépassant le milliard de dollars de revenus depuis le lancement de watsonx à la mi-2023. La société prévoit de continuer à performer en matière de revenus, conformément à son modèle à un chiffre moyen pour l'année complète.
IBM hat starke Ergebnisse für das erste Quartal 2024 gemeldet, mit beschleunigtem Wachstum der Softwareerlöse, robuster Erweiterung der Bruttomarge und soliden Geldgenerierung. Das Unternehmen hob die strategische Akquisition von HashiCorp, Inc. hervor und betonte den Erfolg seiner Hybrid-Cloud- und KI-Strategie. IBMs Unternehmens-KI-Angebote, einschließlich watsonx und generative KI, zeigten erheblichen Schwung und überschritten seit dem Start von watsonx Mitte 2023 eine Milliarde Dollar Umsatz. Das Unternehmen prognostiziert eine anhaltende Umsatzleistung im Einklang mit seinem Modell mittlerer einstelliger Zahlen für das gesamte Jahr.
Positive
  • Accelerated software revenue growth
  • Strong gross margin expansion
  • Successful strategic acquisition of HashiCorp, Inc.
  • Positive performance of watsonx and generative AI
  • Consistent revenue growth expected for the full year
Negative
  • None.

IBM's first-quarter earnings exhibit a corporate strategy that leans heavily on their hybrid cloud and AI segments. Notably, the revenue growth, particularly in software, coupled with gross margin expansion, demonstrates the company's operational efficiency and product mix optimization. The strong cash generation underscores their ability to maintain liquidity, which is a critical factor for investors seeking stable investments. Furthermore, the acquisition of HashiCorp, a leader in infrastructure automation software, could signal IBM's commitment to bolstering its cloud offerings. This strategic move may potentially create synergies by integrating HashiCorp's tools with IBM's existing cloud services, possibly leading to enhanced product capabilities and customer value propositions.

IBM's focus on enterprise AI, with watsonx and generative AI, is a remarkable pivot into cutting-edge technology domains. The report of their book of business growing quarter over quarter and surpassing 1 billion since its launch, indicates robust market adoption and the effectiveness of their R&D investments. The growth in enterprise AI is a trend to watch, as it can be a significant differentiator in the competitive cloud market. Investors should be aware of the potential for these segments to drive long-term revenue for IBM. However, it's worth noting that the tech sector is subject to rapid change and ongoing innovation and customer satisfaction will be key to sustaining that momentum.

Aligning revenue performance with the mid-single digit model is a conservative yet realistic target for IBM, reflecting steady growth without overpromising. Such guidance can instill investor confidence and indicates a management team that is attuned to achievable outcomes. This approach may cushion the stock from volatile market reactions that can occur with overly optimistic forecasts. Nonetheless, the market's reception to these results will hinge on broader economic conditions and competitive pressures. Investors would do well to monitor these factors alongside IBM's operational progress for a balanced view of the stock's potential movement.

Accelerated Software revenue growth; Strong gross margin expansion and cash generation
Announces strategic acquisition of HashiCorp, Inc.

ARMONK, N.Y., April 24, 2024 /PRNewswire/ -- IBM (NYSE: IBM) today announced first-quarter 2024 earnings results.

"We began the year with solid revenue and free cash flow growth, reflecting the strength of our hybrid cloud and AI strategy. We continue to capitalize on the excitement and demand for enterprise AI from our clients. Our book of business for watsonx and generative AI again showed strong momentum, growing quarter over quarter, and has now eclipsed one billion dollars since we launched watsonx in mid-2023. As a result, for the full year, we continue to expect revenue performance in line with our mid-single digit model and about $12 billion in free cash flow," said Arvind Krishna, IBM chairman and chief executive officer. "To strengthen our position in today's hybrid cloud and AI-driven technology landscape, we also announced our intent to acquire HashiCorp. IBM's and HashiCorp's combined portfolios will help clients manage growing application and infrastructure complexity and create a comprehensive hybrid cloud platform designed for the AI era." 

Strategic Acquisition
IBM today announced its intent to acquire HashiCorp, Inc. for $35 per share in cash, representing an enterprise value of $6.4 billion. The acquisition will create a comprehensive end-to-end hybrid cloud platform for the AI era. The transaction is expected to close by the end of 2024, subject to approval by HashiCorp shareholders, regulatory approvals and other customary closing conditions.

First-Quarter Highlights

  • Revenue
    - Revenue of $14.5 billion, up 1 percent, up 3 percent at constant currency
    - Software revenue up 5 percent, up 6 percent at constant currency
    - Consulting revenue flat, up 2 percent at constant currency
    - Infrastructure revenue down 1 percent, flat at constant currency
  • Profit Margin
    - Gross Profit Margin: GAAP: 53.5 percent, up 80 basis points; Operating (Non-GAAP): 54.7 percent, up 100 basis points
    - Pre-Tax Income Margin: GAAP: 7.4 percent, flat; Operating (Non-GAAP): 11.5 percent, up 130 basis points
  • Cash Flow
    - Net cash from operating activities of $4.2 billion, up $0.4 billion; free cash flow of $1.9 billion, up $0.6 billion
    - Over the last twelve months, net cash from operating activities of $14.3 billion; free cash flow of $11.8 billion

FIRST QUARTER 2024 INCOME STATEMENT SUMMARY


Revenue


Gross

Profit



Gross

Profit

Margin



Pre-tax

Income


Pre-tax

Income

Margin


Net

Income (1)


Diluted

Earnings

Per Share

GAAP from
Continuing

Operations

$   14.5 B



$   7.7 B



53.5

%


$  1.1 B



7.4

%


$     1.6 B



$     1.69


Year/Year

1

%(2)


3

%


0.8

Pts


1

%


0.0

Pts


69

%


66

%

Operating

(Non-GAAP)




$   7.9 B



54.7

%


$  1.7 B



11.5

%


$     1.6 B



$     1.68


Year/Year




3

%


1.0

Pts


14

%


1.3

Pts


25

%


24

%

(1) 2024 includes a net benefit from discrete tax events.

(2) 3% at constant currency.

"In the quarter we continued to focus on the fundamentals of our business, growing revenue, expanding operating margins, improving profit performance and increasing productivity and operating leverage," said James Kavanaugh, IBM senior vice president and chief financial officer. "These fundamentals, combined with our strong cash generation, position us to invest both organically and through strategic acquisitions like today's announcement with HashiCorp. At the same time, we continue to return value to shareholders through our dividend."

Segment Results for First Quarter

  • Software — revenues of $5.9 billion, up 5.5 percent, up 5.9 percent at constant currency:
    - Hybrid Platform & Solutions up 6 percent, up 7 percent at constant currency:
       -- Red Hat up 9 percent
       -- Automation up 13 percent
       -- Data & AI up 1 percent
       -- Security down 3 percent
    - Transaction Processing up 3 percent, up 4 percent at constant currency
  • Consulting — revenues of $5.2 billion, down 0.2 percent, up 1.7 percent at constant currency:
    - Business Transformation up 1 percent, up 3 percent at constant currency
    - Technology Consulting up 1 percent, up 3 percent at constant currency
    - Application Operations down 3 percent, down 1 percent at constant currency
  • Infrastructure — revenues of $3.1 billion, down 0.7 percent, up 0.2 percent at constant currency:
    - Hybrid Infrastructure up 5 percent, up 6 percent at constant currency
       -- IBM Z up 4 percent, up 5 percent at constant currency
       -- Distributed Infrastructure up 6 percent, up 7 percent at constant currency
    - Infrastructure Support down 8 percent, down 7 percent at constant currency
  • Financing — revenues of $0.2 billion, down 1.6 percent, down 1.5 percent at constant currency

Cash Flow and Balance Sheet
In the first quarter, the company generated net cash from operating activities of $4.2 billion, up $0.4 billion year to year. Net cash from operating activities excluding IBM Financing receivables was $2.3 billion. IBM's free cash flow was $1.9 billion, up $0.6 billion year to year. Over the last twelve months, the company generated net cash from operating activities of $14.3 billion and free cash flow of $11.8 billion. The company returned $1.5 billion to shareholders in dividends in the first quarter.

IBM ended the first quarter with $19.3 billion of cash and marketable securities, up $5.8 billion from year-end 2023. Debt, including IBM Financing debt of $9.9 billion, totaled $59.5 billion, up $3.0 billion since the end of 2023.

Full-Year 2024 Expectations

  • Revenue: The company continues to expect constant currency revenue growth consistent with its mid-single digit model. At current foreign exchange rates, currency is expected to be about a one-and-a-half to two-point headwind to revenue growth
  • Free cash flow: The company continues to expect about $12 billion in free cash flow

Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on the company's current assumptions regarding future business and financial performance. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including, but not limited to, the following: a downturn in economic environment and client spending budgets; a failure of the company's innovation initiatives; damage to the company's reputation; risks from investing in growth opportunities; failure of the company's intellectual property portfolio to prevent competitive offerings and the failure of the company to obtain necessary licenses; the company's ability to successfully manage acquisitions, alliances and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels; fluctuations in financial results; impact of local legal, economic, political, health and other conditions; the company's failure to meet growth and productivity objectives; ineffective internal controls; the company's use of accounting estimates; impairment of the company's goodwill or amortizable intangible assets; the company's ability to attract and retain key employees and its reliance on critical skills; impacts of relationships with critical suppliers; product quality issues; impacts of business with government clients; reliance on third party distribution channels and ecosystems; cybersecurity and data privacy considerations; adverse effects related to climate change and environmental matters; tax matters; legal proceedings and investigatory risks; the company's pension plans; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; potential failure of the separation of Kyndryl Holdings, Inc. to qualify for tax-free treatment; risk factors related to IBM securities; and other risks, uncertainties and factors discussed in the company's Form 10-Qs, Form 10-K and in the company's other filings with the U.S. Securities and Exchange Commission or in materials incorporated therein by reference.

Statements in this communication regarding the strategic acquisition that are forward-looking may include projections as to closing date for the transaction, the extent of, and the time necessary to obtain, the regulatory approvals required for the transaction, the anticipated benefits of the transaction, the impact of the transaction on IBM's business, the synergies from the transaction, and the combined company's future operating results.

Any forward-looking statement in this release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.

Presentation of Information in this Press Release
In an effort to provide investors with additional information regarding the company's results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release the following non-GAAP information, which management believes provides useful information to investors:

IBM results —

  • adjusting for currency (i.e., at constant currency);
  • presenting operating (non-GAAP) earnings per share amounts and related income statement items;
  • free cash flow;
  • net cash from operating activities excluding IBM Financing receivables;
  • adjusted EBITDA.

The rationale for management's use of these non-GAAP measures is included in Exhibit 99.2 in the Form 8-K that includes this press release and is being submitted today to the SEC.

For watsonx and generative AI, book of business includes Software transactional revenue, SaaS Annual Contract Value and Consulting signings.

Conference Call and Webcast
IBM's regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. ET, today. The Webcast may be accessed via a link at https://www.ibm.com/investor/events/earnings-1q24. Presentation charts will be available shortly before the Webcast.

Financial Results Below (certain amounts may not add due to use of rounded numbers; percentages presented are calculated from the underlying whole-dollar amounts).

Contact:       IBM
                    Sarah Meron, 347-891-1770
                    sarah.meron@ibm.com

                    Tim Davidson, 914-844-7847
                    tfdavids@us.ibm.com 

INTERNATIONAL BUSINESS MACHINES CORPORATION

COMPARATIVE FINANCIAL RESULTS

(Unaudited; Dollars in millions except per share amounts)



Three Months Ended
March 31,



2024



2023 (1)


REVENUE BY SEGMENT






Software

$                   5,899



$                   5,591


Consulting

5,186



5,197


Infrastructure

3,076



3,098


Financing

193



196


Other

108



169


TOTAL REVENUE

14,462



14,252








GROSS PROFIT

7,742



7,509








GROSS PROFIT MARGIN






Software

82.4

%


82.6

%

Consulting

25.3

%


25.5

%

Infrastructure

54.2

%


51.8

%

Financing

48.5

%


43.9

%







TOTAL GROSS PROFIT MARGIN

53.5

%


52.7

%







EXPENSE AND OTHER INCOME






S,G&A

4,974



4,853


R,D&E

1,796



1,655


Intellectual property and custom development income

(216)



(180)


Other (income) and expense

(317)



(245)


Interest expense

432



367


TOTAL EXPENSE AND OTHER INCOME

6,669



6,451








INCOME FROM CONTINUING OPERATIONS

BEFORE INCOME TAXES

1,074



1,058


Pre-tax margin

7.4

%


7.4

%

Provision for/(Benefit from) income taxes (2)

(502)



124


Effective tax rate (2)

(46.7)

%


11.7

%







INCOME FROM CONTINUING OPERATIONS

$                   1,575



$                        934








DISCONTINUED OPERATIONS






Income/(loss) from discontinued operations, net of taxes

30



(7)








NET INCOME

$                   1,605



$                        927








EARNINGS/(LOSS) PER SHARE OF COMMON STOCK






Assuming Dilution






Continuing Operations

$                      1.69



$                      1.02


Discontinued Operations

$                      0.03



$                     (0.01)


TOTAL

$                      1.72



$                      1.01








Basic






Continuing Operations

$                      1.72



$                      1.03


Discontinued Operations

$                      0.03



$                     (0.01)


TOTAL

$                      1.75



$                      1.02








WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M's)






Assuming Dilution

933.4



917.8


Basic

917.2



907.5


____________________

(1)  Recast to reflect segment changes.

(2)  2024 includes a net benefit from discrete tax events.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET 

(Unaudited)


(Dollars in Millions)


At

March 31,
2024


At

December 31,
2023

ASSETS:





Current Assets:





Cash and cash equivalents


$                   14,603


$                   13,068

Restricted cash


162


21

Marketable securities


4,512


373

Notes and accounts receivable - trade, net


6,041


7,214

Short-term financing receivables, net


5,521


6,793

Other accounts receivable, net


760


640

Inventories


1,212


1,161

Deferred costs


1,047


998

Prepaid expenses and other current assets


2,804


2,639

Total Current Assets


36,663


32,908






Property, plant and equipment, net


5,594


5,501

Operating right-of-use assets, net


3,204


3,220

Long-term financing receivables, net


4,927


5,766

Prepaid pension assets


7,545


7,506

Deferred costs


810


842

Deferred taxes


6,465


6,656

Goodwill


59,534


60,178

Intangibles, net


10,750


11,036

Investments and sundry assets


1,678


1,626

Total Assets


$                  137,169


$                  135,241






LIABILITIES:





Current Liabilities:





Taxes


$                      1,710


$                      2,270

Short-term debt


5,471


6,426

Accounts payable


3,588


4,132

Deferred income


14,051


13,451

Operating lease liabilities


784


820

Other liabilities


6,794


7,022

Total Current Liabilities


32,397


34,122






Long-term debt


54,033


50,121

Retirement related obligations


10,421


10,808

Deferred income


3,488


3,533

Operating lease liabilities


2,583


2,568

Other liabilities


10,914


11,475

Total Liabilities


113,836


112,628






EQUITY:





IBM Stockholders' Equity:





Common stock


60,145


59,643

Retained earnings


151,362


151,276

Treasury stock — at cost


(169,759)


(169,624)

Accumulated other comprehensive income/(loss)


(18,488)


(18,761)

Total IBM Stockholders' Equity


23,261


22,533






Noncontrolling interests


72


80

Total Equity


23,333


22,613






Total Liabilities and Equity


$                137,169


$                135,241

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW ANALYSIS

(Unaudited)




Three Months Ended
March 31,


Trailing Twelve

Months Ended

March 31,

(Dollars in Millions)


2024


2023


2024

Net Cash from Operations per GAAP


$            4,168


$            3,774


$                      14,325








Less: change in IBM Financing receivables


1,897


1,977


1,152

Capital Expenditures, net


(361)


(457)


(1,393)








Free Cash Flow


1,910


1,340


11,780








Acquisitions


(82)


(22)


(5,142)

Divestitures


703



699

Dividends


(1,522)


(1,497)


(6,065)

Non-Financing Debt


5,244


9,692


1,098

Other (includes IBM Financing net receivables and debt)


(437)


(762)


(684)








Change in Cash, Cash Equivalents, Restricted Cash and Short-term Marketable

Securities


$            5,815


$            8,752


$                         1,686

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW

(Unaudited)




Three Months Ended
March 31,


(Dollars in Millions)


2024


2023


Net Income from Operations


$                     1,605


$                          927


Depreciation/Amortization of Intangibles (1)


1,132


1,074


Stock-based Compensation


320


268


Operating assets and liabilities/Other, net (2)


(785)


(473)


IBM Financing A/R


1,897


1,977


Net Cash Provided by Operating Activities


$                     4,168


$                      3,774








Capital Expenditures, net of payments & proceeds


(361)


(457)


Divestitures, net of cash transferred


703


-


Acquisitions, net of cash acquired


(82)


(22)


Marketable Securities / Other Investments, net


(4,469)


(7,481)


Net Cash Provided by/(Used in) Investing Activities


$                   (4,210)


$                    (7,960)








Debt, net of payments & proceeds


3,382


7,304


Dividends


(1,522)


(1,497)


Financing - Other


17


(99)


Net Cash Provided by/(Used in) Financing Activities


$                     1,877


$                     5,708








Effect of Exchange Rate changes on Cash


(159)


24


Net Change in Cash, Cash Equivalents and Restricted Cash


$                     1,676


$                     1,547


____________________

(1)  Includes operating lease right-of-use assets amortization. 

(2)  Includes the reduction of tax reserves. 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)




Three Months Ended

March 31,


(Dollars in Billions)


2024


2023


Yr/Yr


Net Income as reported (GAAP)


$           1.6


$           0.9


$           0.7


Less: Income/(loss) from discontinued operations, net of tax


0.0


0.0


0.0


Income from continuing operations


1.6


0.9


0.6


Provision for/(Benefit from) income taxes from continuing ops.


(0.5)


0.1


(0.6)


Pre-tax income from continuing operations (GAAP)


1.1


1.1


0.0


Non-operating adjustments (before tax)








Acquisition-related charges (1)


0.5


0.4


0.1


Non-operating retirement-related costs/(income)


0.1


0.0


0.1










Operating (non-GAAP) pre-tax income from continuing ops.


1.7


1.4


0.2










Net interest expense


0.2


0.2


0.0


Depreciation/Amortization of non-acquired intangible assets


0.7


0.7


0.0


Stock-based compensation


0.3


0.3


0.1


Workforce rebalancing charges


0.4


0.3


0.1


Corporate (gains) and charges (2)


(0.2)


0.0


(0.2)










Adjusted EBITDA


$           3.0


$           2.8


$           0.2


____________________

(1)   Primarily consists of amortization of acquired intangible assets. 

(2)   Corporate (gains) and charges primarily consists of unique corporate actions such as gains on divestitures. 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

SEGMENT DATA

(Unaudited)




Three Months Ended March 31, 2024















(Dollars in Millions)


Software



Consulting



Infrastructure



Financing


Revenue


$                       5,899



$                        5,186



$                        3,076



$                            193


Segment Profit


$                       1,500



$                           424



$                           311



$                              92


Segment Profit Margin


25.4

%


8.2

%


10.1

%


47.7

%

Change YTY Revenue


5.5

%


(0.2)

%


(0.7)

%


(1.6)

%

Change YTY Revenue - Constant Currency


5.9

%


1.7

%


0.2

%


(1.5)

%




Three Months Ended March 31, 2023 (1)















(Dollars in Millions)


 Software



Consulting



Infrastructure



Financing


Revenue


$                       5,591



$                        5,197



$                        3,098



$                           196


Segment Profit


$                       1,379



$                           427



$                           307



$                           100


Segment Profit Margin


24.7

%


8.2

%


9.9

%


51.2

%

____________________

(1) Recast to reflect segment changes. 

     

INTERNATIONAL BUSINESS MACHINES CORPORATION

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; Dollars in millions except per share amounts)



Three Months Ended March 31, 2024



Continuing Operations



GAAP



Acquisition-

Related

Adjustments (1)



Retirement-

Related

Adjustments (2)



Tax

Reform

Impacts (3)



Operating

(Non-

GAAP)


Gross Profit

$       7,742



$                         170



$                               —



$                       —



$           7,913


Gross Profit Margin

53.5

%


1.2

pts.


pts.


pts.


54.7

%

S,G&A

$       4,974



$                        (268)



$                               —



$                       —



$           4,706


Other (Income) & Expense

(317)



(50)



(96)





(463)


Total Expense & Other (Income)

6,669



(318)



(96)





6,255


Pre-tax Income from Continuing Operations

1,074



488



96





1,658


Pre-tax Income Margin from Continuing

Operations

7.4

%


3.4

pts.


0.7

pts.


pts.


11.5

%

Provision for/(Benefit from) Income Taxes (4)

$         (502)



$                         142



$                                5



$                    448



$                 94


Effective Tax Rate

(46.7)

%


22.3

pts.


3.0

pts.


27.0

pts.


5.6

%

Income from Continuing Operations

$       1,575



$                         346



$                              91



$                  (448)



$            1,564


Income Margin from Continuing Operations

10.9

%


2.4

pts.


0.6

pts.


(3.1)

pts.


10.8

%

Diluted Earnings Per Share: Continuing

Operations

$         1.69



$                        0.37



$                           0.10



$                 (0.48)



$              1.68




Three Months Ended March 31, 2023



Continuing Operations



GAAP



Acquisition-

Related

Adjustments (1)



Retirement-

Related

Adjustments (2)



Tax

Reform

Impacts



Operating

(Non-

GAAP)


Gross Profit

$        7,509



$                          148



$                               —



$                —



$          7,658


Gross Profit Margin

52.7

%


1.0

pts.


pts.


pts.


53.7

%

S,G&A

$        4,853



$                         (246)



$                               —



$                —



$          4,607


Other (Income) & Expense

(245)



(2)



5





(242)


Total Expense & Other (Income)

6,451



(247)



5





6,209


Pre-tax Income from Continuing Operations

1,058



396



(5)





1,449


Pre-tax Income Margin from Continuing

Operations

7.4

%


2.8

pts.


0.0

pts.


pts.


10.2

%

Provision for/(Benefit from) Income Taxes (4)

$           124



$                            91



$                             (10)



$                (5)



$              200


Effective Tax Rate

11.7

%


3.1

pts.


(0.7)

pts.


(0.3)

pts.


13.8

%

Income from Continuing Operations

$           934



$                          305



$                                5



$                 5



$           1,249


Income Margin from Continuing Operations

6.6

%


2.1

pts.


pts.


pts.


8.8

%

Diluted Earnings Per Share: Continuing
Operations

$          1.02



$                         0.33



$                           0.01



$            0.01



$             1.36


____________________

(1)    Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax

        charges related to acquisition integration and pre-closing charges, such as financing costs. 2024 also includes a loss of $50 million on foreign

        exchange call option contracts related to the company's planned acquisition of StreamSets and webMethods from Software AG.

(2)    Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan

        curtailments/settlements and pension insolvency costs and other costs.

(3)    2024 includes a net benefit from discrete tax events.

(4)    Tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the

         As Reported pre-tax income under ASC 740, which employs an annual effective tax rate method to the results.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP OPERATING CASH FLOW TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)




Three Months

Ended
March 31,


(Dollars in Billions)


2024


2023


Net Cash Provided by Operating Activities


$           4.2


$           3.8








Add:






Net interest expense


0.2


0.2


Provision for/(Benefit from) income taxes from continuing operations


(0.5)


0.1








Less change in:






Financing receivables


1.9


2.0


Other assets and liabilities/Other, net (1)


(1.0)


(0.7)








Adjusted EBITDA


$           3.0


$           2.8


____________________

(1)    Other assets and liabilities/Other, net mainly consists of Operating assets and liabilities/Other, net in the Cash flow chart, workforce

         rebalancing charges, non-operating impacts and corporate (gains) and charges. 

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/ibm-releases-first-quarter-results-302126651.html

SOURCE IBM

FAQ

What were IBM's first-quarter 2024 earnings results like?

IBM reported strong first-quarter 2024 earnings results with accelerated software revenue growth, robust gross margin expansion, and solid cash generation.

What strategic acquisition did IBM announce?

IBM announced the strategic acquisition of HashiCorp, Inc.

How much revenue has watsonx and generative AI generated since mid-2023?

Watsonx and generative AI have generated over one billion dollars in revenue since the launch of watsonx in mid-2023.

What revenue performance does IBM expect for the full year?

IBM expects revenue performance in line with its mid-single digit model for the full year.

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