IBM RELEASES SECOND-QUARTER RESULTS
IBM reported strong second-quarter 2024 results, with revenue reaching $15.8 billion, up 2% (4% at constant currency). The company's performance was driven by Software revenue growth of 7% and improved free cash flow. IBM's book of business for generative AI has grown to over $2 billion since the launch of watsonx a year ago.
Key financial highlights include:
- Gross Profit Margin (GAAP): 56.8%, up 180 basis points
- Pre-Tax Income Margin (GAAP): 14.1%, up 110 basis points
- Diluted Earnings Per Share (GAAP): $1.96, up 14%
IBM has raised its full-year free cash flow expectation to more than $12 billion. The company continues to expect constant currency revenue growth consistent with its mid-single digit model for 2024.
IBM ha riportato risultati forti per il secondo trimestre del 2024, con un fatturato che ha raggiunto 15,8 miliardi di dollari, con un incremento del 2% (4% a valuta costante). La performance della società è stata trainata da una crescita del fatturato software del 7% e un miglioramento del flusso di cassa libero. Il portafoglio di business di IBM per l'AI generativa è cresciuto a oltre 2 miliardi di dollari dal lancio di watsonx un anno fa.
I principali indicatori finanziari includono:
- Margine di profitto lordo (GAAP): 56,8%, in aumento di 180 punti base
- Margine di utile ante imposte (GAAP): 14,1%, in aumento di 110 punti base
- Utili per azione diluiti (GAAP): 1,96 dollari, in aumento del 14%
IBM ha alzato le sue previsioni di flusso di cassa libero per l'intero anno a oltre 12 miliardi di dollari. L'azienda si aspetta ancora una crescita del fatturato a valuta costante in linea con il suo modello di crescita a singolo ciclo medio per il 2024.
IBM informó sobre resultados sólidos para el segundo trimestre de 2024, con ingresos que alcanzaron 15.8 mil millones de dólares, un incremento del 2% (4% a tipo de cambio constante). El rendimiento de la empresa se vio impulsado por un crecimiento del ingreso por software del 7% y una mejora en el flujo de caja libre. El negocio de AI generativa de IBM ha crecido a más de 2 mil millones de dólares desde el lanzamiento de watsonx hace un año.
Los principales aspectos financieros incluyen:
- Margen de beneficio bruto (GAAP): 56.8%, un aumento de 180 puntos básicos
- Margen de ingreso antes de impuestos (GAAP): 14.1%, un aumento de 110 puntos básicos
- Beneficios por acción diluidos (GAAP): 1.96 dólares, un aumento del 14%
IBM ha elevado su expectativa de flujo de caja libre para todo el año a más de 12 mil millones de dólares. La empresa sigue esperando un crecimiento de ingresos a tipo de cambio constante que sea consistente con su modelo de crecimiento de dígitos medios para 2024.
IBM은 2024년 2분기 강력한 실적을 보고하며, 수익이 158억 달러에 달했으며, 이는 2% 증가한 수치입니다 (상수 통화 기준으로는 4% 증가). 회사의 성장은 소프트웨어 수익이 7% 증가하고 자유 현금 흐름이 개선되면서 이루어졌습니다. IBM의 생성 AI 사업 규모는 지난 1년 동안 watsonx 출시 이후 20억 달러 이상으로 성장했습니다.
주요 재무 하이라이트는 다음과 같습니다:
- 총 이익률 (GAAP): 56.8%, 180bp 증가
- 세전 수익률 (GAAP): 14.1%, 110bp 증가
- 희석 주당 순이익 (GAAP): 1.96달러, 14% 증가
IBM은 연간 자유 현금 흐름 예상치를 120억 달러 이상으로 높였습니다. 회사는 2024년 중간 싱글 디지털 모델에 일치하는 상수 통화 기준 수익 성장을 계속 예상하고 있습니다.
IBM a annoncé de bons résultats pour le deuxième trimestre 2024, avec des revenus atteignant 15,8 milliards de dollars, en hausse de 2% (4% à taux de change constant). La performance de l'entreprise a été soutenue par une croissance des revenus logiciels de 7% et une amélioration du flux de trésorerie libre. Le portefeuille d'affaires d'IBM pour l'IA générative a augmenté à plus de 2 milliards de dollars depuis le lancement de watsonx il y a un an.
Les principaux faits saillants financiers comprennent :
- Marche brute (GAAP) : 56,8 %, en hausse de 180 points de base
- Marche de l'excédent avant impôt (GAAP) : 14,1 %, en hausse de 110 points de base
- Bénéfice par action dilué (GAAP) : 1,96 dollars, en hausse de 14 %
IBM a relevé ses prévisions de flux de trésorerie libre pour l'année entière à plus de 12 milliards de dollars. L'entreprise s'attend toujours à une croissance des revenus à taux de change constant conforme à son modèle de croissance à un chiffre pour 2024.
IBM meldete starke Ergebnisse für das zweite Quartal 2024, mit einem Umsatz von 15,8 Milliarden US-Dollar, was einem Anstieg von 2% (4% bei konstanten Währungen) entspricht. Die Leistung des Unternehmens wurde durch eine Umsatzsteigerung im Softwarebereich von 7% und einen verbesserten freien Cashflow angetrieben. IBMs Geschäft im Bereich generative KI ist seit dem Start von watsonx vor einem Jahr auf über 2 Milliarden US-Dollar gewachsen.
Wichtige finanzielle Highlights sind:
- Bruttomarge (GAAP): 56,8%, Anstieg um 180 Basispunkte
- Ertrag vor Steuern (GAAP): 14,1%, Anstieg um 110 Basispunkte
- Verdünnte Ergebnisse pro Aktie (GAAP): 1,96 US-Dollar, Anstieg um 14%
IBM hat die Prognose für den freien Cashflow für das Gesamtjahr auf über 12 Milliarden US-Dollar angehoben. Das Unternehmen erwartet weiterhin ein Umsatzwachstum bei konstanten Währungen, das mit seinem Modell für das Jahr 2024 im mittleren einstelligen Bereich übereinstimmt.
- Revenue increased by 2% (4% at constant currency) to $15.8 billion
- Software revenue grew by 7% (8% at constant currency)
- Gross Profit Margin (GAAP) improved by 180 basis points to 56.8%
- Pre-Tax Income Margin (GAAP) increased by 110 basis points to 14.1%
- Diluted Earnings Per Share (GAAP) rose by 14% to $1.96
- Free cash flow for the first six months increased by $1.1 billion year-over-year
- Raised full-year free cash flow expectation to more than $12 billion
- Generative AI book of business grew to over $2 billion since watsonx launch
- Consulting revenue decreased by 1% (up 2% at constant currency)
- Data & AI revenue within Software segment declined by 3% (2% at constant currency)
- Infrastructure Support revenue decreased by 5% (3% at constant currency)
- Financing revenue fell by 8.3% (6.6% at constant currency)
- Net cash from operating activities for Q2 decreased by $0.6 billion year-over-year
Insights
IBM's Q2 2024 results demonstrate a robust performance, with several key metrics surpassing expectations. The 2% revenue growth (4% at constant currency) to
The company's profitability metrics are particularly impressive. The GAAP gross profit margin expanded by 180 basis points to
IBM's free cash flow generation is noteworthy, with
The company's focus on AI, particularly generative AI, appears to be paying dividends, with CEO Arvind Krishna noting a
However, investors should note the slight decline in Consulting revenues (
Overall, IBM's Q2 results paint a picture of a company successfully executing its strategy, with strong financial discipline and a clear focus on high-growth areas like AI and cloud computing. The raised free cash flow guidance is particularly encouraging for potential dividend growth and continued investment in innovation.
IBM's Q2 2024 results reveal significant progress in its strategic transformation towards AI and hybrid cloud solutions. The
The
The
The
While the overall results are positive, the slight decline in Consulting revenues and the modest growth in Infrastructure highlight the challenges IBM faces in these segments. The company may need to further align its consulting services with emerging technologies and continue to innovate in its infrastructure offerings to drive stronger growth across all segments.
IBM's Q2 2024 results offer valuable insights into broader market trends and enterprise technology adoption patterns. The strong performance in Software, particularly in Automation and Red Hat, indicates a growing enterprise appetite for solutions that enhance operational efficiency and enable hybrid cloud strategies. This aligns with the broader market trend of digital transformation and cloud adoption.
The
The
However, the slight decline in Consulting revenues (
The growth in Transaction Processing (
Overall, IBM's results paint a picture of a market where businesses are prioritizing software solutions, particularly those that enable automation, hybrid cloud and AI capabilities, while being more selective about consulting engagements and infrastructure investments. This trend is likely to continue as enterprises seek to balance innovation with operational efficiency in an uncertain economic environment.
Accelerated revenue growth led by Software; Raises full-year free cash flow expectation
"We had a strong second quarter, exceeding our expectations, driven by growth in both revenue and free cash flow. We continue to see that clients turn to IBM for our technology and our expertise in enterprise AI, and our book of business for generative AI has grown to more than
Second-Quarter Highlights
- Revenue
- Revenue of$15.8 billion
- Software revenue up 7 percent, up 8 percent at constant currency
- Consulting revenue down 1 percent, up 2 percent at constant currency
- Infrastructure revenue up 1 percent, up 3 percent at constant currency - Profit Margin
- Gross Profit Margin: GAAP: 56.8 percent, up 180 basis points; Operating (Non-GAAP): 57.8 percent, up 190 basis points
- Pre-Tax Income Margin: GAAP: 14.1 percent, up 110 basis points; Operating (Non-GAAP): 17.7 percent, up 220 basis points - Cash Flow
- Year to date, net cash from operating activities of$6.2 billion $0.2 billion $4.5 billion $1.1 billion
- Over the last twelve months, net cash from operating activities of$13.8 billion $12.3 billion
SECOND QUARTER 2024 INCOME STATEMENT SUMMARY | ||||||||||||||||||||
Revenue | Gross Profit | Gross | Pre-tax Income | Pre-tax Income Margin | Net Income | Diluted Earnings Per Share | ||||||||||||||
GAAP from | $ 15.8 B | $ 8.9 B | 56.8 | % | $ 2.2 B | 14.1 | % | $ 1.8 B | $ 1.96 | |||||||||||
Year/Year | 2 | %(1) | 5 | % | 1.8 | Pts | 11 | % | 1.1 | Pts | 16 | % | 14 | % | ||||||
Operating (Non-GAAP) | $ 9.1 B | 57.8 | % | $ 2.8 B | 17.7 | % | $ 2.3 B | $ 2.43 | ||||||||||||
Year/Year | 5 | % | 1.9 | Pts | 17 | % | 2.2 | Pts | 14 | % | 11 | % | ||||||||
(1) | ||||||||||||||||||||
"In the quarter, we accelerated our revenue growth as we continue to execute well on our strategy. Our business fundamentals, operating leverage, product mix and productivity initiatives all contributed to significant margin expansion and increased profit and free cash flow," said James Kavanaugh, IBM senior vice president and chief financial officer. "Our strong cash generation enables us to continue investing in innovation and expertise across the portfolio, while returning value to shareholders through dividends."
Segment Results for Second Quarter
- Software — revenues of
$6.7 billion
- Hybrid Platform & Solutions up 5 percent, up 6 percent at constant currency:
-- Red Hat up 7 percent, up 8 percent at constant currency
-- Automation up 15 percent, up 16 percent at constant currency
-- Data & AI down 3 percent, down 2 percent at constant currency
-- Security up 2 percent, up 3 percent at constant currency
- Transaction Processing up 11 percent, up 13 percent at constant currency - Consulting — revenues of
$5.2 billion
- Business Transformation up 3 percent, up 6 percent at constant currency
- Technology Consulting down 3 percent, up 1 percent at constant currency
- Application Operations down 4 percent, down 2 percent at constant currency - Infrastructure — revenues of
$3.6 billion
- Hybrid Infrastructure up 4 percent, up 6 percent at constant currency
-- IBM Z up 6 percent, up 8 percent at constant currency
-- Distributed Infrastructure up 3 percent, up 5 percent at constant currency
- Infrastructure Support down 5 percent, down 3 percent at constant currency - Financing — revenues of
$0.2 billion
Cash Flow and Balance Sheet
In the second quarter, the company generated net cash from operating activities of
For the first six months of the year, the company generated net cash from operating activities of
IBM ended the second quarter with
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 to two-point headwind to revenue growth
- Free cash flow: The company now expects more than
$12 billion
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
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 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-2q24. 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 | Six Months Ended | ||||||||||
2024 | 2023 (1) | 2024 | 2023 (1) | ||||||||
REVENUE BY SEGMENT | |||||||||||
Software | $ 6,739 | $ 6,294 | $ 12,637 | $ 11,885 | |||||||
Consulting | 5,179 | 5,226 | 10,365 | 10,423 | |||||||
Infrastructure | 3,645 | 3,618 | 6,721 | 6,716 | |||||||
Financing | 169 | 185 | 362 | 380 | |||||||
Other | 38 | 152 | 146 | 321 | |||||||
TOTAL REVENUE | 15,770 | 15,475 | 30,231 | 29,727 | |||||||
GROSS PROFIT | 8,950 | 8,501 | 16,692 | 16,010 | |||||||
GROSS PROFIT MARGIN | |||||||||||
Software | 83.6 | % | 82.1 | % | 83.0 | % | 82.3 | % | |||
Consulting | 26.3 | % | 25.9 | % | 25.8 | % | 25.7 | % | |||
Infrastructure | 56.5 | % | 56.0 | % | 55.4 | % | 54.1 | % | |||
Financing | 48.9 | % | 49.2 | % | 48.7 | % | 46.5 | % | |||
TOTAL GROSS PROFIT MARGIN | 56.8 | % | 54.9 | % | 55.2 | % | 53.9 | % | |||
EXPENSE AND OTHER INCOME | |||||||||||
S,G&A | 4,938 | 4,900 | 9,912 | 9,754 | |||||||
R,D&E | 1,840 | 1,687 | 3,637 | 3,342 | |||||||
Intellectual property and custom development income | (241) | (248) | (458) | (428) | |||||||
Other (income) and expense | (233) | (261) | (550) | (506) | |||||||
Interest expense | 427 | 423 | 859 | 790 | |||||||
TOTAL EXPENSE AND OTHER INCOME | 6,730 | 6,501 | 13,399 | 12,952 | |||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 2,219 | 2,000 | 3,293 | 3,058 | |||||||
Pre-tax margin | 14.1 | % | 12.9 | % | 10.9 | % | 10.3 | % | |||
Provision for/(Benefit from) income taxes | 389 | 419 | (112) | 543 | |||||||
Effective tax rate | 17.5 | % | 21.0 | % | (3.4) | % | 17.8 | % | |||
INCOME FROM CONTINUING OPERATIONS | $ 1,830 | $ 1,581 | $ 3,405 | $ 2,515 | |||||||
DISCONTINUED OPERATIONS | |||||||||||
Income/(loss) from discontinued operations, net of taxes | 4 | 2 | 34 | (4) | |||||||
NET INCOME | $ 1,834 | $ 1,583 | $ 3,439 | $ 2,511 | |||||||
EARNINGS/(LOSS) PER SHARE OF COMMON STOCK | |||||||||||
Assuming Dilution | |||||||||||
Continuing Operations | $ 1.96 | $ 1.72 | $ 3.65 | $ 2.74 | |||||||
Discontinued Operations | $ 0.00 | $ 0.00 | $ 0.04 | $ 0.00 | |||||||
TOTAL | $ 1.96 | $ 1.72 | $ 3.68 | $ 2.73 | |||||||
Basic | |||||||||||
Continuing Operations | $ 1.99 | $ 1.74 | $ 3.71 | $ 2.77 | |||||||
Discontinued Operations | $ 0.00 | $ 0.00 | $ 0.04 | $ 0.00 | |||||||
TOTAL | $ 1.99 | $ 1.74 | $ 3.74 | $ 2.76 | |||||||
WEIGHTED-AVERAGE NUMBER OF COMMON | |||||||||||
Assuming Dilution | 934.4 | 919.5 | 933.9 | 918.6 | |||||||
Basic | 920.3 | 909.9 | 918.7 | 908.7 | |||||||
____________________ | |||||||||||
(1) Recast to reflect January 2024 segment changes. | |||||||||||
INTERNATIONAL BUSINESS MACHINES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) | ||||
(Dollars in Millions) | At | At | ||
ASSETS: | ||||
Current Assets: | ||||
Cash and cash equivalents | $ 12,210 | $ 13,068 | ||
Restricted cash | 2,268 | 21 | ||
Marketable securities | 1,481 | 373 | ||
Notes and accounts receivable - trade, net | 5,769 | 7,214 | ||
Short-term financing receivables, net | 5,799 | 6,793 | ||
Other accounts receivable, net | 757 | 640 | ||
Inventories | 1,234 | 1,161 | ||
Deferred costs | 997 | 998 | ||
Prepaid expenses and other current assets | 2,784 | 2,639 | ||
Total Current Assets | 33,299 | 32,908 | ||
Property, plant and equipment, net | 5,600 | 5,501 | ||
Operating right-of-use assets, net | 3,130 | 3,220 | ||
Long-term financing receivables, net | 5,483 | 5,766 | ||
Prepaid pension assets | 7,630 | 7,506 | ||
Deferred costs | 820 | 842 | ||
Deferred taxes | 6,378 | 6,656 | ||
Goodwill | 59,416 | 60,178 | ||
Intangibles, net | 10,251 | 11,036 | ||
Investments and sundry assets | 1,840 | 1,626 | ||
Total Assets | $ 133,848 | $ 135,241 | ||
LIABILITIES: | ||||
Current Liabilities: | ||||
Taxes | $ 1,691 | $ 2,270 | ||
Short-term debt | 3,602 | 6,426 | ||
Accounts payable | 3,631 | 4,132 | ||
Deferred income | 13,643 | 13,451 | ||
Operating lease liabilities | 762 | 820 | ||
Other liabilities | 6,319 | 7,022 | ||
Total Current Liabilities | 29,648 | 34,122 | ||
Long-term debt | 52,929 | 50,121 | ||
Retirement related obligations | 10,200 | 10,808 | ||
Deferred income | 3,489 | 3,533 | ||
Operating lease liabilities | 2,546 | 2,568 | ||
Other liabilities | 10,932 | 11,475 | ||
Total Liabilities | 109,745 | 112,628 | ||
EQUITY: | ||||
IBM Stockholders' Equity: | ||||
Common stock | 60,501 | 59,643 | ||
Retained earnings | 151,659 | 151,276 | ||
Treasury stock — at cost | (169,815) | (169,624) | ||
Accumulated other comprehensive income/(loss) | (18,319) | (18,761) | ||
Total IBM Stockholders' Equity | 24,026 | 22,533 | ||
Noncontrolling interests | 77 | 80 | ||
Total Equity | 24,103 | 22,613 | ||
Total Liabilities and Equity | $ 133,848 | $ 135,241 | ||
INTERNATIONAL BUSINESS MACHINES CORPORATION CASH FLOW ANALYSIS (Unaudited) | ||||||||||
Three Months Ended | Six Months Ended | Trailing Twelve | ||||||||
(Dollars in Millions) | 2024 | 2023 | 2024 | 2023 | 2024 | |||||
Net Cash from Operations per GAAP | $ 2,066 | $ 2,638 | $ 6,234 | $ 6,412 | $ 13,752 | |||||
Less: change in IBM Financing receivables | (946) | 50 | 951 | 2,028 | 156 | |||||
Capital Expenditures, net | (399) | (487) | (761) | (944) | (1,305) | |||||
Free Cash Flow | 2,612 | 2,101 | 4,522 | 3,441 | 12,292 | |||||
Acquisitions | (153) | (334) | (235) | (356) | (4,961) | |||||
Divestitures | — | 6 | 703 | 6 | 693 | |||||
Dividends | (1,537) | (1,510) | (3,058) | (3,007) | (6,092) | |||||
Non-Financing Debt | (4,168) | (1,178) | 1,076 | 8,514 | (1,892) | |||||
Other (includes IBM Financing net receivables and debt) | (73) | (347) | (510) | (1,109) | (410) | |||||
Change in Cash, Cash Equivalents, Restricted Cash | $ (3,318) | $ (1,263) | $ 2,497 | $ 7,489 | $ (370) | |||||
INTERNATIONAL BUSINESS MACHINES CORPORATION CASH FLOW (Unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
(Dollars in Millions) | 2024 | 2023 | 2024 | 2023 | ||||
Net Income from Operations | $ 1,834 | $ 1,583 | $ 3,439 | $ 2,511 | ||||
Depreciation/Amortization of Intangibles (1) | 1,155 | 1,076 | 2,287 | 2,150 | ||||
Stock-based Compensation | 316 | 288 | 636 | 556 | ||||
Operating assets and liabilities/Other, net (2) | (293) | (359) | (1,079) | (832) | ||||
IBM Financing A/R | (946) | 50 | 951 | 2,028 | ||||
Net Cash Provided by Operating Activities | $ 2,066 | $ 2,638 | $ 6,234 | $ 6,412 | ||||
Capital Expenditures, net of payments & proceeds | (399) | (487) | (761) | (944) | ||||
Divestitures, net of cash transferred | - | 6 | 703 | 6 | ||||
Acquisitions, net of cash acquired | (153) | (334) | (235) | (356) | ||||
Marketable Securities / Other Investments, net | 2,791 | 822 | (1,679) | (6,659) | ||||
Net Cash Provided by/(Used in) Investing Activities | $ 2,239 | $ 7 | $ (1,971) | $ (7,953) | ||||
Debt, net of payments & proceeds | (2,900) | (1,135) | 481 | 6,169 | ||||
Dividends | (1,537) | (1,510) | (3,058) | (3,007) | ||||
Financing - Other | (78) | (86) | (61) | (185) | ||||
Net Cash Provided by/(Used in) Financing Activities | $ (4,515) | $ (2,731) | $ (2,638) | $ 2,978 | ||||
Effect of Exchange Rate changes on Cash | (76) | (25) | (236) | (1) | ||||
Net Change in Cash, Cash Equivalents and Restricted Cash | $ (287) | $ (110) | $ 1,389 | $ 1,436 | ||||
____________________ | ||||||||
(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 June 30, | Six Months Ended | |||||||||||
(Dollars in Billions) | 2024 | 2023 | Yr/Yr | 2024 | 2023 | Yr/Yr | ||||||
Net Income as reported (GAAP) | $ 1.8 | $ 1.6 | $ 0.3 | $ 3.4 | $ 2.5 | $ 0.9 | ||||||
Less: Income/(loss) from discontinued operations, net of tax | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
Income from continuing operations | 1.8 | 1.6 | 0.2 | 3.4 | 2.5 | 0.9 | ||||||
Provision for/(Benefit from) income taxes from continuing ops. | 0.4 | 0.4 | 0.0 | (0.1) | 0.5 | (0.7) | ||||||
Pre-tax income from continuing operations (GAAP) | 2.2 | 2.0 | 0.2 | 3.3 | 3.1 | 0.2 | ||||||
Non-operating adjustments (before tax) | ||||||||||||
Acquisition-related charges (1) | 0.5 | 0.4 | 0.1 | 1.0 | 0.8 | 0.2 | ||||||
Non-operating retirement-related costs/(income) | 0.1 | 0.0 | 0.1 | 0.2 | 0.0 | 0.2 | ||||||
Operating (non-GAAP) pre-tax income from continuing ops. | 2.8 | 2.4 | 0.4 | 4.4 | 3.8 | 0.6 | ||||||
Net interest expense | 0.2 | 0.2 | 0.0 | 0.4 | 0.4 | 0.0 | ||||||
Depreciation/Amortization of non-acquired intangible assets | 0.7 | 0.7 | 0.0 | 1.4 | 1.4 | 0.0 | ||||||
Stock-based compensation | 0.3 | 0.3 | 0.0 | 0.6 | 0.6 | 0.1 | ||||||
Workforce rebalancing charges | 0.0 | 0.1 | (0.1) | 0.4 | 0.4 | 0.0 | ||||||
Corporate (gains) and charges (2) | 0.0 | 0.0 | 0.0 | (0.2) | 0.0 | (0.2) | ||||||
Adjusted EBITDA | $ 4.0 | $ 3.7 | $ 0.4 | $ 7.1 | $ 6.5 | $ 0.5 | ||||||
____________________ | ||||||||||||
(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 June 30, 2024 | ||||||||||||
(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||||||
Revenue | $ 6,739 | $ 5,179 | $ 3,645 | $ 169 | ||||||||
Segment Profit | $ 2,113 | $ 463 | $ 654 | $ 77 | ||||||||
Segment Profit Margin | 31.3 | % | 8.9 | % | 17.9 | % | 45.3 | % | ||||
Change YTY Revenue | 7.1 | % | (0.9) | % | 0.7 | % | (8.3) | % | ||||
Change YTY Revenue - Constant Currency | 8.4 | % | 1.8 | % | 2.7 | % | (6.6) | % | ||||
Three Months Ended June 30, 2023 (1) | ||||||||||||
(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||||||
Revenue | $ 6,294 | $ 5,226 | $ 3,618 | $ 185 | ||||||||
Segment Profit | $ 1,749 | $ 483 | $ 732 | $ 64 | ||||||||
Segment Profit Margin | 27.8 | % | 9.2 | % | 20.2 | % | 34.8 | % | ||||
____________________ | ||||||||||||
(1) Recast to reflect January 2024 segment changes. | ||||||||||||
Six Months Ended June 30, 2024 | ||||||||||||
(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||||||
Revenue | $ 12,637 | $ 10,365 | $ 6,721 | $ 362 | ||||||||
Segment Profit | $ 3,612 | $ 888 | $ 965 | $ 168 | ||||||||
Segment Profit Margin | 28.6 | % | 8.6 | % | 14.4 | % | 46.5 | % | ||||
Change YTY Revenue | 6.3 | % | (0.6) | % | 0.1 | % | (4.9) | % | ||||
Change YTY Revenue - Constant Currency | 7.2 | % | 1.8 | % | 1.5 | % | (4.0) | % | ||||
Six Months Ended June 30, 2023 (1) | ||||||||||||
(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||||||
Revenue | $ 11,885 | $ 10,423 | $ 6,716 | $ 380 | ||||||||
Segment Profit | $ 3,128 | $ 910 | $ 1,039 | $ 164 | ||||||||
Segment Profit Margin | 26.3 | % | 8.7 | % | 15.5 | % | 43.2 | % | ||||
__________ | ||||||||||||
(1) Recast to reflect January 2004 segment changes. | ||||||||||||
INTERNATIONAL BUSINESS MACHINES CORPORATION (Unaudited; Dollars in millions except per share amounts) | ||||||||||||||
Three Months Ended June 30, 2024 | ||||||||||||||
Continuing Operations | ||||||||||||||
GAAP | Acquisition- Related Adjustments (1) | Retirement- Related Adjustments (2) | Tax Reform Impacts | Operating (Non-GAAP) | ||||||||||
Gross Profit | $ 8,950 | $ 170 | $ — | $ — | $ 9,120 | |||||||||
Gross Profit Margin | 56.8 | % | 1.1 | pts | — | pts | — | pts | 57.8 | % | ||||
S,G&A | $ 4,938 | $ (286) | $ — | $ — | $ 4,651 | |||||||||
Other (Income) & Expense | (233) | (18) | (98) | — | (349) | |||||||||
Total Expense & Other (Income) | 6,730 | (304) | (98) | — | 6,328 | |||||||||
Pre-tax Income from Continuing Operations | 2,219 | 474 | 98 | — | 2,792 | |||||||||
Pre-tax Income Margin from Continuing | 14.1 | % | 3.0 | pts | 0.6 | pts | — | pts | 17.7 | % | ||||
Provision for/(Benefit from) Income Taxes (3) | $ 389 | $ 113 | $ 26 | $ (12) | $ 516 | |||||||||
Effective Tax Rate | 17.5 | % | 1.1 | pts | 0.3 | pts | (0.4) | pts | 18.5 | % | ||||
Income from Continuing Operations | $ 1,830 | $ 362 | $ 72 | $ 12 | $ 2,275 | |||||||||
Income Margin from Continuing Operations | 11.6 | % | 2.3 | pts | 0.5 | pts | 0.1 | pts | 14.4 | % | ||||
Diluted Earnings Per Share: Continuing | $ 1.96 | $ 0.39 | $ 0.08 | $ 0.01 | $ 2.43 | |||||||||
Three Months Ended June 30, 2023 | ||||||||||||||
Continuing Operations | ||||||||||||||
GAAP | Acquisition- Related Adjustments (1) | Retirement- Related Adjustments (2) | Tax Reform Impacts | Operating (Non-GAAP) | ||||||||||
Gross Profit | $ 8,501 | $ 150 | $ — | $ — | $ 8,650 | |||||||||
Gross Profit Margin | 54.9 | % | 1.0 | pts | — | pts | — | pts | 55.9 | % | ||||
S,G&A | $ 4,900 | $ (245) | $ — | $ — | $ 4,655 | |||||||||
Other (Income) & Expense | (261) | 0 | (1) | — | (262) | |||||||||
Total Expense & Other (Income) | 6,501 | (246) | (1) | — | 6,254 | |||||||||
Pre-tax Income from Continuing Operations | 2,000 | 395 | 1 | — | 2,396 | |||||||||
Pre-tax Income Margin from Continuing | 12.9 | % | 2.6 | pts | 0.0 | pts | — | pts | 15.5 | % | ||||
Provision for/(Benefit from) Income Taxes (3) | $ 419 | $ 87 | $ (3) | $ (110) | $ 393 | |||||||||
Effective Tax Rate | 21.0 | % | 0.2 | pts | (0.2) | pts | (4.6) | pts | 16.4 | % | ||||
Income from Continuing Operations | $ 1,581 | $ 308 | $ 5 | $ 110 | $ 2,003 | |||||||||
Income Margin from Continuing Operations | 10.2 | % | 2.0 | pts | 0.0 | pts | 0.7 | pts | 12.9 | % | ||||
Diluted Earnings Per Share: Continuing | $ 1.72 | $ 0.34 | $ 0.00 | $ 0.12 | $ 2.18 | |||||||||
____________________ | ||||||||||||||
(1) Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax | ||||||||||||||
(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan | ||||||||||||||
(3) Tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the | ||||||||||||||
INTERNATIONAL BUSINESS MACHINES CORPORATION (Unaudited; Dollars in millions except per share amounts) | ||||||||||||||
Six Months Ended June 30, 2024 | ||||||||||||||
Continuing Operations | ||||||||||||||
GAAP | Acquisition- Related Adjustments (1) | Retirement- Related Adjustments (2) | Tax Reform Impacts (3) | Operating (Non-GAAP) | ||||||||||
Gross Profit | $ 16,692 | $ 341 | $ — | $ — | $ 17,033 | |||||||||
Gross Profit Margin | 55.2 | % | 1.1 | pts | — | pts | — | pts | 56.3 | % | ||||
S,G&A | $ 9,912 | $ (554) | $ — | $ — | $ 9,358 | |||||||||
Other (Income) & Expense | (550) | (68) | (194) | — | (812) | |||||||||
Total Expense & Other (Income) | 13,399 | (622) | (194) | — | 12,584 | |||||||||
Pre-tax Income from Continuing Operations | 3,293 | 963 | 194 | — | 4,449 | |||||||||
Pre-tax Income Margin from Continuing | 10.9 | % | 3.2 | pts | 0.6 | pts | — | pts | 14.7 | % | ||||
Provision for/(Benefit from) Income Taxes (4) | $ (112) | $ 255 | $ 31 | $ 436 | $ 610 | |||||||||
Effective Tax Rate | (3.4) | % | 6.5 | pts | 0.9 | pts | 9.8 | pts | 13.7 | % | ||||
Income from Continuing Operations | $ 3,405 | $ 707 | $ 163 | $ (436) | $ 3,839 | |||||||||
Income Margin from Continuing Operations | 11.3 | % | 2.3 | pts | 0.5 | pts | (1.4) | pts | 12.7 | % | ||||
Diluted Earnings Per Share: Continuing | $ 3.65 | $ 0.76 | $ 0.17 | $ (0.47) | $ 4.11 | |||||||||
Six Months Ended June 30, 2023 | ||||||||||||||
Continuing Operations | ||||||||||||||
GAAP | Acquisition- Related Adjustments (1) | Retirement- Related Adjustments (2) | Tax Reform Impacts | Operating (Non-GAAP) | ||||||||||
Gross Profit | $ 16,010 | $ 298 | $ — | $ — | $ 16,308 | |||||||||
Gross Profit Margin | 53.9 | % | 1.0 | pts | — | pts | — | pts | 54.9 | % | ||||
S,G&A | $ 9,754 | $ (491) | $ — | $ — | $ 9,263 | |||||||||
Other (Income) & Expense | (506) | (2) | 4 | — | (504) | |||||||||
Total Expense & Other (Income) | 12,952 | (493) | 4 | — | 12,463 | |||||||||
Pre-tax Income from Continuing Operations | 3,058 | 791 | (4) | — | 3,845 | |||||||||
Pre-tax Income Margin from Continuing | 10.3 | % | 2.7 | pts | 0.0 | pts | — | pts | 12.9 | % | ||||
Provision for/(Benefit from) Income Taxes (4) | $ 543 | $ 178 | $ (14) | $ (115) | $ 593 | |||||||||
Effective Tax Rate | 17.8 | % | 1.0 | pts | (0.3) | pts | (3.0) | pts | 15.4 | % | ||||
Income from Continuing Operations | $ 2,515 | $ 613 | $ 10 | $ 115 | $ 3,252 | |||||||||
Income Margin from Continuing Operations | 8.5 | % | 2.1 | pts | 0.0 | pts | 0.4 | pts | 10.9 | % | ||||
Diluted Earnings Per Share: Continuing | $ 2.74 | $ 0.67 | $ 0.01 | $ 0.13 | $ 3.54 | |||||||||
____________________ | ||||||||||||||
(1) Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax | ||||||||||||||
(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan | ||||||||||||||
(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 | ||||||||||||||
INTERNATIONAL BUSINESS MACHINES CORPORATION GAAP OPERATING CASH FLOW TO ADJUSTED EBITDA RECONCILIATION (Unaudited) | ||||||||
Three Months Ended | Six Months Ended | |||||||
(Dollars in Billions) | 2024 | 2023 | 2024 | 2023 | ||||
Net Cash Provided by Operating Activities | $ 2.1 | $ 2.6 | $ 6.2 | $ 6.4 | ||||
Add: | ||||||||
Net interest expense | 0.2 | 0.2 | 0.4 | 0.4 | ||||
Provision for/(Benefit from) income taxes from continuing operations | 0.4 | 0.4 | (0.1) | 0.5 | ||||
Less change in: | ||||||||
Financing receivables | (0.9) | 0.1 | 1.0 | 2.0 | ||||
Other assets and liabilities/Other, net (1) | (0.4) | (0.5) | (1.5) | (1.2) | ||||
Adjusted EBITDA | $ 4.0 | $ 3.7 | $ 7.1 | $ 6.5 | ||||
____________________ | ||||||||
(1) Other assets and liabilities/Other, net mainly consists of Operating assets and liabilities/Other, net in the Cash flow chart, workforce | ||||||||
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SOURCE IBM
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