INTERNATIONAL BUSINESS MACHINES CORP Quarterly Report for Q2 Ended Jun 30, 2021

Summary

International Business Machines Corporation (IBM) reported its second-quarter 2021 financial results, showing a 3.4% increase in total revenue to $18.7 billion, driven by growth in Cloud & Cognitive Software and Global Business Services, though partially offset by a decline in Systems. For the six-month period, revenue rose 2.2% to $36.5 billion. Net income from continuing operations for the quarter was $1.325 billion, a decrease of 2.7% year-over-year, resulting in diluted earnings per share of $1.47. On an operating (non-GAAP) basis, which excludes certain charges, diluted EPS was $2.33, an increase of 6.9%. The company generated strong operating cash flow of $2.6 billion for the quarter and highlighted its strategic focus on hybrid cloud and AI, underscored by several key acquisitions in the period, including Turbonomic. IBM also continued its deleveraging efforts, reducing total debt by $6.4 billion year-to-date.

Key Highlights

• 1Total revenue increased 3.4% to $18.7 billion in Q2 2021, with Cloud & Cognitive Software up 6.1% and Global Business Services up 11.6%.
• 2Diluted earnings per share from continuing operations were $1.47, a decrease of 3.3% year-over-year.
• 3Operating (non-GAAP) diluted earnings per share increased 6.9% to $2.33, reflecting the company's focus on operational performance.
• 4Net cash from operating activities was $7.5 billion for the first six months of 2021, demonstrating consistent cash generation.
• 5IBM continues to execute its hybrid cloud and AI strategy, evidenced by seven acquisitions in the first half of 2021, including Turbonomic for $1.8 billion.
• 6Total debt was reduced by $6.4 billion in the first six months of 2021, continuing the company's deleveraging efforts.
• 7The company reiterated its plan to separate its managed infrastructure services unit (Kyndryl) by the end of 2021.

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