10-QPeriod: Q1 FY2024

INTERNATIONAL BUSINESS MACHINES CORP Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 30, 2024For Securities:IBM

Summary

IBM's first-quarter 2024 report shows a solid performance with a 1.5% increase in total revenue to $14.5 billion, driven primarily by growth in its Software segment, which saw a 5.5% revenue increase. The company also reported a significant 68.6% rise in net income from continuing operations to $1.6 billion, resulting in diluted earnings per share of $1.72, up from $1.01 in the prior year. This strong financial performance reflects continued execution of IBM's hybrid cloud and AI strategy, coupled with effective gross margin expansion and robust cash generation. The company generated $4.2 billion in cash from operations, indicating strong operational efficiency and financial health. IBM continues to strategically invest in innovation, particularly in AI, and has recently made significant acquisition announcements, including the intended acquisition of HashiCorp for approximately $6.4 billion. These strategic moves underscore IBM's commitment to enhancing its hybrid cloud and AI capabilities. The company maintained a strong balance sheet with $19.3 billion in cash, cash equivalents, restricted cash, and marketable securities at the end of the quarter, providing financial flexibility for future investments and shareholder returns.

Financial Highlights

49 data points
Beta

Revenue

$14.46B

53.5% Gross Margin

Net Income

$1.60B

11.1% Net Margin

EPS (Diluted)

$1.72

Total Assets

$137.17B

Cash & Equivalents

$14.60B

Free Cash Flow

$3.93B

Financial Statements
Beta
Revenue$14.46B
Cost of Revenue$6.72B
Gross Profit$7.74B
R&D Expenses$1.80B
SG&A Expenses$4.97B
Operating Income$1.57B
Interest Expense$432.00M
Net Income$1.60B
EPS (Basic)$1.75
EPS (Diluted)$1.72
Shares Outstanding (Basic)917.18M
Shares Outstanding (Diluted)933.43M

Key Highlights

  • 1Total revenue increased by 1.5% year-over-year to $14.5 billion, with revenue growth of 2.5% when adjusted for currency.
  • 2Net income from continuing operations surged by 68.6% to $1.6 billion, leading to a substantial increase in diluted EPS to $1.72 from $1.01 in the prior year.
  • 3Software segment revenue grew by 5.5% to $5.9 billion, driven by strong performance in Hybrid Platform & Solutions (up 6.5%) and Transaction Processing (up 3.4%).
  • 4The company generated $4.2 billion in cash from operating activities, a 10.4% increase year-over-year, demonstrating strong cash flow generation.
  • 5IBM announced its intention to acquire HashiCorp for approximately $6.4 billion, reinforcing its strategic focus on hybrid cloud and AI.
  • 6Gross profit margin improved by 0.8 percentage points to 53.5%, reflecting revenue growth, portfolio mix, and productivity actions.

Frequently Asked Questions

IBM reported total revenue of $14.5 billion for the first quarter of 2024, an increase of 1.5% compared to the prior year. When adjusted for currency impacts, the revenue growth was 2.5%.

IBM's profitability saw a significant improvement. Net income from continuing operations increased by 68.6% to $1.6 billion, and diluted earnings per share (EPS) rose to $1.72 from $1.01 in the same period last year. This growth was supported by a gross profit margin expansion of 0.8 percentage points to 53.5%.

The Software segment was a key driver, with revenue increasing by 5.5% to $5.9 billion, thanks to strong performance in Hybrid Platform & Solutions and Transaction Processing. The company also saw revenue growth in its hybrid cloud and AI strategies, as evidenced by investments and strategic acquisitions.

IBM announced its intention to acquire HashiCorp, a leader in cloud infrastructure and application automation, for approximately $6.4 billion. This acquisition aims to enhance IBM's hybrid cloud and AI platform capabilities. Additionally, IBM completed the sale of The Weather Company assets and three other acquisitions in the Software and Consulting segments.