INTERNATIONAL BUSINESS MACHINES CORP Quarterly Report for Q3 Ended Sep 30, 2024

Summary

IBM reported total revenue of $14.97 billion for the third quarter of 2024, a 1.5% increase year-over-year, or 1.6% adjusted for currency. The company experienced a net loss of $330 million ($0.36 per share), significantly impacted by a one-time, non-cash pension settlement charge of $2.7 billion ($2.0 billion net of tax). Despite the reported net loss, IBM's operating (non-GAAP) earnings were $2.16 billion ($2.30 per share), reflecting growth driven by accelerated Software revenue and expanded gross profit margins across segments. Software revenue grew 9.7% year-over-year, led by Hybrid Platform & Solutions. Consulting revenue saw a slight decline, while Infrastructure revenue decreased due to product cycle dynamics. The company generated strong operating cash flow of $2.9 billion and free cash flow of $2.1 billion in the quarter, demonstrating operational resilience and a commitment to returning value to shareholders through dividends.

Key Highlights

• 1Total revenue increased by 1.5% year-over-year to $14.97 billion, driven by Software segment growth.
• 2A significant one-time, non-cash pension settlement charge of $2.7 billion ($2.0 billion net of tax) resulted in a reported net loss of $330 million ($0.36 per share).
• 3Operating (non-GAAP) earnings were $2.16 billion ($2.30 per share), up 4.5% year-over-year, showcasing underlying business strength.
• 4Software segment revenue grew 9.7% year-over-year, with strong performance in Hybrid Platform & Solutions, Automation, and Data & AI.
• 5Consulting revenue experienced a slight decline of 0.5%, impacted by macroeconomic uncertainty and client reprioritization towards AI.
• 6Infrastructure revenue decreased by 7.0%, primarily due to product cycle dynamics in Hybrid Infrastructure and Infrastructure Support.
• 7Cash from operating activities was $2.9 billion, and free cash flow was $2.1 billion for the quarter.

Frequently Asked Questions