Results exceed expectations driven by
strong Software revenue growth, significant gross margin
expansion and solid free cash flow
ARMONK,
N.Y., April 23, 2025 /PRNewswire/ -- IBM (NYSE:
IBM) today announced first-quarter 2025 earnings results.
"We exceeded expectations for revenue, profitability and free
cash flow in the quarter, led by strength across our Software
portfolio. There continues to be strong demand for generative AI
and our book of business stands at more than $6 billion inception-to-date, up more than
$1 billion in the quarter," said
Arvind Krishna, IBM chairman,
president and chief executive officer. "We remain bullish on the
long-term growth opportunities for technology and the global
economy. While the macroeconomic environment is fluid, based on
what we know today, we are maintaining our full-year expectations
for revenue growth and free cash flow."
First-Quarter Highlights
- Revenue
- Revenue of $14.5 billion, up 1
percent, up 2 percent at constant currency
- Software revenue up 7 percent, up 9 percent at constant
currency
- Consulting revenue down 2 percent, flat at constant currency
- Infrastructure revenue down 6 percent, down 4 percent at constant
currency
- Profit
- Gross Profit Margin: GAAP: 55.2 percent, up 170 basis points;
Operating (Non-GAAP): 56.6 percent, up 190 basis points
- Pre-Tax Income Margin: GAAP: 8.0 percent, up 50 basis points;
Operating (Non-GAAP): 12.0 percent, up 50 basis points
- Cash Flow
- Net cash from operating activities of $4.4
billion; free cash flow of $2.0
billion
|
FIRST-QUARTER
2025 INCOME STATEMENT SUMMARY
|
|
Revenue
|
|
Gross
Profit
|
|
|
Gross
Profit
Margin
|
|
|
Pre-tax
Income
|
|
Pre-tax
Income
Margin
|
|
Net
Income
|
|
Diluted
Earnings
Per
Share
|
|
GAAP
from
Continuing
Operations
|
$ 14.5
B
|
|
|
$ 8.0
B
|
|
|
55.2
|
%
|
|
$
1.2 B
|
|
|
8.0
|
%
|
|
$ 1.1 B
|
|
|
$ 1.12
|
|
|
Year/Year
|
1
|
%(1)
|
|
4
|
%
|
|
1.7
|
Pts
|
|
8
|
%
|
|
0.5
|
Pts
|
|
(33)
|
%(2)
|
|
(34)
|
%
|
|
Operating
(Non-GAAP)
|
|
|
|
$ 8.2
B
|
|
|
56.6
|
%
|
|
$
1.7 B
|
|
|
12.0
|
%
|
|
$ 1.5 B
|
|
|
$ 1.60
|
|
|
Year/Year
|
|
|
|
4
|
%
|
|
1.9
|
Pts
|
|
5
|
%
|
|
0.5
|
Pts
|
|
(3)
|
%
|
|
(5)
|
%
|
|
(1) 2% at
constant currency.
|
|
(2) GAAP 2024 net
income includes a benefit from income taxes due to the resolution
of certain tax audit matters.
|
"Revenue growth, once again led by Software, combined with our
productivity initiatives, drove significant gross margin expansion
and operating leverage in the quarter," said James Kavanaugh, IBM senior vice president and
chief financial officer. "With our focus on the fundamentals of our
business, we continue to maintain a strong liquidity position and
yield solid free cash flow. This enables us to both invest in our
business and return value to shareholders through dividends."
Segment Results for First Quarter
- Software — revenues of $6.3
billion, up 7 percent, up 9 percent at constant
currency:
- Hybrid Cloud (Red Hat) up 12 percent, up 13 percent at constant
currency
- Automation up 14 percent, up 15 percent at constant currency
- Data up 5 percent, up 7 percent at constant currency
- Transaction Processing flat, up 2 percent at constant
currency
- Consulting — revenues of $5.1
billion, down 2 percent, flat at constant currency:
- Strategy and Technology down 3 percent, down 1 percent at
constant currency
- Intelligent Operations down 2 percent, flat at constant
currency
- Infrastructure — revenues of $2.9
billion, down 6 percent, down 4 percent at constant
currency:
- Hybrid Infrastructure down 9 percent, down 7 percent at constant
currency
-- IBM Z down 15 percent, down 14 percent
at constant currency
-- Distributed Infrastructure down 5
percent, down 4 percent at constant currency
- Infrastructure Support down 3 percent, flat at constant
currency
- Financing — revenues of $0.2
billion, down 1 percent, up 2 percent at constant
currency
Cash Flow and Balance Sheet
In the first quarter, the company generated net cash from
operating activities of $4.4 billion,
up $0.2 billion year to year. IBM's
free cash flow was $2.0 billion, up
$0.1 billion year to year. The
company returned $1.5 billion to
shareholders in dividends in the first quarter and invested
$7.1 billion in acquisitions,
including the acquisition of HashiCorp.
IBM ended the first quarter with $17.6
billion of cash, restricted cash and marketable securities,
up $2.8 billion from year-end 2024.
Debt, including IBM Financing debt of $10.0
billion, totaled $63.3
billion, up $8.3 billion year
to date.
Expectations
- Revenue: The company continues to expect full-year constant
currency revenue growth of at least 5 percent. At current foreign
exchange rates, currency is expected to be about a one to
one-and-a-half-point tailwind to growth for the year.
- The company expects second-quarter revenue to be in the range of
$16.40 billion to $16.75 billion.
- Free cash flow: The company continues to expect about
$13.5 billion in free cash flow for
the full year.
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 divestitures, including integration challenges, failure to
achieve objectives, the assumption or retention 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 and service quality
issues; the development and use of AI and generative AI, including
the company's increased offerings and use of AI-based technologies;
impacts of business with government clients; reliance on third
party distribution channels and ecosystems; cybersecurity, privacy,
and AI considerations; adverse effects related to climate change
and other 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; 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.
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
For generative AI, book of business includes Software
transactional revenue, SaaS Annual Contract Value and Consulting
signings. The generative AI book of business is further defined
within Exhibit 99.2 in the Form 8-K that includes 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.
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-1q25. 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,
|
|
|
2025
|
|
|
2024
|
|
|
REVENUE BY
SEGMENT
|
|
|
|
|
|
|
Software
|
$
6,336
|
|
|
$
5,899
|
|
|
Consulting
|
5,068
|
|
|
5,186
|
|
|
Infrastructure
|
2,886
|
|
|
3,076
|
|
|
Financing
|
191
|
|
|
193
|
|
|
Other
|
61
|
|
|
108
|
|
|
TOTAL
REVENUE
|
14,541
|
|
|
14,462
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
8,031
|
|
|
7,742
|
|
|
|
|
|
|
|
|
GROSS PROFIT
MARGIN
|
|
|
|
|
|
|
Software
|
83.6
|
%
|
|
82.4
|
%
|
|
Consulting
|
27.3
|
%
|
|
25.3
|
%
|
|
Infrastructure
|
52.8
|
%
|
|
54.2
|
%
|
|
Financing
|
45.8
|
%
|
|
48.5
|
%
|
|
|
|
|
|
|
|
TOTAL GROSS PROFIT
MARGIN
|
55.2
|
%
|
|
53.5
|
%
|
|
|
|
|
|
|
|
EXPENSE AND OTHER
INCOME
|
|
|
|
|
|
|
SG&A
|
4,886
|
|
|
4,974
|
|
|
R&D
|
1,950
|
|
|
1,796
|
|
|
Intellectual property
and custom development income
|
(253)
|
|
|
(216)
|
|
|
Other (income) and
expense
|
(165)
|
|
|
(317)
|
|
|
Interest
expense
|
455
|
|
|
432
|
|
|
TOTAL EXPENSE AND
OTHER INCOME
|
6,873
|
|
|
6,669
|
|
|
|
|
|
|
|
|
INCOME FROM
CONTINUING OPERATIONS
BEFORE INCOME
TAXES
|
1,158
|
|
|
1,074
|
|
|
Pre-tax
margin
|
8.0
|
%
|
|
7.4
|
%
|
|
Provision for/(Benefit
from) income taxes (1)
|
103
|
|
|
(502)
|
|
|
Effective tax rate
(1)
|
8.9
|
%
|
|
(46.7)
|
%
|
|
|
|
|
|
|
|
INCOME FROM
CONTINUING OPERATIONS
|
$
1,054
|
|
|
$
1,575
|
|
|
|
|
|
|
|
|
DISCONTINUED
OPERATIONS
|
|
|
|
|
|
|
Income from
discontinued operations, net of taxes
|
1
|
|
|
30
|
|
|
|
|
|
|
|
|
NET
INCOME
|
$
1,055
|
|
|
$
1,605
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE
OF COMMON STOCK
|
|
|
|
|
|
|
Assuming
Dilution
|
|
|
|
|
|
|
Continuing
Operations
|
$
1.12
|
|
|
$
1.69
|
|
|
Discontinued
Operations
|
$
0.00
|
|
|
$
0.03
|
|
|
TOTAL
|
$
1.12
|
|
|
$
1.72
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
Continuing
Operations
|
$
1.14
|
|
|
$
1.72
|
|
|
Discontinued
Operations
|
$
0.00
|
|
|
$
0.03
|
|
|
TOTAL
|
$
1.14
|
|
|
$
1.75
|
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING (M's)
|
|
|
|
|
|
|
Assuming
Dilution
|
945.4
|
|
|
933.4
|
|
|
Basic
|
928.0
|
|
|
917.2
|
|
|
____________________
|
|
(1) 2024 includes a
benefit from income taxes due to the resolution of certain tax
audit matters.
|
|
INTERNATIONAL
BUSINESS MACHINES CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEET
(Unaudited)
|
|
|
(Dollars in
Millions)
|
|
At
March 31,
2025
|
|
At
December 31,
2024
|
|
ASSETS:
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
11,035
|
|
$
13,947
|
|
Restricted
cash
|
|
126
|
|
214
|
|
Marketable
securities
|
|
6,430
|
|
644
|
|
Notes and accounts
receivable - trade, net
|
|
5,857
|
|
6,804
|
|
Short-term financing
receivables, net
|
|
5,715
|
|
7,159
|
|
Other accounts
receivable, net
|
|
897
|
|
947
|
|
Inventories
|
|
1,431
|
|
1,289
|
|
Deferred
costs
|
|
1,074
|
|
959
|
|
Prepaid expenses and
other current assets
|
|
2,770
|
|
2,520
|
|
Total Current
Assets
|
|
35,336
|
|
34,482
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
5,742
|
|
5,731
|
|
Operating right-of-use
assets, net
|
|
3,323
|
|
3,197
|
|
Long-term financing
receivables, net
|
|
4,920
|
|
5,353
|
|
Prepaid pension
assets
|
|
7,670
|
|
7,492
|
|
Deferred
costs
|
|
769
|
|
788
|
|
Deferred
taxes
|
|
7,594
|
|
6,978
|
|
Goodwill
|
|
66,065
|
|
60,706
|
|
Intangibles,
net
|
|
12,392
|
|
10,660
|
|
Investments and sundry
assets
|
|
1,856
|
|
1,787
|
|
Total
Assets
|
|
$
145,667
|
|
$
137,175
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
Taxes
|
|
$
1,573
|
|
$
2,033
|
|
Short-term
debt
|
|
6,913
|
|
5,089
|
|
Accounts
payable
|
|
3,585
|
|
4,032
|
|
Deferred
income
|
|
15,057
|
|
13,907
|
|
Operating lease
liabilities
|
|
798
|
|
768
|
|
Other
liabilities
|
|
7,179
|
|
7,313
|
|
Total Current
Liabilities
|
|
35,106
|
|
33,142
|
|
|
|
|
|
|
Long-term
debt
|
|
56,371
|
|
49,884
|
|
Retirement-related
obligations
|
|
9,536
|
|
9,432
|
|
Deferred
income
|
|
3,844
|
|
3,622
|
|
Operating lease
liabilities
|
|
2,753
|
|
2,655
|
|
Other
liabilities
|
|
11,105
|
|
11,048
|
|
Total
Liabilities
|
|
118,714
|
|
109,783
|
|
|
|
|
|
|
EQUITY:
|
|
|
|
|
|
IBM Stockholders'
Equity:
|
|
|
|
|
|
Common stock
|
|
61,913
|
|
61,380
|
|
Retained
earnings
|
|
150,703
|
|
151,163
|
|
Treasury stock - at
cost
|
|
(170,160)
|
|
(169,968)
|
|
Accumulated other
comprehensive income/(loss)
|
|
(15,575)
|
|
(15,269)
|
|
Total IBM
Stockholders' Equity
|
|
26,880
|
|
27,307
|
|
|
|
|
|
|
Noncontrolling
interests
|
|
72
|
|
86
|
|
Total
Equity
|
|
26,953
|
|
27,393
|
|
|
|
|
|
|
Total Liabilities
and Equity
|
|
$
145,667
|
|
$
137,175
|
|
INTERNATIONAL
BUSINESS MACHINES CORPORATION
CASH
FLOW
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
(Dollars in
Millions)
|
|
2025
|
|
2024
|
|
Net Income from
Operations
|
|
$
1,055
|
|
$
1,605
|
|
Depreciation/Amortization of Intangibles
(1)
|
|
1,177
|
|
1,132
|
|
Stock-based
Compensation
|
|
401
|
|
320
|
|
Operating assets and
liabilities/Other, net (2)
|
|
(350)
|
|
(785)
|
|
IBM Financing
A/R
|
|
2,087
|
|
1,897
|
|
Net Cash Provided by
Operating Activities
|
|
$
4,370
|
|
$
4,168
|
|
|
|
|
|
|
Capital Expenditures,
net of payments & proceeds
|
|
(321)
|
|
(361)
|
|
Divestitures, net of
cash transferred
|
|
(1)
|
|
703
|
|
Acquisitions, net of
cash acquired
|
|
(7,098)
|
|
(82)
|
|
Marketable Securities
/ Other Investments, net
|
|
(5,559)
|
|
(4,469)
|
|
Net Cash Provided
by/(Used in) Investing Activities
|
|
$
(12,979)
|
|
$
(4,210)
|
|
|
|
|
|
|
Debt, net of payments
& proceeds
|
|
7,092
|
|
3,382
|
|
Dividends
|
|
(1,549)
|
|
(1,522)
|
|
Financing -
Other
|
|
(100)
|
|
17
|
|
Net Cash Provided
by/(Used in) Financing Activities
|
|
$
5,443
|
|
$
1,877
|
|
|
|
|
|
|
Effect of Exchange Rate
changes on Cash
|
|
167
|
|
(159)
|
|
Net Change in Cash,
Cash Equivalents and Restricted Cash
|
|
$
(2,999)
|
|
$
1,676
|
|
____________________
|
|
(1) Includes
operating lease right-of-use assets amortization.
|
|
(2) 2024 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)
|
|
2025
|
|
2024
|
|
Yr/Yr
|
|
Net Income as
reported (GAAP)
|
|
$
1.1
|
|
$
1.6
|
|
$
(0.5)
|
|
Less: Income from
discontinued operations, net of tax
|
|
0.0
|
|
0.0
|
|
0.0
|
|
Income from continuing
operations
|
|
1.1
|
|
1.6
|
|
(0.5)
|
|
Provision for/(Benefit
from) income taxes from continuing ops.
|
|
0.1
|
|
(0.5)
|
|
0.6
|
|
Pre-tax income from
continuing operations (GAAP)
|
|
1.2
|
|
1.1
|
|
0.1
|
|
Non-operating
adjustments (before tax)
|
|
|
|
|
|
|
|
Acquisition-related
charges (1)
|
|
0.6
|
|
0.5
|
|
0.1
|
|
Non-operating
retirement-related costs/(income)
|
|
0.0
|
|
0.1
|
|
(0.1)
|
|
|
|
|
|
|
|
|
Operating (non-GAAP)
pre-tax income from continuing ops.
|
|
1.7
|
|
1.7
|
|
0.1
|
|
|
|
|
|
|
|
|
Net interest
expense
|
|
0.3
|
|
0.2
|
|
0.0
|
|
Depreciation/Amortization of non-acquired intangible
assets
|
|
0.7
|
|
0.7
|
|
0.0
|
|
Stock-based
compensation
|
|
0.4
|
|
0.3
|
|
0.1
|
|
Workforce rebalancing
charges
|
|
0.3
|
|
0.4
|
|
(0.1)
|
|
Corporate (gains) and
charges (2)
|
|
0.0
|
|
(0.2)
|
|
0.2
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
3.4
|
|
$
3.0
|
|
$
0.4
|
|
___________________
|
|
(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, 2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in
Millions)
|
|
Software
|
|
|
Consulting
|
|
|
Infrastructure
|
|
|
Financing
|
|
|
Revenue
|
|
$
6,336
|
|
|
$
5,068
|
|
|
$
2,886
|
|
|
$
191
|
|
|
Segment
Profit
|
|
$
1,847
|
|
|
$
558
|
|
|
$
248
|
|
|
$
69
|
|
|
Segment Profit
Margin
|
|
29.1
|
%
|
|
11.0
|
%
|
|
8.6
|
%
|
|
35.8
|
%
|
|
Change YTY
Revenue
|
|
7.4
|
%
|
|
(2.3)
|
%
|
|
(6.2)
|
%
|
|
(0.8)
|
%
|
|
Change YTY Revenue -
Constant Currency
|
|
9.0
|
%
|
|
(0.5)
|
%
|
|
(4.3)
|
%
|
|
2.2
|
%
|
|
|
|
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
|
%
|
|
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, 2025
|
|
|
Continuing
Operations
|
|
|
GAAP
|
|
|
Acquisition-
Related
Adjustments
(1)
|
|
|
Retirement-
Related
Adjustments
(2)
|
|
|
Tax
Reform
Impacts
|
|
|
Operating
(Non-
GAAP)
|
|
|
Gross Profit
|
$
8,031
|
|
|
$
201
|
|
|
$
—
|
|
|
$
—
|
|
|
$
8,232
|
|
|
Gross Profit
Margin
|
55.2
|
%
|
|
1.4
|
pts
|
|
—
|
pts
|
|
—
|
pts
|
|
56.6
|
%
|
|
SG&A
|
$
4,886
|
|
|
$
(353)
|
|
|
$
—
|
|
|
$
—
|
|
|
$
4,533
|
|
|
R&D
|
1,950
|
|
|
(4)
|
|
|
—
|
|
|
—
|
|
|
1,946
|
|
|
Other (Income) &
Expense
|
(165)
|
|
|
—
|
|
|
(23)
|
|
|
—
|
|
|
(187)
|
|
|
Total Expense &
Other (Income)
|
6,873
|
|
|
(357)
|
|
|
(23)
|
|
|
—
|
|
|
6,494
|
|
|
Pre-tax Income from
Continuing Operations
|
1,158
|
|
|
557
|
|
|
23
|
|
|
—
|
|
|
1,738
|
|
|
Pre-tax Income Margin
from Continuing
Operations
|
8.0
|
%
|
|
3.8
|
pts
|
|
0.2
|
pts
|
|
—
|
pts
|
|
12.0
|
%
|
|
Provision for/(Benefit
from) Income Taxes (3)
|
$
103
|
|
|
$
128
|
|
|
$
(12)
|
|
|
$
2
|
|
|
$
221
|
|
|
Effective Tax
Rate
|
8.9
|
%
|
|
4.5
|
pts
|
|
(0.8)
|
pts
|
|
0.1
|
pts
|
|
12.7
|
%
|
|
Income from Continuing
Operations
|
$
1,054
|
|
|
$
429
|
|
|
$
35
|
|
|
$
(2)
|
|
|
$
1,517
|
|
|
Income Margin from
Continuing Operations
|
7.3
|
%
|
|
3.0
|
pts
|
|
0.2
|
pts
|
|
0.0
|
pts
|
|
10.4
|
%
|
|
Diluted Earnings Per
Share: Continuing
Operations
|
$
1.12
|
|
|
$
0.45
|
|
|
$
0.04
|
|
|
$
0.00
|
|
|
$
1.60
|
|
|
|
|
Three Months Ended
March 31, 2024
|
|
|
Continuing
Operations
|
|
|
GAAP
|
|
|
Acquisition-
Related
Adjustments
(1)
|
|
|
Retirement-
Related
Adjustments
(2)
|
|
|
Tax
Reform
Impacts (4)
|
|
|
Operating
(Non-
GAAP)
|
|
|
Gross Profit
|
$
7,742
|
|
|
$
170
|
|
|
$
—
|
|
|
$
—
|
|
|
$
7,913
|
|
|
Gross Profit
Margin
|
53.5
|
%
|
|
1.2
|
pts
|
|
—
|
pts
|
|
—
|
pts
|
|
54.7
|
%
|
|
SG&A
|
$
4,974
|
|
|
$
(268)
|
|
|
$
—
|
|
|
$
—
|
|
|
$
4,706
|
|
|
R&D
|
1,796
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,796
|
|
|
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 (3)
|
$
(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
|
|
|
____________________
|
|
(1)
Includes amortization of acquired intangible assets,
in-process R&D, transaction costs, applicable retention,
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 derivative contracts entered into by
the
company prior to the 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) The tax
impact on operating (non-GAAP) pre-tax income from continuing
operations is calculated under the same accounting principles
applied to the GAAP pre-tax income.
|
|
(4) 2024
includes a benefit from income taxes due to the resolution of
certain tax audit matters.
|
|
INTERNATIONAL
BUSINESS MACHINES CORPORATION
GAAP
OPERATING CASH FLOW TO FREE CASH FLOW
RECONCILIATION
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
(Dollars in
Millions)
|
|
2025
|
|
2024
|
|
Net Cash from
Operations per GAAP
|
|
$
4,370
|
|
$
4,168
|
|
|
|
|
|
|
Less: change in IBM
Financing receivables
|
|
2,087
|
|
1,897
|
|
|
|
|
|
|
Net cash from
operating activities excl. IBM Financing receivables
|
|
2,283
|
|
2,271
|
|
|
|
|
|
|
Capital Expenditures,
net
|
|
(321)
|
|
(361)
|
|
|
|
|
|
|
Free Cash
Flow
|
|
$
1,962
|
|
$
1,910
|
|
INTERNATIONAL
BUSINESS MACHINES CORPORATION
GAAP OPERATING CASH
FLOW TO ADJUSTED EBITDA RECONCILIATION
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
(Dollars in
Billions)
|
|
2025
|
|
2024
|
|
Net Cash Provided by
Operating Activities
|
|
$
4.4
|
|
$
4.2
|
|
|
|
|
|
|
Add:
|
|
|
|
|
|
Net interest
expense
|
|
0.3
|
|
0.2
|
|
Provision for/(Benefit
from) income taxes from continuing operations
|
|
0.1
|
|
(0.5)
|
|
|
|
|
|
|
Less change
in:
|
|
|
|
|
|
Financing
receivables
|
|
2.1
|
|
1.9
|
|
Other assets and
liabilities/other, net (1)
|
|
(0.7)
|
|
(1.0)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
3.4
|
|
$
3.0
|
|
____________________
|
|
(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.
|
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SOURCE IBM
