INTERNATIONAL BUSINESS MACHINES CORPORATION COMPARATIVE FINANCIAL RESULTS (Unaudited; Dollars in millions except per share amounts) |
|||||
Three Months Ended |
|||||
2024 |
2023 (1) |
||||
REVENUE BY SEGMENT |
|||||
Software |
$ 5,899 |
$ 5,591 |
|||
Consulting |
5,186 |
5,197 |
|||
Infrastructure |
3,076 |
3,098 |
|||
Financing |
193 |
196 |
|||
Other |
108 |
169 |
|||
TOTAL REVENUE |
14,462 |
14,252 |
|||
GROSS PROFIT |
7,742 |
7,509 |
|||
GROSS PROFIT MARGIN |
|||||
Software |
82.4 |
% |
82.6 |
% |
|
Consulting |
25.3 |
% |
25.5 |
% |
|
Infrastructure |
54.2 |
% |
51.8 |
% |
|
Financing |
48.5 |
% |
43.9 |
% |
|
TOTAL GROSS PROFIT MARGIN |
53.5 |
% |
52.7 |
% |
|
EXPENSE AND OTHER INCOME |
|||||
S,G&A |
4,974 |
4,853 |
|||
R,D&E |
1,796 |
1,655 |
|||
Intellectual property and custom development income |
(216) |
(180) |
|||
Other (income) and expense |
(317) |
(245) |
|||
Interest expense |
432 |
367 |
|||
TOTAL EXPENSE AND OTHER INCOME |
6,669 |
6,451 |
|||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
1,074 |
1,058 |
|||
Pre-tax margin |
7.4 |
% |
7.4 |
% |
|
Provision for/(Benefit from) income taxes (2) |
(502) |
124 |
|||
Effective tax rate (2) |
(46.7) |
% |
11.7 |
% |
|
INCOME FROM CONTINUING OPERATIONS |
$ 1,575 |
$ 934 |
|||
DISCONTINUED OPERATIONS |
|||||
Income/(loss) from discontinued operations, net of taxes |
30 |
(7) |
|||
NET INCOME |
$ 1,605 |
$ 927 |
|||
EARNINGS/(LOSS) PER SHARE OF COMMON STOCK |
|||||
Assuming Dilution |
|||||
Continuing Operations |
$ 1.69 |
$ 1.02 |
|||
Discontinued Operations |
$ 0.03 |
$ (0.01) |
|||
TOTAL |
$ 1.72 |
$ 1.01 |
|||
Basic |
|||||
Continuing Operations |
$ 1.72 |
$ 1.03 |
|||
Discontinued Operations |
$ 0.03 |
$ (0.01) |
|||
TOTAL |
$ 1.75 |
$ 1.02 |
|||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M's) |
|||||
Assuming Dilution |
933.4 |
917.8 |
|||
Basic |
917.2 |
907.5 |
|||
____________________ |
|||||
(1) Recast to reflect segment changes. |
|||||
(2) 2024 includes a net benefit from discrete tax events. |
INTERNATIONAL BUSINESS MACHINES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) |
||||
(Dollars in Millions) |
At March 31, |
At December 31, |
||
ASSETS: |
||||
Current Assets: |
||||
Cash and cash equivalents |
$ 14,603 |
$ 13,068 |
||
Restricted cash |
162 |
21 |
||
Marketable securities |
4,512 |
373 |
||
Notes and accounts receivable - trade, net |
6,041 |
7,214 |
||
Short-term financing receivables, net |
5,521 |
6,793 |
||
Other accounts receivable, net |
760 |
640 |
||
Inventories |
1,212 |
1,161 |
||
Deferred costs |
1,047 |
998 |
||
Prepaid expenses and other current assets |
2,804 |
2,639 |
||
Total Current Assets |
36,663 |
32,908 |
||
Property, plant and equipment, net |
5,594 |
5,501 |
||
Operating right-of-use assets, net |
3,204 |
3,220 |
||
Long-term financing receivables, net |
4,927 |
5,766 |
||
Prepaid pension assets |
7,545 |
7,506 |
||
Deferred costs |
810 |
842 |
||
Deferred taxes |
6,465 |
6,656 |
||
Goodwill |
59,534 |
60,178 |
||
Intangibles, net |
10,750 |
11,036 |
||
Investments and sundry assets |
1,678 |
1,626 |
||
Total Assets |
$ 137,169 |
$ 135,241 |
||
LIABILITIES: |
||||
Current Liabilities: |
||||
Taxes |
$ 1,710 |
$ 2,270 |
||
Short-term debt |
5,471 |
6,426 |
||
Accounts payable |
3,588 |
4,132 |
||
Deferred income |
14,051 |
13,451 |
||
Operating lease liabilities |
784 |
820 |
||
Other liabilities |
6,794 |
7,022 |
||
Total Current Liabilities |
32,397 |
34,122 |
||
Long-term debt |
54,033 |
50,121 |
||
Retirement related obligations |
10,421 |
10,808 |
||
Deferred income |
3,488 |
3,533 |
||
Operating lease liabilities |
2,583 |
2,568 |
||
Other liabilities |
10,914 |
11,475 |
||
Total Liabilities |
113,836 |
112,628 |
||
EQUITY: |
||||
IBM Stockholders' Equity: |
||||
Common stock |
60,145 |
59,643 |
||
Retained earnings |
151,362 |
151,276 |
||
Treasury stock — at cost |
(169,759) |
(169,624) |
||
Accumulated other comprehensive income/(loss) |
(18,488) |
(18,761) |
||
Total IBM Stockholders' Equity |
23,261 |
22,533 |
||
Noncontrolling interests |
72 |
80 |
||
Total Equity |
23,333 |
22,613 |
||
Total Liabilities and Equity |
$ 137,169 |
$ 135,241 |
INTERNATIONAL BUSINESS MACHINES CORPORATION CASH FLOW ANALYSIS (Unaudited) |
||||||
Three Months Ended |
Trailing Twelve Months Ended March 31, |
|||||
(Dollars in Millions) |
2024 |
2023 |
2024 |
|||
Net Cash from Operations per GAAP |
$ 4,168 |
$ 3,774 |
$ 14,325 |
|||
Less: change in IBM Financing receivables |
1,897 |
1,977 |
1,152 |
|||
Capital Expenditures, net |
(361) |
(457) |
(1,393) |
|||
Free Cash Flow |
1,910 |
1,340 |
11,780 |
|||
Acquisitions |
(82) |
(22) |
(5,142) |
|||
Divestitures |
703 |
— |
699 |
|||
Dividends |
(1,522) |
(1,497) |
(6,065) |
|||
Non-Financing Debt |
5,244 |
9,692 |
1,098 |
|||
Other (includes IBM Financing net receivables and debt) |
(437) |
(762) |
(684) |
|||
Change in Cash, Cash Equivalents, Restricted Cash and Short-term Marketable Securities |
$ 5,815 |
$ 8,752 |
$ 1,686 |
INTERNATIONAL BUSINESS MACHINES CORPORATION CASH FLOW (Unaudited) |
|||||
Three Months Ended |
|||||
(Dollars in Millions) |
2024 |
2023 |
|||
Net Income from Operations |
$ 1,605 |
$ 927 |
|||
Depreciation/Amortization of Intangibles (1) |
1,132 |
1,074 |
|||
Stock-based Compensation |
320 |
268 |
|||
Operating assets and liabilities/Other, net (2) |
(785) |
(473) |
|||
IBM Financing A/R |
1,897 |
1,977 |
|||
Net Cash Provided by Operating Activities |
$ 4,168 |
$ 3,774 |
|||
Capital Expenditures, net of payments & proceeds |
(361) |
(457) |
|||
Divestitures, net of cash transferred |
703 |
- |
|||
Acquisitions, net of cash acquired |
(82) |
(22) |
|||
Marketable Securities / Other Investments, net |
(4,469) |
(7,481) |
|||
Net Cash Provided by/(Used in) Investing Activities |
$ (4,210) |
$ (7,960) |
|||
Debt, net of payments & proceeds |
3,382 |
7,304 |
|||
Dividends |
(1,522) |
(1,497) |
|||
Financing - Other |
17 |
(99) |
|||
Net Cash Provided by/(Used in) Financing Activities |
$ 1,877 |
$ 5,708 |
|||
Effect of Exchange Rate changes on Cash |
(159) |
24 |
|||
Net Change in Cash, Cash Equivalents and Restricted Cash |
$ 1,676 |
$ 1,547 |
|||
____________________ |
|||||
(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 March 31, |
|||||||
(Dollars in Billions) |
2024 |
2023 |
Yr/Yr |
||||
Net Income as reported (GAAP) |
$ 1.6 |
$ 0.9 |
$ 0.7 |
||||
Less: Income/(loss) from discontinued operations, net of tax |
0.0 |
0.0 |
0.0 |
||||
Income from continuing operations |
1.6 |
0.9 |
0.6 |
||||
Provision for/(Benefit from) income taxes from continuing ops. |
(0.5) |
0.1 |
(0.6) |
||||
Pre-tax income from continuing operations (GAAP) |
1.1 |
1.1 |
0.0 |
||||
Non-operating adjustments (before tax) |
|||||||
Acquisition-related charges (1) |
0.5 |
0.4 |
0.1 |
||||
Non-operating retirement-related costs/(income) |
0.1 |
0.0 |
0.1 |
||||
Operating (non-GAAP) pre-tax income from continuing ops. |
1.7 |
1.4 |
0.2 |
||||
Net interest expense |
0.2 |
0.2 |
0.0 |
||||
Depreciation/Amortization of non-acquired intangible assets |
0.7 |
0.7 |
0.0 |
||||
Stock-based compensation |
0.3 |
0.3 |
0.1 |
||||
Workforce rebalancing charges |
0.4 |
0.3 |
0.1 |
||||
Corporate (gains) and charges (2) |
(0.2) |
0.0 |
(0.2) |
||||
Adjusted EBITDA |
$ 3.0 |
$ 2.8 |
$ 0.2 |
||||
____________________ |
|||||||
(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, 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 |
% |
||||
Change YTY Revenue |
5.5 |
% |
(0.2) |
% |
(0.7) |
% |
(1.6) |
% |
||||
Change YTY Revenue - Constant Currency |
5.9 |
% |
1.7 |
% |
0.2 |
% |
(1.5) |
% |
||||
Three Months Ended March 31, 2023 (1) |
||||||||||||
(Dollars in Millions) |
Software |
Consulting |
Infrastructure |
Financing |
||||||||
Revenue |
$ 5,591 |
$ 5,197 |
$ 3,098 |
$ 196 |
||||||||
Segment Profit |
$ 1,379 |
$ 427 |
$ 307 |
$ 100 |
||||||||
Segment Profit Margin |
24.7 |
% |
8.2 |
% |
9.9 |
% |
51.2 |
% |
||||
____________________ |
||||||||||||
(1) Recast to reflect segment changes. |
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, 2024 |
||||||||||||||
Continuing Operations |
||||||||||||||
GAAP |
Acquisition- Related Adjustments (1) |
Retirement- Related Adjustments (2) |
Tax Reform Impacts (3) |
Operating (Non- GAAP) |
||||||||||
Gross Profit |
$ 7,742 |
$ 170 |
$ — |
$ — |
$ 7,913 |
|||||||||
Gross Profit Margin |
53.5 |
% |
1.2 |
pts. |
— |
pts. |
— |
pts. |
54.7 |
% |
||||
S,G&A |
$ 4,974 |
$ (268) |
$ — |
$ — |
$ 4,706 |
|||||||||
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 (4) |
$ (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 |
|||||||||
Three Months Ended March 31, 2023 |
||||||||||||||
Continuing Operations |
||||||||||||||
GAAP |
Acquisition- Related Adjustments (1) |
Retirement- Related Adjustments (2) |
Tax Reform Impacts |
Operating (Non- GAAP) |
||||||||||
Gross Profit |
$ 7,509 |
$ 148 |
$ — |
$ — |
$ 7,658 |
|||||||||
Gross Profit Margin |
52.7 |
% |
1.0 |
pts. |
— |
pts. |
— |
pts. |
53.7 |
% |
||||
S,G&A |
$ 4,853 |
$ (246) |
$ — |
$ — |
$ 4,607 |
|||||||||
Other (Income) & Expense |
(245) |
(2) |
5 |
— |
(242) |
|||||||||
Total Expense & Other (Income) |
6,451 |
(247) |
5 |
— |
6,209 |
|||||||||
Pre-tax Income from Continuing Operations |
1,058 |
396 |
(5) |
— |
1,449 |
|||||||||
Pre-tax Income Margin from Continuing Operations |
7.4 |
% |
2.8 |
pts. |
0.0 |
pts. |
— |
pts. |
10.2 |
% |
||||
Provision for/(Benefit from) Income Taxes (4) |
$ 124 |
$ 91 |
$ (10) |
$ (5) |
$ 200 |
|||||||||
Effective Tax Rate |
11.7 |
% |
3.1 |
pts. |
(0.7) |
pts. |
(0.3) |
pts. |
13.8 |
% |
||||
Income from Continuing Operations |
$ 934 |
$ 305 |
$ 5 |
$ 5 |
$ 1,249 |
|||||||||
Income Margin from Continuing Operations |
6.6 |
% |
2.1 |
pts. |
— |
pts. |
— |
pts. |
8.8 |
% |
||||
Diluted Earnings Per Share: Continuing |
$ 1.02 |
$ 0.33 |
$ 0.01 |
$ 0.01 |
$ 1.36 |
|||||||||
____________________ |
||||||||||||||
(1) Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable 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 call option contracts related to the company's planned 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) 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 As Reported pre-tax income under ASC 740, which employs an annual effective tax rate method to the results. |
INTERNATIONAL BUSINESS MACHINES CORPORATION GAAP OPERATING CASH FLOW TO ADJUSTED EBITDA RECONCILIATION (Unaudited) |
|||||
Three Months Ended |
|||||
(Dollars in Billions) |
2024 |
2023 |
|||
Net Cash Provided by Operating Activities |
$ 4.2 |
$ 3.8 |
|||
Add: |
|||||
Net interest expense |
0.2 |
0.2 |
|||
Provision for/(Benefit from) income taxes from continuing operations |
(0.5) |
0.1 |
|||
Less change in: |
|||||
Financing receivables |
1.9 |
2.0 |
|||
Other assets and liabilities/Other, net (1) |
(1.0) |
(0.7) |
|||
Adjusted EBITDA |
$ 3.0 |
$ 2.8 |
|||
____________________ |
|||||
(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. |