THIRD-QUARTER 2024 INCOME STATEMENT SUMMARY
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GAAP results include impact of one-time, non-cash pension settlement charge (1)
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Revenue |
Gross Profit | Gross Profit Margin |
Pre-tax
Income/
(Loss) (1)
|
Pre-tax
Income
Margin (1)
|
Net
Income/
(Loss) (1)
|
Diluted
Earnings/
(Loss) Per
Share (1)
| ||||||||
GAAP from Continuing Operations | $ | 15.0B | $ | 8.4B | 56.3 | % | $ | (0.8)B | (5.4) | % | $ | (0.3)B | $ | (0.34) |
Year/Year | 1 |
%(2)
| 5 | % | 1.9 | Pts | NM | -18.1 | Pts | NM | NM | |||
Operating (Non-GAAP) | $ | 8.6B | 57.5 | % | $ | 2.5B | 16.6 | % | $ | 2.2B | $ | 2.30 | ||
Year/Year | 5 | % | 2.1 | Pts | 8 | % | 1.0 | Pts | 6 | % | 5 | % |
Contact:
|
IBM
|
Sarah Meron, 347-891-1770 | |
sarah.meron@ibm.com | |
Tim Davidson, 914-844-7847 | |
tfdavids@us.ibm.com |
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||
2024 |
2023 (1)
| 2024 |
2023 (1)
| |||||
REVENUE BY SEGMENT | ||||||||
Software | $ | 6,524 | $ | 5,947 | $ | 19,162 | $ | 17,832 |
Consulting | 5,152 | 5,178 | 15,517 | 15,601 | ||||
Infrastructure | 3,042 | 3,272 | 9,764 | 9,988 | ||||
Financing | 181 | 186 | 543 | 566 | ||||
Other | 68 | 170 | 214 | 491 | ||||
TOTAL REVENUE | 14,968 | 14,752 | 45,199 | 44,479 | ||||
GROSS PROFIT | 8,420 | 8,023 | 25,112 | 24,033 | ||||
GROSS PROFIT MARGIN | ||||||||
Software | 83.2 | % | 82.3 | % | 83.1 | % | 82.3 | % |
Consulting | 28.4 | % | 27.6 | % | 26.7 | % | 26.3 | % |
Infrastructure | 55.0 | % | 53.7 | % | 55.3 | % | 54.0 | % |
Financing | 47.2 | % | 49.7 | % | 48.2 | % | 47.5 | % |
TOTAL GROSS PROFIT MARGIN | 56.3 | % | 54.4 | % | 55.6 | % | 54.0 | % |
EXPENSE AND OTHER INCOME | ||||||||
S,G&A | 4,911 | 4,458 | 14,823 | 14,212 | ||||
R,D&E | 1,876 | 1,685 | 5,512 | 5,027 | ||||
Intellectual property and custom development income | (238) | (190) | (696) | (618) | ||||
Other (income) and expense | 2,244 | (215) | 1,694 | (721) | ||||
Interest expense | 429 | 412 | 1,288 | 1,202 | ||||
TOTAL EXPENSE AND OTHER INCOME | 9,222 | 6,150 | 22,621 | 19,102 | ||||
INCOME/(LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (802) | 1,873 | 2,491 | 4,931 | ||||
Pre-tax margin | (5.4) | % | 12.7 | % | 5.5 | % | 11.1 | % |
Provision for/(Benefit from) income taxes | (485) | 159 | (597) | 702 | ||||
Effective tax rate | 60.4 | % | 8.5 | % | (24.0) | % | 14.2 | % |
INCOME/(LOSS) FROM CONTINUING OPERATIONS | $ | (317) | $ | 1,714 | $ | 3,088 | $ | 4,229 |
DISCONTINUED OPERATIONS | ||||||||
Income/ (loss) from discontinued operations, net of taxes | (13) | (10) | 21 | (15) | ||||
NET INCOME/(LOSS) (2)
| $ | (330) | $ | 1,704 | $ | 3,109 | $ | 4,214 |
EARNINGS/(LOSS) PER SHARE OF COMMON STOCK (2)
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Assuming Dilution | ||||||||
Continuing Operations | $ | (0.34) | $ | 1.86 | $ | 3.30 | $ | 4.59 |
Discontinued Operations | $ | (0.01) | $ | (0.01) | $ | 0.02 | $ | (0.02) |
TOTAL | $ | (0.36) | $ | 1.84 | $ | 3.32 | $ | 4.58 |
Basic | ||||||||
Continuing Operations | $ | (0.34) | $ | 1.88 | $ | 3.36 | $ | 4.65 |
Discontinued Operations | $ | (0.01) | $ | (0.01) | $ | 0.02 | $ | (0.02) |
TOTAL | $ | (0.36) | $ | 1.87 | $ | 3.38 | $ | 4.63 |
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M's) | ||||||||
Assuming Dilution | 923.6 | 923.7 | 935.4 | 920.3 | ||||
Basic | 923.6 | 912.8 | 920.3 | 910.1 |
(Dollars in Millions) |
At September 30, 2024 |
At December 31, 2023 | ||
ASSETS: | ||||
Current Assets: | ||||
Cash and cash equivalents | $ | 13,197 | $ | 13,068 |
Restricted cash | 17 | 21 | ||
Marketable securities | 505 | 373 | ||
Notes and accounts receivable - trade, net | 5,390 | 7,214 | ||
Short-term financing receivables, net | 5,765 | 6,793 | ||
Other accounts receivable, net | 928 | 640 | ||
Inventories | 1,367 | 1,161 | ||
Deferred costs | 966 | 998 | ||
Prepaid expenses and other current assets | 2,408 | 2,639 | ||
Total Current Assets | 30,543 | 32,908 | ||
Property, plant and equipment, net | 5,614 | 5,501 | ||
Operating right-of-use assets, net | 3,355 | 3,220 | ||
Long-term financing receivables, net | 4,931 | 5,766 | ||
Prepaid pension assets | 7,975 | 7,506 | ||
Deferred costs | 788 | 842 | ||
Deferred taxes | 6,943 | 6,656 | ||
Goodwill | 61,092 | 60,178 | ||
Intangibles, net | 11,090 | 11,036 | ||
Investments and sundry assets | 2,009 | 1,626 | ||
Total Assets | $ | 134,339 | $ | 135,241 |
LIABILITIES: | ||||
Current Liabilities: | ||||
Taxes | $ | 1,584 | $ | 2,270 |
Short-term debt | 3,599 | 6,426 | ||
Accounts payable | 3,274 | 4,132 | ||
Deferred income | 12,882 | 13,451 | ||
Operating lease liabilities | 790 | 820 | ||
Other liabilities | 6,725 | 7,022 | ||
Total Current Liabilities | 28,853 | 34,122 | ||
Long-term debt | 52,980 | 50,121 | ||
Retirement-related obligations | 10,366 | 10,808 | ||
Deferred income | 3,666 | 3,533 | ||
Operating lease liabilities | 2,757 | 2,568 | ||
Other liabilities | 11,186 | 11,475 | ||
Total Liabilities | 109,809 | 112,628 | ||
EQUITY: | ||||
IBM Stockholders' Equity: | ||||
Common stock | 61,013 | 59,643 | ||
Retained earnings | 149,789 | 151,276 | ||
Treasury stock - at cost | (169,935) | (169,624) | ||
Accumulated other comprehensive income/(loss) | (16,418) | (18,761) | ||
Total IBM Stockholders' Equity | 24,448 | 22,533 | ||
Noncontrolling interests | 82 | 80 | ||
Total Equity | 24,530 | 22,613 | ||
Total Liabilities and Equity | $ | 134,339 | $ | 135,241 |
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||
(Dollars in Millions) | 2024 | 2023 | 2024 | 2023 | ||||
Net Cash from Operations per GAAP | $ | 2,881 | $ | 3,055 | $ | 9,115 | $ | 9,468 |
Less: change in IBM Financing receivables | 873 | 1,092 | 1,824 | 3,119 | ||||
Capital Expenditures, net | 55 | (282) | (705) | (1,226) | ||||
Free Cash Flow | 2,064 | 1,682 | 6,586 | 5,123 | ||||
Acquisitions | (2,513) | (4,589) | (2,748) | (4,945) | ||||
Divestitures | 2 | (10) | 705 | (4) | ||||
Dividends | (1,542) | (1,515) | (4,601) | (4,522) | ||||
Non-Financing Debt | (383) | (942) | 693 | 7,572 | ||||
Other (includes IBM Financing net receivables and debt) | 131 | 41 | (379) | (1,068) | ||||
Change in Cash, Cash Equivalents, Restricted Cash and Short-term Marketable Securities | $ | (2,241) | $ | (5,333) | $ | 257 | $ | 2,156 |
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||
(Dollars in Millions) | 2024 | 2023 | 2024 | 2023 | ||||
Net Income/(loss) from Operations | $ | (330) | $ | 1,704 | $ | 3,109 | $ | 4,214 |
Pension Settlement Charge | 2,725 | - | 2,725 | - | ||||
Depreciation/Amortization of Intangibles (1)
| 1,268 | 1,093 | 3,555 | 3,243 | ||||
Stock-based Compensation | 330 | 286 | 966 | 843 | ||||
Operating assets and liabilities/Other, net (2)
| (1,984) | (1,119) | (3,063) | (1,952) | ||||
IBM Financing A/R | 873 | 1,092 | 1,824 | 3,119 | ||||
Net Cash Provided by Operating Activities | $ | 2,881 | $ | 3,055 | $ | 9,115 | $ | 9,468 |
Capital Expenditures, net of payments & proceeds (3)
| 55 | (282) | (705) | (1,226) | ||||
Divestitures, net of cash transferred | 2 | (10) | 705 | (4) | ||||
Acquisitions, net of cash acquired | (2,513) | (4,589) | (2,748) | (4,945) | ||||
Marketable Securities / Other Investments, net | 869 | 2,927 | (810) | (3,732) | ||||
Net Cash Provided by/(Used in) Investing Activities | $ | (1,587) | $ | (1,953) | $ | (3,558) | $ | (9,906) |
Debt, net of payments & proceeds | (1,259) | (1,550) | (777) | 4,619 | ||||
Dividends | (1,542) | (1,515) | (4,601) | (4,522) | ||||
Financing - Other | 35 | (67) | (26) | (252) | ||||
Net Cash Provided by/(Used in) Financing Activities | $ | (2,766) | $ | (3,132) | $ | (5,403) | $ | (154) |
Effect of Exchange Rate changes on Cash | 207 | (119) | (29) | (120) | ||||
Net Change in Cash, Cash Equivalents and Restricted Cash | $ | (1,264) | $ | (2,149) | $ | 125 | $ | (713) |
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||
(Dollars in Billions) | 2024 | 2023 | Yr/Yr | 2024 | 2023 | Yr/Yr | ||||||
Net Income/(Loss) as reported (GAAP) (1)
| $ | (0.3) | $ | 1.7 | $ | (2.0) | $ | 3.1 | $ | 4.2 | $ | (1.1) |
Less: Income/(loss) from discontinued operations, net of tax | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
Income/(Loss) from continuing operations | (0.3) | 1.7 | (2.0) | 3.1 | 4.2 | (1.1) | ||||||
Provision for/(Benefit from) income taxes from continuing ops. | (0.5) | 0.2 | (0.6) | (0.6) | 0.7 | (1.3) | ||||||
Pre-tax income/(loss) from continuing operations (GAAP) | (0.8) | 1.9 | (2.7) | 2.5 | 4.9 | (2.4) | ||||||
Non-operating adjustments (before tax) | ||||||||||||
Acquisition-related charges (2)
| 0.5 | 0.4 | 0.1 | 1.5 | 1.2 | 0.2 | ||||||
Non-operating retirement-related costs/(income) (1)
| 2.8 | 0.0 | 2.8 | 3.0 | 0.0 | 3.0 | ||||||
Operating (non-GAAP) pre-tax income/(loss) from continuing ops. | 2.5 | 2.3 | 0.2 | 6.9 | 6.1 | 0.8 | ||||||
Net interest expense | 0.3 | 0.3 | 0.0 | 0.7 | 0.7 | 0.0 | ||||||
Depreciation/Amortization of non-acquired intangible assets | 0.7 | 0.7 | 0.0 | 2.1 | 2.0 | 0.1 | ||||||
Stock-based compensation | 0.3 | 0.3 | 0.0 | 1.0 | 0.8 | 0.1 | ||||||
Workforce rebalancing charges | 0.3 | 0.0 | 0.3 | 0.7 | 0.4 | 0.3 | ||||||
Corporate (gains) and charges (3)
| (0.4) | 0.0 | (0.3) | (0.6) | 0.0 | (0.6) | ||||||
Adjusted EBITDA | $ | 3.8 | $ | 3.5 | $ | 0.2 | $ | 10.8 | $ | 10.1 | $ | 0.8 |
Three Months Ended September 30, 2024 | ||||||||
(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||
Revenue | $ | 6,524 | $ | 5,152 | $ | 3,042 | $ | 181 |
Segment Profit | $ | 1,969 | $ | 559 | $ | 422 | $ | 86 |
Segment Profit Margin | 30.2 | % | 10.9 | % | 13.9 | % | 47.5 | % |
Change YTY Revenue | 9.7 | % | (0.5) | % | (7.0) | % | (2.5) | % |
Change YTY Revenue - Constant Currency | 9.6 | % | (0.2) | % | (6.7) | % | (1.3) | % |
Three Months Ended September 30, 2023 (1)
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(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||
Revenue | $ | 5,947 | $ | 5,178 | $ | 3,272 | $ | 186 |
Segment Profit | $ | 1,722 | $ | 566 | $ | 490 | $ | 91 |
Segment Profit Margin | 29.0 | % | 10.9 | % | 15.0 | % | 49.2 | % |
Nine Months Ended September 30, 2024 | ||||||||
(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||
Revenue | $ | 19,162 | $ | 15,517 | $ | 9,764 | $ | 543 |
Segment Profit | $ | 5,582 | $ | 1,447 | $ | 1,387 | $ | 254 |
Segment Profit Margin | 29.1 | % | 9.3 | % | 14.2 | % | 46.9 | % |
Change YTY Revenue | 7.5 | % | (0.5) | % | (2.3) | % | (4.1) | % |
Change YTY Revenue - Constant Currency | 8.0 | % | 1.1 | % | (1.2) | % | (3.1) | % |
Nine Months Ended September 30, 2023 (1)
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(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||
Revenue | $ | 17,832 | $ | 15,601 | $ | 9,988 | $ | 566 |
Segment Profit | $ | 4,850 | $ | 1,476 | $ | 1,529 | $ | 256 |
Segment Profit Margin | 27.2 | % | 9.5 | % | 15.3 | % | 45.2 | % |
Three Months Ended September 30, 2024 | ||||||||||
Continuing Operations | ||||||||||
GAAP |
Acquisition-
Related
Adjustments (1)
|
Retirement-
Related
Adjustments (2)
|
Tax Reform Impacts |
Operating (Non-GAAP) | ||||||
Gross Profit | $ | 8,420 | $ | 192 | $ | - | $ | - | $ | 8,612 |
Gross Profit Margin | 56.3 | % | 1.3 | pts | - | pts | - | pts | 57.5 | % |
S,G&A | $ | 4,911 | $ | (300) | $ | - | $ | - | $ | 4,611 |
Other (Income) & Expense | 2,244 | - | (2,797) | - | (553) | |||||
Total Expense & Other (Income) | 9,222 | (300) | (2,797) | - | 6,125 | |||||
Pre-tax Income/(Loss) from Continuing Operations | (802) | 492 | 2,797 | - | 2,487 | |||||
Pre-tax Income Margin from Continuing Operations | (5.4) | % | 3.3 | pts | 18.7 | pts | - | pts | 16.6 | % |
Provision for/(Benefit from) Income Taxes (3)
| $ | (485) | $ | 119 | $ | 700 | $ | (2) | $ | 332 |
Effective Tax Rate | 60.4 | % | (7.2) | pts | (39.8) | pts | (0.1) | pts | 13.4 | % |
Income/(Loss) from Continuing Operations | $ | (317) | $ | 373 | $ | 2,097 | $ | 2 | $ | 2,155 |
Income Margin from Continuing Operations | (2.1) | % | 2.5 | pts | 14.0 | pts | 0.0 | pts | 14.4 | % |
Diluted Earnings/(Loss) Per Share: Continuing Operations (4)
| $ | (0.34) | $ | 0.40 | $ | 2.27 | $ | 0.00 | $ | 2.30 |
Three Months Ended September 30, 2023 | ||||||||||
Continuing Operations | ||||||||||
GAAP |
Acquisition-
Related
Adjustments (1)
|
Retirement-
Related
Adjustments (2)
|
Tax Reform Impacts |
Operating (Non-GAAP) | ||||||
Gross Profit | $ | 8,023 | $ | 162 | $ | - | $ | - | $ | 8,185 |
Gross Profit Margin | 54.4 | % | 1.1 | pts | - | pts | - | pts | 55.5 | % |
S,G&A | $ | 4,458 | $ | (277) | $ | - | $ | - | $ | 4,181 |
Other (Income) & Expense | (215) | 0 | 12 | - | (203) | |||||
Total Expense & Other (Income) | 6,150 | (277) | 12 | - | 5,885 | |||||
Pre-tax Income/(Loss) from Continuing Operations | 1,873 | 438 | (12) | - | 2,299 | |||||
Pre-tax Income Margin from Continuing Operations | 12.7 | % | 3.0 | pts | (0.1) | pts | - | pts | 15.6 | % |
Provision for/(Benefit from) Income Taxes (3)
| $ | 159 | $ | 99 | $ | (14) | $ | 24 | $ | 268 |
Effective Tax Rate | 8.5 | % | 2.7 | pts | (0.5) | pts | 1.0 | pts | 11.7 | % |
Income/(Loss) from Continuing Operations | $ | 1,714 | $ | 340 | $ | 1 | $ | (24) | $ | 2,031 |
Income Margin from Continuing Operations | 11.6 | % | 2.3 | pts | 0.0 | pts | (0.2) | pts | 13.8 | % |
Diluted Earnings/(Loss) Per Share: Continuing Operations | $ | 1.86 | $ | 0.37 | $ | 0.00 | $ | (0.03) | $ | 2.20 |
Nine Months Ended September 30, 2024 | ||||||||||
Continuing Operations | ||||||||||
GAAP |
Acquisition-
Related
Adjustments (1)
|
Retirement-
Related
Adjustments (2)
|
Tax
Reform
Impacts (3)
|
Operating (Non-GAAP) | ||||||
Gross Profit | $ | 25,112 | $ | 533 | $ | - | $ | - | $ | 25,645 |
Gross Profit Margin | 55.6 | % | 1.2 | pts | - | pts | - | pts | 56.7 | % |
S,G&A | $ | 14,823 | $ | (854) | $ | - | $ | - | $ | 13,969 |
Other (Income) & Expense | 1,694 | (68) | (2,991) | - | (1,364) | |||||
Total Expense & Other (Income) | 22,621 | (922) | (2,991) | - | 18,709 | |||||
Pre-tax Income/(Loss) from Continuing Operations | 2,491 | 1,454 | 2,991 | - | 6,936 | |||||
Pre-tax Income Margin from Continuing Operations | 5.5 | % | 3.2 | pts | 6.6 | pts | - | pts | 15.3 | % |
Provision for/(Benefit from) Income Taxes (4)
| $ | (597) | $ | 374 | $ | 731 | $ | 434 | $ | 942 |
Effective Tax Rate | (24.0) | % | 10.4 | pts | 20.9 | pts | 6.3 | pts | 13.6 | % |
Income/(Loss) from Continuing Operations | $ | 3,088 | $ | 1,081 | $ | 2,259 | $ | (434) | $ | 5,994 |
Income Margin from Continuing Operations | 6.8 | % | 2.4 | pts | 5.0 | pts | (1.0) | pts | 13.3 | % |
Diluted Earnings/(Loss) Per Share: Continuing Operations | $ | 3.30 | $ | 1.16 | $ | 2.42 | $ | (0.46) | $ | 6.41 |
Nine Months Ended September 30, 2023 | ||||||||||
Continuing Operations | ||||||||||
GAAP |
Acquisition-
Related
Adjustments (1)
|
Retirement-
Related
Adjustments (2)
|
Tax Reform Impacts |
Operating (Non-GAAP) | ||||||
Gross Profit | $ | 24,033 | $ | 460 | $ | - | $ | - | $ | 24,492 |
Gross Profit Margin | 54.0 | % | 1.0 | pts | - | pts | - | pts | 55.1 | % |
S,G&A | $ | 14,212 | $ | (768) | $ | - | $ | - | $ | 13,444 |
Other (Income) & Expense | (721) | (2) | 16 | - | (707) | |||||
Total Expense & Other (Income) | 19,102 | (770) | 16 | - | 18,348 | |||||
Pre-tax Income from Continuing Operations | 4,931 | 1,229 | (16) | - | 6,144 | |||||
Pre-tax Income Margin from Continuing Operations | 11.1 | % | 2.8 | pts | 0.0 | pts | - | pts | 13.8 | % |
Provision for/(Benefit from) Income Taxes (4)
| $ | 702 | $ | 277 | $ | (27) | $ | (91) | $ | 861 |
Effective Tax Rate | 14.2 | % | 1.7 | pts | (0.4) | pts | (1.5) | pts | 14.0 | % |
Income from Continuing Operations | $ | 4,229 | $ | 953 | $ | 11 | $ | 91 | $ | 5,283 |
Income Margin from Continuing Operations | 9.5 | % | 2.1 | pts | 0.0 | pts | 0.2 | pts | 11.9 | % |
Diluted Earnings Per Share: Continuing Operations | $ | 4.59 | $ | 1.04 | $ | 0.01 | $ | 0.10 | $ | 5.74 |
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||
(Dollars in Billions) | 2024 | 2023 | 2024 | 2023 | ||||
Net Cash Provided by Operating Activities | $ | 2.9 | $ | 3.1 | $ | 9.1 | $ | 9.5 |
Add: | ||||||||
Net interest expense | 0.3 | 0.3 | 0.7 | 0.7 | ||||
Provision for/(Benefit from) income taxes from continuing operations | (0.5) | 0.2 | (0.6) | 0.7 | ||||
Less change in: | ||||||||
Financing receivables | 0.9 | 1.1 | 1.8 | 3.1 | ||||
Other assets and liabilities/other, net (1)
| (2.0) | (1.2) | (3.5) | (2.3) | ||||
Adjusted EBITDA | $ | 3.8 | $ | 3.5 | $ | 10.8 | $ | 10.1 |
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IBM - International Business Machines Corporation published this content on October 23, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 23, 2024 at 20:24:57.581.