Revenue Growth in All Key Segments Led by Global Hybrid Cloud Adoption; Solid Cash Generation.
'
Third-Quarter Highlights
Revenue
Revenue of
Software revenue up 7 percent, up 14 percent at constant currency (about 8 points from sales to
Consulting revenue up 5 percent, up 16 percent at constant currency
Infrastructure revenue up 15 percent, up 23 percent at constant currency (about 9 points from sales to
Hybrid cloud revenue, over the last 12 months, of
Cash Flow
On a consolidated basis, year to date, net cash from operating activities of
THIRD QUARTER 2022 INCOME STATEMENT SUMMARY
GAAP results include impact of one-time, non-cash pension settlement charge*
Pre-tax
Diluted
Gross
Pre-tax
Income/(Loss)
Net
Earnings/(Loss)
Revenue
Profit
Income/(Loss)
Margin
Income/(Loss)
Per Share
GAAP from
Continuing
Operations
$
14.1B
$
7.4B
$
(4.5B)
*
(31.9)
%*
$
(3.2B)
*
$
(3.55)
*
Year/Year
6
%**
5
%
NM
*
(38.0)
Pts*
NM
*
NM
*
Operating
(Non-GAAP)
$
7.6B
$
2.0B
13.9
%
$
1.7B
$
1.81
Year/Year
4
%
23
%
1.8
Pts
(1)
%
(2)
%
GAAP results include the impact of a one-time, non-cash pension settlement charge of
** 15% at constant currency
'Both our revenue growth and operating profit profile for the first three quarters of the year align to the investment thesis we outlined last fall,' said
Segment Results for Third Quarter
Software (includes Hybrid Platform & Solutions, Transaction Processing)- revenues of
Hybrid Platform & Solutions up 2 percent, up 8 percent at constant currency (about 1.5 points from sales to
Red Hat up 12 percent, up 18 percent at constant currency
Automation down 2 percent, up 3 percent at constant currency
Data & AI down 1 percent, up 4 percent at constant currency
Security down 1 percent, up 6 percent at constant currency
Transaction Processing up 23 percent, up 33 percent at constant currency (about 26 points from sales to
Consulting (includes Business Transformation,
Business Transformation up 5 percent, up 14 percent at constant currency
Application Operations up 6 percent, up 17 percent at constant currency
Infrastructure (includes Hybrid Infrastructure, Infrastructure Support)- revenues of
Hybrid Infrastructure up 33 percent, up 41 percent at constant currency (about 11 points from sales to
Distributed Infrastructure up 13 percent, up 21 percent at constant currency
Infrastructure Support down 3 percent, up 5 percent at constant currency (about 7 points from sales to
Financing (includes client and commercial financing)- revenues of
Cash Flow and Balance Sheet
On a consolidated basis, in the third quarter, the company generated net cash from operating activities of
On a consolidated basis, for the first nine months of the year, the company generated net cash from operating activities of
Full-Year 2022 Expectations
Revenue Growth: The company now expects constant currency revenue growth above its mid-single digit model. The company continues to expect an additional contribution of approximately 3.5 points from sales to
Free Cash Flow: The company continues to expect about
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 dispositions, including integration challenges, failure to achieve objectives, the assumption 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 quality issues; impacts of business with government clients; reliance on third party distribution channels and ecosystems; cybersecurity and data privacy considerations; adverse effects related to climate change and 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; potential failure of the separation of
Presentation of Information in this Press Release
On
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:
adjusting for currency (i.e., at constant currency);
presenting operating (non-GAAP) earnings per share amounts and related income statement items;
consolidated free cash flow;
consolidated cash from operating activities excluding IBM Financing receivables.
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
Conference Call and 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:
sarah.meron@ibm.com
tfdavids@us.ibm.com
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