07/24/2024 | Press release | Distributed by Public on 07/24/2024 14:15
SECOND QUARTER 2024 INCOME STATEMENT SUMMARY
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Revenue |
Gross Profit |
Gross Profit Margin |
Pre-tax Income |
Pre-tax Income Margin |
Net Income |
Diluted Earnings Per Share |
||||||||
GAAP from Continuing Operations | $ | 15.8B | $ | 8.9B | 56.8 | % | $ | 2.2B | 14.1 | % | $ | 1.8B | $ | 1.96 |
Year/Year | 2 |
%(1)
|
5 | % | 1.8 | Pts | 11 | % | 1.1 | Pts | 16 | % | 14 | % |
Operating (Non-GAAP) |
$ | 9.1B | 57.8 | % | $ | 2.8B | 17.7 | % | $ | 2.3B | $ | 2.43 | ||
Year/Year | 5 | % | 1.9 | Pts | 17 | % | 2.2 | Pts | 14 | % | 11 | % |
Contact:
|
IBM
|
Sarah Meron, 347-891-1770 | |
[email protected] | |
Tim Davidson, 914-844-7847 | |
[email protected] |
Three Months Ended June 30, |
Six Months Ended June 30, |
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2024 |
2023 (1)
|
2024 |
2023 (1)
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REVENUE BY SEGMENT | ||||||||
Software | $ | 6,739 | $ | 6,294 | $ | 12,637 | $ | 11,885 |
Consulting | 5,179 | 5,226 | 10,365 | 10,423 | ||||
Infrastructure | 3,645 | 3,618 | 6,721 | 6,716 | ||||
Financing | 169 | 185 | 362 | 380 | ||||
Other | 38 | 152 | 146 | 321 | ||||
TOTAL REVENUE | 15,770 | 15,475 | 30,231 | 29,727 | ||||
GROSS PROFIT | 8,950 | 8,501 | 16,692 | 16,010 | ||||
GROSS PROFIT MARGIN | ||||||||
Software | 83.6 | % | 82.1 | % | 83.0 | % | 82.3 | % |
Consulting | 26.3 | % | 25.9 | % | 25.8 | % | 25.7 | % |
Infrastructure | 56.5 | % | 56.0 | % | 55.4 | % | 54.1 | % |
Financing | 48.9 | % | 49.2 | % | 48.7 | % | 46.5 | % |
TOTAL GROSS PROFIT MARGIN | 56.8 | % | 54.9 | % | 55.2 | % | 53.9 | % |
EXPENSE AND OTHER INCOME | ||||||||
S,G&A | 4,938 | 4,900 | 9,912 | 9,754 | ||||
R,D&E | 1,840 | 1,687 | 3,637 | 3,342 | ||||
Intellectual property and custom development income | (241) | (248) | (458) | (428) | ||||
Other (income) and expense | (233) | (261) | (550) | (506) | ||||
Interest expense | 427 | 423 | 859 | 790 | ||||
TOTAL EXPENSE AND OTHER INCOME | 6,730 | 6,501 | 13,399 | 12,952 | ||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
2,219 | 2,000 | 3,293 | 3,058 | ||||
Pre-tax margin | 14.1 | % | 12.9 | % | 10.9 | % | 10.3 | % |
Provision for/(Benefit from) income taxes | 389 | 419 | (112) | 543 | ||||
Effective tax rate | 17.5 | % | 21.0 | % | (3.4) | % | 17.8 | % |
INCOME FROM CONTINUING OPERATIONS | $ | 1,830 | $ | 1,581 | $ | 3,405 | $ | 2,515 |
DISCONTINUED OPERATIONS | ||||||||
Income/(loss) from discontinued operations, net of taxes | 4 | 2 | 34 | (4) | ||||
NET INCOME | $ | 1,834 | $ | 1,583 | $ | 3,439 | $ | 2,511 |
EARNINGS/(LOSS) PER SHARE OF COMMON STOCK | ||||||||
Assuming Dilution | ||||||||
Continuing Operations | $ | 1.96 | $ | 1.72 | $ | 3.65 | $ | 2.74 |
Discontinued Operations | $ | 0.00 | $ | 0.00 | $ | 0.04 | $ | 0.00 |
TOTAL | $ | 1.96 | $ | 1.72 | $ | 3.68 | $ | 2.73 |
Basic | ||||||||
Continuing Operations | $ | 1.99 | $ | 1.74 | $ | 3.71 | $ | 2.77 |
Discontinued Operations | $ | 0.00 | $ | 0.00 | $ | 0.04 | $ | 0.00 |
TOTAL | $ | 1.99 | $ | 1.74 | $ | 3.74 | $ | 2.76 |
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M's) | ||||||||
Assuming Dilution | 934.4 | 919.5 | 933.9 | 918.6 | ||||
Basic | 920.3 | 909.9 | 918.7 | 908.7 |
(Dollars in Millions) |
At June 30, 2024 |
At December 31, 2023 |
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ASSETS: | ||||
Current Assets: | ||||
Cash and cash equivalents | $ | 12,210 | $ | 13,068 |
Restricted cash | 2,268 | 21 | ||
Marketable securities | 1,481 | 373 | ||
Notes and accounts receivable - trade, net | 5,769 | 7,214 | ||
Short-term financing receivables, net | 5,799 | 6,793 | ||
Other accounts receivable, net | 757 | 640 | ||
Inventories | 1,234 | 1,161 | ||
Deferred costs | 997 | 998 | ||
Prepaid expenses and other current assets | 2,784 | 2,639 | ||
Total Current Assets | 33,299 | 32,908 | ||
Property, plant and equipment, net | 5,600 | 5,501 | ||
Operating right-of-use assets, net | 3,130 | 3,220 | ||
Long-term financing receivables, net | 5,483 | 5,766 | ||
Prepaid pension assets | 7,630 | 7,506 | ||
Deferred costs | 820 | 842 | ||
Deferred taxes | 6,378 | 6,656 | ||
Goodwill | 59,416 | 60,178 | ||
Intangibles, net | 10,251 | 11,036 | ||
Investments and sundry assets | 1,840 | 1,626 | ||
Total Assets | $ | 133,848 | $ | 135,241 |
LIABILITIES: | ||||
Current Liabilities: | ||||
Taxes | $ | 1,691 | $ | 2,270 |
Short-term debt | 3,602 | 6,426 | ||
Accounts payable | 3,631 | 4,132 | ||
Deferred income | 13,643 | 13,451 | ||
Operating lease liabilities | 762 | 820 | ||
Other liabilities | 6,319 | 7,022 | ||
Total Current Liabilities | 29,648 | 34,122 | ||
Long-term debt | 52,929 | 50,121 | ||
Retirement related obligations | 10,200 | 10,808 | ||
Deferred income | 3,489 | 3,533 | ||
Operating lease liabilities | 2,546 | 2,568 | ||
Other liabilities | 10,932 | 11,475 | ||
Total Liabilities | 109,745 | 112,628 | ||
EQUITY: | ||||
IBM Stockholders' Equity: | ||||
Common stock | 60,501 | 59,643 | ||
Retained earnings | 151,659 | 151,276 | ||
Treasury stock - at cost | (169,815) | (169,624) | ||
Accumulated other comprehensive income/(loss) | (18,319) | (18,761) | ||
Total IBM Stockholders' Equity | 24,026 | 22,533 | ||
Noncontrolling interests | 77 | 80 | ||
Total Equity | 24,103 | 22,613 | ||
Total Liabilities and Equity | $ | 133,848 | $ | 135,241 |
Three Months Ended June 30, |
Six Months Ended June 30, |
Trailing Twelve Months Ended June 30, | ||||||||
(Dollars in Millions) | 2024 | 2023 | 2024 | 2023 | 2024 | |||||
Net Cash from Operations per GAAP | $ | 2,066 | $ | 2,638 | $ | 6,234 | $ | 6,412 | $ | 13,752 |
Less: change in IBM Financing receivables | (946) | 50 | 951 | 2,028 | 156 | |||||
Capital Expenditures, net | (399) | (487) | (761) | (944) | (1,305) | |||||
Free Cash Flow | 2,612 | 2,101 | 4,522 | 3,441 | 12,292 | |||||
Acquisitions | (153) | (334) | (235) | (356) | (4,961) | |||||
Divestitures | - | 6 | 703 | 6 | 693 | |||||
Dividends | (1,537) | (1,510) | (3,058) | (3,007) | (6,092) | |||||
Non-Financing Debt | (4,168) | (1,178) | 1,076 | 8,514 | (1,892) | |||||
Other (includes IBM Financing net receivables and debt) | (73) | (347) | (510) | (1,109) | (410) | |||||
Change in Cash, Cash Equivalents, Restricted Cash and Short-term Marketable Securities | $ | (3,318) | $ | (1,263) | $ | 2,497 | $ | 7,489 | $ | (370) |
Three Months Ended June 30, |
Six Months Ended June 30, |
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(Dollars in Millions) | 2024 | 2023 | 2024 | 2023 | ||||
Net Income from Operations | $ | 1,834 | $ | 1,583 | $ | 3,439 | $ | 2,511 |
Depreciation/Amortization of Intangibles (1)
|
1,155 | 1,076 | 2,287 | 2,150 | ||||
Stock-based Compensation | 316 | 288 | 636 | 556 | ||||
Operating assets and liabilities/Other, net (2)
|
(293) | (359) | (1,079) | (832) | ||||
IBM Financing A/R | (946) | 50 | 951 | 2,028 | ||||
Net Cash Provided by Operating Activities | $ | 2,066 | $ | 2,638 | $ | 6,234 | $ | 6,412 |
Capital Expenditures, net of payments & proceeds | (399) | (487) | (761) | (944) | ||||
Divestitures, net of cash transferred | - | 6 | 703 | 6 | ||||
Acquisitions, net of cash acquired | (153) | (334) | (235) | (356) | ||||
Marketable Securities / Other Investments, net | 2,791 | 822 | (1,679) | (6,659) | ||||
Net Cash Provided by/(Used in) Investing Activities | $ | 2,239 | $ | 7 | $ | (1,971) | $ | (7,953) |
Debt, net of payments & proceeds | (2,900) | (1,135) | 481 | 6,169 | ||||
Dividends | (1,537) | (1,510) | (3,058) | (3,007) | ||||
Financing - Other | (78) | (86) | (61) | (185) | ||||
Net Cash Provided by/(Used in) Financing Activities | $ | (4,515) | $ | (2,731) | $ | (2,638) | $ | 2,978 |
Effect of Exchange Rate changes on Cash | (76) | (25) | (236) | (1) | ||||
Net Change in Cash, Cash Equivalents and Restricted Cash | $ | (287) | $ | (110) | $ | 1,389 | $ | 1,436 |
Three Months Ended June 30, |
Six Months Ended June 30, |
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(Dollars in Billions) | 2024 | 2023 | Yr/Yr | 2024 | 2023 | Yr/Yr | ||||||
Net Income as reported (GAAP) | $ | 1.8 | $ | 1.6 | $ | 0.3 | $ | 3.4 | $ | 2.5 | $ | 0.9 |
Less: Income/(loss) from discontinued operations, net of tax | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | ||||||
Income from continuing operations | 1.8 | 1.6 | 0.2 | 3.4 | 2.5 | 0.9 | ||||||
Provision for/(Benefit from) income taxes from continuing ops. | 0.4 | 0.4 | 0.0 | (0.1) | 0.5 | (0.7) | ||||||
Pre-tax income from continuing operations (GAAP) | 2.2 | 2.0 | 0.2 | 3.3 | 3.1 | 0.2 | ||||||
Non-operating adjustments (before tax) | ||||||||||||
Acquisition-related charges (1)
|
0.5 | 0.4 | 0.1 | 1.0 | 0.8 | 0.2 | ||||||
Non-operating retirement-related costs/(income) | 0.1 | 0.0 | 0.1 | 0.2 | 0.0 | 0.2 | ||||||
Operating (non-GAAP) pre-tax income from continuing ops. | 2.8 | 2.4 | 0.4 | 4.4 | 3.8 | 0.6 | ||||||
Net interest expense | 0.2 | 0.2 | 0.0 | 0.4 | 0.4 | 0.0 | ||||||
Depreciation/Amortization of non-acquired intangible assets | 0.7 | 0.7 | 0.0 | 1.4 | 1.4 | 0.0 | ||||||
Stock-based compensation | 0.3 | 0.3 | 0.0 | 0.6 | 0.6 | 0.1 | ||||||
Workforce rebalancing charges | 0.0 | 0.1 | (0.1) | 0.4 | 0.4 | 0.0 | ||||||
Corporate (gains) and charges (2)
|
0.0 | 0.0 | 0.0 | (0.2) | 0.0 | (0.2) | ||||||
Adjusted EBITDA | $ | 4.0 | $ | 3.7 | $ | 0.4 | $ | 7.1 | $ | 6.5 | $ | 0.5 |
Three Months Ended June 30, 2024 | ||||||||
(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||
Revenue | $ | 6,739 | $ | 5,179 | $ | 3,645 | $ | 169 |
Segment Profit | $ | 2,113 | $ | 463 | $ | 654 | $ | 77 |
Segment Profit Margin | 31.3 | % | 8.9 | % | 17.9 | % | 45.3 | % |
Change YTY Revenue | 7.1 | % | (0.9) | % | 0.7 | % | (8.3) | % |
Change YTY Revenue - Constant Currency | 8.4 | % | 1.8 | % | 2.7 | % | (6.6) | % |
Three Months Ended June 30, 2023 (1)
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(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||
Revenue | $ | 6,294 | $ | 5,226 | $ | 3,618 | $ | 185 |
Segment Profit | $ | 1,749 | $ | 483 | $ | 732 | $ | 64 |
Segment Profit Margin | 27.8 | % | 9.2 | % | 20.2 | % | 34.8 | % |
Six Months Ended June 30, 2024 | ||||||||
(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||
Revenue | $ | 12,637 | $ | 10,365 | $ | 6,721 | $ | 362 |
Segment Profit | $ | 3,612 | $ | 888 | $ | 965 | $ | 168 |
Segment Profit Margin | 28.6 | % | 8.6 | % | 14.4 | % | 46.5 | % |
Change YTY Revenue | 6.3 | % | (0.6) | % | 0.1 | % | (4.9) | % |
Change YTY Revenue - Constant Currency | 7.2 | % | 1.8 | % | 1.5 | % | (4.0) | % |
Six Months Ended June 30, 2023 (1)
|
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(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||
Revenue | $ | 11,885 | $ | 10,423 | $ | 6,716 | $ | 380 |
Segment Profit | $ | 3,128 | $ | 910 | $ | 1,039 | $ | 164 |
Segment Profit Margin | 26.3 | % | 8.7 | % | 15.5 | % | 43.2 | % |
Three Months Ended June 30, 2024 | ||||||||||
Continuing Operations | ||||||||||
GAAP |
Acquisition-
Related
Adjustments (1)
|
Retirement-
Related
Adjustments (2)
|
Tax Reform Impacts |
Operating (Non-GAAP) |
||||||
Gross Profit | $ | 8,950 | $ | 170 | $ | - | $ | - | $ | 9,120 |
Gross Profit Margin | 56.8 | % | 1.1 | pts | - | pts | - | pts | 57.8 | % |
S,G&A | $ | 4,938 | $ | (286) | $ | - | $ | - | $ | 4,651 |
Other (Income) & Expense | (233) | (18) | (98) | - | (349) | |||||
Total Expense & Other (Income) | 6,730 | (304) | (98) | - | 6,328 | |||||
Pre-tax Income from Continuing Operations | 2,219 | 474 | 98 | - | 2,792 | |||||
Pre-tax Income Margin from Continuing Operations | 14.1 | % | 3.0 | pts | 0.6 | pts | - | pts | 17.7 | % |
Provision for/(Benefit from) Income Taxes (3)
|
$ | 389 | $ | 113 | $ | 26 | $ | (12) | $ | 516 |
Effective Tax Rate | 17.5 | % | 1.1 | pts | 0.3 | pts | (0.4) | pts | 18.5 | % |
Income from Continuing Operations | $ | 1,830 | $ | 362 | $ | 72 | $ | 12 | $ | 2,275 |
Income Margin from Continuing Operations | 11.6 | % | 2.3 | pts | 0.5 | pts | 0.1 | pts | 14.4 | % |
Diluted Earnings Per Share: Continuing Operations | $ | 1.96 | $ | 0.39 | $ | 0.08 | $ | 0.01 | $ | 2.43 |
Three Months Ended June 30, 2023 | ||||||||||
Continuing Operations | ||||||||||
GAAP |
Acquisition-
Related
Adjustments (1)
|
Retirement-
Related
Adjustments (2)
|
Tax Reform Impacts |
Operating (Non-GAAP) |
||||||
Gross Profit | $ | 8,501 | $ | 150 | $ | - | $ | - | $ | 8,650 |
Gross Profit Margin | 54.9 | % | 1.0 | pts | - | pts | - | pts | 55.9 | % |
S,G&A | $ | 4,900 | $ | (245) | $ | - | $ | - | $ | 4,655 |
Other (Income) & Expense | (261) | 0 | (1) | - | (262) | |||||
Total Expense & Other (Income) | 6,501 | (246) | (1) | - | 6,254 | |||||
Pre-tax Income from Continuing Operations | 2,000 | 395 | 1 | - | 2,396 | |||||
Pre-tax Income Margin from Continuing Operations | 12.9 | % | 2.6 | pts | 0.0 | pts | - | pts | 15.5 | % |
Provision for/(Benefit from) Income Taxes (3)
|
$ | 419 | $ | 87 | $ | (3) | $ | (110) | $ | 393 |
Effective Tax Rate | 21.0 | % | 0.2 | pts | (0.2) | pts | (4.6) | pts | 16.4 | % |
Income from Continuing Operations | $ | 1,581 | $ | 308 | $ | 5 | $ | 110 | $ | 2,003 |
Income Margin from Continuing Operations | 10.2 | % | 2.0 | pts | 0.0 | pts | 0.7 | pts | 12.9 | % |
Diluted Earnings Per Share: Continuing Operations | $ | 1.72 | $ | 0.34 | $ | 0.00 | $ | 0.12 | $ | 2.18 |
Six Months Ended June 30, 2024 | ||||||||||
Continuing Operations | ||||||||||
GAAP |
Acquisition-
Related
Adjustments (1)
|
Retirement-
Related
Adjustments (2)
|
Tax
Reform
Impacts (3)
|
Operating (Non-GAAP) |
||||||
Gross Profit | $ | 16,692 | $ | 341 | $ | - | $ | - | $ | 17,033 |
Gross Profit Margin | 55.2 | % | 1.1 | pts | - | pts | - | pts | 56.3 | % |
S,G&A | $ | 9,912 | $ | (554) | $ | - | $ | - | $ | 9,358 |
Other (Income) & Expense | (550) | (68) | (194) | - | (812) | |||||
Total Expense & Other (Income) | 13,399 | (622) | (194) | - | 12,584 | |||||
Pre-tax Income from Continuing Operations | 3,293 | 963 | 194 | - | 4,449 | |||||
Pre-tax Income Margin from Continuing Operations | 10.9 | % | 3.2 | pts | 0.6 | pts | - | pts | 14.7 | % |
Provision for/(Benefit from) Income Taxes (4)
|
$ | (112) | $ | 255 | $ | 31 | $ | 436 | $ | 610 |
Effective Tax Rate | (3.4) | % | 6.5 | pts | 0.9 | pts | 9.8 | pts | 13.7 | % |
Income from Continuing Operations | $ | 3,405 | $ | 707 | $ | 163 | $ | (436) | $ | 3,839 |
Income Margin from Continuing Operations | 11.3 | % | 2.3 | pts | 0.5 | pts | (1.4) | pts | 12.7 | % |
Diluted Earnings Per Share: Continuing Operations | $ | 3.65 | $ | 0.76 | $ | 0.17 | $ | (0.47) | $ | 4.11 |
Six Months Ended June 30, 2023 | ||||||||||
Continuing Operations | ||||||||||
GAAP |
Acquisition-
Related
Adjustments (1)
|
Retirement-
Related
Adjustments (2)
|
Tax Reform Impacts |
Operating (Non-GAAP) |
||||||
Gross Profit | $ | 16,010 | $ | 298 | $ | - | $ | - | $ | 16,308 |
Gross Profit Margin | 53.9 | % | 1.0 | pts | - | pts | - | pts | 54.9 | % |
S,G&A | $ | 9,754 | $ | (491) | $ | - | $ | - | $ | 9,263 |
Other (Income) & Expense | (506) | (2) | 4 | - | (504) | |||||
Total Expense & Other (Income) | 12,952 | (493) | 4 | - | 12,463 | |||||
Pre-tax Income from Continuing Operations | 3,058 | 791 | (4) | - | 3,845 | |||||
Pre-tax Income Margin from Continuing Operations | 10.3 | % | 2.7 | pts | 0.0 | pts | - | pts | 12.9 | % |
Provision for/(Benefit from) Income Taxes (4)
|
$ | 543 | $ | 178 | $ | (14) | $ | (115) | $ | 593 |
Effective Tax Rate | 17.8 | % | 1.0 | pts | (0.3) | pts | (3.0) | pts | 15.4 | % |
Income from Continuing Operations | $ | 2,515 | $ | 613 | $ | 10 | $ | 115 | $ | 3,252 |
Income Margin from Continuing Operations | 8.5 | % | 2.1 | pts | 0.0 | pts | 0.4 | pts | 10.9 | % |
Diluted Earnings Per Share: Continuing Operations | $ | 2.74 | $ | 0.67 | $ | 0.01 | $ | 0.13 | $ | 3.54 |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||
(Dollars in Billions) | 2024 | 2023 | 2024 | 2023 | ||||
Net Cash Provided by Operating Activities | $ | 2.1 | $ | 2.6 | $ | 6.2 | $ | 6.4 |
Add: | ||||||||
Net interest expense | 0.2 | 0.2 | 0.4 | 0.4 | ||||
Provision for/(Benefit from) income taxes from continuing operations | 0.4 | 0.4 | (0.1) | 0.5 | ||||
Less change in: | ||||||||
Financing receivables | (0.9) | 0.1 | 1.0 | 2.0 | ||||
Other assets and liabilities/Other, net (1)
|
(0.4) | (0.5) | (1.5) | (1.2) | ||||
Adjusted EBITDA | $ | 4.0 | $ | 3.7 | $ | 7.1 | $ | 6.5 |