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IBM RELEASES SECOND-QUARTER RESULTS

Published

2 years ago

on

Accelerated revenue growth led by Software; Raises full-year free cash flow expectation

ARMONK, N.Y., July 24, 2024 /PRNewswire/ — IBM (NYSE: IBM) today announced second-quarter 2024 earnings results.

“We had a strong second quarter, exceeding our expectations, driven by growth in both revenue and free cash flow. We continue to see that clients turn to IBM for our technology and our expertise in enterprise AI, and our book of business for generative AI has grown to more than two billion dollars since the launch of watsonx one year ago,” said Arvind Krishna, IBM chairman and chief executive officer. “Given our first-half results, we are raising our full-year view of free cash flow, which we now expect to be more than $12 billion.” 

Second-Quarter Highlights

Revenue
– Revenue of $15.8 billion, up 2 percent, up 4 percent at constant currency
– Software revenue up 7 percent, up 8 percent at constant currency
– Consulting revenue down 1 percent, up 2 percent at constant currency
– Infrastructure revenue up 1 percent, up 3 percent at constant currency
Profit Margin
– Gross Profit Margin: GAAP: 56.8 percent, up 180 basis points; Operating (Non-GAAP): 57.8 percent, up 190 basis points
– Pre-Tax Income Margin: GAAP: 14.1 percent, up 110 basis points; Operating (Non-GAAP): 17.7 percent, up 220 basis points
Cash Flow
– Year to date, net cash from operating activities of $6.2 billion, down $0.2 billion; free cash flow of $4.5 billion, up $1.1 billion
– Over the last twelve months, net cash from operating activities of $13.8 billion; free cash flow of $12.3 billion

SECOND QUARTER 2024 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

$   15.8 B

 
 

$   8.9 B

 
 

56.8

%

 

$  2.2 B

 
 

14.1

%

 

$     1.8 B

 
 

$     1.96

 

Year/Year

2

%(1)

 

5

%

 

1.8

Pts

 

11

%

 

1.1

Pts

 

16

%

 

14

%

Operating

(Non-GAAP)

 
 
 

$   9.1 B

 
 

57.8

%

 

$  2.8 B

 
 

17.7

%

 

$     2.3 B

 
 

$     2.43

 

Year/Year

 
 
 

5

%

 

1.9

Pts

 

17

%

 

2.2

Pts

 

14

%

 

11

%

(1)  4% at constant currency.

“In the quarter, we accelerated our revenue growth as we continue to execute well on our strategy. Our business fundamentals, operating leverage, product mix and productivity initiatives all contributed to significant margin expansion and increased profit and free cash flow,” said James Kavanaugh, IBM senior vice president and chief financial officer. “Our strong cash generation enables us to continue investing in innovation and expertise across the portfolio, while returning value to shareholders through dividends.”

Segment Results for Second Quarter

Software — revenues of $6.7 billion, up 7.1 percent, up 8.4 percent at constant currency:
– Hybrid Platform & Solutions up 5 percent, up 6 percent at constant currency:
      — Red Hat up 7 percent, up 8 percent at constant currency
      — Automation up 15 percent, up 16 percent at constant currency
      — Data & AI down 3 percent, down 2 percent at constant currency
      — Security up 2 percent, up 3 percent at constant currency
– Transaction Processing up 11 percent, up 13 percent at constant currency

Consulting — revenues of $5.2 billion, down 0.9 percent, up 1.8 percent at constant currency:
– Business Transformation up 3 percent, up 6 percent at constant currency
– Technology Consulting down 3 percent, up 1 percent at constant currency
– Application Operations down 4 percent, down 2 percent at constant currency

Infrastructure — revenues of $3.6 billion, up 0.7 percent, up 2.7 percent at constant currency:
– Hybrid Infrastructure up 4 percent, up 6 percent at constant currency
      — IBM Z up 6 percent, up 8 percent at constant currency
      — Distributed Infrastructure up 3 percent, up 5 percent at constant currency
– Infrastructure Support down 5 percent, down 3 percent at constant currency

Financing — revenues of $0.2 billion, down 8.3 percent, down 6.6 percent at constant currency

Cash Flow and Balance Sheet

In the second quarter, the company generated net cash from operating activities of $2.1 billion, down $0.6 billion year to year. IBM’s free cash flow was $2.6 billion, up $0.5 billion year to year. The company returned $1.5 billion to shareholders in dividends in the second quarter.

For the first six months of the year, the company generated net cash from operating activities of $6.2 billion, down $0.2 billion year to year. IBM’s free cash flow was $4.5 billion, up $1.1 billion year to year. Over the last twelve months, the company generated net cash from operating activities of $13.8 billion and free cash flow of $12.3 billion.

IBM ended the second quarter with $16.0 billion of cash, restricted cash and marketable securities, up $2.5 billion from year-end 2023. Debt, including IBM Financing debt of $11.1 billion, totaled $56.5 billion, flat year to date.

Full-Year 2024 Expectations

Revenue: The company continues to expect constant currency revenue growth consistent with its mid-single digit model. At current foreign exchange rates, currency is expected to be about a one to two-point headwind to revenue growth
Free cash flow: The company now expects more than $12 billion in free cash flow

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 Kyndryl Holdings, Inc. to qualify for tax-free treatment; 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.

Statements in this communication regarding the strategic acquisition that are forward-looking may include projections as to closing date for the transaction, the extent of, and the time necessary to obtain, the regulatory approvals required for the transaction, the anticipated benefits of the transaction, the impact of the transaction on IBM’s business, the synergies from the transaction, and the combined company’s future operating results.

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

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.

For generative AI, book of business includes Software transactional revenue, SaaS Annual Contract Value and Consulting signings.

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-2q24. 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
June 30,

 
 

Six Months Ended
June 30,

 
 

2024

 
 

2023 (1)

 
 

2024

 
 

2023 (1)

 

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

 

____________________

 

(1)  Recast to reflect January 2024 segment changes.

 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

 

(Dollars in Millions)

 

At
June 30,
2024

 

At
December 31,
2023

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

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW ANALYSIS

(Unaudited)

 
 
 

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)

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW

(Unaudited)

 
 
 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

(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

____________________

(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

June 30,

 

Six Months Ended
June 30,

(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

____________________

(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 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)

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(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

%

____________________

(1) Recast to reflect January 2024 segment changes. 

 
 
 

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)

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(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

%

__________

(1) Recast to reflect January 2004 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 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

 

____________________

(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 $18 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)    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

U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION

(Unaudited; Dollars in millions except per share amounts)

 
 

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

 

____________________

(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 $68 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)    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
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

____________________

(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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Technology

TiTE x IHT 2026: The Definitive Hub for Taiwan’s Hardware Manufacturing Excellence

Published

2 hours ago

on

May 6, 2026

By

TAICHUNG, May 6, 2026 /PRNewswire/ — When sourcing from Taiwan, location is the ultimate strategic advantage. Don’t be misled by smaller, general trade shows held in city centers like Taipei. To truly connect with the source, you must go where the products are born. TiTE x IHT (Oct 20-22, 2026) in Taichung is the undisputed largest and most vital hardware industrial expo on the island. Hosted directly in the heart of Taiwan’s precision manufacturing cluster, this event features 1,000+ booths and 500+ top-tier manufacturers, offering a scale and industrial depth that no other exhibition can replicate.

Why Global Buyers Choose the Taichung Source Over Urban Trade Shows:

The Revolutionary “Exhibition as Factory” Model: Taichung is the global epicenter for hardware, home to 70% of Taiwan’s industry output. Our unique location enables the “30-Minute Sourcing Circle.” This allows you to verify high-end samples on the show floor in the morning and audit world-class production lines by the afternoon. By eliminating the travel gap between the booth and the factory, we reduce traditional procurement cycles from weeks to hours, providing unmatched transparency for R&D, capacity assessment, and quality control.ESG & CBAM Compliance for Western Markets: As the EU’s Carbon Border Adjustment Mechanism (CBAM) and global ESG mandates reshape trade, our exhibitors are already ahead of the curve. Discover CBAM-ready solutions and green manufacturing processes specifically designed to meet the strict sustainability requirements of the European and American markets. We provide more than just tools; we provide carbon-footprint-managed resilience for your brand.AI-Driven Smart Manufacturing: Address global labor shortages and rising costs with Taiwan’s latest innovations. The 2026 expo focuses on “AI Empowerment,” showcasing collaborative robotics, automated digital inspection, and data-driven supply chain management. These technologies ensure lead-time stability and high-precision consistency for premium global brand owners.Direct Sourcing & Global Matchmaking: Skip the middlemen and trading agencies. Our “Global Buyer Day” offers exclusive, pre-arranged matchmaking with the actual OEMs/ODMs. This is the primary decision-making platform for major distributors seeking resilient, direct-to-factory partnerships that guarantee the best pricing and priority production slots.

Experience the synergy of smart manufacturing and global trade. Stop at the source—where the world’s hardware is actually built. Secure your competitive edge in the true heart of the industry.

【TiTE x IHT】

Date: October 20-22, 2026Venue: TICEC, Taichung, TaiwanRegister Now: https://accu.ps/g8MZ1SHousing Subsidy: https://forms.gle/34VHVxSrEw7g8GxDAOfficial Website: https://www.hardwareexpotw.com

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KIST Accelerates U.S. Expansion of Quantum Deep-Tech Startups Through SelectUSA 2026

Published

2 hours ago

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May 6, 2026

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SEOUL, South Korea, May 5, 2026 /PRNewswire/ — The Korea Institute of Science and Technology (KIST) President Oh Sang-rok announced that it will participate in the SelectUSA Investment Summit 2026 as part of a Korean delegation, together with quantum technology startups supported by the Ministry of SMEs and Startups under the Deeptech Project (DIPS).

The initiative, supported by South Korea’s Ministry of SMEs and Startups (MSS), is part of the government’s “Deeptech Incubator Project for Startups” (DIPS) initiative, which aims to nurture globally competitive deep-tech ventures.

KIST, which serves as the lead institution for the quantum technology sector under the program, said it will oversee the global commercialization efforts of participating firms. In particular, the “Global Bridge Program,” jointly developed with the U.S. Embassy in Korea in September 2025, is an official program designed to generate tangible overseas expansion outcomes by linking investment attraction with local market entry through diplomatic channels.

Organized by the U.S. Department of Commerce, the SelectUSA Investment Summit is the largest investment promotion event in the US, connecting international startups with venture capital firms, corporate investors and state-level economic development agencies.

It serves as an execution-oriented platform that extends to investment, corporate establishment, site selection, and tax incentives, and is considered a key entry gateway for deep-tech companies, including those in quantum technology.

KIST said participation in the summit is particularly significant for deep-tech sectors such as quantum technology, where access to the US innovation ecosystem is seen as key to growth.

The program is conducted in two stages. From April 30 to May 1, companies took part in a spin-off program hosted by the State of Maryland, which included visits to research institutions and tours of the regional quantum technology ecosystem.

During this period, the delegation also conducted localized activities with the Maryland state government and its economic development agencies, focusing on investment attraction, corporate collaboration, and joint R&D. In addition, on May 5, the delegation held discussions with U.S. Department of Commerce Deputy Secretary William Kimmitt on potential areas of cooperation.

The delegation will also meet officials from Fairfax County Government to explore collaboration and investment opportunities.

The main summit, currently ongoing from May 3 to May 6, features exhibitions, pitching sessions and meetings with US state representatives, with participating firms expected to engage in discussions on investment and market entry.

The delegation is structured to encompass the entire quantum industry rather than a single technology domain.

The Korean delegation comprises five startups, alongside Kyung Hee University Department of Future Science & Technology Commercialization Policy and Entrepreneurship, with approximately 20 participants forming an integrated ecosystem that combines research institutes, academia, and startups, enabling a full-cycle support system from technology validation to commercialization and global expansion.

One of the firms, OptiQ-Labs, was selected for an official pitching session on May 4, where it presented its laser-based optical modules designed for ion-trap quantum computing systems.

This highly competitive program selects only around 100 companies from more than 20,000 applicants worldwide. If selected as the winner of the pitching session, the company will receive follow-up meetings with U.S. state governments and economic development agencies, access to global investor networks, support for local entity establishment, and connections to site selection and tax incentive programs.

Other participating companies include QUAD, which develops single-photon detection technology; SLEEX, focused on underwater sensing; Elixir (StatUp AI), which works on quantum-classical hybrid algorithms for healthcare; and SQK (QMEDIC), specializing in physics-based imaging solutions.

KIST Project Director, Kang Sunjoon, said, “This program represents a critical milestone for Korean quantum startups to directly connect with global investors and industry ecosystems. Via the DIPS program, we are actively promoting the global commercialization of quantum technologies.”

Through its participation in SelectUSA, KIST has established a package-type global expansion model that integrates technology validation, investment attraction, and U.S. market entry.

The summit serves as a turning point for South Korea’s quantum sector, enabling startups to move into the next phase of validation, investment, and overseas expansion.

For more information, visit https://eng.kist.re.kr/.

About KIST 

KIST was established in 1966 as the first government-funded research institute in South Korea. KIST now strives to solve national and social challenges and secure growth engines through leading and innovative research.

About Participating Quantum Startups

QUAD, led by Chief Executive Officer, Oh Byung-doo, develops quantum sensing technologies based on superconducting nanowire single-photon detectors (SNSPDs), offering high sensitivity and precision with applications spanning quantum communication, quantum computing, semiconductor inspection, and defense.

SLEEX is developing an advanced perception technology that combines quantum LiDAR and electric field sensing to overcome limitations of existing underwater sensors, particularly by eliminating blind zones within the 0–2 meter range, with strong potential in autonomous navigation, maritime security, and defense, with Lee Jeho at the helm as Chief Executive Officer.  (https://www.thesleex.com)

Elixir, headed by Chief Executive Officer Jang Jung-kwon, develops a drug discovery and biomarker analysis platform based on quantum-classical hybrid algorithms, targeting the precision medicine market through the integration of bioinformatics and quantum machine learning. (statupai.com)

SQK develops medical imaging AI based on quantum-physics constraints, addressing the hallucination issues of conventional AI by ensuring physical consistency in CT and MRI reconstruction. Under the leadership of Chief Executive Officer Kim Yoon-hak, SQK is improving reliability and reducing the need for re-scans in clinical settings. (www.sqkcloud.com)

View original content to download multimedia:https://www.prnewswire.com/news-releases/kist-accelerates-us-expansion-of-quantum-deep-tech-startups-through-selectusa-2026-302763636.html

SOURCE The Korea Institute of Science and Technology (KIST)

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Former Visa Asia Pacific Executive David Tay Joins YeahPay as Global Vice President

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May 6, 2026

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SINGAPORE, May 6, 2026 /PRNewswire/ — YeahPay, the international payment brand under YEAHKA (9923.HK), has appointed David Tay, a former senior executive at Visa Asia Pacific, as Global Vice President, tasking him with overseeing the strategic direction and product ecosystem development of YEAHKA’s overseas payment business. The appointment comes as global digital trade enters a new phase defined by ecosystem integration, with payment infrastructure undergoing a generational shift in acceleration.

David Tay, a Singaporean national, is a rising leader in the payments industry. During his career at Visa, David played a key role in driving business growth across multiple Southeast Asian markets, demonstrating early promise in commercial insight and innovation. He subsequently moved into Visa’s Innovation division, where he rose to serve as Head of Innovation, leading Visa Pacific’s product innovation and new business.

In that capacity, David led the commercialization of cutting-edge payment paradigms including Visa Flex Credential and Pay by Palm. He was also involved in the evaluation and governance of strategic partners across the region, accumulating deep expertise in collaborating with banks, fintechs, and large-scale enterprise merchants.

David’s track record spans the full go-to-market lifecycle, from concept to pilot to scale, as well as deep capabilities in cross-institutional partnerships and ecosystem development. His appointment comes at an inflection point for YEAHKA’s international expansion. According to YEAHKA’s 2025 annual report, its overseas business delivered full-year Gross Payment Volume (GPV) surpassing RMB 5 billion, representing a 323.3% year-on-year surge from RMB 1.1 billion in 2024.

View original content:https://www.prnewswire.com/apac/news-releases/former-visa-asia-pacific-executive-david-tay-joins-yeahpay-as-global-vice-president-302763652.html

SOURCE Yeahka

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