Technology

IBM RELEASES SECOND-QUARTER RESULTS

Published

2 years ago

July 24, 2024

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

%(1)

1.8

Pts

1.1

Pts

Operating

(Non-GAAP)

$ 9.1 B

57.8

$ 2.8 B

17.7

$ 2.3 B

$ 2.43

Year/Year

1.9

Pts

2.2

Pts

(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

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)

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

$ 0.04

$ 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

$ 0.04

$ 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

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

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)

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

—

703

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)

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

–

703

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

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

0.0

(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

0.0

0.4

0.0

Depreciation/Amortization of non-acquired intangible assets

0.7

0.0

1.4

0.0

Stock-based compensation

0.3

0.0

0.6

0.1

Workforce rebalancing charges

0.0

0.1

(0.1)

0.4

0.0

Corporate (gains) and charges (2)

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-

Adjustments (1)

Retirement-

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

—

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-

Adjustments (1)

Retirement-

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)

(1)

—

(262)

Total Expense & Other (Income)

6,501

(246)

(1)

—

6,254

Pre-tax Income from Continuing Operations

2,000

395

—

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-

Adjustments (1)

Retirement-

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-

Adjustments (1)

Retirement-

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)

—

(504)

Total Expense & Other (Income)

12,952

(493)

—

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.

(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

0.4

Provision for/(Benefit from) income taxes from continuing operations

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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SOURCE IBM

Technology

Changhong at IFA 2026: From Going Global to Going Local

Published

2 minutes ago

September 10, 2026

BERLIN, Sept. 10, 2026 /PRNewswire/ — At IFA 2026, Changhong unveiled a new lineup of AI-powered home appliances spanning TVs, refrigerators, air conditioners and laundry appliances. Centered on real-life scenarios, the company is bringing AI technologies designed to better understand everyday needs into the product experience, highlighting its transition from technological innovation toward more intuitive living experiences. The showcase also signals Changhong’s continued localization efforts.

The concept comes to life across Changhong’s latest AI products. The Q60S Pro TV features the Changhong LeDong AI sports platform, extending the TV beyond a traditional content screen into a space for family fitness and interaction. An AI human-sensing air conditioner can recognize users’ locations and habits and adjust airflow accordingly, while an AI refrigerator uses intelligent sensing to help users take a more proactive approach to food freshness. Rather than adding complexity, Changhong is making everyday life simpler.

This is at the heart of Changhong’s exploration of “seamless technology”—technology that works quietly in the background. The best technology does not always need to be seen; it simply helps people worry less.

A distinctive cultural element is also finding its way into Changhong’s smart product experience. The brand has incorporated the giant panda into AI assistant interactions, bringing greater warmth and approachability to AI-powered TVs and other home appliances. Closely associated with Changhong’s Sichuan heritage, the panda also provides a natural way to bring a recognizable element of Chinese culture into the technology experience.

Skiing offers another bridge to European lifestyles. In recent years, Changhong has continued to strengthen its presence in Europe with CHiQ as an important brand vehicle, building closer connections with local consumers through sports partnerships, including sponsorship of FIS Ski World Cup events in Germany, collaboration with the German Ski Association and its role as an official partner of the FIS Ski Jumping World Cup. More than a sporting platform, skiing allows CHiQ to connect the speed, passion and outdoor spirit of the sport with its product experience, bringing technology closer to the way European consumers live.

Behind these initiatives is a deeper commitment to localization. From product experience and brand expression to sports, culture and local lifestyles, Changhong is creating more diverse touchpoints with the European market. From “going global” to “going local,” the company is moving beyond products and channels toward a deeper integration of its brands, technology and the markets it serves.

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SOURCE Changhong

Technology

Clean hydrogen investment reaches USD 130 billion as energy security and resilience rise up the global agenda

Published

2 minutes ago

September 10, 2026

BRUSSELS, Sept. 10, 2026 /PRNewswire/ — Clean hydrogen is no longer a future bet – it is being built now. According to the Hydrogen Council’s Global Hydrogen Compass 2026, released today, committed investment has surpassed USD 130 billion, corresponding to 6.9 Mtpa of committed capacity across more than 570 projects worldwide, 90% of which are under construction or already operational.

The new report, co-authored with McKinsey & Company and informed by the perspectives of some 70 global CEOs, highlights continued industry progress alongside a changing strategic context. Over the past year, global operational capacity has nearly doubled and is expected to double again next year as projects under construction come online.

At the same time, shifting geopolitical priorities are strengthening hydrogen’s role as a strategic resilience lever. As governments seek to strengthen energy security, build more resilient economies and support long-term industrial growth, hydrogen is receiving renewed attention for its ability to help address multiple strategic priorities alongside deep decarbonization, complementing growing electrification and use of renewable energy sources.

Geographically, China remains the largest market, accounting for more than half of global committed renewable hydrogen capacity, as well as 90% of new operational capacity globally added since 2025. Europe now follows as the second-largest market, leading in project count and relative investment growth (+35% since 2025). The United States continues to lead in low-carbon hydrogen deployment, accounting for approximately 75% of global committed low-carbon hydrogen and ammonia capacity.

The experience of these leading markets also points to the industry’s next challenge: projects move forward where policy and infrastructure are the most robust. Of the 11 Mpta of potential 2030 clean hydrogen demand that existing policies could unlock by 2030, around 6 Mtpa is firmed today by policies that have been enacted and enforced. Unlocking the remaining 5 Mpta now requires urgent action from governments to deliver on existing policy commitments.

For policymakers, the top priority is to implement enabling incentives and mandates, as well as robust carbon pricing instruments providing demand signals. For industry, the focus is to serve that demand cost effectively, which requires strong push to reduce cost and build the necessary infrastructure.

Combining comprehensive industry data with CEO perspectives and lessons learned from some of the world’s most significant clean hydrogen projects, Global Hydrogen Compass 2026 provides a fact-based assessment of the industry’s progress and the practical actions needed to accelerate deployment. The report was launched today for the first time through a dedicated global virtual event, featuring the Hydrogen Council Co-Chairs alongside CEOs from Baker Hughes, CF Industries, Port of Rotterdam and Sinopec, with its findings also presented at today’s Hydrogen Energy Ministerial in Japan.

Jaehoon Chang, Vice-Chair of Hyundai Motor Group and Co-Chair of the Hydrogen Council, said: “The debate has shifted from whether hydrogen can deliver to how fast countries choose to build. While the pace varies by market, the principle is the same: identify where hydrogen creates the most value, build the ecosystem around it and prove it works. This year’s Compass highlights a clear lesson: wherever countries deploy hydrogen solutions suited to their context and support them with policy, competitive hydrogen ecosystems are taking hold. By learning from those examples, we can build on that momentum faster and with greater confidence.”

François Jackow, CEO of Air Liquide and Co-Chair of the Hydrogen Council, said: “Hydrogen is not only a decarbonization solution; it is also the indispensable partner to renewable electricity. Through their synergies, hydrogen strengthens the resilience and improves the efficiency and affordability of the overall energy system. As countries accelerate electrification, recognizing hydrogen’s systemic role will be essential to building secure, competitive and affordable energy systems for the future.”

Ivana Jemelkova, CEO of the Hydrogen Council, said: “Decision-makers need both robust market data and practical experience from those delivering projects on the ground. Global Hydrogen Compass 2026 complements the IEA’s Global Hydrogen Review by bringing together the collective perspective of industry leaders. Together, they provide a more complete picture of where the industry stands today and the practical actions needed to accelerate deployment.”

Global Hydrogen Compass Launch
Join the Hydrogen Council for the launch of Global Hydrogen Compass 2026 on September 10, 2026 where you will hear directly from industry CEOs.

The event will be delivered in two live virtual sessions. Sign up here: https://hc.brrmedia.co.uk/

About Global Hydrogen Compass

Global Hydrogen Compass is the Hydrogen Council’s annual publication tracking the progress and priorities of the global hydrogen industry. Authored in collaboration with McKinsey & Company, it combines comprehensive industry data with proprietary insights from Hydrogen Council members, direct perspectives from global CEO leaders, and lessons learned from key hydrogen projects worldwide.

Visit compass.hydrogencouncil.com for key insights, dynamic dashboards and global maps.

About The Hydrogen Council

The Hydrogen Council is the world’s largest and only CEO-led global hydrogen alliance, bringing together some 140 companies from 20+ countries across the entire hydrogen value chain. Representing some $9 trillion in market capitalization, 7.1 million in FTEs and some $6.4 trillion in revenues, the Council provides a unique, cross-sector platform for global leaders to align strategy, accelerate collaboration and shape the development of a globally integrated hydrogen sector.

To find out more visit www.hydrogencouncil.com and follow the Hydrogen Council on LinkedIn.

Media Enquiries
communications@hydrogencouncil.com

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SOURCE Hydrogen Council

Technology

NatGold Digital Activates European Marketing Campaign for NATG

Published

2 minutes ago

September 10, 2026

bull markets media GmbH engaged by 78X to lead first major activation under expanded global marketing program

CORAL GABLES, Fla., Sept. 10, 2026 /PRNewswire/ — NatGold Digital Ltd. (“NatGold Digital” or the “Company”), a pioneering digital gold mining company with a patent-pending process for sustainably unlocking the intrinsic value of in-ground gold resources through its digital mining and blockchain-based tokenization platform, today announced the launch of its European marketing campaign for the NatGold Token (NATG).

The initiative represents the first major regional activation of NatGold Digital’s expanding global marketing strategy, moving from the establishment of international trading access and multilingual marketing infrastructure to direct market engagement across Europe.

78X Marketing Group, which is leading NatGold Digital’s global marketing efforts, has engaged Germany-based bull markets media GmbH to spearhead the Company’s European educational and market-awareness campaign. Bull markets brings an established financial-media ecosystem, digital marketing capabilities, investor communities and specialized experience across both commodity and cryptocurrency markets to the European program.

Through financial-market education and content, digital audience development and targeted market engagement, the program will introduce European audiences to NatGold’s sustainable digital mining model — designed to unlock the intrinsic value of technically verified in-ground gold resources through tokenization without physically extracting, processing or moving the gold. This non-extractive approach allows the gold to remain securely stored in Mother Nature’s Vault while providing a new digital pathway for realizing its intrinsic value.

“Gold and Bitcoin have demonstrated the enormous global demand for assets that offer an alternative to traditional fiat money,” said Matthias Abresch, Managing Director of bull markets media GmbH. “NatGold introduces something genuinely new to that category: the geological scarcity and monetary heritage of gold combined with the accessibility of a digital asset, while avoiding the environmental disruption associated with physically mining the gold. We believe this combination of sound-money principles, sustainability and digital innovation will resonate strongly with European investors, and we are excited to introduce the NatGold story across the region.”

The European initiative is being structured to operate in accordance with applicable European regulatory requirements, including MiCA requirements governing crypto-asset marketing communications.

NatGold Digital’s newly launched multilingual Web3 platform and professionally localized educational video library will support the campaign, with resources available in English, German, French, Italian, Spanish and Portuguese.

“Europe brings together many of the characteristics that make the NatGold proposition particularly relevant — a deep understanding of gold as a monetary asset, strong expectations around sustainability and an increasingly sophisticated digital-asset marketplace,” said Andrés Fernández, Chief Executive Officer of NatGold Digital. “With the regional expertise and market reach now in place to engage European audiences directly, this campaign represents an important next step in building international awareness and understanding of NatGold and NATG.”

NatGold Digital intends to progressively expand its marketing activities into additional international markets and languages while continuing to broaden global trading access to NATG.

About NatGold Digital Ltd.

NatGold Digital Ltd. is the global leader in digital gold mining and the architect and operator of a patent-pending, non-extractive platform designed to unlock the intrinsic value of technically verified in-ground gold resources that remain securely stored in Mother Nature’s Vault. NatGold Tokens are structured to represent standardized unit interests in NatGold Certified Resources, disclosed under internationally recognized geological Technical Reports — without physical extraction, processing, or movement of gold. The result is a superior fiat money alternative designed to help lead a global monetary reformation.

For additional background, please visit NatGold.com or our official YouTube channel for videos and information about our digital mining ecosystem: youtube.com/@NatGold_Digital.

About bull markets media GmbH

bull markets media GmbH is a Germany-based financial media company specializing in financial-market information, investor education and digital financial publishing, serving private investors and market participants across European markets.

Contact

Media@NatGold.com
InvestorServices@NatGold.com
+1 (646) 825-3038

The information presented in the above release has been compiled by NatGold with diligent effort to provide an accurate and realistic overview of the subject matter. Nonetheless, factors such as subjective judgment, reliance on circumstances beyond NatGold’s control, and external information sources inherently limit the exhaustiveness, completeness, and sufficiency of this information. Forward-looking statements are generally indicated by terms including “plans”, “expects”, “does not expect”, “is expected”, “scheduled”, “budget”, “estimates”, “projects”, “intends”, “anticipates”, “does not anticipate”, “believes”, and similar expressions, or by references to potential actions, events, or outcomes that “may”, “can”, “could”, “would”, “might”, or “will” transpire or be achieved. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. Numerous risks, uncertainties, and events may result in outcomes that differ substantially from those described in NatGold’s forward-looking statements, including but not limited to: alterations in economic conditions or sector trends; fluctuations in currency and financial markets; volatility in gold prices and AISC costs; changes in investment activity; legal proceedings; legislative developments; as well as environmental, regulatory, political, judicial, and competitive circumstances in regions where NatGold operates. Additionally, technological, mechanical, and operational challenges may arise during NatGold’s development operations. Prospective NATG tokens purchasers are strongly advised to consult with a qualified financial advisor prior to purchasing NATG tokens and to use discretion in relation to decisions to purchase NATG tokens. References above to mineral resources being “certified” are specific to NatGold’s tokenization eligibility standards and do not signify compliance with the JORC Code, NI 43-101, or S-K 1300; such resources are instead certified under NatGold’s criteria as NatGold Certified Resources. While NatGold deems current assumptions reasonable based on available data, these assumptions may ultimately prove inaccurate. Actual outcomes could vary from forward-looking statements due to diverse risks, uncertainties, and unforeseen events. The information herein serves solely for general informational purposes and does not constitute an offer or solicitation for the purchase or sale of NatGold shares or securities or for the purchase or sale of any NATG tokens, nor is any information contained herein intended to be construed as making a recommendation, endorsement, or solicitation to engage in any investment strategy. NATG tokens are not intended to be “securities” in any jurisdiction, and NatGold makes no claim or representation related to the value of NatGold or NATG tokens. Forward-looking statements contained in this news release are current as of the date issued. Except where mandated by applicable securities laws, NatGold expressly disclaims any intent or obligation to update or revise any forward-looking statements in response to new data, future developments, or otherwise. Furthermore, the Company assumes no commitment to address third-party expectations or statements regarding issues discussed in this document. Investing in early-stage digital assets entails considerable risk. Any such investment is speculative and involves a high degree of risk, including but not limited to loss of capital. An investment in the NATG tokens, or any other digital asset, may not be appropriate for everyone, and you should carefully consider the appropriate risks, your financial situation, risk tolerance, and investment goals before making any investment decisions. As a digital asset, NATG tokens are also subject to inherent risks related to blockchain technology, including but not limited to, regulatory uncertainty, market adoption, manipulation, volatility, and cyber security risks. Access to NATG trading will be available only to eligible participants in supported jurisdictions, with each participant subject to applicable jurisdictional eligibility, onboarding, regulatory, geographic, and platform requirements. Prospective purchasers should conduct their own due diligence and should consult with their respective financial, legal, tax, and/or other professional advisors.

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SOURCE NatGold Digital Ltd.