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IBM RELEASES THIRD-QUARTER RESULTS

Published

2 years ago

on

Accelerated Software revenue growth, expanded gross profit margin, and strong free cash flow

ARMONK, N.Y., Oct. 23, 2024 /PRNewswire/ — IBM (NYSE: IBM) today announced third-quarter 2024 earnings results.

“Our third-quarter performance was led by double-digit growth in Software, including a re-acceleration in Red Hat. We continue to see great momentum in AI as our models are trusted, fit-for-purpose, and lower cost, with performance leadership. Our generative AI book of business now stands at more than $3 billion, up more than $1 billion quarter to quarter,” said Arvind Krishna, IBM chairman, president and chief executive officer. “Heading into the final quarter of 2024, we expect fourth-quarter constant currency revenue growth to be consistent with the third quarter, with continued strength in Software. We are confident in our ability to deliver more than $12 billion in free cash flow for the year, driven by continued expansion of our operating margins.” 

Third-Quarter Highlights

Revenue
– Revenue of $15.0 billion, up 1 percent, up 2 percent at constant currency
– Software revenue up 10 percent
– Consulting revenue flat
– Infrastructure revenue down 7 percent
Profit
– Gross Profit Margin: GAAP: 56.3 percent, up 190 basis points; Operating (Non-GAAP):             
  57.5 percent, up 210 basis points
Cash Flow
– Year to date, net cash from operating activities of $9.1 billion; free cash flow of $6.6 billion

THIRD-QUARTER 2024 INCOME STATEMENT SUMMARY

 

GAAP results include impact of one-time, non-cash pension settlement charge (1)

 
 

Revenue

 

Gross

Profit

 
 

Gross

Profit

Margin

 
 

Pre-tax

Income/

(Loss) (1)

 

Pre-tax

Income

Margin (1)

 

Net

Income/

(Loss) (1)

 

Diluted

Earnings/

(Loss) Per

Share (1)

GAAP from

Continuing

Operations

$   15.0 B

 
 

$   8.4 B

 
 

56.3

%

 

$ (0.8) B

 
 

(5.4)

%

 

$  (0.3) B

 
 

$    (0.34)

 

Year/Year

1

%(2)

 

5

%

 

1.9

Pts

 

NM

 
 

-18.1

Pts

 

NM

 
 

NM

 

Operating

(Non-GAAP)

 
 
 

$   8.6 B

 
 

57.5

%

 

$    2.5 B

 
 

16.6

%

 

$     2.2 B

 
 

$     2.30

 

Year/Year

 
 
 

5

%

 

2.1

Pts

 

8

%

 

1.0

Pts

 

6

%

 

5

%

(1)  2024 GAAP results include the impact of a one-time, non-cash, pension settlement charge of $2.7 billion ($2.0 billion net of tax) related

       to the transfer of a portion of the company’s U.S. defined benefit pension obligations and related plan assets to a third-party insurer,

       announced in September 2024.

(2)  2% at constant currency.

“Our investments are paying off in Software as we’ve repositioned our portfolio in recent years. In the third quarter, Software delivered broad-based growth and now represents nearly 45 percent of our total revenue. Our ongoing focus on product mix, coupled with our productivity initiatives enables us to continue to drive operating leverage in our underlying profit performance,” said James Kavanaugh, IBM senior vice president and chief financial officer. “With our strong cash generation, we are well-positioned to continue investing for growth while returning value to shareholders through dividends.”

Segment Results for Third Quarter

Software — revenues of $6.5 billion, up 9.7 percent, up 9.6 percent at constant currency:
– Hybrid Platform & Solutions up 10 percent
      — Red Hat up 14 percent
      — Automation up 13 percent
      — Data & AI up 5 percent
      — Security down 1 percent
– Transaction Processing up 9 percent

Consulting — revenues of $5.2 billion, down 0.5 percent, down 0.2 percent at constant currency:
– Business Transformation up 2 percent
– Technology Consulting down 4 percent
– Application Operations down 1 percent

Infrastructure — revenues of $3.0 billion, down 7.0 percent, down 6.7 percent at constant currency:
– Hybrid Infrastructure down 9 percent
      — IBM Z down 19 percent
      — Distributed Infrastructure down 3 percent
– Infrastructure Support down 4 percent, down 3 percent at constant currency

Financing — revenues of $0.2 billion, down 2.5 percent, down 1.3 percent at constant currency

Cash Flow and Balance Sheet

In the third quarter, the company generated net cash from operating activities of $2.9 billion, down $0.2 billion year to year. IBM’s free cash flow was $2.1 billion, up $0.4 billion year to year. The company returned $1.5 billion to shareholders in dividends in the third quarter.

For the first nine months of the year, the company generated net cash from operating activities of $9.1 billion, down $0.4 billion year to year. IBM’s free cash flow was $6.6 billion, up $1.5 billion year to year.

IBM ended the third quarter with $13.7 billion of cash, restricted cash and marketable securities, up $0.3 billion from year-end 2023. Debt, including IBM Financing debt of $10.4 billion, totaled $56.6 billion, flat year to date.

Expectations

Revenue: The company expects fourth-quarter constant currency revenue growth consistent with the third quarter. At current foreign exchange rates, currency is expected to be about a half-point headwind to revenue growth in the quarter
Free cash flow: The company continues to expect more than $12 billion in free cash flow for the full year

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

For generative AI, book of business includes Software transactional revenue, SaaS Annual Contract Value and Consulting signings. The generative AI book of business is further defined within Exhibit 99.2 in the Form 8-K that includes 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;
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.

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-3q24. 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
September 30,

 
 

Nine Months Ended
September 30,

 
 

2024

 
 

2023 (1)

 
 

2024

 
 

2023 (1)

 

REVENUE BY SEGMENT

 
 
 
 
 
 
 
 
 
 
 

Software

$                   6,524

 
 

$                   5,947

 
 

$                19,162

 
 

$                17,832

 

Consulting

5,152

 
 

5,178

 
 

15,517

 
 

15,601

 

Infrastructure

3,042

 
 

3,272

 
 

9,764

 
 

9,988

 

Financing

181

 
 

186

 
 

543

 
 

566

 

Other

68

 
 

170

 
 

214

 
 

491

 

TOTAL REVENUE

14,968

 
 

14,752

 
 

45,199

 
 

44,479

 
 
 
 
 
 
 
 
 
 
 
 
 

GROSS PROFIT

8,420

 
 

8,023

 
 

25,112

 
 

24,033

 
 
 
 
 
 
 
 
 
 
 
 
 

GROSS PROFIT MARGIN

 
 
 
 
 
 
 
 
 
 
 

Software

83.2

%

 

82.3

%

 

83.1

%

 

82.3

%

Consulting

28.4

%

 

27.6

%

 

26.7

%

 

26.3

%

Infrastructure

55.0

%

 

53.7

%

 

55.3

%

 

54.0

%

Financing

47.2

%

 

49.7

%

 

48.2

%

 

47.5

%

 
 
 
 
 
 
 
 
 
 
 
 

TOTAL GROSS PROFIT MARGIN

56.3

%

 

54.4

%

 

55.6

%

 

54.0

%

 
 
 
 
 
 
 
 
 
 
 
 

EXPENSE AND OTHER INCOME

 
 
 
 
 
 
 
 
 
 
 

S,G&A

4,911

 
 

4,458

 
 

14,823

 
 

14,212

 

R,D&E

1,876

 
 

1,685

 
 

5,512

 
 

5,027

 

Intellectual property and custom development income

(238)

 
 

(190)

 
 

(696)

 
 

(618)

 

Other (income) and expense

2,244

 
 

(215)

 
 

1,694

 
 

(721)

 

Interest expense

429

 
 

412

 
 

1,288

 
 

1,202

 

TOTAL EXPENSE AND OTHER INCOME

9,222

 
 

6,150

 
 

22,621

 
 

19,102

 
 
 
 
 
 
 
 
 
 
 
 
 

INCOME/(LOSS)  FROM CONTINUING OPERATIONS

BEFORE INCOME TAXES

(802)

 
 

1,873

 
 

2,491

 
 

4,931

 

Pre-tax margin

(5.4)

%

 

12.7

%

 

5.5

%

 

11.1

%

Provision for/(Benefit from) income taxes

(485)

 
 

159

 
 

(597)

 
 

702

 

Effective tax rate

60.4

%

 

8.5

%

 

(24.0)

%

 

14.2

%

 
 
 
 
 
 
 
 
 
 
 
 

INCOME/(LOSS) FROM CONTINUING OPERATIONS

$                     (317)

 
 

$                   1,714

 
 

$                   3,088

 
 

$                   4,229

 
 
 
 
 
 
 
 
 
 
 
 
 

DISCONTINUED OPERATIONS

 
 
 
 
 
 
 
 
 
 
 

Income/ (loss) from discontinued operations, net of taxes

(13)

 
 

(10)

 
 

21

 
 

(15)

 
 
 
 
 
 
 
 
 
 
 
 
 

NET INCOME/(LOSS) (2)

$                     (330)

 
 

$                   1,704

 
 

$                   3,109

 
 

$                   4,214

 
 
 
 
 
 
 
 
 
 
 
 
 

EARNINGS/(LOSS) PER SHARE OF COMMON STOCK (2)

 
 
 
 
 
 
 
 
 
 
 

Assuming Dilution

 
 
 
 
 
 
 
 
 
 
 

Continuing Operations

$                    (0.34)

 
 

$                      1.86

 
 

$                      3.30

 
 

$                      4.59

 

Discontinued Operations

$                    (0.01)

 
 

$                    (0.01)

 
 

$                      0.02

 
 

$                    (0.02)

 

TOTAL

$                    (0.36)

 
 

$                      1.84

 
 

$                      3.32

 
 

$                      4.58

 
 
 
 
 
 
 
 
 
 
 
 
 

Basic

 
 
 
 
 
 
 
 
 
 
 

Continuing Operations

$                    (0.34)

 
 

$                      1.88

 
 

$                      3.36

 
 

$                      4.65

 

Discontinued Operations

$                    (0.01)

 
 

$                    (0.01)

 
 

$                      0.02

 
 

$                    (0.02)

 

TOTAL

$                    (0.36)

 
 

$                      1.87

 
 

$                      3.38

 
 

$                      4.63

 
 
 
 
 
 
 
 
 
 
 
 
 

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES

OUTSTANDING (M’s)

 
 
 
 
 
 
 
 
 
 
 

Assuming Dilution

923.6

 
 

923.7

 
 

935.4

 
 

920.3

 

Basic

923.6

 
 

912.8

 
 

920.3

 
 

910.1

 

____________________

(1)  Recast to reflect January 2024 segment changes.

(2)  2024 includes the impact of a one-time, non-cash, pension settlement charge of $2.7 billion ($2.0 billion net of tax).

 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

 

(Dollars in Millions)

 

At

September 30,
2024

 

At

December 31,
2023

ASSETS:

 
 
 
 

Current Assets:

 
 
 
 

Cash and cash equivalents

 

$                    13,197

 

$                    13,068

Restricted cash

 

17

 

21

Marketable securities

 

505

 

373

Notes and accounts receivable – trade, net

 

5,390

 

7,214

Short-term financing receivables, net

 

5,765

 

6,793

Other accounts receivable, net

 

928

 

640

Inventories

 

1,367

 

1,161

Deferred costs

 

966

 

998

Prepaid expenses and other current assets

 

2,408

 

2,639

Total Current Assets

 

30,543

 

32,908

 
 
 
 
 

Property, plant and equipment, net

 

5,614

 

5,501

Operating right-of-use assets, net

 

3,355

 

3,220

Long-term financing receivables, net

 

4,931

 

5,766

Prepaid pension assets

 

7,975

 

7,506

Deferred costs

 

788

 

842

Deferred taxes

 

6,943

 

6,656

Goodwill

 

61,092

 

60,178

Intangibles, net

 

11,090

 

11,036

Investments and sundry assets

 

2,009

 

1,626

Total Assets

 

$                  134,339

 

$                  135,241

 
 
 
 
 

LIABILITIES:

 
 
 
 

Current Liabilities:

 
 
 
 

Taxes

 

$                      1,584

 

$                      2,270

Short-term debt

 

3,599

 

6,426

Accounts payable

 

3,274

 

4,132

Deferred income

 

12,882

 

13,451

Operating lease liabilities

 

790

 

820

Other liabilities

 

6,725

 

7,022

Total Current Liabilities

 

28,853

 

34,122

 
 
 
 
 

Long-term debt

 

52,980

 

50,121

Retirement-related obligations

 

10,366

 

10,808

Deferred income

 

3,666

 

3,533

Operating lease liabilities

 

2,757

 

2,568

Other liabilities

 

11,186

 

11,475

Total Liabilities

 

109,809

 

112,628

 
 
 
 
 

EQUITY:

 
 
 
 

IBM Stockholders’ Equity:

 
 
 
 

Common stock

 

61,013

 

59,643

Retained earnings

 

149,789

 

151,276

Treasury stock – at cost

 

(169,935)

 

(169,624)

Accumulated other comprehensive income/(loss)

 

(16,418)

 

(18,761)

Total IBM Stockholders’ Equity

 

24,448

 

22,533

 
 
 
 
 

Noncontrolling interests

 

82

 

80

Total Equity

 

24,530

 

22,613

 
 
 
 
 

Total Liabilities and Equity

 

$                  134,339

 

$                  135,241

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW ANALYSIS

(Unaudited)

 
 
 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(Dollars in Millions)

 

2024

 

2023

 

2024

 

2023

Net Cash from Operations per GAAP

 

$            2,881

 

$            3,055

 

$         9,115

 

$            9,468

 
 
 
 
 
 
 
 
 

Less: change in IBM Financing receivables

 

873

 

1,092

 

1,824

 

3,119

Capital Expenditures, net

 

55

 

(282)

 

(705)

 

(1,226)

 
 
 
 
 
 
 
 
 

Free Cash Flow

 

2,064

 

1,682

 

6,586

 

5,123

 
 
 
 
 
 
 
 
 

Acquisitions

 

(2,513)

 

(4,589)

 

(2,748)

 

(4,945)

Divestitures

 

2

 

(10)

 

705

 

(4)

Dividends

 

(1,542)

 

(1,515)

 

(4,601)

 

(4,522)

Non-Financing Debt

 

(383)

 

(942)

 

693

 

7,572

Other (includes IBM Financing net receivables and debt)

 

131

 

41

 

(379)

 

(1,068)

 
 
 
 
 
 
 
 
 

Change in Cash, Cash Equivalents, Restricted Cash and Short-term

Marketable Securities

 

$          (2,241)

 

$          (5,333)

 

$              257

 

$            2,156

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW

(Unaudited)

 
 
 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(Dollars in Millions)

 

2024

 

2023

 

2024

 

2023

Net Income/(loss) from Operations

 

$                       (330)

 

$                     1,704

 

$                     3,109

 

$                     4,214

Pension Settlement Charge

 

2,725

 

–

 

2,725

 

–

Depreciation/Amortization of Intangibles (1)

 

1,268

 

1,093

 

3,555

 

3,243

Stock-based Compensation

 

330

 

286

 

966

 

843

Operating assets and liabilities/Other, net (2)

 

(1,984)

 

(1,119)

 

(3,063)

 

(1,952)

IBM Financing A/R

 

873

 

1,092

 

1,824

 

3,119

Net Cash Provided by Operating Activities

 

$                     2,881

 

$                     3,055

 

$                     9,115

 

$                     9,468

 
 
 
 
 
 
 
 
 

Capital Expenditures, net of payments & proceeds (3)

 

55

 

(282)

 

(705)

 

(1,226)

Divestitures, net of cash transferred

 

2

 

(10)

 

705

 

(4)

Acquisitions, net of cash acquired

 

(2,513)

 

(4,589)

 

(2,748)

 

(4,945)

Marketable Securities / Other Investments, net

 

869

 

2,927

 

(810)

 

(3,732)

Net Cash Provided by/(Used in) Investing Activities

 

$                    (1,587)

 

$                   (1,953)

 

$                   (3,558)

 

$                    (9,906)

 
 
 
 
 
 
 
 
 

Debt, net of payments & proceeds

 

(1,259)

 

(1,550)

 

(777)

 

4,619

Dividends

 

(1,542)

 

(1,515)

 

(4,601)

 

(4,522)

Financing – Other

 

35

 

(67)

 

(26)

 

(252)

Net Cash Provided by/(Used in) Financing Activities

 

$                    (2,766)

 

$                   (3,132)

 

$                   (5,403)

 

$                       (154)

 
 
 
 
 
 
 
 
 

Effect of Exchange Rate changes on Cash

 

207

 

(119)

 

(29)

 

(120)

Net Change in Cash, Cash Equivalents and Restricted Cash

 

$                    (1,264)

 

$                   (2,149)

 

$                        125

 

$                       (713)

____________________

(1)  Includes operating lease right-of-use assets amortization. 

(2)  Includes a $0.7 billion tax effect associated with the one-time, non-cash pension settlement charge in the third-quarter 2024. 

(3)  2024 includes proceeds of $0.4 billion from the sale of certain QRadar SaaS assets. 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

 
 
 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

(Dollars in Billions)

 

2024

 

2023

 

Yr/Yr

 

2024

 

2023

 

Yr/Yr

Net Income/(Loss) as reported (GAAP) (1)

 

$         (0.3)

 

$           1.7

 

$         (2.0)

 

$           3.1

 

$           4.2

 

$         (1.1)

Less: Income/(loss) from discontinued operations, net of tax

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

Income/(Loss) from continuing operations

 

(0.3)

 

1.7

 

(2.0)

 

3.1

 

4.2

 

(1.1)

Provision for/(Benefit from) income taxes from continuing ops.

 

(0.5)

 

0.2

 

(0.6)

 

(0.6)

 

0.7

 

(1.3)

Pre-tax income/(loss) from continuing operations (GAAP)

 

(0.8)

 

1.9

 

(2.7)

 

2.5

 

4.9

 

(2.4)

Non-operating adjustments (before tax)

 
 
 
 
 
 
 
 
 
 
 
 

Acquisition-related charges (2)

 

0.5

 

0.4

 

0.1

 

1.5

 

1.2

 

0.2

Non-operating retirement-related costs/(income) (1)

 

2.8

 

0.0

 

2.8

 

3.0

 

0.0

 

3.0

 
 
 
 
 
 
 
 
 
 
 
 
 

Operating (non-GAAP) pre-tax income/(loss) from continuing ops.

 

2.5

 

2.3

 

0.2

 

6.9

 

6.1

 

0.8

 
 
 
 
 
 
 
 
 
 
 
 
 

Net interest expense

 

0.3

 

0.3

 

0.0

 

0.7

 

0.7

 

0.0

Depreciation/Amortization of non-acquired intangible assets

 

0.7

 

0.7

 

0.0

 

2.1

 

2.0

 

0.1

Stock-based compensation

 

0.3

 

0.3

 

0.0

 

1.0

 

0.8

 

0.1

Workforce rebalancing charges

 

0.3

 

0.0

 

0.3

 

0.7

 

0.4

 

0.3

Corporate (gains) and charges (3)

 

(0.4)

 

0.0

 

(0.3)

 

(0.6)

 

0.0

 

(0.6)

 
 
 
 
 
 
 
 
 
 
 
 
 

Adjusted EBITDA

 

$           3.8

 

$           3.5

 

$           0.2

 

$        10.8

 

$        10.1

 

$           0.8

____________________

(1) 2024 includes the impact of a one-time, non-cash pension settlement charge of $2.7 billion ($2.0 billion net of tax). 

(2) Primarily consists of amortization of acquired intangible assets. 

(3) Corporate (gains) and charges primarily consists of unique corporate actions such as gains on divestitures and asset sales (e.g., certain QRadar SaaS assets). 

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

SEGMENT DATA

(Unaudited)

 
 
 

Three Months Ended September 30, 2024

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$                       6,524

 
 

$                        5,152

 
 

$                        3,042

 
 

$                            181

 

Segment Profit

 

$                       1,969

 
 

$                           559

 
 

$                           422

 
 

$                              86

 

Segment Profit Margin

 

30.2

%

 

10.9

%

 

13.9

%

 

47.5

%

Change YTY Revenue

 

9.7

%

 

(0.5)

%

 

(7.0)

%

 

(2.5)

%

Change YTY Revenue – Constant Currency

 

9.6

%

 

(0.2)

%

 

(6.7)

%

 

(1.3)

%

 
 

Three Months Ended September 30, 2023 (1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

 Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$                       5,947

 
 

$                        5,178

 
 

$                        3,272

 
 

$                            186

 

Segment Profit

 

$                       1,722

 
 

$                           566

 
 

$                           490

 
 

$                              91

 

Segment Profit Margin

 

29.0

%

 

10.9

%

 

15.0

%

 

49.2

%

__________________

(1) Recast to reflect January 2024 segment changes. 

 
 

Nine Months Ended September 30, 2024

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$                     19,162

 
 

$                     15,517

 
 

$                       9,764

 
 

$                           543

 

Segment Profit

 

$                       5,582

 
 

$                       1,447

 
 

$                       1,387

 
 

$                           254

 

Segment Profit Margin

 

29.1

%

 

9.3

%

 

14.2

%

 

46.9

%

Change YTY Revenue

 

7.5

%

 

(0.5)

%

 

(2.3)

%

 

(4.1)

%

Change YTY Revenue – Constant Currency

 

8.0

%

 

1.1

%

 

(1.2)

%

 

(3.1)

%

 
 

Nine Months Ended September 30, 2023 (1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

 Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$                     17,832

 
 

$                     15,601

 
 

$                       9,988

 
 

$                           566

 

Segment Profit

 

$                       4,850

 
 

$                       1,476

 
 

$                       1,529

 
 

$                           256

 

Segment Profit Margin

 

27.2

%

 

9.5

%

 

15.3

%

 

45.2

%

____________________

(1) Recast to reflect January 2024 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 September 30, 2024

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-GAAP)

 

Gross Profit

$       8,420

 
 

$                          192

 
 

$                                     —

 
 

$                       —

 
 

$           8,612

 

Gross Profit Margin

56.3

%

 

1.3

pts

 

—

pts

 

—

pts

 

57.5

%

S,G&A

$       4,911

 
 

$                        (300)

 
 

$                                     —

 
 

$                       —

 
 

$           4,611

 

Other (Income) & Expense

2,244

 
 

—

 
 

(2,797)

 
 

—

 
 

(553)

 

Total Expense & Other (Income)

9,222

 
 

(300)

 
 

(2,797)

 
 

—

 
 

6,125

 

Pre-tax Income/(Loss) from Continuing Operations

(802)

 
 

492

 
 

2,797

 
 

—

 
 

2,487

 

Pre-tax Income Margin from Continuing Operations

(5.4)

%

 

3.3

pts

 

18.7

pts

 

—

pts

 

16.6

%

Provision for/(Benefit from) Income Taxes (3)

$        (485)

 
 

$                          119

 
 

$                                  700

 
 

$                       (2)

 
 

$              332

 

Effective Tax Rate

60.4

%

 

(7.2)

pts

 

(39.8)

pts

 

(0.1)

pts

 

13.4

%

Income/(Loss) from Continuing Operations

$        (317)

 
 

$                          373

 
 

$                               2,097

 
 

$                        2

 
 

$           2,155

 

Income Margin from Continuing Operations

(2.1)

%

 

2.5

pts

 

14.0

pts

 

0.0

pts

 

14.4

%

Diluted Earnings/(Loss) Per Share: Continuing

Operations (4)

$       (0.34)

 
 

$                         0.40

 
 

$                                 2.27

 
 

$                   0.00

 
 

$             2.30

 
 
 
 
 

Three Months Ended September 30, 2023

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-GAAP)

 

Gross Profit

$       8,023

 
 

$                          162

 
 

$                                     —

 
 

$                       —

 
 

$           8,185

 

Gross Profit Margin

54.4

%

 

1.1

pts

 

—

pts

 

—

pts

 

55.5

%

S,G&A

$       4,458

 
 

$                        (277)

 
 

$                                     —

 
 

$                       —

 
 

$           4,181

 

Other (Income) & Expense

(215)

 
 

0

 
 

12

 
 

—

 
 

(203)

 

Total Expense & Other (Income)

6,150

 
 

(277)

 
 

12

 
 

—

 
 

5,885

 

Pre-tax Income/(Loss) from Continuing Operations

1,873

 
 

438

 
 

(12)

 
 

—

 
 

2,299

 

Pre-tax Income Margin from Continuing Operations

12.7

%

 

3.0

pts

 

(0.1)

pts

 

—

pts

 

15.6

%

Provision for/(Benefit from) Income Taxes (3)

$          159

 
 

$                            99

 
 

$                                   (14)

 
 

$                      24

 
 

$              268

 

Effective Tax Rate

8.5

%

 

2.7

pts

 

(0.5)

pts

 

1.0

pts

 

11.7

%

Income/(Loss) from Continuing Operations

$       1,714

 
 

$                          340

 
 

$                                      1

 
 

$                     (24)

 
 

$           2,031

 

Income Margin from Continuing Operations

11.6

%

 

2.3

pts

 

0.0

pts

 

(0.2)

pts

 

13.8

%

Diluted Earnings/(Loss) Per Share: Continuing

Operations

$         1.86

 
 

$                         0.37

 
 

$                                 0.00

 
 

$                  (0.03)

 
 

$             2.20

 

____________________

(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.

(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. 2024 also includes the impact of a one-time, non-cash, pre-tax pension settlement charge of  $2.7 billion ($2.0 billion net of tax).

(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.

(4)   Operating (non-GAAP) earnings per share was calculated using 938.4 million shares, which includes 14.9 million dilutive potential shares under our stock-based compensation plans and contingently issuable shares. Due to the GAAP net loss for the three months ended September 30, 2024, these dilutive potential shares were excluded from the GAAP loss per share calculation as the effect would have been antidilutive. The difference in share count resulted in an additional $(0.04) reconciling item.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

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

(Unaudited; Dollars in millions except per share amounts)

 
 

Nine Months Ended September 30, 2024

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts (3)

 
 

Operating

(Non-GAAP)

 

Gross Profit

$     25,112

 
 

$                         533

 
 

$                                  —

 
 

$                   —

 
 

$         25,645

 

Gross Profit Margin

55.6

%

 

1.2

pts

 

—

pts

 

—

pts

 

56.7

%

S,G&A

$     14,823

 
 

$                       (854)

 
 

$                                  —

 
 

$                   —

 
 

$         13,969

 

Other (Income) & Expense

1,694

 
 

(68)

 
 

(2,991)

 
 

—

 
 

(1,364)

 

Total Expense & Other (Income)

22,621

 
 

(922)

 
 

(2,991)

 
 

—

 
 

18,709

 

Pre-tax Income/(Loss) from Continuing Operations

2,491

 
 

1,454

 
 

2,991

 
 

—

 
 

6,936

 

Pre-tax Income Margin from Continuing Operations

5.5

%

 

3.2

pts

 

6.6

pts

 

—

pts

 

15.3

%

Provision for/(Benefit from) Income Taxes (4)

$        (597)

 
 

$                         374

 
 

$                               731

 
 

$                434

 
 

$              942

 

Effective Tax Rate

(24.0)

%

 

10.4

pts

 

20.9

pts

 

6.3

pts

 

13.6

%

Income/(Loss) from Continuing Operations

$      3,088

 
 

$                      1,081

 
 

$                            2,259

 
 

$               (434)

 
 

$           5,994

 

Income Margin from Continuing Operations

6.8

%

 

2.4

pts

 

5.0

pts

 

(1.0)

pts

 

13.3

%

Diluted Earnings/(Loss) Per Share: Continuing

Operations

$        3.30

 
 

$                        1.16

 
 

$                              2.42

 
 

$              (0.46)

 
 

$             6.41

 
 
 
 
 

Nine Months Ended September 30, 2023

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-GAAP)

 

Gross Profit

$     24,033

 
 

$                         460

 
 

$                                  —

 
 

$                   —

 
 

$         24,492

 

Gross Profit Margin

54.0

%

 

1.0

pts

 

—

pts

 

—

pts

 

55.1

%

S,G&A

$     14,212

 
 

$                       (768)

 
 

$                                  —

 
 

$                   —

 
 

$         13,444

 

Other (Income) & Expense

(721)

 
 

(2)

 
 

16

 
 

—

 
 

(707)

 

Total Expense & Other (Income)

19,102

 
 

(770)

 
 

16

 
 

—

 
 

18,348

 

Pre-tax Income from Continuing Operations

4,931

 
 

1,229

 
 

(16)

 
 

—

 
 

6,144

 

Pre-tax Income Margin from Continuing

Operations

11.1

%

 

2.8

pts

 

0.0

pts

 

—

pts

 

13.8

%

Provision for/(Benefit from) Income Taxes (4)

$          702

 
 

$                         277

 
 

$                                (27)

 
 

$                 (91)

 
 

$              861

 

Effective Tax Rate

14.2

%

 

1.7

pts

 

(0.4)

pts

 

(1.5)

pts

 

14.0

%

Income from Continuing Operations

$       4,229

 
 

$                         953

 
 

$                                  11

 
 

$                  91

 
 

$           5,283

 

Income Margin from Continuing Operations

9.5

%

 

2.1

pts

 

0.0

pts

 

0.2

pts

 

11.9

%

Diluted Earnings Per Share: Continuing

Operations

$         4.59

 
 

$                        1.04

 
 

$                              0.01

 
 

$               0.10

 
 

$             5.74

 

____________________

(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. 2024 also includes the impact of a one-time, non-cash, pre-tax pension settlement charge of  $2.7 billion ($2.0 billion net of tax).

(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
September 30,

 

Nine Months Ended
September 30,

(Dollars in Billions)

 

2024

 

2023

 

2024

 

2023

Net Cash Provided by Operating Activities

 

$           2.9

 

$             3.1

 

$           9.1

 

$           9.5

 
 
 
 
 
 
 
 
 

Add:

 
 
 
 
 
 
 
 

Net interest expense

 

0.3

 

0.3

 

0.7

 

0.7

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

 

(0.5)

 

0.2

 

(0.6)

 

0.7

 
 
 
 
 
 
 
 
 

Less change in:

 
 
 
 
 
 
 
 

Financing receivables

 

0.9

 

1.1

 

1.8

 

3.1

Other assets and liabilities/other, net (1)

 

(2.0)

 

(1.2)

 

(3.5)

 

(2.3)

 
 
 
 
 
 
 
 
 

Adjusted EBITDA

 

$           3.8

 

$             3.5

 

$        10.8

 

$        10.1

____________________

(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. 

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/ibm-releases-third-quarter-results-302285120.html

SOURCE IBM

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Technology

VibeBeats Launches AI-Powered Music Streaming Service for Businesses globally

Published

5 minutes ago

on

July 24, 2026

By

Vibebeats AI gives cafés, gyms, retailers, bars and hotels fully licensed, AI-curated streaming music for business from any phone, tablet or browser — no hardware, no lock-in contracts, no licensing paperwork — from A$29 a month with a 7-day free trial.

BRISBANE, Australia, July 24, 2026 /PRNewswire-PRWeb/ — VibeBeats Launches AI-Powered Music Streaming Service for Businesses globally

VibeBeats gives venues fully licensed, AI-curated Music at a fraction of the cost — one app, one licence, one platform.

Vibebeats AI gives cafés, gyms, retailers, bars and hotels fully licensed, AI-curated streaming music for business from any phone, tablet or browser — no hardware, no lock-in contracts, no licensing paperwork — from A$29 a month with a 7-day free trial.

Most venues playing music through consumer apps are doing it on the wrong licence. VibeBeats, an Australian-built, AI-powered streaming music for business platform, has launched across Australia and worldwide to fix that — turning any phone, tablet or browser into a fully licensed venue sound system in under five minutes. One agreement covers commercial performance rights across OneMusic and APRA AMCOS in Australia, and ASCAP, BMI, PRS and other rights bodies internationally — the same platform serving a café in Melbourne or a gym in London.

The “Spotify for business” that actually exists

Every month, thousands of venue owners worldwide search for “Spotify for business” — a product that doesn’t exist. Consumer streaming accounts are licensed for personal use only, leaving businesses that play them exposed under copyright law in Australia and virtually every other market. VibeBeats fills that gap: a business music streaming service where the commercial music rights are handled under one agreement — no separate music licence for business paperwork to manage.

“The number one thing we see is venue owners assuming it’s fine to play their personal Spotify account in the café — most don’t realise a licence fee even applies,” said Damien King, founder of VibeBeats. “It’s not bad intent. Licensing is complex, and when you’re running a small business there are a hundred competing priorities. VibeBeats solves it with one app, one licence, one platform.”

What VibeBeats delivers

Fully Licensed for Commercial Use — one agreement covers the rights that would otherwise involve OneMusic, APRA AMCOS, ASCAP, BMI, PRS and more.No Hardware Required — any phone, tablet or browser becomes the venue sound system — set up in under five minutes.AI-Curated Background Music for Business — stations matched to venue type and time of day, from morning coffee trade to peak gym floor to late-night bar.Smart Scheduling — playlists by daypart, with music that keeps running through connection drops.Multi-Venue Dashboard — manage every location from a single account.Simple Pricing — from A$29 per month per venue with a 7-day free trial — no lock-in contracts.

Pricing and availability

VibeBeats is available now from $29AUD/$20US per month per venue, and globally, with a 7-day free trial at vibebeats.ai. Purpose-built stations are available for cafés, gyms, retail and in-store environments, bars and hotels.

About VibeBeats

VibeBeats is an AI-powered commercial music streaming platform for businesses, offering direct-licensed music for cafés, restaurants, bars, retail stores, gyms and hotels. One agreement covers commercial performance rights that would otherwise involve PROs, OneMusic, APRA AMCOS, ASCAP, BMI, PRS and more. Australian-built and available globally, VibeBeats AI streams to any device with no proprietary hardware required. Learn more at vibebeats.ai.

VibeBeats is not affiliated with Spotify.

Media Contact

Damien King, Vibebeats AI, 61 0408009067, hello@vibebeats.ai, https://vibebeats.ai

View original content:https://www.prweb.com/releases/vibebeats-launches-ai-powered-music-streaming-service-for-businesses-globally-302832010.html

SOURCE Vibebeats AI

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Technology

Inside information: Valmet initiates a strategic review to evaluate a potential separation of its two segments

Published

6 minutes ago

on

July 24, 2026

By

Valmet Oyj’s stock exchange release (inside information) on July 24, 2026 at 9.01a.m. EEST 

ESPOO, Finland, July 24, 2026 /PRNewswire/ — The Board of Directors of Valmet Oyj (“Valmet” or the “Company”) has decided to initiate a strategic review to evaluate a potential separation of its two core businesses, Biomaterial Solutions and Services, and Process Performance Solutions, into two standalone publicly listed companies. The review will focus on assessing whether a separation of the two businesses and their operation as separately listed companies on Nasdaq Helsinki would create additional value for shareholders compared with the current combined structure.

Both Valmet’s core businesses report as separate segments and they have grown into large, mostly independent profitable businesses, each with strong market positions and scale that allow them to succeed independently. With the recent completion of the Severn acquisition taking Process Performance Solutions to approximately EUR 1.7 billion in annual net sales and the renewed operating model now firmly in place, the Board believes this is the right time to assess whether a separation would unlock shareholder value by enabling each business to better realise its full potential.

The Board also notes that the two core businesses operate relatively independently as they serve mainly different customer industries, exhibit distinct business drivers, and have different capital allocation profiles. Biomaterial Solutions and Services is a global technology and lifecycle services business focused on the pulp, board, paper, tissue and energy industries, where its competitive advantage is anchored in a vast installed base, advanced technology, global presence, strong customer references and global services penetration. Process Performance Solutions is a mission-critical automation and flow control business serving a diversified set of industries. Over the past decade, it has evolved from a business primarily focused on pulp and paper into a diversified industrial platform, with close to 70 percent of net sales generated from other industries today.

Based on the Board’s initial assessment, a separation would allow each business to pursue sustainable profitable growth opportunities more independently and efficiently, with the potential for sharper management focus, greater agility, more tailored capital allocation, and more flexible access to external capital to support both organic and inorganic growth. The Board will also assess whether, if implemented, a separation would improve transparency, simplify governance, and allow capital markets to better recognize the full value of both businesses.

Pekka Vauramo, Chair of the Board, said:
“The Board continuously evaluates how to create the greatest long-term value for Valmet’s shareholders. Today, Valmet consists of two strong businesses with distinct markets, growth opportunities and capital allocation needs. Through this review, we will assess whether they can create more value as independent companies than they can together. We will only proceed with a separation if we conclude after detailed analysis that separation is clearly in the best interests of our shareholders.” 

Thomas Hinnerskov, President and CEO of Valmet, said:
“Both of our businesses are well positioned, with strong customer relationships and market positions, as well as talented employees. The review reflects the strength and maturity of both businesses, which we have built through strong execution, organic growth and strategic investments into sizeable and successful operations with the scale, capabilities and opportunities to create further value both together and, potentially, as independent companies. This review does not change our commitment to our customers or our strategy. It is a priority for us to preserve the strength of our full offering and the value our customers gain from services, automation and technology working together. Throughout the process, our focus remains on serving our customers and delivering value for their success.”

Although the strategic review has been initiated, there is no guarantee that the review will result in any transaction, including a separation. The Board will only execute or recommend changes to the Group’s structure if clear evidence of enhanced shareholder value creation can be attained. Valmet will provide an update on the review latest in connection with the publication of its full-year 2026 results.

Further information, please contact:

For investors: Pekka Rouhiainen, VP, Investor Relations, Valmet, tel. +358 10 672 0020

For media: Valmet Communications, media@valmet.com

VALMET

Katri Hokkanen
CFO

Pekka Rouhiainen
VP, Investor Relations

DISTRIBUTION:
Nasdaq Helsinki
Major media
www.valmet.com

Valmet is a global technology leader in serving process industries. We work with our customers throughout the lifecycle, delivering cutting-edge technologies and services, as well as mission-critical automation and flow control solutions. Backed by more than 225 years of industrial experience and a global team of 18,500 professionals close to customers, we are uniquely positioned to transform industries toward a regenerative tomorrow.

In 2025, Valmet’s net sales totaled approximately EUR 5.2 billion. Our head office is in Espoo, Finland, and we have experts in approximately 40 countries around the world. Valmet’s shares are listed on Nasdaq Helsinki.

Follow us on valmet.com | X | LinkedIn | Facebook | YouTube | Instagram |

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Securitas AB Interim Report Q2 2026 | January-June

Published

6 minutes ago

on

July 24, 2026

By

STOCKHOLM, July 24, 2026 /PRNewswire/ — 

APRIL–JUNE 2026

Total sales MSEK 37 843 (38 564)Organic sales growth 0 percent (5)Adjusted organic sales growth, 3 percent*Real sales growth within technology and solutions 5 percent (4)Operating income before amortization MSEK 2 824 (2 798)Operating margin 7.5 percent (7.3)Adjusted operating margin, 7.6 percent (7.5)*Items affecting comparability (IAC) MSEK –46 (–166) Earnings per share, SEK 2.88 (2.56)Earnings per share before IAC, SEK 2.94 (2.79)Cash flow from operating activities 87 percent (106)

JANUARY–JUNE 2026

Total sales MSEK 74 054 (78 170)Organic sales growth 0 percent (4)Adjusted organic sales growth, 2 ­percent*Real sales growth within technology and solutions 4 percent (5)Operating income before amortization MSEK 5 283 (5 323)Operating margin 7.1 percent (6.8)Adjusted operating margin, 7.3 ­percent (7.1)*Items affecting comparability (IAC) MSEK 138 (–243) whereof MSEK 213 (–5) related to divestitures Earnings per share, SEK 5.68 (4.86)Earnings per share before IAC, SEK 5.40 (5.15)Cash flow from operating activities 65 percent (56)Net debt/EBITDA ratio 2.2 (2.4) 

*A new key ratio, operating margin adjusted for the government business within SCIS in the process of being closed down, was added as of the second quarter 2025. A new key ratio, organic sales growth adjusted for the same business, was added as of the third quarter 2025. Refer to note 5 for further information.

Comments from the President and CEO

“Continued profitability improvement”

Organic sales growth in the second quarter, adjusted for the close-down of the SCIS government business, was 3 percent. Organic sales growth in North America was supported by both the Guarding and Technology business units, while active portfolio management had a hampering effect on organic sales growth in Europe. 

Real sales growth in technology and solutions reached 5 percent in the second quarter, supported by good performance in Technology in North America. Commercial activity remained healthy in the global technology business with strong growth in installation order intake and backlog.

We execute on our strategy with the share of technology and solutions increasing across all segments but we are not fully satisfied with the overall growth. We have built a strong and differentiated technology-led offering and we are intensifying our efforts to commercialize the capabilities we have built.

We delivered an improved adjusted operating margin in the second quarter, reaching 7.6 percent (7.5), driven by both the technology and solutions and the security services business lines. Operating income increased 3 percent and earnings per share 7 percent. For the first six months earnings per share increased 11 percent.

Cash generation was good, cor­re­spond­ing to 87 percent (106) of oper­at­ing income in the quarter, and 65 per­cent (56) for the first six months of the year. The net debt to EBITDA ratio was 2.2 (2.4).

THE TRUSTED PARTNER IN INTELLIGENCE-LED SECURITY

Our recently announced 2030 strategy positions Securitas as the trusted partner in intelligence-led security, combining global presence and deep security expertise with advanced data, analytics and technology. By leveraging actionable risk intelligence and a more consultative approach, we aim to move further up the value chain, delivering proactive, insight-driven security and strengthening our role as a strategic advisor to clients. In an increasingly complex risk environment, growing demand for professional security ­ser­vices supports our continued growth and competitive position.

The close-down of the SCIS govern­ment business is progressing accord­ing to plan and is expected to be concluded by year-end. As no further activities remain, the strategic as­sess­­­ment program was concluded in the second quarter of 2026.

The shift toward technology and solutions continues to drive prof­itabil­ity improvements. We are also strength­en­ing the performance of our security services business and, as of the second quarter of 2026, have completed portfolio management actions related to underperforming contracts in Europe. Going forward, portfolio optimization will continue as part of normal business operations, with a sustained focus on contract profitability.

CREATING LONG-TERM SHAREHOLDER VALUE

In conjunction with the launch of our strategy, we have updated the Group’s financial targets for the period through 2030. The revised targets include a new headline target of achieving 10 percent average annual earnings per share growth over a business cycle, alongside targets for cash flow, leverage and dividend policy. With a strong focus on quality and innovation, we are accelerating our transformation and remain confident in our ability to deliver sustainable earnings growth and create long-term shareholder value.

Magnus Ahlqvist
President and CEO

PRESENTATION OF THE INTERIM REPORT

Analysts and media are invited to participate in a telephone ­conference on July 24, 2026, at 9.30 a.m. (CEST) where President and CEO Magnus Ahlqvist and CFO Matteo Dall’Ora will present the report and answer questions. The ­telephone conference will also be audio cast live via Securitas’ website www.securitas.com

To follow the audio cast of the telephone conference via the web, please follow the link
www.securitas.com/en/investors/financial-reports-and-presentations/

A recorded version of the audio cast will be available at www.securitas.com/en/investors/financial-reports-and-presentations/
after the ­telephone conference.

For further information, please contact:
Micaela Sjökvist, Vice President, Investor Relations +46 76 116 7443

ABOUT SECURITAS

Securitas is a world-leading safety and security solutions partner that helps make your world a safer place. Nine decades of deep experience means we see what others miss. By leveraging technology in partnership with our clients, ­combined with an innovative, holistic approach, we’re transforming the security ­industry. With approximately 322 000 employees in 44 markets, we see a ­different world and ­create sustainable value for our clients by protecting what matters most – their people and assets.

Group financial targets

Securitas has the following financial targets:

Average annual earnings per share growth of 10 percent over a business cycle, excluding items affecting comparability and adjusted for changes in exchange rates, with a >10 percent operating margin ambition long-termOperating cash flow of 80–90 percent of operating income before amortizationNet debt to EBITDA below 2.5xDividend policy of 50–60 percent of annual net income over a business cycle, with excess capital returned to shareholders once stra-tegic growth priorities are met

Securitas AB (publ.)
P.O. Box 12307, SE-102 28 Stockholm, Sweden
Visiting address:
Lindhagensplan 70
Telephone: +46 10 470 30 00
Corporate registration number: 556302-7241

www.securitas.com

This is information that Securitas AB is obliged to make public pursuant to the EU Market Abuse Regulation.
The information was submitted for publication, through the agency of the contact person set out above,
at 8.00 a.m. (CEST) on Friday, July 24, 2026.

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