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IBM RELEASES FOURTH-QUARTER RESULTS

Published

2 years ago

on

Double-digit Software revenue growth; Free cash flow well-exceeds full-year expectation

ARMONK, N.Y., Jan. 29, 2025 /PRNewswire/ — IBM (NYSE: IBM) today announced fourth-quarter 2024 earnings results.

“We closed the year with double-digit revenue growth in Software for the quarter, led by further acceleration in Red Hat. Clients globally continue to turn to IBM to transform with AI. Our generative AI book of business now stands at more than $5 billion inception-to-date, up nearly $2 billion quarter over quarter,” said Arvind Krishna, IBM chairman, president and chief executive officer. “Three years ago, we laid out a vision for a faster-growing, more-profitable IBM. I’m proud of the work the IBM team has done to meet or exceed our commitments. With our focused strategy, enhanced portfolio, and culture of innovation, we’re well-positioned for 2025 and beyond and expect revenue growth of at least five percent and free cash flow of about $13.5 billion this year.” 

Fourth-Quarter Highlights

Revenue
– Revenue of $17.6 billion, up 1 percent, up 2 percent at constant currency
– Software revenue up 10 percent, up 11 percent at constant currency
– Consulting revenue down 2 percent, down 1 percent at constant currency
– Infrastructure revenue down 8 percent, down 6 percent at constant currency
Profit
– Gross Profit Margin: GAAP: 59.5 percent, up 40 basis points; Operating (Non-GAAP): 60.6 percent, up 50 basis points

Full-Year Highlights

Revenue
– Revenue of $62.8 billion, up 1 percent, up 3 percent at constant currency
– Software revenue up 8 percent, up 9 percent at constant currency
– Consulting revenue down 1 percent, up 1 percent at constant currency
– Infrastructure revenue down 4 percent, down 3 percent at constant currency
Profit
– Gross Profit Margin: GAAP: 56.7 percent, up 120 basis points; Operating (Non-GAAP): 57.8 percent, up 130 basis points
Cash Flow
– Net cash from operating activities of $13.4 billion; free cash flow of $12.7 billion

FOURTH-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 (1)

 

Pre-tax

Income

Margin (1)

 

Net

Income (1)

 

Diluted

Earnings

Per Share (1)

GAAP from
Continuing
Operations

$   17.6 B

 
 

$ 10.4 B

 
 

59.5

%

 

$    3.3 B

 
 

18.8

%

 

$     2.9 B

 
 

$     3.11

 

Year/Year

1

%(2)

 

2

%

 

0.4

Pts

 

(12)

%

 

-2.8

Pts

 

(11)

%

 

(12)

%

Operating

(Non-GAAP)

 
 
 

$ 10.6 B

 
 

60.6

%

 

$    4.3 B

 
 

24.3

%

 

$     3.7 B

 
 

$     3.92

 

Year/Year

 
 
 

2

%

 

0.5

Pts

 

2

%

 

0.4

Pts

 

3

%

 

1

%

(1)  2024 GAAP results include the impact of a one-time, non-cash pension settlement charge of $0.4 billion related to the transfer of a
       portion of the company’s Non-U.S. defined benefit pension obligations and related plan assets to third-party insurers in October 2024.

(2)  2% at constant currency.

“With strong performance across our Software portfolio, we continue to drive solid fundamentals within our business,” said James Kavanaugh, IBM senior vice president and chief financial officer. “As a result, we generated $12.7 billion in free cash flow, far-outpacing our expectation for the year. Continued strength in operating profitability and free cash flow fuels our ability to invest for the future while returning value to shareholders through dividends.”

Segment Results for Fourth Quarter

Software — revenues of $7.9 billion, up 10.4 percent, up 11.5 percent at constant currency:
– Hybrid Platform & Solutions up 11 percent, up 12 percent at constant currency
      — Red Hat up 16 percent, up 17 percent at constant currency
      — Automation up 15 percent, up 16 percent at constant currency
      — Data & AI up 4 percent, up 5 percent at constant currency
      — Security up 4 percent, up 5 percent at constant currency
– Transaction Processing up 10 percent, up 11 percent at constant currency

Consulting — revenues of $5.2 billion, down 2.0 percent, down 1.1 percent at constant currency:
– Business Transformation up 1 percent, up 2 percent at constant currency
– Technology Consulting down 7 percent, down 6 percent at constant currency
– Application Operations down 4 percent, down 3 percent at constant currency

Infrastructure — revenues of $4.3 billion, down 7.6 percent, down 6.0 percent at constant currency:
– Hybrid Infrastructure down 10 percent, down 8 percent at constant currency
      — IBM Z down 21 percent, down 20 percent at constant currency
      — Distributed Infrastructure flat, up 2 percent at constant currency
– Infrastructure Support down 2 percent, flat at constant currency

Financing — revenues of $0.2 billion, down 2.5 percent, down 0.5 percent at constant currency

Cash Flow and Balance Sheet

In the fourth quarter, the company generated net cash from operating activities of $4.3 billion, down $0.1 billion year to year. IBM’s free cash flow was $6.2 billion, up $0.1 billion year to year. The company returned $1.5 billion to shareholders in dividends in the fourth quarter.

For the year, the company generated net cash from operating activities of $13.4 billion, down $0.5 billion year to year. Net cash from operating activities excluding IBM financing receivables was $13.9 billion, up $1.2 billion. IBM’s free cash flow was $12.7 billion, up $1.5 billion year to year.

IBM ended the fourth quarter with $14.8 billion of cash, restricted cash and marketable securities, up $1.3 billion from year-end 2023. Debt, including IBM Financing debt of $12.1 billion, totaled $55.0 billion, down $1.6 billion since year-end 2023.

Full-Year 2024 Results

FULL-YEAR 2024 INCOME STATEMENT SUMMARY

 

GAAP results include impacts of one-time, non-cash pension settlement charges (1)

 
 

Revenue

 

Gross

Profit

 
 

Gross
Profit
Margin

 
 

Pre-tax

Income (1)

 

Pre-tax

Income

Margin (1)

 

Net

Income (1)

 

Diluted

Earnings

Per Share (1)

GAAP from
Continuing
Operations

$   62.8 B

 
 

$ 35.6 B

 
 

56.7

%

 

$    5.8 B

 
 

9.2

%

 

$     6.0 B

 
 

$     6.42

 

Year/Year

1

%(2)

 

4

%

 

1.2

Pts

 

(33)

%

 

-4.8

Pts

 

(20)

%

 

(21)

%

Operating

(Non-GAAP)

 
 
 

$ 36.3 B

 
 

57.8

%

 

$ 11.2 B

 
 

17.9

%

 

$     9.7 B

 
 

$   10.33

 

Year/Year

 
 
 

4

%

 

1.3

Pts

 

9

%

 

1.2

Pts

 

9

%

 

7

%

(1)  2024 GAAP results include the impacts of one-time, non-cash, U.S. and non-U.S. pension settlement charges of $3.1 billion ($2.4 billion
       net of tax).

(2)   3% at constant currency

Full-Year 2025 Expectations

Revenue: The company expects full-year constant currency revenue growth of at least 5 percent. At current foreign exchange rates, currency is expected to be about a two-point headwind to growth for the year.
Free cash flow: The company expects about $13.5 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; 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;
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.

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-4q24. 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
December 31,

 
 

Year Ended
December 31,

 
 

2024

 
 

2023 (1)

 
 

2024

 
 

2023 (1)

 

REVENUE BY SEGMENT

 
 
 
 
 
 
 
 
 
 
 

Software

$                   7,924

 
 

$                   7,179

 
 

$                27,085

 
 

$                25,011

 

Consulting

5,175

 
 

5,283

 
 

20,692

 
 

20,884

 

Infrastructure

4,256

 
 

4,604

 
 

14,020

 
 

14,593

 

Financing

170

 
 

175

 
 

713

 
 

741

 

Other

29

 
 

141

 
 

243

 
 

632

 

TOTAL REVENUE

17,553

 
 

17,381

 
 

62,753

 
 

61,860

 
 
 
 
 
 
 
 
 
 
 
 
 

GROSS PROFIT

10,439

 
 

10,267

 
 

35,551

 
 

34,300

 
 
 
 
 
 
 
 
 
 
 
 
 

GROSS PROFIT MARGIN

 
 
 
 
 
 
 
 
 
 
 

Software

85.0

%

 

84.1

%

 

83.7

%

 

82.9

%

Consulting

28.0

%

 

28.1

%

 

27.0

%

 

26.8

%

Infrastructure

56.9

%

 

60.8

%

 

55.8

%

 

56.1

%

Financing

46.9

%

 

50.2

%

 

47.9

%

 

48.1

%

 
 
 
 
 
 
 
 
 
 
 
 

TOTAL GROSS PROFIT MARGIN

59.5

%

 

59.1

%

 

56.7

%

 

55.4

%

 
 
 
 
 
 
 
 
 
 
 
 

EXPENSE AND OTHER INCOME

 
 
 
 
 
 
 
 
 
 
 

S,G&A

4,866

 
 

4,791

 
 

19,688

 
 

19,003

 

R,D&E

1,967

 
 

1,748

 
 

7,479

 
 

6,775

 

Intellectual property and custom development income

(301)

 
 

(242)

 
 

(996)

 
 

(860)

 

Other (income) and expense (2)

177

 
 

(193)

 
 

1,871

 
 

(914)

 

Interest expense

424

 
 

405

 
 

1,712

 
 

1,607

 

TOTAL EXPENSE AND OTHER INCOME

7,133

 
 

6,509

 
 

29,754

 
 

25,610

 
 
 
 
 
 
 
 
 
 
 
 
 

INCOME FROM CONTINUING OPERATIONS

BEFORE INCOME TAXES

3,306

 
 

3,759

 
 

5,797

 
 

8,690

 

Pre-tax margin

18.8

%

 

21.6

%

 

9.2

%

 

14.0

%

Provision for/(Benefit from) income taxes (2)

379

 
 

474

 
 

(218)

 
 

1,176

 

Effective tax rate

11.5

%

 

12.6

%

 

(3.8)

%

 

13.5

%

 
 
 
 
 
 
 
 
 
 
 
 

INCOME FROM CONTINUING OPERATIONS

$                   2,927

 
 

$                   3,285

 
 

$                   6,015

 
 

$                   7,514

 
 
 
 
 
 
 
 
 
 
 
 
 

DISCONTINUED OPERATIONS

 
 
 
 
 
 
 
 
 
 
 

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

(12)

 
 

3

 
 

8

 
 

(12)

 
 
 
 
 
 
 
 
 
 
 
 
 

NET INCOME (2)

$                   2,915

 
 

$                   3,288

 
 

$                   6,023

 
 

$                   7,502

 
 
 
 
 
 
 
 
 
 
 
 
 

EARNINGS PER SHARE OF COMMON STOCK (2)

 
 
 
 
 
 
 
 
 
 
 

Assuming Dilution

 
 
 
 
 
 
 
 
 
 
 

Continuing Operations

$                      3.11

 
 

$                      3.54

 
 

$                      6.42

 
 

$                      8.15

 

Discontinued Operations

$                     (0.01)

 
 

$                      0.00

 
 

$                      0.01

 
 

$                     (0.01)

 

TOTAL

$                      3.09

 
 

$                      3.55

 
 

$                      6.43

 
 

$                      8.14

 
 
 
 
 
 
 
 
 
 
 
 
 

Basic

 
 
 
 
 
 
 
 
 
 
 

Continuing Operations

$                      3.16

 
 

$                      3.59

 
 

$                      6.53

 
 

$                      8.25

 

Discontinued Operations

$                     (0.01)

 
 

$                      0.00

 
 

$                      0.01

 
 

$                     (0.01)

 

TOTAL

$                      3.15

 
 

$                      3.59

 
 

$                      6.53

 
 

$                      8.23

 
 
 
 
 
 
 
 
 
 
 
 
 

WEIGHTED-AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (M’s)

 
 
 
 
 
 
 
 
 
 
 

Assuming Dilution

942.4

 
 

927.3

 
 

937.2

 
 

922.1

 

Basic

926.0

 
 

914.7

 
 

921.8

 
 

911.2

 

____________________

(1)    Recast to reflect January 2024 segment changes.

(2)    2024 results include the impacts of one-time, non-cash pension settlement charges in the third quarter of $2.7 billion ($2.0 billion net of tax) in the U.S. and

        fourth quarter of $0.4 billion in the non-U.S.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited)

 

(Dollars in Millions)

 

At

December 31,
2024

 

At

December 31,
2023

ASSETS:

 
 
 
 

Current Assets:

 
 
 
 

Cash and cash equivalents

 

$                    13,947

 

$                    13,068

Restricted cash

 

214

 

21

Marketable securities

 

644

 

373

Notes and accounts receivable – trade, net

 

6,804

 

7,214

Short-term financing receivables, net

 

7,159

 

6,793

Other accounts receivable, net

 

947

 

640

Inventories

 

1,289

 

1,161

Deferred costs

 

959

 

998

Prepaid expenses and other current assets

 

2,520

 

2,639

Total Current Assets

 

34,482

 

32,908

 
 
 
 
 

Property, plant and equipment, net

 

5,731

 

5,501

Operating right-of-use assets, net

 

3,197

 

3,220

Long-term financing receivables, net

 

5,353

 

5,766

Prepaid pension assets

 

7,492

 

7,506

Deferred costs

 

788

 

842

Deferred taxes

 

6,978

 

6,656

Goodwill

 

60,706

 

60,178

Intangibles, net

 

10,660

 

11,036

Investments and sundry assets

 

1,787

 

1,626

Total Assets

 

$                  137,175

 

$                  135,241

 
 
 
 
 

LIABILITIES:

 
 
 
 

Current Liabilities:

 
 
 
 

Taxes

 

$                      2,033

 

$                      2,270

Short-term debt

 

5,089

 

6,426

Accounts payable

 

4,032

 

4,132

Deferred income

 

13,907

 

13,451

Operating lease liabilities

 

768

 

820

Other liabilities

 

7,313

 

7,022

Total Current Liabilities

 

33,142

 

34,122

 
 
 
 
 

Long-term debt

 

49,884

 

50,121

Retirement-related obligations

 

9,432

 

10,808

Deferred income

 

3,622

 

3,533

Operating lease liabilities

 

2,655

 

2,568

Other liabilities

 

11,048

 

11,475

Total Liabilities

 

109,783

 

112,628

 
 
 
 
 

EQUITY:

 
 
 
 

IBM Stockholders’ Equity:

 
 
 
 

Common stock

 

61,380

 

59,643

Retained earnings

 

151,163

 

151,276

Treasury stock – at cost

 

(169,968)

 

(169,624)

Accumulated other comprehensive income/(loss)

 

(15,269)

 

(18,761)

Total IBM Stockholders’ Equity

 

27,307

 

22,533

 
 
 
 
 

Noncontrolling interests

 

86

 

80

Total Equity

 

27,393

 

22,613

 
 
 
 
 

Total Liabilities and Equity

 

$                  137,175

 

$                  135,241

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

CASH FLOW

(Unaudited)

 
 
 

Three Months Ended
December 31,

 

Year Ended
December 31,

(Dollars in Millions)

 

2024

 

2023

 

2024

 

2023

Net Income from Operations

 

$                     2,915

 

$                     3,288

 

$                     6,023

 

$                     7,502

Pension Settlement Charges

 

388

 

–

 

3,113

 

–

Depreciation/Amortization of Intangibles (1)

 

1,112

 

1,152

 

4,667

 

4,395

Stock-based Compensation

 

345

 

291

 

1,311

 

1,133

Operating assets and liabilities/Other, net (2)

 

1,824

 

1,619

 

(1,238)

 

(332)

IBM Financing A/R

 

(2,255)

 

(1,887)

 

(431)

 

1,233

Net Cash Provided by Operating Activities

 

$                     4,330

 

$                     4,463

 

$                  13,445

 

$                  13,931

 
 
 
 
 
 
 
 
 

Capital Expenditures, net of payments & proceeds (3)

 

(422)

 

(263)

 

(1,127)

 

(1,488)

Divestitures, net of cash transferred

 

(7)

 

–

 

698

 

(4)

Acquisitions, net of cash acquired

 

(541)

 

(137)

 

(3,289)

 

(5,082)

Marketable Securities / Other Investments, net

 

(409)

 

3,236

 

(1,218)

 

(496)

Net Cash Provided by/(Used in) Investing Activities

 

$                  (1,379)

 

$                     2,837

 

$                  (4,937)

 

$                  (7,070)

 
 
 
 
 
 
 
 
 

Debt, net of payments & proceeds

 

(103)

 

(122)

 

(880)

 

4,497

Dividends

 

(1,546)

 

(1,518)

 

(6,147)

 

(6,040)

Financing – Other

 

(26)

 

26

 

(52)

 

(226)

Net Cash Provided by/(Used in) Financing Activities

 

$                  (1,675)

 

$                   (1,615)

 

$                  (7,079)

 

$                  (1,769)

 
 
 
 
 
 
 
 
 

Effect of Exchange Rate changes on Cash

 

(330)

 

128

 

(359)

 

9

Net Change in Cash, Cash Equivalents and Restricted Cash

 

$                      946

 

$                    5,814

 

$                   1,071

 

$                   5,101

____________________

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

(2)  The year ended December 31, 2024 includes a $0.7 billion tax effect associated with a one-time, non-cash, U.S. pension settlement

       charge in the third-quarter 2024.

(3)  The year ended December 31, 2024 includes proceeds of $0.4 billion from the sale of certain QRadar SaaS assets in third-quarter 2024.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

 
 
 

Three Months Ended

December 31,

 

Year Ended

December 31,

(Dollars in Billions)

 

2024

 

2023

 

Yr/Yr

 

2024

 

2023

 

Yr/Yr

Net Income as reported (GAAP) (1)

 

$           2.9

 

$           3.3

 

$         (0.4)

 

$           6.0

 

$           7.5

 

$         (1.5)

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

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

 

0.0

Income from continuing operations

 

2.9

 

3.3

 

(0.4)

 

6.0

 

7.5

 

(1.5)

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

 

0.4

 

0.5

 

(0.1)

 

(0.2)

 

1.2

 

(1.4)

Pre-tax income from continuing operations (GAAP)

 

3.3

 

3.8

 

(0.5)

 

5.8

 

8.7

 

(2.9)

Non-operating adjustments (before tax)

 
 
 
 
 
 
 
 
 
 
 
 

Acquisition-related charges (2)

 

0.5

 

0.4

 

0.1

 

2.0

 

1.7

 

0.3

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

 

0.5

 

0.0

 

0.5

 

3.5

 

0.0

 

3.5

 
 
 
 
 
 
 
 
 
 
 
 
 

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

 

4.3

 

4.2

 

0.1

 

11.2

 

10.3

 

0.9

 
 
 
 
 
 
 
 
 
 
 
 
 

Net interest expense

 

0.3

 

0.3

 

0.0

 

1.0

 

0.9

 

0.0

Depreciation/Amortization of non-acquired intangible assets

 

0.7

 

0.7

 

0.0

 

2.8

 

2.8

 

0.1

Stock-based compensation

 

0.3

 

0.3

 

0.1

 

1.3

 

1.1

 

0.2

Workforce rebalancing charges

 

0.0

 

0.0

 

0.0

 

0.7

 

0.4

 

0.3

Corporate (gains) and charges (3)

 

0.0

 

0.0

 

0.0

 

(0.6)

 

(0.1)

 

(0.6)

 
 
 
 
 
 
 
 
 
 
 
 
 

Adjusted EBITDA

 

$           5.6

 

$           5.5

 

$           0.1

 

$        16.4

 

$        15.5

 

$           0.9

____________________

(1)    2024 results include the impacts of one-time, non-cash pension settlement charges in the third quarter of $2.7 billion ($2.0 billion net of tax) in the U.S. and fourth

         quarter of $0.4 billion in the non-U.S.

(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 December 31, 2024

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$                       7,924

 
 

$                        5,175

 
 

$                       4,256

 
 

$                            170

 

Segment Profit

 

$                       3,102

 
 

$                           606

 
 

$                       1,063

 
 

$                              94

 

Segment Profit Margin

 

39.2

%

 

11.7

%

 

25.0

%

 

55.0

%

Change YTY Revenue

 

10.4

%

 

(2.0)

%

 

(7.6)

%

 

(2.5)

%

Change YTY Revenue – Constant Currency

 

11.5

%

 

(1.1)

%

 

(6.0)

%

 

(0.5)

%

 
 
 

Three Months Ended December 31, 2023 (1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

 Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$                       7,179

 
 

$                        5,283

 
 

$                       4,604

 
 

$                           175

 

Segment Profit

 

$                       2,649

 
 

$                           654

 
 

$                       1,299

 
 

$                           117

 

Segment Profit Margin

 

36.9

%

 

12.4

%

 

28.2

%

 

67.0

%

____________________

(1)    Recast to reflect January 2024 segment changes.

 
 
 

Year Ended December 31, 2024

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$                     27,085

 
 

$                     20,692

 
 

$                     14,020

 
 

$                           713

 

Segment Profit

 

$                       8,684

 
 

$                       2,054

 
 

$                       2,450

 
 

$                           348

 

Segment Profit Margin

 

32.1

%

 

9.9

%

 

17.5

%

 

48.8

%

Change YTY Revenue

 

8.3

%

 

(0.9)

%

 

(3.9)

%

 

(3.7)

%

Change YTY Revenue – Constant Currency

 

9.0

%

 

0.6

%

 

(2.7)

%

 

(2.5)

%

 
 
 

Year Ended December 31, 2023 (1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 

(Dollars in Millions)

 

 Software

 
 

Consulting

 
 

Infrastructure

 
 

Financing

 

Revenue

 

$                     25,011

 
 

$                     20,884

 
 

$                     14,593

 
 

$                           741

 

Segment Profit

 

$                       7,499

 
 

$                       2,130

 
 

$                       2,828

 
 

$                           373

 

Segment Profit Margin

 

30.0

%

 

10.2

%

 

19.4

%

 

50.3

%

____________________

(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 December 31, 2024

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-GAAP)

 

Gross Profit

$       10,439

 
 

$                              191

 
 

$                                  —

 
 

$                       —

 
 

$           10,630

 

Gross Profit Margin

59.5

%

 

1.1

pts

 

—

pts

 

—

pts

 

60.6

%

S,G&A

$         4,866

 
 

$                            (305)

 
 

$                                  —

 
 

$                       —

 
 

$             4,561

 

Other (Income) & Expense

177

 
 

(2)

 
 

(467)

 
 

—

 
 

(291)

 

Total Expense & Other (Income)

7,133

 
 

(307)

 
 

(467)

 
 

—

 
 

6,359

 

Pre-tax Income from Continuing Operations

3,306

 
 

498

 
 

467

 
 

—

 
 

4,271

 

Pre-tax Income Margin from Continuing

Operations

18.8

%

 

2.8

pts

 

2.7

pts

 

—

pts

 

24.3

%

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

$            379

 
 

$                              123

 
 

$                                  58

 
 

$                      21

 
 

$                581

 

Effective Tax Rate

11.5

%

 

1.5

pts

 

0.1

pts

 

0.5

pts

 

13.6

%

Income from Continuing Operations

$         2,927

 
 

$                              375

 
 

$                                408

 
 

$                    (21)

 
 

$             3,690

 

Income Margin from Continuing Operations

16.7

%

 

2.1

pts

 

2.3

pts

 

(0.1)

pts

 

21.0

%

Diluted Earnings Per Share: Continuing

Operations

$           3.11

 
 

$                             0.40

 
 

$                               0.43

 
 

$                 (0.02)

 
 

$               3.92

 
 
 

Three Months Ended December 31, 2023

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-GAAP)

 

Gross Profit

$      10,267

 
 

$                             172

 
 

$                                 —

 
 

$                     —

 
 

$          10,439

 

Gross Profit Margin

59.1

%

 

1.0

pts

 

—

pts

 

—

pts

 

60.1

%

S,G&A

$        4,791

 
 

$                           (271)

 
 

$                                 —

 
 

$                     —

 
 

$            4,520

 

Other (Income) & Expense

(193)

 
 

12

 
 

22

 
 

—

 
 

(159)

 

Total Expense & Other (Income)

6,509

 
 

(259)

 
 

22

 
 

—

 
 

6,272

 

Pre-tax Income from Continuing Operations

3,759

 
 

431

 
 

(22)

 
 

—

 
 

4,167

 

Pre-tax Income Margin from Continuing

Operations

21.6

%

 

2.5

pts

 

(0.1)

pts

 

—

pts

 

24.0

%

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

$          474

 
 

$                              91

 
 

$                                19

 
 

$                     (4)

 
 

$              580

 

Effective Tax Rate

12.6

%

 

0.9

pts

 

0.5

pts

 

(0.1)

pts

 

13.9

%

Income from Continuing Operations

$       3,285

 
 

$                            339

 
 

$                              (41)

 
 

$                      4

 
 

$           3,587

 

Income Margin from Continuing Operations

18.9

%

 

2.0

pts

 

(0.2)

pts

 

—

pts

 

20.6

%

Diluted Earnings Per Share: Continuing

Operations

$         3.54

 
 

$                           0.37

 
 

$                           (0.04)

 
 

$                    —

 
 

$             3.87

 

____________________

(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. 2023 also includes a $12 million gain recognized 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, non-U.S. pension settlement charge of $0.4 billion.

(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.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

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

(Unaudited; Dollars in millions except per share amounts)

 
 

Year Ended December 31, 2024

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts (3)

 
 

Operating

(Non-GAAP)

 

Gross Profit

$     35,551

 
 

$                          724

 
 

$                                  —

 
 

$                   —

 
 

$        36,275

 

Gross Profit Margin

56.7

%

 

1.2

pts

 

—

pts

 

—

pts

 

57.8

%

S,G&A

$     19,688

 
 

$                     (1,159)

 
 

$                                  —

 
 

$                   —

 
 

$        18,529

 

Other (Income) & Expense

1,871

 
 

(70)

 
 

(3,457)

 
 

—

 
 

(1,656)

 

Total Expense & Other (Income)

29,754

 
 

(1,229)

 
 

(3,457)

 
 

—

 
 

25,068

 

Pre-tax Income from Continuing Operations

5,797

 
 

1,953

 
 

3,457

 
 

—

 
 

11,207

 

Pre-tax Income Margin from Continuing

Operations

9.2

%

 

3.1

pts

 

5.5

pts

 

—

pts

 

17.9

%

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

$        (218)

 
 

$                         497

 
 

$                               790

 
 

$                455

 
 

$         1,523

 

Effective Tax Rate

(3.8)

%

 

5.1

pts

 

8.2

pts

 

4.1

pts

 

13.6

%

Income from Continuing Operations

$      6,015

 
 

$                      1,456

 
 

$                            2,668

 
 

$              (455)

 
 

$         9,684

 

Income Margin from Continuing Operations

9.6

%

 

2.3

pts

 

4.3

pts

 

(0.7)

pts

 

15.4

%

Diluted Earnings Per Share: Continuing

Operations

$        6.42

 
 

$                        1.55

 
 

$                              2.85

 
 

$             (0.49)

 
 

$         10.33

 
 
 

Year Ended December 31, 2023

 
 

Continuing Operations

 
 

GAAP

 
 

Acquisition-

Related

Adjustments (1)

 
 

Retirement-

Related

Adjustments (2)

 
 

Tax

Reform

Impacts

 
 

Operating

(Non-GAAP)

 

Gross Profit

$    34,300

 
 

$                         631

 
 

$                                 —

 
 

$                   —

 
 

$       34,931

 

Gross Profit Margin

55.4

%

 

1.0

pts

 

—

pts

 

—

pts

 

56.5

%

S,G&A

$    19,003

 
 

$                    (1,039)

 
 

$                                 —

 
 

$                   —

 
 

$       17,964

 

Other (Income) & Expense

(914)

 
 

10

 
 

39

 
 

—

 
 

(866)

 

Total Expense & Other (Income)

25,610

 
 

(1,029)

 
 

39

 
 

—

 
 

24,620

 

Pre-tax Income from Continuing Operations

8,690

 
 

1,660

 
 

(39)

 
 

—

 
 

10,311

 

Pre-tax Income Margin from Continuing

Operations

14.0

%

 

2.7

pts

 

(0.1)

pts

 

—

pts

 

16.7

%

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

$      1,176

 
 

$                         368

 
 

$                                 (8)

 
 

$                 (95)

 
 

$         1,441

 

Effective Tax Rate

13.5

%

 

1.4

pts

 

—

pts

 

(0.9)

pts

 

14.0

%

Income from Continuing Operations

$      7,514

 
 

$                      1,292

 
 

$                               (30)

 
 

$                  95

 
 

$         8,870

 

Income Margin from Continuing Operations

12.1

%

 

2.1

pts

 

0.0

pts

 

0.2

pts

 

14.3

%

Diluted Earnings Per Share: Continuing

Operations

$        8.15

 
 

$                        1.40

 
 

$                            (0.03)

 
 

$               0.10

 
 

$           9.62

 

____________________

(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 and 2023 also include a $68 million loss and a $12 million gain, respectively, recognized 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 impacts of one-time, non-cash, U.S. and non-U.S. pension settlement charges of $3.1 billion ($2.4 billion net of tax).

(3)    2024 includes a net benefit from income taxes due to the resolution of certain tax audit matters.

(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.

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP OPERATING CASH FLOW TO FREE CASH FLOW RECONCILIATION

(Unaudited)

 
 
 

Three Months Ended
December 31,

 

Year Ended
December 31,

(Dollars in Millions)

 

2024

 

2023

 

2024

 

2023

Net Cash from Operations per GAAP

 

$            4,330

 

$            4,463

 

$         13,445

 

$         13,931

 
 
 
 
 
 
 
 
 

Less: change in IBM Financing receivables

 

(2,255)

 

(1,887)

 

(431)

 

1,233

 
 
 
 
 
 
 
 
 

Net cash from operating activities excl. IBM Financing receivables

 

6,584

 

6,350

 

13,876

 

12,699

 
 
 
 
 
 
 
 
 

Capital Expenditures, net

 

(422)

 

(263)

 

(1,127)

 

(1,488)

 
 
 
 
 
 
 
 
 

Free Cash Flow

 

6,163

 

6,087

 

12,749

 

11,210

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

GAAP OPERATING CASH FLOW TO ADJUSTED EBITDA RECONCILIATION

(Unaudited)

 
 
 

Three Months Ended
December 31,

 

Year Ended
December 31,

(Dollars in Billions)

 

2024

 

2023

 

2024

 

2023

Net Cash Provided by Operating Activities

 

$           4.3

 

$             4.5

 

$        13.4

 

$        13.9

 
 
 
 
 
 
 
 
 

Add:

 
 
 
 
 
 
 
 

Net interest expense

 

0.3

 

0.3

 

1.0

 

0.9

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

 

0.4

 

0.5

 

(0.2)

 

1.2

 
 
 
 
 
 
 
 
 

Less change in:

 
 
 
 
 
 
 
 

Financing receivables

 

(2.3)

 

(1.9)

 

(0.4)

 

1.2

Other assets and liabilities/other, net (1)

 

1.7

 

1.6

 

(1.8)

 

(0.7)

 
 
 
 
 
 
 
 
 

Adjusted EBITDA

 

$           5.6

 

$             5.5

 

$        16.4

 

$        15.5

____________________

(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.

 

 

View original content to download multimedia:https://www.prnewswire.com/news-releases/ibm-releases-fourth-quarter-results-302363763.html

SOURCE IBM

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Technology

Toku launches Makimoto Flows, a visual builder for speech AI pipelines, taking its open-source initiative beyond transcription

Published

44 minutes ago

on

October 21, 2026

By

Developers can chain transcription, summarisation and call tagging on one canvas, test each step and export the pipeline as code, with every step processed in Singapore

SINGAPORE, Oct. 21, 2026 /PRNewswire/ — Toku Ltd. (SGX: TKU), a Singapore-headquartered AI-powered customer experience (CX) platform, has launched Makimoto Flows (“Flows”), a visual builder within its open-source conversational AI initiative where developers assemble speech AI pipelines block by block and test each stage on a recorded call. Flows is now live at makimoto.ai.

On the Flows canvas, developers connect blocks to build a speech AI pipeline and test each step individually. The Transcribe block converts audio into text using Kawa, the Summarise block generates a topic and short summary from the transcript, and the Tags block classifies each call across seven categories, including customer sentiment. Developers can see how audio moves from transcription to analysis, and control how each stage connects and runs. Every block runs in Singapore, so audio, transcripts and the resulting analysis stay in-country.

The Chained Analysis starter template puts these blocks together in one click, and developers can adjust any block and rerun it to compare results. Each block maps to a Makimoto API endpoint, and any flow can be exported as ready-to-run Python code, so developers can take the same capabilities into their own code for applications such as call recaps and call triage.

“Developers should have control over how their voice AI works, from the models they use to the way each stage connects. That is the principle behind Makimoto. Flows puts the orchestration layer in front of them: they can build a pipeline, run a recorded call through it and see what each step produces before anything reaches their customers. Models will keep changing. The ability to compose them, and to know where they run, is what lasts,” said Thomas Laboulle, Founder and CEO at Toku.

Flows builds on the composable architecture Toku set out when it introduced Makimoto in April 2026, and takes the initiative beyond transcription. Kawa, released on schedule on 1 July 2026, established the transcription layer through a Singapore-hosted API; summarisation and tagging endpoints followed in September; Flows now lets developers compose them visually. Next, Makimoto plans to add audio preparation blocks, starting with noise filtering, giving developers more control over how recordings are processed before transcription.

By pairing open-source development with enterprise-grade deployment, Makimoto complements Toku’s existing customer experience platform and supports long-term innovation opportunities across the Group’s AI roadmap.

Developers can create a free account at makimoto.ai, open the Chained Analysis template and run a sample recording, or one of their own call recordings, through it; each account includes 1,000 free minutes. Feedback reaches the Makimoto team directly from the portal.

About Toku

Headquartered in Singapore, Toku Ltd. (SGX Catalist: TKU) is a cloud-native, AI-powered customer experience platform purpose-built for enterprises operating in complex, multi-market environments. With deep roots in the APAC region and an expanding global footprint, Toku’s modular 360° CX Platform orchestrates customer interactions across voice, chat, email and digital channels while managing regulatory, linguistic and infrastructure complexity at scale.

Built on end-to-end ownership of its technology stack, from carrier-grade connectivity to AI applications, Toku delivers enterprise-grade security, reliability and deployment flexibility in commercial cloud, private data centres and hybrid environments. Its AI capabilities include transcription, summarisation, sentiment analysis, conversation analytics and governed virtual agents, designed to integrate seamlessly with enterprise systems and customer data.

Trusted by leading enterprises and public-sector organisations, Toku helps organisations streamline operations, scale customer engagement and deliver consistent experiences in fragmented markets worldwide.

For more information about Toku, visit toku.co.

About Makimoto

Makimoto is Toku’s open-source initiative, operated through Makimoto Technology Pte Ltd, a wholly owned subsidiary of the Toku Group, dedicated to building composable conversational AI infrastructure for Asia-Pacific. Its releases include Makimoto Kawa, a Singapore-hosted transcription API; summarisation and tagging endpoints; and Makimoto Flows, a visual builder for composing speech AI pipelines. For more information about Makimoto, visit makimoto.ai.

Forward-Looking Statements

This press release contains forward-looking statements regarding Toku’s expansion plans, business strategy and planned product releases. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Toku undertakes no obligation to update these statements to reflect subsequent events or circumstances.

Sponsor’s Statement

Toku Ltd. (the “Company”) was listed on Catalist of the Singapore Exchange Securities Trading Limited (the “Exchange”) on 22 January 2026. The initial public offering of the Company was sponsored by PrimePartners Corporate Finance Pte. Ltd. (the “Sponsor”). This press release has been reviewed by the Sponsor. It has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this press release, including the correctness of any of the statements or opinions made or reports contained in this press release. The contact person for the Sponsor is Ms. Ng Shi Qing, 16 Collyer Quay, #10-00 Collyer Quay Centre, Singapore 049318, sponsorship@ppcf.com.sg.

Investor Relations Contact:
investor.relations@toku.co

Developers and Partners:
contact@makimoto.ai  

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Conscious Spark LLC Launches Alphimiya® Neuro-Recalibration Framework Designed to Resolve C-Suite Revenue Plateaus

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44 minutes ago

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October 21, 2026

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New research-backed neuro-recalibration framework targets the autonomic nervous system’s threat response to managing high financial amounts, offering enterprise leaders a biological pathway to scaling.

ANTALYA, Turkey and ALBUQUERQUE, N.M., Oct. 21, 2026 /PRNewswire/ — Conscious Spark LLC, a research and advisory firm specializing in applied neuroscience for executive leadership, today announced the official launch of Alphimiya®, a proprietary C-suite neuro-recalibration framework designed to resolve corporate revenue plateaus by upgrading the biological capacity of enterprise decision-makers.

Developed to address the root causes of stalled enterprise growth, the Alphimiya® framework targets the human autonomic nervous system’s subconscious threat response to managing high financial amounts. When commercial leaders and CEOs attempt to scale past historical capital thresholds without recalibrating their stress response, the body’s natural survival mechanism triggers decision fatigue, strategic risk aversion, and systemic self-sabotage. Alphimiya® recalibrates this biological safety brake, enabling executive teams to hold, absorb, and scale larger financial volumes without physiological or operational friction.

“A corporate revenue plateau is rarely an operational or marketing failure; it is a biological safety brake embedded within executive leadership,” stated Dr. Ahmed Al-Nashi, Founder of Conscious Spark LLC. “When managing high financial amounts triggers an underlying physical stress response, the enterprise subconsciously contracts to remain in its perceived safe zone. Alphimiya® removes that biological friction, allowing C-level leaders to multiply revenue with calm, biological authority.”

The Alphimiya® framework restructures executive performance across three core operational pillars:

Sovereign Enterprise Scaling: Expands the nervous system’s tolerance for high-stakes capital, allowing leadership teams to scale revenue without experiencing executive burnout.

High-Value Deal Execution: Regulates autonomic stress responses during multi-million-dollar negotiations and volatile market entries, eliminating hesitation under pressure.

Restored Strategic Clarity: Removes chronic decision fatigue across C-suite teams, restoring mental focus and strategic presence inside and outside the boardroom.

By recalibrating the autonomic nervous system’s response to high capital exposure, Alphimiya® removes the subconscious biological brakes that lock corporate revenue at a standstill. Senior C-level executives and enterprise leadership teams seeking to evaluate their organization’s biological capacity can access the official executive briefing, case studies, and framework assessment directly at https://alphimiya.co/.

About Conscious Spark LLC

Conscious Spark LLC is a U.S.-registered firm specializing in executive education, training, and strategic performance consulting. Pioneering applied neuroscience for C-level leaders, founders, and commercial decision-makers, the firm utilizes its proprietary Alphimiya® methodology to enable leadership teams to recalibrate biological stress responses, resolve revenue ceilings, and build scalable corporations.

Media Relations Team
Conscious Spark LLC
Email: hello@consciousspark.online 
Website: https://alphimiya.co/

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SOURCE Conscious Spark LLC

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Daffodil Software Brings Multilingual Conversational AI to Aadhaar’s Udai Mascot

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44 minutes ago

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October 21, 2026

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GURUGRAM, India, Oct. 21, 2026 /PRNewswire/ — Daffodil Software showcased an AI-powered conversational experience featuring UIDAI’s Udai mascot at Aadhaar Samvaad 2026. Developed by Daffodil Software, the assistant is designed to help users access Aadhaar-related information through natural conversation, using official UIDAI as its reference knowledge base.

Daffodil Software has developed Udai, an AI-powered virtual mascot that helps users get clear, reliable answers about Aadhaar simply by talking to it. The assistant was showcased at Aadhaar Samvaad 2026, held in Kolkata on 29 September, coinciding with the 17th Aadhaar Day, where visitors watched it listen, respond, and gesture in real time in their own language.

For most people, questions about Aadhaar come up in daily life, and they usually need answers fast. Which documents do I need for an address change? How much does an update cost? How do I link Aadhaar to my bank account or mobile number? The answers exist, but finding them usually means working through long help pages and documents.

 Udai is designed to answer exactly these questions in a natural conversation, without anyone having to search through long help pages.

A conversation in the user’s own language

Udai speaks and understands 11 languages: Hindi, Tamil, Bengali, Telugu, Kannada, Malayalam, Marathi, Gujarati, Punjabi, Odia, and English. A user simply asks a question. Udai listens, works out the answer, and replies in the same language, with natural speech, matching lip movements and expressive hand gestures.

What sets Udai apart is how it is built. AI avatars rely on expensive, specialised graphics hardware to bring a face to life. Udai takes a simpler route. The character is created from pre-filmed footage, and its lip movements are matched to its speech in real time using lightweight processing that runs in a web browser.

The result is a smooth experience at 24 frames per second on ordinary servers, at a fraction of the usual cost per user. For a programme that serves hundreds of millions of people, that efficiency is what turns a nationwide rollout from an ambition into a practical plan.

“Our focus with Udai was to make Aadhaar-related information easier to access through natural conversation. Combining multilingual voice interaction with official reference content allowed our team to build an experience that is practical, approachable, and useful to users,” said Yogesh Agarwal, Founder and CEO, Daffodil Software.

Answers drawn only from official sources

The assistant uses official UIDAI material as its reference knowledge base: frequently asked questions, provisions of the Aadhaar Act, and government policy documents on Aadhaar services. It covers the topics users ask about most:

Enrolment and registrationAddress and demographic updatesFees, required documents and eligibilityeKYC and Virtual IDLinking Aadhaar with bank accounts, PAN and mobile numbersmAadhaar servicesGrievance redressal

Users don’t need to phrase their questions in any particular way. Udai understands everyday language, whether a question is spoken in English, Hindi, or asked in a mix of both, and finds the most relevant official information to answer it.

Built to be accurate, respectful, and secure

When a public service speaks directly to users, trust matters as much as convenience. Udai is protected by three layers of safeguards.

Accuracy first. Udai answers only from its verified knowledge base. Responses are grounded in a curated knowledge base of official UIDAI material. If a question falls outside Aadhaar, it guides the user back rather than offering an answer it cannot stand behind.

Respectful conversations. A screening layer catches abusive or offensive language in English, Hindi, and Hinglish before it reaches the assistant. Screening is designed to identify abusive language while supporting legitimate queries

Protection against misuse. Udai cannot be talked into abandoning its role, pretending to be someone else, revealing its internal setup, or answering beyond its approved scope. These checks work almost instantly, so users experience no delay.

What comes next?

Udai is planned to roll out in two phases.

In the first phase, the mascot will be placed in Aadhaar Centres. Visitors will be able to check information and understand processes on their own, such as which documents they need for an address change. This frees centre staff to focus on their core work instead of answering the same questions again and again.

In the second phase, Udai will come to the Aadhaar website and mobile app, taking the place of the current text-based chatbot, which was also built by Daffodil.

About Daffodil Software

Daffodil Software is a software engineering and AI solutions company serving businesses across industries. Its services span software consulting, product engineering, UI/UX design, AI/ML development, quality assurance, cloud and DevOps, and maintenance. The company serves sectors including healthcare, fintech, banking, technology, and digital commerce. Its client portfolio includes organizations such as the Reserve Bank of India, Mount Sinai Hospital, Maruti, Samsung, Pramerica Insurance, and Dangote Group. Daffodil Software has also been featured in industry research and recognition by Gartner, Everest Group, Zinnov, and Frost & Sullivan. For more information, visit https://www.daffodilsw.com

Media contact

Kunwar Pal Singh
media-relations@daffodilsw.com

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