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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

eSign.AI Named Sole Electronic Signature Technology Provider for Hong Kong Government’s CorpID Project, Building the Foundation for Digital Signing Infrastructure in Hong Kong

Published

5 hours ago

on

May 8, 2026

By

HONG KONG, May 8, 2026 /PRNewswire/ — As Hong Kong’s Digital Corporate Identity Platform (CorpID) counts down to its phased launch, eSign.AI has been appointed as the sole electronic signature vendor in the project, responsible for delivering core digital signing capabilities including digital signatures, certificate management, and signature verification services. CorpID is led by Nexify, a seasoned government systems integrator, as the prime contractor. The platform is expected to launch in phases starting late 2026, with multiple CorpID-based e-government services going live in mid-2027.

CorpID: Government-Grade Digital Identity Infrastructure for Hong Kong Enterprises

The Digital Corporate Identity Platform (CorpID) is an enterprise-level digital services platform launched by the Hong Kong SAR Government, developed under the oversight of the Digital Policy Office (DPO). It is designed to serve as the business equivalent of “iAM Smart,” providing a unified digital identity foundation for Hong Kong enterprises. CorpID’s core mission is to build an integrated digital government infrastructure — offering unified identity authentication, digital signing, form pre-filling, and e-licence storage — replacing paper-heavy, cumbersome traditional processes and enabling smart city development through seamless data connectivity.

The platform is open to companies incorporated under the Companies Ordinance (Cap. 622) and businesses registered under the Business Registration Ordinance (Cap. 310), including sole proprietorships and partnerships. The DPO requires all enterprise-related e-government services to support CorpID within 18 months of launch, and will continue expanding ecosystem coverage through sandbox initiatives, cross-industry identity standard interoperability, and fully online registration processes.

eSign.AI: The Digital Signing Engine Behind CorpID

eSign.AI is an AI-native electronic signature and contract automation platform built for enterprises worldwide, offering a complete signing framework from simple electronic signatures to the highest-level compliant digital signatures — meeting diverse regulatory requirements across industries and jurisdictions.

On the identity verification front, eSign.AI has completed integration with iAM Smart, enabling individual identity verification through Hong Kong’s citizen digital identity system, and providing legally valid digital certificate services for both enterprises and individuals.

Looking ahead, the eSign.AI SaaS platform will be deeply integrated with CorpID, providing enterprise and individual identity verification for Hong Kong businesses, and supporting both electronic and digital signing that complies with Hong Kong’s Electronic Transactions Ordinance — connecting the full digital contracting lifecycle for government and enterprise alike.

Getting Ahead of the AI Era: From eSignGlobal to eSign.AI

The electronic signature industry is undergoing a structural shift from “tooling” to “intelligence.” Market data underscores this acceleration: the AI-powered contract analysis tools market has grown from USD 3.32 billion in 2025 to USD 4.3 billion in 2026, at a CAGR of 29.6%. Signing is just one node in the contract lifecycle — document generation, workflow orchestration, compliance tracking, and post-execution management are all being transformed by AI, and the industry window is closing fast.

In April 2026, the company officially rebranded from eSignGlobal to eSign.AI, completing its strategic transformation from an e-signature tool provider to an AI-native contract automation platform. As the company’s spokesperson noted, this rebrand is not cosmetic — it is an acknowledgment of where the product actually is. Customers were already using eSign.AI to automate workflows that go far beyond the signature itself.

eSign Automation Skill was launched alongside the rebrand — an AI-powered signing automation framework for enterprise workflows that enables complete contract signing through natural language interaction, with no manual intervention required. Whether it is single-party approval, multi-party sequential signing, or large-scale parallel execution, an AI Agent can orchestrate the entire workflow in a single call. All signature initiations and status queries return structured JSON outputs, directly parseable by leading large language models and intelligent workflow systems.

eSign Automation is now available in the OpenClaw ecosystem and supports integration via Claude MCP, ChatGPT, and other leading AI platforms.

By combining AI automation capabilities with CorpID’s government-grade digital identity infrastructure, eSign.AI delivers a complete solution for Hong Kong enterprises — from identity verification to intelligent signing to full workflow automation.

About eSign.AI

eSign.AI (formerly eSignGlobal) is an AI-native electronic signature and contract automation platform built for enterprises worldwide. The platform serves over 100 countries and regions, covering core industries including financial services, manufacturing, real estate, human resources, and healthcare — with 1,500+ scenario applications and 3,000+ ecosystem partners. eSign.AI holds ISO 27001, ISO 27701, and ISO 27018 certifications and supports major regulatory frameworks including the U.S. ESIGN Act / UETA, EU eIDAS, HIPAA, GDPR, and 21 CFR Part 11. Infrastructure is anchored by independent data centers in Hong Kong, Singapore, and Frankfurt, Germany.

View original content:https://www.prnewswire.com/apac/news-releases/esignai-named-sole-electronic-signature-technology-provider-for-hong-kong-governments-corpid-project-building-the-foundation-for-digital-signing-infrastructure-in-hong-kong-302766763.html

SOURCE eSignGlobal

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The 9th AskGamblers Awards Finalists Announced as Voting Starts

Published

5 hours ago

on

May 8, 2026

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The highly anticipated 9th AskGamblers Awards has officially moved into the voting phase. Following a rigorous selection process, the finalists across 5 premier categories have been revealed: Best Casino, Best New Casino, Best New Slot, Best Sportsbook, Best Provider. Players are invited to cast their votes until 11 June.

BELGRADE, Serbia, May 8, 2026 /PRNewswire/ — The voting stage of the 9th annual AskGamblers Awards has officially begun. The list of finalists is announced, and the first votes are already coming in. 

Players will have a chance to vote for their favourites until 11 June, when the winners will be announced at the gala ceremony in Belgrade. There’s a total of 5 categories where popular votes are taken into consideration:

Best CasinoBest New CasinoBest SportsbookBest New SlotBest Game Provider

There aren’t any big changes to the voting process compared to last year. The votes from the prominent members of AskGamblers Forum will be counted in as well, while some award winners will be announced directly by the AskGamblers teams. 

These include: Best Crypto Casino, Best Partner, and Best Manager categories, while the AskGamblers Superstar Award is expected to be handed to the operator that illustrates the brand values best.

Dijana Radunović, General Manager at AskGamblers, is excited for voting to start: “We’re seeing some familiar contestants, but there are a lot of new names, so it will be exciting to see who comes up on top.”

“We invite players to vote for their favourites! This is a chance for you to speak your mind and support operators and games that shape this industry,” Radunović added.

Before the AskGamblers Awards Ceremony that takes place on 11 June, Charity Night is scheduled for 10 June.

About AskGamblers

AskGamblers.com strives to provide current, objective, and accurate information and guide its users towards a safe gaming experience. The way we deliver our services, from the online casino, sportsbook, slot, and bonus reviews to our trusted Complaint Service, is best described by our motto: ‘Get the truth. Then play.’

For more information about AskGamblers and AskGamblers Awards, please contact dijana.radunovic@g2m.com.

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Technology

SUNMI Wins 2026 Red Dot Design Awards with Five Products, Leading Global Commercial Industrial Design

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5 hours ago

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May 8, 2026

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SINGAPORE, May 8, 2026 /PRNewswire/ — The winners of the 2026 German Red Dot Design Award were officially announced. Five of SUNMI Technology’s flagship products won awards: the CPad Business Tablet, CPad PAY, FLEX 3 Interactive Display, the V3 handheld POS Terminal and L3 Industrial PDA. These products stood out with three core design concepts: integration, versatility and human-centricity.

Known as “The Oscars” of global industrial design, the Red Dot Award has strict evaluation criteria covering aesthetics, ergonomics, scenario adaptability and sustainability. SUNMI adheres to original commercial scenario customization, rejecting crudely modified consumer devices. All winning products are originally developed for real commercial scenarios such as cash register, food delivery, industrial inspection and store operations, covering the entire commercial track with high scenario adaptability. Meanwhile, it practices ESG concepts, adopting eco-friendly materials and modular structures to extend equipment service life, reduce consumable consumption, and implement low-carbon and long-term design, which perfectly meets the Red Dot’s sustainability evaluation criteria.

Simplify Complexity: With highly integrated design, SUNMI eliminates the “patchwork feeling” of cluttered devices and tangled cables in traditional commercial scenarios, streamlining store operations and saving space.All-in-One Versatility: Beyond a single tool function, SUNMI’s products achieve flexible transformation through modular and multi-form designs to proactively adapt to changing business needs. The CPad series with modular accessories and FLEX 3’s Lego-style modular design enable multi-scenario application and long-term reuse.Human-Centric Design: Every detail is human-oriented, focusing on real pain points to enhance scenario experience. The L3 Industrial PDA reduces high-frequency work fatigue through scientific weight distribution; the V3 Smart POS Terminal balances large-screen visibility and grip comfort; CPad PAY integrates full-link functions to simplify workflows.

These honors stem from SUNMI’s long-term commitment to a sustainable society, original commercial R&D and ESG. In the future, SUNMI will uphold its core concepts, expand the boundaries of commercial industrial design, and empower global businesses with user-oriented, eco-friendly and high-value products.

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