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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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NAVER D2SF Invests in On-Device AI Startup TraceWeave

Published

47 minutes ago

on

October 21, 2026

By

TraceWeave develops its own post-Transformer AI architecture that enables AI agents to run on memory-constrained devicesCompletes paid pilot in mobility; pursues commercialization across robots, drones, smart glasses, and moreNAVER D2SF continues to invest in on-device AI and next-generation device technologies

SEOUL, South Korea, Oct. 20, 2026 /PRNewswire/ — NAVER D2SF has made a new investment in TraceWeave, an on-device AI startup led by co-founder and CEO Jaeyoung Park. TraceWeave is the team behind Phase-TITAN, a post-Transformer architecture that understands long contexts and carries out multi-step tasks while keeping memory usage constant. NAVER D2SF recognized the company’s core technology for enabling AI agents on resource-constrained devices.

As AI expands to robots, vehicles, smart glasses, and drones, its applications are advancing beyond simple chatbots toward complex reasoning and decision-making. In Transformer-based models, the key-value cache (KV-Cache) grows with context length, requiring more memory. On-device constraints in memory, battery life, and heat have made it difficult to implement AI agents that understand long contexts and perform complex tasks.

TraceWeave’s Phase-TITAN is a new AI architecture designed to resolve this memory bottleneck by replacing the conventional Transformer architecture altogether. TraceWeave develops its own AI models rather than relying on existing open-source models. Memory usage remains constant as context grows. According to TraceWeave, at a 1M-token context without quantization, a comparable Transformer’s KV-Cache holds tens of gigabytes or more, while its 1B Phase-TITAN model holds 0.04 GB. This enables agents to call tools, interpret results, and decide on their next actions entirely on the device, without cloud calls. TraceWeave’s internal benchmarks on RULER and BFCL indicate that Phase-TITAN maintains performance on par with Transformer models of the same size and larger.

TraceWeave has demonstrated a multi-step agent running on a smartphone using only its CPU, without cloud calls. In mobility, it completed a paid pilot with the autonomous driving affiliate of a global automotive group, identifying driving-data frames that improve the partner’s autonomous driving model without human annotation. It is also validating in-vehicle agent performance with a global automotive electronics software company and exploring opportunities in robots, drones, smart glasses, and wearables. TraceWeave was a Top 20 finalist in NVIDIA’s 2026 Inception Grand Challenge.

TraceWeave was co-founded in October 2025 by researchers with backgrounds at ETH Zurich, Google, and KAIST. The team combines engineering expertise grounded in computational neuroscience and physics with business development capabilities, designing its own architecture and validating it in device environments that reflect real-world customer needs. In this seed round led by Mirae Asset Capital, TraceWeave raised approximately KRW 3 billion at a pre-money valuation of approximately KRW 30 billion. Based at NAVER D2SF @Gangnam, the company plans to use the funding to expand its research and engineering team for next-generation architecture development and grow its business.

“Taking the KV cache out was never the hard part. Staying capable without it was,” said Jaeyoung Park, co-founder and CEO of TraceWeave. “The best part is no part. Phase-TITAN already delivers Transformer-class capability without the Transformer’s memory tax, and the next one goes well beyond its class, with the memory still fixed.”

“On-device AI is a core technology for implementing complex, advanced AI across diverse device environments beyond PCs, and it also offers advantages in reducing cloud call costs and protecting privacy,” said Sanghwan Yang, Head of NAVER D2SF. “TraceWeave is a team that is innovating AI architecture to overcome the limitations of existing AI models and bring AI to on-device environments.”

View original content:https://www.prnewswire.com/news-releases/naver-d2sf-invests-in-on-device-ai-startup-traceweave-302913752.html

SOURCE NAVER D2SF

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Gear Up for Year-End Wellness: iHerb Spotlights 4 Everyday Health Essentials and Kicks Off 11.11 Early Access Sale with Up to 40% Off Sitewide

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October 21, 2026

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HONG KONG, Oct. 21, 2026 /PRNewswire/ — As October gets underway, many individuals are proactively preparing their daily health and self-care routines ahead of the busy year-end season. Global health and wellness e-commerce platform iHerb has curated a premier lineup of four top-selling daily nutritional supplements from its flagship house brand, California Gold Nutrition, and consumer-favorite brand, Doctor’s Best. Encompassing marine collagen, Omega-3 fatty acids, CoQ10, and chelated magnesium, this selection addresses distinct nutritional priorities, providing consumers with comprehensive, high-quality choices for daily maintenance and holistic vitality.

The iHerb Singles’ Day Early Access campaign officially launches today and runs through October 28. During the promotional period, shoppers can apply promo code “HD11BUY” at checkout to receive up to 40% off sitewide. Additionally, new customers worldwide can use promo code “WELCOME7” to enjoy 30% off their first purchase—offering consumers the ideal opportunity to proactively map out their year-end wellness and nutrition regimens.

Daily Wellness from Within: Collagen and Omega-3 as Nutritional Building Blocks

Founded in the United States and powered by 30 years of global health curation, iHerb offers an extensive catalogue spanning vitamins, dietary supplements, beauty, sports nutrition, and everyday lifestyle essentials. The platform empowers consumers to explore premier wellness goods from around the world all in one convenient place.

Among the featured highlights is California Gold Nutrition’s Hydrolyzed Marine Collagen Peptides + Hyaluronic Acid and Vitamin C. This synergistic formula pairs bioavailable hydrolyzed marine collagen peptides with hyaluronic acid and antioxidant vitamin C. Formulated as an unflavored, easily dissolvable powder, it blends effortlessly into morning coffee, smoothies, or water according to usage guidelines, offering a hassle-free addition to daily beauty and mobility regimens.

For essential fatty acid support, California Gold Nutrition’s Omega-3 Premium Fish Oil provides concentrated Omega-3 fatty acids, specifically EPA and DHA. Delivered in fish gelatin softgels, it offers an accessible, high-purity option for consumers seeking to incorporate vital fatty acids into their daily dietary routine to maintain overall cardiovascular, cognitive, and cellular wellness.

Targeted Cellular Vitality and Essential Minerals: Advanced Science from Doctor’s Best

Complementing collagen and fish oil, trusted wellness brand Doctor’s Best delivers science-backed formulations for more specialized nutritional support. The brand’s High Absorption CoQ10 utilizes naturally fermented Coenzyme Q10 paired with patented BioPerine® black pepper extract to enhance nutrient absorption and bioavailability. It provides an exceptional daily option for adults focused on supporting cardiovascular function, cellular energy generation, and antioxidant defenses.

Another standout favorite is Doctor’s Best High Absorption Magnesium Lysinate Glycinate, which features Albion® TRAACS® chelated magnesium in convenient tablet form. This fully chelated delivery ensures high bioavailability and superior digestive tolerance, allowing consumers to easily select the right daily supplement tailored to their dietary habits, physical activity, and relaxation needs.

Special Promotion: 11.11 Early Access

Sitewide Early Bird Offer: Use promo code HD11BUY to take up to 40% off sitewide.

New Customer Welcome: First-time shoppers globally can apply promo code WELCOME7 for 30% off their order.Promotion Window: Active immediately through October 28, 2026.Details & WhatsApp: Subject to terms and product eligibility on the official iHerb website. Subscribe to the official iHerb Hong Kong WhatsApp channel for real-time campaign updates.

About iHerb (https://hk.iherb.com/）

iHerb is a world-leading e-commerce destination dedicated to health, wellness, and self-care. Founded in California in 1996, iHerb now serves millions of customers across more than 180 countries. With a selection of over 40,000 authentic, high-quality products across vitamins, supplements, sports nutrition, personal care, and grocery items, iHerb delivers value and convenience directly to doorsteps worldwide, supported by state-of-the-art GMP-registered, climate-controlled distribution centers.

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SOURCE iHerb

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Technology

EPG Showcases Full-Stack AIDC Capabilities and Global Delivery Network at DCWA 2026 in Singapore

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October 21, 2026

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SINGAPORE, Oct. 21, 2026 /PRNewswire/ — EPG, a global provider for prefabricated modular data center infrastructure, showcased its latest AI data center solutions at Data Centre World Asia (DCWA) 2026, held in Singapore on September 29–30. Demonstrating its commitment to Asia-Pacific and the markets beyond, EPG presented its AI Core prefabricated modular data center solution and Edge POD prefabricated edge data center solution, alongside the global launch of AeroLev 1850, an air-cooled, magnetic-bearing chiller platform jointly introduced with MagPro. Together, these offerings demonstrate EPG’s end-to-end capabilities across modular infrastructure and high-efficiency cooling for AI data centers (AIDCs).

At the opening address for the Critical Infrastructure Theatre, EPG Chief Operating Officer Johnny Zhang highlighted the growing demands AI is placing on data center infrastructure, from higher power density and faster deployment to more efficient cooling. As AI continues to evolve, infrastructure must keep pace to support the next generation of AI computing.

Building on these themes, Johnny Zhang moderated a panel discussion on the future of data centers, resilience and digital infrastructure, bringing together industry experts from data center design, cloud and AI infrastructure, and cooling technology to explore emerging requirements for energy efficiency, high-density cooling and scalability. EPG Chief Technology Officer Enso Li also presented AI Core at the Energy Security & Efficiency Theatre, demonstrating how standardized modules and factory prefabrication can accelerate data center deployment.

Alongside these industry discussions, EPG continued to strengthen its global partnerships. The company signed cooperation agreements with international industry partners across AI data center planning, construction and delivery. These collaborations will support the development of next-generation data center infrastructure, broaden EPG’s ecosystem across the Asia-Pacific and expand its presence in global markets.

Complementing these industry engagements, EPG showcased its AI Core and Edge POD solutions across its exhibition space, welcoming visitors to explore its modular infrastructure offerings. AI Core takes a prefabricated, modular approach to AI infrastructure, integrating standardized power, cooling and other critical infrastructure modules to simplify deployment and enable flexible expansion as compute requirements grow. Built on this modular approach, EPG’s E Series offers configurable solutions tailored to different project requirements. One of its offerings, Edge POD, is an all-in-one solution for distributed computing environments where power availability and deployment speed are critical. Designed for 1–10 MW applications, Edge POD supports rapid deployment, low-latency computing and distributed redundancy.

EPG’s joint venture, MagPro, also introduced its new magnetic levitation chiller platform, AeroLev 1850. The 1.85 MW-class, air-cooled, magnetic-bearing chiller platform is designed for next-generation AI data centers in water-scarce, high-ambient environments, with chilled-water outlet temperatures of up to 45°C. Its cooling-tower-free architecture combines oil-free magnetic-levitation technology with intelligent controls to deliver efficient, reliable cooling while reducing water consumption.

The launch of AeroLev 1850 marks a strategic milestone in EPG’s global cooling technology roadmap. Established in May 2026, MagPro brings together EPG’s data center engineering and global delivery expertise with CIGU’s magnetic-levitation technology and R&D capabilities. The partnership expands EPG’s portfolio into advanced cooling to address the demands of high-density AI computing while reducing reliance on water-intensive cooling systems.

“AI computing is reshaping the infrastructure requirements of data centers,” said Alick Wan, Founder and Chairman of EPG. “Our focus extends beyond individual technological breakthroughs. By combining modular and standardized solutions with global delivery capabilities, we aim to help customers deploy and scale computing infrastructure efficiently across markets. We will continue working with global partners to build more efficient and resilient infrastructure for the next generation of digital growth.”

Looking ahead, EPG will continue to evolve its solutions and strengthen its capabilities to meet the changing demands of the data center industry.

Learn more: https://www.epg-module.com/

CONTACT: communications@epg-module.com

About EPG

EPG is a prefabricated modular data center infrastructure provider, powered by R&D centers in Singapore, Malaysia, and Shanghai, as well as six advanced manufacturing hubs in Malaysia and China. With over 20 years of engineering expertise, it has a workforce of more than 1,600 employees, including nearly 300 researchers and experienced engineers in its R&D and technical team. Through continuous technological innovation and a scalable delivery system, EPG delivers  integrated and efficient data center solutions for hyperscale, cloud, and enterprise deployments across APAC, EMEA, and other global markets.

About MagPro (Nanjing CIPU Technology Co., Ltd.)

MagPro is a joint venture between CIGU Technology Corp. Ltd. and EPG Data Technology (Shanghai) Co., Ltd., specializing in the research, development, and production of reliable, energy-efficient cooling and air-conditioning systems for AI data centers, cloud, and hyperscales. MagPro operates a more than 6,000-square-meter production base and two air-cooled laboratories, supporting testing of air-cooled units up to 2,000 kW.

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SOURCE EPG Global Technology (Shanghai) Co., Ltd.

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