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IBM Exceeds Expectations in Second-Quarter 2024 Earnings

Strategic Insights

— 2 min read

IBM's chairman and CEO, Arvind Krishna, attributed the company's strong second quarter to growth in both revenue and free cash flow. Revenue reached $15.8 billion, up 2 percent year over year, with software revenue seeing a 7 percent increase. The company also raised its full-year view of free cash flow to more than $12 billion. IBM's senior vice president and chief financial officer, James Kavanaugh, highlighted the company's successful strategy execution, which led to significant margin expansion and increased profit and free cash flow.

Key Takeaways:

  • IBM's second-quarter 2024 revenue reached $15.8 billion, a 2 percent increase from the same period last year, with 4 percent growth at constant currency.
  • Software revenue saw a 7 percent increase, with an 8 percent growth at constant currency.
  • Consulting revenue declined by 1 percent, but increased by 2 percent at constant currency.
  • Infrastructure revenue increased by 1 percent, with a 3 percent growth at constant currency.
  • Gross Profit Margin, GAAP, increased by 180 basis points, while Operating (Non-GAAP) margin increased by 190 basis points.
  • Pre-tax Income Margin, GAAP, increased by 110 basis points, while Operating (Non-GAAP) margin increased by 220 basis points.
  • Net cash from operating activities for the year to date was $6.2 billion, with free cash flow of $4.5 billion.
  • Over the last twelve months, net cash from operating activities was $13.8 billion, with free cash flow of $12.3 billion.
  • IBM raised its full-year view of free cash flow to more than $12 billion.
  • The company's chairman and CEO, Arvind Krishna, credited the growth to clients seeking IBM's expertise in enterprise AI and embracement of the company's technology.

Statistics:

  • Revenue (2024 Q2): $15.8 billion (up 2% from 2023 Q2)
  • Software revenue (2024 Q2): up 7%
  • Software revenue at constant currency (2024 Q2): up 8%
  • Consulting revenue (2024 Q2): down 1%
  • Consulting revenue at constant currency (2024 Q2): up 2%
  • Infrastructure revenue (2024 Q2): up 1%
  • Infrastructure revenue at constant currency (2024 Q2): up 3%
  • Gross Profit Margin (GAAP): 56.8%, up 180 basis points
  • Operating (Non-GAAP) margin: 57.8%, up 190 basis points
  • Pre-tax Income Margin (GAAP): 14.1%, up 110 basis points
  • Operating (Non-GAAP) margin: 17.7%, up 220 basis points
  • Net cash from operating activities (YTD 2024): $6.2 billion
  • Free cash flow (YTD 2024): $4.5 billion
  • Net cash from operating activities (LTM 2024): $13.8 billion
  • Free cash flow (LTM 2024): $12.3 billion
  • IBM's raised full-year view of free cash flow: more than $12 billion

Sources:

  • IBM (NYSE: IBM), "IBM Announces Second-Quarter 2024 Earnings Results" (no date)

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