Summary of IBM's Conference Call at Credit Suisse 26th Annual Technology Conference Company Overview - **Company**: International Business Machines Corporation (IBM) - **Date of Call**: November 29, 2022 - **Participants**: Rob Thomas (SVP, Global Sales), Shannon Cross (Credit Suisse IT Hardware Analyst) Key Points Industry and Company Transformation - IBM has undergone significant cultural and operational changes in the past few years, focusing on growth and cash flow, particularly in hybrid cloud and AI [5][6] - The company has shifted from a singular public cloud strategy to a hybrid cloud approach, integrating public and private cloud solutions [9][10] - Geopolitical factors have increased demand for sovereign and local cloud strategies, aligning with IBM's investments in Red Hat and open-source technologies [10][11] Go-to-Market Strategy - IBM has transformed its go-to-market strategy to focus on technical expertise and client engagement, including the establishment of client engineering and customer success teams [13][14][15] - Red Hat remains an independent entity within IBM, but the company prefers Red Hat solutions in sales cycles to leverage its capabilities [15][16] Consulting Business - IBM has built strategic partnerships with major players like AWS, Azure, SAP, Salesforce, and Adobe, resulting in billion-dollar pipelines [18] - The company has actively hired in the consulting sector and restarted its M&A engine, completing 14 acquisitions in the last two years [19] - Technology is viewed as deflationary, with expectations that technology growth will outpace GDP growth by 2-4 percentage points [19] AI and Innovation - IBM's AI investments focus on natural language processing, automation, and trusted AI, with five key use cases identified: customer service, IT operations, cybersecurity, sustainability, and employee experience [24][25][26] - The company has developed a robust security portfolio, including Cloud Pak for security and acquisitions to enhance its capabilities in extended detection and response (XDR) [30] - Data management innovations include Cloud Pak for data and Data Fabric, allowing for data governance without moving data [31] Mainframe Business - The mainframe is positioned as a core transactional system, with innovations like the Telum processor enabling real-time analytics [35] - Clients increasingly inquire about integrating mainframes into their hybrid strategies, with examples of successful workload consolidation [36][37] Future Outlook - IBM is optimistic about quantum computing, with a 10-year roadmap for enterprise computing and ongoing development of its quantum systems [39] - The company is investing in large language models and AI, with a focus on enhancing cybersecurity through AI capabilities [41][42] - A partner-first model has been established to expand distribution networks and enhance collaboration with partners [47][49] Additional Insights - The shift towards product-led growth aims to convert web traffic into product trials and sales, enhancing IBM's market reach [33][49] - The company emphasizes transparency and collaboration with partners, providing them with insights into IBM's product strategies [45] This summary encapsulates the key insights and strategic directions discussed during the conference call, highlighting IBM's focus on hybrid cloud, AI, consulting, and innovation as it navigates the evolving technology landscape.

International Business Machines Corporation (NYSE:IBM) RBC Capital Markets Technology, Internet, Media and Telecommunications Conference 2022 November 16, 2022 11:45 AM ET Company Participants Arvind Krishna - Chairman and CEO Conference Call Participants Dave McKay - President and CEO, RBC Capital Markets Unidentified Company Representative Good afternoon. Please welcome President and CEO, Royal Bank of Canada, Dave McKay; and Chairman and CEO, IBM, Arvind Krishna. Dave McKay All right. Well, hopefully eve ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED SEPTEMBER 30, 2022 1-2360 (Commission file number) INTERNATIONAL BUSINESS MACHINES CORPORATION Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter pe ...

Welcome and thank you for standing by. At this time, all participants are in a listen-only mode. Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now I will turn the meeting over to Ms. Patricia Murphy with IBM. Ma'am, you may begin. Thank you. This is Patricia Murphy, and I'd like to welcome you to IBM's third quarter 2022 earnings presentation. I'm here with Arvind Krishna. IBM's Chairman and Chief Executive Officer, and Jim Cavanaugh, IBM Senior Vice Pres ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED JUNE 30, 2022 1-2360 (Commission file number) INTERNATIONAL BUSINESS MACHINES CORPORATION Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section l3 or l5(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period ...

Financial Data and Key Metrics Changes - The company reported $15.5 billion in revenue for the second quarter, with a 16% year-over-year increase, including nearly five points of incremental revenue from Kindrel [6][7] - Operating pre-tax income was $2.5 billion, resulting in a margin of 16.2%, and operating earnings per share were $2.31 [6][7] - Free cash flow for the first half of the year was $3.3 billion, with over $2 billion generated in the second quarter [8][9] Business Line Data and Key Metrics Changes - Software revenue grew by 12%, driven by hybrid cloud and AI capabilities, with hybrid cloud revenue now representing $21.7 billion, or 36% of total revenue [7][9] - Consulting revenue increased by 18%, with hybrid cloud consulting revenue growing 32% to $8.6 billion [10][11] - Infrastructure revenue rose by 25%, with zSystems revenue up 77% due to the successful launch of the Z16 platform [11][12] Market Data and Key Metrics Changes - The company has over 4,000 hybrid cloud platform clients, with more than 250 added in the last quarter [3][4] - AI adoption is increasing, with 35% of companies now using some form of AI in their business [3][4] - The company expects technology spending in the B2B space to continue to surpass GDP growth [2][3] Company Strategy and Development Direction - The company is focused on executing its hybrid cloud and AI strategy, integrating technology and expertise to accelerate clients' digital transformation [2][3] - Strategic partnerships with firms like AWS and Tech Mahindra are being expanded to enhance service offerings [4][5] - The company is committed to advancing quantum computing technology, with plans to demonstrate a 400-plus-qubit system by year-end [5][6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering revenue at the high end of the mid-single-digit model for 2022, despite currency headwinds and the impact of exiting the Russian market [12][13] - The company anticipates continued strong demand for its solutions, particularly in consulting and hybrid cloud services [10][11] - Management highlighted the importance of sustainability as a business opportunity, with 50% of CEOs prioritizing sustainability investments [5][6] Other Important Information - The company has made over 25 acquisitions in the last two years, with a focus on enhancing its capabilities in AI and cybersecurity [5][6] - The divestiture of healthcare software assets generated a pre-tax gain of about $230 million, but also incurred charges related to stranded costs [7][8] Q&A Session Summary Question: Concerns about Red Hat business deceleration - Management remains confident in the Red Hat business, expecting growth in the upper teens, with strong demand continuing [15][16] Question: Free cash flow guidance - The company adjusted its free cash flow guidance to about $10 billion, citing impacts from exiting the Russian market and currency fluctuations [17][18] Question: Expectations for $35 billion in free cash flow through 2024 - Management reaffirmed commitment to the $35 billion free cash flow target, with confidence in achieving this goal [18][19] Question: Dynamics affecting consulting business - Demand for consulting remains strong, with a focus on capturing growth through strategic investments in skills and capabilities [23][24]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED MARCH 31, 2022 1-2360 (Commission file number) | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |--------|-------------------|--------------------|-------|-------------|-----------------------|-------|------------------------------ ...

Welcome and thank you for standing by. At this time, all participants are in a listen-only mode. Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now I will turn the meeting over to Ms. Patricia Murphy with IBM. Ma'am, you may begin. Thank you. This is Patricia Murphy, and I'd like to welcome you to IBM's first quarter 2022 earnings presentation. I'm here with Arvind Krishna, IBM's Chairman and Chief Executive Officer, and Jim Cavanaugh, IBM's Senior Vice Pr ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ANNUAL REPORT pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 FOR THE YEAR ENDED DECEMBER 31, 2021 1-2360 (Commission file number) INTERNATIONAL BUSINESS MACHINES CORPORATION (Exact name of registrant as specified in its charter) 13-0871985 (IRS Employer Identification Number) 914-499-1900 (Registrant's telephone number) Securities registered pursuant to Section 12(b) of the Act: | --- ...