IBM(US:IBM)2024-07-24 20:14Revenue Performance - Revenue for Q2 2024 was $15.8 billion, an increase of 2%, and 4% at constant currency[2] - Total revenue for the three months ended June 30, 2024, was $15,770 million, an increase from $15,475 million in the same period last year, representing a growth of 1.9%[14] - Total revenue for the six months ended June 30, 2024, was $16,692 million, with a gross profit margin of 55.2%[29] - Software revenue rose to $6.7 billion, up 7.1%, and 8.4% at constant currency; Automation segment grew by 15%[5] - Consulting revenue decreased by 0.9% to $5.2 billion, but increased by 1.8% at constant currency[5] - Infrastructure revenue was $3.6 billion, up 0.7%, and 2.7% at constant currency[5] - The Financing segment reported revenue of $169 million for the three months ended June 30, 2024, reflecting a year-over-year decline of 8.3%[21] - Total capital expenditures for the three months ended June 30, 2024, were $399 million, down from $487 million in the same period of 2023[18] Profitability Metrics - Gross profit margin improved to 56.8%, up 180 basis points year-over-year[2] - Gross profit for the same period was $8,950 million, up from $8,501 million, resulting in a gross profit margin of 56.8%, compared to 54.9% year-over-year[14] - The gross profit margin for the software segment was 83.6%, up from 82.1% year-over-year[14] - Income from continuing operations was $1,830 million, an increase from $1,581 million, with an effective tax rate of 17.5%, down from 21.0%[14] - The company reported a pre-tax margin of 14.1%, an improvement from 12.9% in the previous year[14] - Pre-tax income from continuing operations for the same period was $2,219 million, with a pre-tax income margin of 14.1%[26] Cash Flow and Financial Position - Free cash flow for Q2 2024 was $2.6 billion, an increase of $0.5 billion year-over-year; year-to-date free cash flow reached $4.5 billion[6] - The company expects full-year free cash flow to exceed $12 billion, raising its previous guidance[7] - Net cash from operating activities for Q2 was $2.1 billion, down $0.6 billion year-over-year[6] - Net cash provided by operating activities for the three months ended June 30, 2024, was $2.1 billion, compared to $2.6 billion for the same period in 2023, reflecting a decrease of approximately 19.2%[32] - For the six months ended June 30, 2024, net cash provided by operating activities was $6.2 billion, slightly down from $6.4 billion in the same period of 2023[32] - The company ended Q2 with $16.0 billion in cash, restricted cash, and marketable securities, an increase of $2.5 billion from year-end 2023[6] Shareholder Returns - The company declared dividends of $1,537 million for the three months ended June 30, 2024, compared to $1,510 million in the same period of 2023[18] - IBM stockholders' equity increased to $24,026 million from $22,533 million, reflecting a positive trend in retained earnings[16] Research and Development - Research, development, and engineering expenses were $1,840 million, compared to $1,687 million in the same period last year[14] Other Financial Metrics - Adjusted EBITDA for the three months ended June 30, 2024, was $4,000 million, an increase of 10.8% from $3,700 million in the same period of 2023[20] - The adjusted EBITDA for the six months ended June 30, 2024, was $7.1 billion, compared to $6.5 billion for the same period in 2023, indicating a growth of approximately 9.2%[32] - Net interest expense remained stable at $0.2 billion for the three months ended June 30, 2024, and 2023[32] - The overall financial performance indicates a mixed trend with improvements in adjusted EBITDA but declines in net cash from operating activities for the three months ended June 30, 2024[32] Generative AI Business - IBM's book of business for generative AI has grown to over $2 billion since the launch of watsonx[1]