IBM(IBM) - 2024 Q4 - Annual Results

Software Revenue Growth - Software revenue grew by 10% in Q4 2024, reaching $7.9 billion, with Red Hat leading the growth at 16$62.8 billion, up 1% (3% at constant currency), with Software revenue up 8%[8][16] - Software segment revenue grew to $7.924 billion in Q4 2024, a 10.4$7.179 billion in Q4 2023[25] - Software segment revenue grew 10.4% Y/Y to $7.924 billion in Q4 2024, with a segment profit margin of 39.2$27.085 billion, with a segment profit margin of 32.1%[37] Generative AI Business - The company's generative AI book of business reached over $5 billion, up nearly$2 billion quarter over quarter[2] Free Cash Flow and Financial Performance - Free cash flow for 2024 was $12.7 billion, exceeding expectations and up$1.5 billion year over year[9][12] - The company expects full-year 2025 revenue growth of at least 5% and free cash flow of about $13.5 billion[2][18] - Net cash from operating activities in 2024 was$13.4 billion, down $0.5 billion year over year[12] - Net cash provided by operating activities was$4.330 billion in Q4 2024, slightly down from $4.463 billion in Q4 2023[30] - Net Cash from Operations per GAAP for 2024 was$13.445 billion, with Free Cash Flow of $12.749 billion[52] Gross Profit Margin - Q4 2024 gross profit margin was 59.5$35.551 billion, with a Gross Profit Margin of 56.7%, increasing to $36.275 billion and 57.8$34.3 billion, with a Gross Profit Margin of 55.4%, increasing to $34.931 billion and 56.5$5.175 billion in Q4 2024, with a segment profit margin of 11.7%[36] - Infrastructure segment revenue decreased 7.6% Y/Y to $4.256 billion in Q4 2024, with a segment profit margin of 25.0$20.692 billion, with a segment profit margin of 9.9%[37] Cash and Marketable Securities - IBM ended Q4 2024 with $14.8 billion in cash, restricted cash, and marketable securities, up$1.3 billion from 2023[13] - Cash and cash equivalents increased to $13.947 billion at the end of 2024, up from$13.068 billion at the end of 2023[28] Total Revenue and Assets - Total revenue for Q4 2024 increased to $17.553 billion, up 1$17.381 billion in Q4 2023[25] - Total assets grew to $137.175 billion at the end of 2024, compared to$135.241 billion at the end of 2023[28] Net Income and Earnings - Net income from operations decreased to $2.915 billion in Q4 2024, down from$3.288 billion in Q4 2023[30] - Net income for Q4 2024 was $2.9 billion, a decrease of$0.4 billion (12.1%) compared to Q4 2023[33] - Full-year 2024 net income was $6.0 billion, down$1.5 billion (20.0%) from 2023[33] - Income from Continuing Operations for 2024 was $6.015 billion, increasing to$9.684 billion after adjustments, with an Income Margin of 15.4%[46] - Income from Continuing Operations for 2023 was $7.514 billion, increasing to$8.87 billion after adjustments, with an Income Margin of 14.3%[47] Dividends and Shareholder Returns - The company returned $1.5 billion to shareholders in dividends during Q4 2024[11] - The company paid$1.546 billion in dividends in Q4 2024, up from 1.518 billion in Q4 2023[30] R&D Expenses - R&D expenses increased to 1.967 billion in Q4 2024, up 12.5% from $1.748 billion in Q4 2023[25] Pension Settlement Charges - Pension settlement charges impacted 2024 results with$2.7 billion in Q3 and $0.4 billion in Q4[26] Adjusted EBITDA - Adjusted EBITDA for Q4 2024 was$5.6 billion, up $0.1 billion (1.8$16.4 billion, an increase of $0.9 billion (5.8$16.4 billion, compared to $15.5 billion in 2023[54] Pre-tax Income and Earnings Per Share - Q4 2024 operating (non-GAAP) pre-tax income from continuing operations was$4.3 billion, up $0.1 billion (2.4$5.797 billion, increasing to $11.207 billion after adjustments, with a Pre-tax Income Margin of 17.9$8.69 billion, increasing to $10.311 billion after adjustments, with a Pre-tax Income Margin of 16.7$6.42, increasing to $10.33 after adjustments[46] - Diluted Earnings Per Share from Continuing Operations for 2023 was$8.15, increasing to $9.62 after adjustments[47]