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%[14][8] - Full-year 2024 revenue was $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% increase from $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%[36] - Full-year 2024 software revenue increased 8.3% to $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% (GAAP) and 60.6% (Non-GAAP), up 40 and 50 basis points respectively[6][8] - Gross profit margin improved to 59.5% in Q4 2024, up from 59.1% in Q4 2023[25] - Gross Profit for 2024 was $35.551 billion, with a Gross Profit Margin of 56.7%, increasing to $36.275 billion and 57.8% after adjustments[46] - Gross Profit for 2023 was $34.3 billion, with a Gross Profit Margin of 55.4%, increasing to $34.931 billion and 56.5% after adjustments[47] Consulting and Infrastructure Revenue - Consulting revenue declined by 2% in Q4 2024, while Infrastructure revenue dropped by 8%[8][14] - Consulting segment revenue declined 2.0% Y/Y to $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%[36] - Full-year 2024 consulting revenue declined 0.9% to $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% from $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%) from Q4 2023[33] - Full-year 2024 adjusted EBITDA was $16.4 billion, an increase of $0.9 billion (5.8%) compared to 2023[33] - Adjusted EBITDA for 2024 was $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%) from Q4 2023[33] - Pre-tax Income from Continuing Operations for 2024 was $5.797 billion, increasing to $11.207 billion after adjustments, with a Pre-tax Income Margin of 17.9%[46] - Pre-tax Income from Continuing Operations for 2023 was $8.69 billion, increasing to $10.311 billion after adjustments, with a Pre-tax Income Margin of 16.7%[47] - Diluted Earnings Per Share from Continuing Operations for 2024 was $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]