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IBM Beats Q4 Earnings Estimates on Solid Cloud & AI Traction
IBMIBM(IBM) ZACKS·2025-01-30 15:21

Core Insights - IBM reported strong fourth-quarter 2024 results, with adjusted earnings and revenues exceeding Zacks Consensus Estimate [1][2] - The company experienced healthy demand for hybrid cloud and AI solutions, achieving growth across its client-focused portfolio despite economic uncertainties [2] Financial Performance - GAAP net income for the quarter was 2.91billionor2.91 billion or 3.09 per share, down from 3.29billionor3.29 billion or 3.55 per share year-over-year due to high operating expenses [3] - Non-GAAP net income from continuing operations was 3.92pershare,slightlyupfrom3.92 per share, slightly up from 3.87 in the prior-year quarter, beating the Zacks Consensus Estimate by 19 cents [3] - For 2024, net income was reported at 6.02billionor6.02 billion or 6.43 per share, compared to 7.5billionor7.5 billion or 8.14 per share in 2023 [4] Revenue Growth - Quarterly total revenues increased to 17.55billionfrom17.55 billion from 17.38 billion, driven by strong demand for hybrid cloud and AI, exceeding the consensus estimate of 17.51billion[5]−Onaconstantcurrencybasis,revenueswereup217.51 billion [5] - On a constant currency basis, revenues were up 2% year-over-year [5] Segment Performance - Software segment revenues improved to 7.92 billion from 7.18billion,withnotablegrowthinRedHat(up177.18 billion, with notable growth in Red Hat (up 17%), Automation (16%), and Data & AI (5%) [7] - Consulting segment revenues were 5.17 billion, down from 5.28billionyear−over−year,missingestimatesduetoclientsprioritizingspending[8]−Infrastructuresegmentrevenuesdecreasedto5.28 billion year-over-year, missing estimates due to clients prioritizing spending [8] - Infrastructure segment revenues decreased to 4.26 billion from 4.6billion,reflectinglowerdemandandhigherinvestmentsinAIandhybridcloud[9]−Financingsegmentrevenuesdeclinedto4.6 billion, reflecting lower demand and higher investments in AI and hybrid cloud [9] - Financing segment revenues declined to 170 million from 175millionyear−over−year[10]CashFlowandLiquidity−IBMgenerated175 million year-over-year [10] Cash Flow and Liquidity - IBM generated 4.33 billion in cash from operations during the quarter, bringing total cash from operations for 2024 to 13.44billion[11]−Freecashflowwas13.44 billion [11] - Free cash flow was 6.16 billion in the quarter, up from 6.09billionintheprior−yearperiod[11]−AsofDecember31,2024,thecompanyhad6.09 billion in the prior-year period [11] - As of December 31, 2024, the company had 13.95 billion in cash and cash equivalents, with long-term debt at $49.88 billion [11] Future Outlook - For 2025, IBM expects revenues to grow at least 5% on a constant currency basis, driven by a strong portfolio mix and productivity initiatives [12]