Technology

IBM RELEASES FOURTH-QUARTER RESULTS PR Newswire ARMONK, N.Y., Jan. 24, 2024 Revenue growth in all segments; Strong margin expansion and cash generation ARMONK, N.Y., Jan. 24, 2024 /PRNewswire/ — IBM (NYSE: IBM) today announced fourth-quarter 2023 earnings results. “In the fourth quarter, we grew revenue in all of our segments, driven by continued adoption of our hybrid cloud and AI offerings. Client demand for AI is accelerating and our book of business for watsonx and generative AI roughly doubled from the third to the fourth quarter,” said Arvind Krishna, IBM chairman and chief executive officer. “For the year, revenue growth was in line with our expectations, and we exceeded our free cash flow objective. Based on the strength of our portfolio and demonstrated track record of innovation, for 2024 we expect revenue performance in line with our mid-single digit model and about $12 billion in free cash flow.” Fourth-Quarter Highlights

By Dean Seal International Business Machines’ profit rose in the fourth quarter as strong demand for artificial intelligence pushed revenue higher than analysts had expected. Shares are up 23% over 12 months and rose to a nine-year high of $174.86 in Wednesday trading. Chief Executive Arvind Krishna said client demand for AI is accelerating and that IBM’s book of business for its generative AI platform Watsonx roughly doubled between the third quarter and the fourth. Each of the legacy tech giant’s segments reported higher revenue. The biggest gain came from IBM’s consulting business while its infrastructure unit logged a smaller bump. The top line of IBM’s software business, its largest by revenue, rose 3% to $7.5 billion as growth from its cloud-computing subsidiary Red Hat and smaller gains from automation and AI more than offset a 5% decline from its security division. IBM’s quarterly report, by the numbers: — Revenue

IBM (IBM) reported Q4 non-GAAP diluted earnings late Wednesday of $3.87 per share, up from $3.60 a year earlier. Analysts polled by Capital IQ expected $3.80 normalized. Revenue in the quarter ended Dec. 31 rose to $17.4 billion from $16.7 billion a year earlier. Analysts surveyed by Capital IQ expected $17.3 billion. The company said it expects 2024 constant currency revenue growth consistent with its mid-single-digit model. At current foreign exchange rates, the currency will likely be about a one-point headwind to revenue growth. Analysts polled by Capital IQ expect $63.4 billion.

IBM’s book of business for its Watsonx platform and generative AI offerings roughly doubled from 3Q to 4Q, with two thirds of that coming from signings in its consulting segment and the rest flowing through its software unit. CFO Jim Kavanaugh tells WSJ the company has had thousands of hands-on client interactions quarter-to-quarter and seen the number of client pilots of its AI tech shoot up fivefold. “We’re seeing a lot of acceleration overall,” he says.

After cutting about 3,900 jobs at the beginning of 2023, IBM is entering the new year with confidence that it will maintain a relatively stable headcount in 2024, CFO Jim Kavanaugh tells WSJ. That said, the legacy tech giant “constantly has to revitalize and reskill our mix to be competitive in the marketplace,” the CFO says. IBM spent about $400 million on workforce rebalancing and reskilling in 2023 and expects to spend a similar amount this year, although there are no concrete management plans in place right now, Kavanaugh says.