New York | 1-2360 | 13-0871985 | ||||||||||||
(State of Incorporation) | (Commission File Number) | (IRS employer Identification No.) |
One New Orchard Road
Armonk, New York
|
10504 | ||||||||||
(Address of principal executive offices) | (Zip Code) |
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading symbol(s) | Name of each exchange on which registered | ||||||||||||
Capital stock, par value $.20 per share | IBM | New York Stock Exchange | ||||||||||||
NYSE Chicago | ||||||||||||||
1.125% Notes due 2024 | IBM 24A | New York Stock Exchange | ||||||||||||
2.875% Notes due 2025 | IBM 25A | New York Stock Exchange | ||||||||||||
0.950% Notes due 2025 | IBM 25B | New York Stock Exchange | ||||||||||||
0.875% Notes due 2025 | IBM 25C | New York Stock Exchange | ||||||||||||
0.300% Notes due 2026 | IBM 26B | New York Stock Exchange | ||||||||||||
1.250% Notes due 2027 | IBM 27B | New York Stock Exchange | ||||||||||||
3.375% Notes due 2027 | IBM 27F | New York Stock Exchange | ||||||||||||
0.300% Notes due 2028 | IBM 28B | New York Stock Exchange | ||||||||||||
1.750% Notes due 2028 | IBM 28A | New York Stock Exchange | ||||||||||||
1.500% Notes due 2029 | IBM 29 | New York Stock Exchange | ||||||||||||
0.875% Notes due 2030 | IBM 30A | New York Stock Exchange | ||||||||||||
1.750% Notes due 2031 | IBM 31 | New York Stock Exchange | ||||||||||||
3.625% Notes due 2031 | IBM 31B | New York Stock Exchange | ||||||||||||
0.650% Notes due 2032 | IBM 32A | New York Stock Exchange | ||||||||||||
1.250% Notes due 2034 | IBM 34 | New York Stock Exchange | ||||||||||||
3.750% Notes due 2035 | IBM 35 | New York Stock Exchange | ||||||||||||
4.875% Notes due 2038 | IBM 38 | New York Stock Exchange | ||||||||||||
1.200% Notes due 2040 | IBM 40 | New York Stock Exchange | ||||||||||||
4.000% Notes due 2043 | IBM 43 | New York Stock Exchange | ||||||||||||
7.00% Debentures due 2025 | IBM 25 | New York Stock Exchange | ||||||||||||
6.22% Debentures due 2027 | IBM 27 | New York Stock Exchange | ||||||||||||
6.50% Debentures due 2028 | IBM 28 | New York Stock Exchange | ||||||||||||
5.875% Debentures due 2032 | IBM 32D | New York Stock Exchange | ||||||||||||
7.00% Debentures due 2045 | IBM 45 | New York Stock Exchange | ||||||||||||
7.125% Debentures due 2096 | IBM 96 | New York Stock Exchange |
Exhibit No. | Description of Exhibit | |||||||
99.1 | ||||||||
99.2 |
Exhibit No. | Description of Exhibit | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document) |
Date: April 24, 2024 |
||||||||
By: | /s/ Nicolás A. Fehring | |||||||
Nicolás A. Fehring | ||||||||
Vice President and Controller |
FIRST QUARTER 2024 INCOME STATEMENT SUMMARY |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Gross Profit |
Gross Profit Margin | Pre-tax Income |
Pre-tax Income Margin |
Net
Income (1)
|
Diluted Earnings Per Share |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP from Continuing Operations | $ | 14.5B | $ | 7.7B | 53.5 | % | $ | 1.1B | 7.4 | % | $ | 1.6B | $ | 1.69 | ||||||||||||||||||||||||||||||||||||||||||||||||
Year/Year | 1 | %(2) |
3 | % | 0.8 | Pts | 1 | % | 0.0 | Pts | 69 | % | 66 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
Operating (Non-GAAP) |
$ | 7.9B | 54.7 | % | $ | 1.7B | 11.5 | % | $ | 1.6B | $ | 1.68 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Year/Year | 3 | % | 1.0 | Pts | 14 | % | 1.3 | Pts | 25 | % | 24 | % |
Contact: |
IBM |
||||
Sarah Meron, 347-891-1770 | |||||
sarah.meron@ibm.com | |||||
Tim Davidson, 914-844-7847 | |||||
tfdavids@us.ibm.com |
Three Months Ended March 31, |
|||||||||||||||||
2024 | 2023 (1) |
||||||||||||||||
REVENUE BY SEGMENT | |||||||||||||||||
Software | $ | 5,899 | $ | 5,591 | |||||||||||||
Consulting | 5,186 | 5,197 | |||||||||||||||
Infrastructure | 3,076 | 3,098 | |||||||||||||||
Financing | 193 | 196 | |||||||||||||||
Other | 108 | 169 | |||||||||||||||
TOTAL REVENUE | 14,462 | 14,252 | |||||||||||||||
GROSS PROFIT | 7,742 | 7,509 | |||||||||||||||
GROSS PROFIT MARGIN | |||||||||||||||||
Software | 82.4 | % | 82.6 | % | |||||||||||||
Consulting | 25.3 | % | 25.5 | % | |||||||||||||
Infrastructure | 54.2 | % | 51.8 | % | |||||||||||||
Financing | 48.5 | % | 43.9 | % | |||||||||||||
TOTAL GROSS PROFIT MARGIN | 53.5 | % | 52.7 | % | |||||||||||||
EXPENSE AND OTHER INCOME | |||||||||||||||||
S,G&A | 4,974 | 4,853 | |||||||||||||||
R,D&E | 1,796 | 1,655 | |||||||||||||||
Intellectual property and custom development income | (216) | (180) | |||||||||||||||
Other (income) and expense | (317) | (245) | |||||||||||||||
Interest expense | 432 | 367 | |||||||||||||||
TOTAL EXPENSE AND OTHER INCOME | 6,669 | 6,451 | |||||||||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
1,074 | 1,058 | |||||||||||||||
Pre-tax margin | 7.4 | % | 7.4 | % | |||||||||||||
Provision for/(Benefit from) income taxes (2) |
(502) | 124 | |||||||||||||||
Effective tax rate (2) |
(46.7) | % | 11.7 | % | |||||||||||||
INCOME FROM CONTINUING OPERATIONS | $ | 1,575 | $ | 934 | |||||||||||||
DISCONTINUED OPERATIONS | |||||||||||||||||
Income/(loss) from discontinued operations, net of taxes | 30 | (7) | |||||||||||||||
NET INCOME | $ | 1,605 | $ | 927 | |||||||||||||
EARNINGS/(LOSS) PER SHARE OF COMMON STOCK | |||||||||||||||||
Assuming Dilution | |||||||||||||||||
Continuing Operations | $ | 1.69 | $ | 1.02 | |||||||||||||
Discontinued Operations | $ | 0.03 | $ | (0.01) | |||||||||||||
TOTAL | $ | 1.72 | $ | 1.01 | |||||||||||||
Basic | |||||||||||||||||
Continuing Operations | $ | 1.72 | $ | 1.03 | |||||||||||||
Discontinued Operations | $ | 0.03 | $ | (0.01) | |||||||||||||
TOTAL | $ | 1.75 | $ | 1.02 | |||||||||||||
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (M’s) | |||||||||||||||||
Assuming Dilution | 933.4 | 917.8 | |||||||||||||||
Basic | 917.2 | 907.5 |
(Dollars in Millions) | At March 31, 2024 |
At December 31, 2023 |
||||||||||||
ASSETS: | ||||||||||||||
Current Assets: | ||||||||||||||
Cash and cash equivalents | $ | 14,603 | $ | 13,068 | ||||||||||
Restricted cash | 162 | 21 | ||||||||||||
Marketable securities | 4,512 | 373 | ||||||||||||
Notes and accounts receivable - trade, net | 6,041 | 7,214 | ||||||||||||
Short-term financing receivables, net | 5,521 | 6,793 | ||||||||||||
Other accounts receivable, net | 760 | 640 | ||||||||||||
Inventories | 1,212 | 1,161 | ||||||||||||
Deferred costs | 1,047 | 998 | ||||||||||||
Prepaid expenses and other current assets | 2,804 | 2,639 | ||||||||||||
Total Current Assets | 36,663 | 32,908 | ||||||||||||
Property, plant and equipment, net | 5,594 | 5,501 | ||||||||||||
Operating right-of-use assets, net | 3,204 | 3,220 | ||||||||||||
Long-term financing receivables, net | 4,927 | 5,766 | ||||||||||||
Prepaid pension assets | 7,545 | 7,506 | ||||||||||||
Deferred costs | 810 | 842 | ||||||||||||
Deferred taxes | 6,465 | 6,656 | ||||||||||||
Goodwill | 59,534 | 60,178 | ||||||||||||
Intangibles, net | 10,750 | 11,036 | ||||||||||||
Investments and sundry assets | 1,678 | 1,626 | ||||||||||||
Total Assets | $ | 137,169 | $ | 135,241 | ||||||||||
LIABILITIES: | ||||||||||||||
Current Liabilities: | ||||||||||||||
Taxes | $ | 1,710 | $ | 2,270 | ||||||||||
Short-term debt | 5,471 | 6,426 | ||||||||||||
Accounts payable | 3,588 | 4,132 | ||||||||||||
Deferred income | 14,051 | 13,451 | ||||||||||||
Operating lease liabilities | 784 | 820 | ||||||||||||
Other liabilities | 6,794 | 7,022 | ||||||||||||
Total Current Liabilities | 32,397 | 34,122 | ||||||||||||
Long-term debt | 54,033 | 50,121 | ||||||||||||
Retirement related obligations | 10,421 | 10,808 | ||||||||||||
Deferred income | 3,488 | 3,533 | ||||||||||||
Operating lease liabilities | 2,583 | 2,568 | ||||||||||||
Other liabilities | 10,914 | 11,475 | ||||||||||||
Total Liabilities | 113,836 | 112,628 | ||||||||||||
EQUITY: | ||||||||||||||
IBM Stockholders’ Equity: | ||||||||||||||
Common stock | 60,145 | 59,643 | ||||||||||||
Retained earnings | 151,362 | 151,276 | ||||||||||||
Treasury stock — at cost | (169,759) | (169,624) | ||||||||||||
Accumulated other comprehensive income/(loss) | (18,488) | (18,761) | ||||||||||||
Total IBM Stockholders’ Equity | 23,261 | 22,533 | ||||||||||||
Noncontrolling interests | 72 | 80 | ||||||||||||
Total Equity | 23,333 | 22,613 | ||||||||||||
Total Liabilities and Equity | $ | 137,169 | $ | 135,241 |
Three Months Ended March 31, |
Trailing Twelve Months Ended March 31, | |||||||||||||||||||
(Dollars in Millions) | 2024 | 2023 | 2024 | |||||||||||||||||
Net Cash from Operations per GAAP | $ | 4,168 | $ | 3,774 | $ | 14,325 | ||||||||||||||
Less: change in IBM Financing receivables | 1,897 | 1,977 | 1,152 | |||||||||||||||||
Capital Expenditures, net | (361) | (457) | (1,393) | |||||||||||||||||
Free Cash Flow | 1,910 | 1,340 | 11,780 | |||||||||||||||||
Acquisitions | (82) | (22) | (5,142) | |||||||||||||||||
Divestitures | 703 | — | 699 | |||||||||||||||||
Dividends | (1,522) | (1,497) | (6,065) | |||||||||||||||||
Non-Financing Debt | 5,244 | 9,692 | 1,098 | |||||||||||||||||
Other (includes IBM Financing net receivables and debt) | (437) | (762) | (684) | |||||||||||||||||
Change in Cash, Cash Equivalents, Restricted Cash and Short-term Marketable Securities | $ | 5,815 | $ | 8,752 | $ | 1,686 |
Three Months Ended March 31, |
|||||||||||||||||
(Dollars in Millions) | 2024 | 2023 | |||||||||||||||
Net Income from Operations | $ | 1,605 | $ | 927 | |||||||||||||
Depreciation/Amortization of Intangibles (1) |
1,132 | 1,074 | |||||||||||||||
Stock-based Compensation | 320 | 268 | |||||||||||||||
Operating assets and liabilities/Other, net (2) |
(785) | (473) | |||||||||||||||
IBM Financing A/R | 1,897 | 1,977 | |||||||||||||||
Net Cash Provided by Operating Activities | $ | 4,168 | $ | 3,774 | |||||||||||||
Capital Expenditures, net of payments & proceeds | (361) | (457) | |||||||||||||||
Divestitures, net of cash transferred | 703 | - | |||||||||||||||
Acquisitions, net of cash acquired | (82) | (22) | |||||||||||||||
Marketable Securities / Other Investments, net | (4,469) | (7,481) | |||||||||||||||
Net Cash Provided by/(Used in) Investing Activities | $ | (4,210) | $ | (7,960) | |||||||||||||
Debt, net of payments & proceeds | 3,382 | 7,304 | |||||||||||||||
Dividends | (1,522) | (1,497) | |||||||||||||||
Financing - Other | 17 | (99) | |||||||||||||||
Net Cash Provided by/(Used in) Financing Activities | $ | 1,877 | $ | 5,708 | |||||||||||||
Effect of Exchange Rate changes on Cash | (159) | 24 | |||||||||||||||
Net Change in Cash, Cash Equivalents and Restricted Cash | $ | 1,676 | $ | 1,547 |
Three Months Ended March 31, |
|||||||||||||||||||||||
(Dollars in Billions) | 2024 | 2023 | Yr/Yr | ||||||||||||||||||||
Net Income as reported (GAAP) | $ | 1.6 | $ | 0.9 | $ | 0.7 | |||||||||||||||||
Less: Income/(loss) from discontinued operations, net of tax | 0.0 | 0.0 | 0.0 | ||||||||||||||||||||
Income from continuing operations | 1.6 | 0.9 | 0.6 | ||||||||||||||||||||
Provision for/(Benefit from) income taxes from continuing ops. | (0.5) | 0.1 | (0.6) | ||||||||||||||||||||
Pre-tax income from continuing operations (GAAP) | 1.1 | 1.1 | 0.0 | ||||||||||||||||||||
Non-operating adjustments (before tax) | |||||||||||||||||||||||
Acquisition-related charges (1) |
0.5 | 0.4 | 0.1 | ||||||||||||||||||||
Non-operating retirement-related costs/(income) | 0.1 | 0.0 | 0.1 | ||||||||||||||||||||
Operating (non-GAAP) pre-tax income from continuing ops. | 1.7 | 1.4 | 0.2 | ||||||||||||||||||||
Net interest expense | 0.2 | 0.2 | 0.0 | ||||||||||||||||||||
Depreciation/Amortization of non-acquired intangible assets | 0.7 | 0.7 | 0.0 | ||||||||||||||||||||
Stock-based compensation | 0.3 | 0.3 | 0.1 | ||||||||||||||||||||
Workforce rebalancing charges | 0.4 | 0.3 | 0.1 | ||||||||||||||||||||
Corporate (gains) and charges (2) |
(0.2) | 0.0 | (0.2) | ||||||||||||||||||||
Adjusted EBITDA | $ | 3.0 | $ | 2.8 | $ | 0.2 |
Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||||||||||||||
(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||||||||||||||||||||||||||||||||
Revenue | $ | 5,899 | $ | 5,186 | $ | 3,076 | $ | 193 | ||||||||||||||||||||||||||||||
Segment Profit | $ | 1,500 | $ | 424 | $ | 311 | $ | 92 | ||||||||||||||||||||||||||||||
Segment Profit Margin | 25.4 | % | 8.2 | % | 10.1 | % | 47.7 | % | ||||||||||||||||||||||||||||||
Change YTY Revenue | 5.5 | % | (0.2) | % | (0.7) | % | (1.6) | % | ||||||||||||||||||||||||||||||
Change YTY Revenue - Constant Currency | 5.9 | % | 1.7 | % | 0.2 | % | (1.5) | % |
Three Months Ended March 31, 2023 (1) |
||||||||||||||||||||||||||||||||||||||
(Dollars in Millions) | Software | Consulting | Infrastructure | Financing | ||||||||||||||||||||||||||||||||||
Revenue | $ | 5,591 | $ | 5,197 | $ | 3,098 | $ | 196 | ||||||||||||||||||||||||||||||
Segment Profit | $ | 1,379 | $ | 427 | $ | 307 | $ | 100 | ||||||||||||||||||||||||||||||
Segment Profit Margin | 24.7 | % | 8.2 | % | 9.9 | % | 51.2 | % |
Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||||||||||||||||||||||||||
GAAP |
Acquisition-
Related
Adjustments (1)
|
Retirement-
Related
Adjustments (2)
|
Tax
Reform
Impacts (3)
|
Operating (Non-GAAP) |
||||||||||||||||||||||||||||||||||||||||
Gross Profit | $ | 7,742 | $ | 170 | $ | — | $ | — | $ | 7,913 | ||||||||||||||||||||||||||||||||||
Gross Profit Margin | 53.5 | % | 1.2 | pts. | — | pts. | — | pts. | 54.7 | % | ||||||||||||||||||||||||||||||||||
S,G&A | $ | 4,974 | $ | (268) | $ | — | $ | — | $ | 4,706 | ||||||||||||||||||||||||||||||||||
Other (Income) & Expense | (317) | (50) | (96) | — | (463) | |||||||||||||||||||||||||||||||||||||||
Total Expense & Other (Income) | 6,669 | (318) | (96) | — | 6,255 | |||||||||||||||||||||||||||||||||||||||
Pre-tax Income from Continuing Operations | 1,074 | 488 | 96 | — | 1,658 | |||||||||||||||||||||||||||||||||||||||
Pre-tax Income Margin from Continuing Operations | 7.4 | % | 3.4 | pts. | 0.7 | pts. | — | pts. | 11.5 | % | ||||||||||||||||||||||||||||||||||
Provision for/(Benefit from) Income Taxes (4) |
$ | (502) | $ | 142 | $ | 5 | $ | 448 | $ | 94 | ||||||||||||||||||||||||||||||||||
Effective Tax Rate | (46.7) | % | 22.3 | pts. | 3.0 | pts. | 27.0 | pts. | 5.6 | % | ||||||||||||||||||||||||||||||||||
Income from Continuing Operations | $ | 1,575 | $ | 346 | $ | 91 | $ | (448) | $ | 1,564 | ||||||||||||||||||||||||||||||||||
Income Margin from Continuing Operations | 10.9 | % | 2.4 | pts. | 0.6 | pts. | (3.1) | pts. | 10.8 | % | ||||||||||||||||||||||||||||||||||
Diluted Earnings Per Share: Continuing Operations | $ | 1.69 | $ | 0.37 | $ | 0.10 | $ | (0.48) | $ | 1.68 |
Three Months Ended March 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Continuing Operations | ||||||||||||||||||||||||||||||||||||||||||||
GAAP |
Acquisition-
Related
Adjustments (1)
|
Retirement-
Related
Adjustments (2)
|
Tax Reform Impacts |
Operating (Non-GAAP) |
||||||||||||||||||||||||||||||||||||||||
Gross Profit | $ | 7,509 | $ | 148 | $ | — | $ | — | $ | 7,658 | ||||||||||||||||||||||||||||||||||
Gross Profit Margin | 52.7 | % | 1.0 | pts. | — | pts. | — | pts. | 53.7 | % | ||||||||||||||||||||||||||||||||||
S,G&A | $ | 4,853 | $ | (246) | $ | — | $ | — | $ | 4,607 | ||||||||||||||||||||||||||||||||||
Other (Income) & Expense | (245) | (2) | 5 | — | (242) | |||||||||||||||||||||||||||||||||||||||
Total Expense & Other (Income) | 6,451 | (247) | 5 | — | 6,209 | |||||||||||||||||||||||||||||||||||||||
Pre-tax Income from Continuing Operations | 1,058 | 396 | (5) | — | 1,449 | |||||||||||||||||||||||||||||||||||||||
Pre-tax Income Margin from Continuing Operations | 7.4 | % | 2.8 | pts. | 0.0 | pts. | — | pts. | 10.2 | % | ||||||||||||||||||||||||||||||||||
Provision for/(Benefit from) Income Taxes (4) |
$ | 124 | $ | 91 | $ | (10) | $ | (5) | $ | 200 | ||||||||||||||||||||||||||||||||||
Effective Tax Rate | 11.7 | % | 3.1 | pts. | (0.7) | pts. | (0.3) | pts. | 13.8 | % | ||||||||||||||||||||||||||||||||||
Income from Continuing Operations | $ | 934 | $ | 305 | $ | 5 | $ | 5 | $ | 1,249 | ||||||||||||||||||||||||||||||||||
Income Margin from Continuing Operations | 6.6 | % | 2.1 | pts. | — | pts. | — | pts. | 8.8 | % | ||||||||||||||||||||||||||||||||||
Diluted Earnings Per Share: Continuing Operations | $ | 1.02 | $ | 0.33 | $ | 0.01 | $ | 0.01 | $ | 1.36 |
Three Months Ended March 31, |
|||||||||||||||||
(Dollars in Billions) | 2024 | 2023 | |||||||||||||||
Net Cash Provided by Operating Activities | $ | 4.2 | $ | 3.8 | |||||||||||||
Add: | |||||||||||||||||
Net interest expense | 0.2 | 0.2 | |||||||||||||||
Provision for/(Benefit from) income taxes from continuing operations | (0.5) | 0.1 | |||||||||||||||
Less change in: | |||||||||||||||||
Financing receivables | 1.9 | 2.0 | |||||||||||||||
Other assets and liabilities/Other, net (1) |
(1.0) | (0.7) | |||||||||||||||
Adjusted EBITDA | $ | 3.0 | $ | 2.8 |