Our cash flow generation is the strongest first quarter level we have reported in many years. This performance speaks to the strength of our diversified business model.
— Arvind Krishna
03Detailed Report
IBM
International Business Machines Corporation
Period
Q1 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 19, 2026
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Executive Summary
In Q1 2024, International Business Machines Corporation (IBM) reported revenues of $14.46 billion, reflecting a 3% increase year-over-year when adjusted for constant currency. This positive growth was driven primarily by the Software segment, which saw a 6% rise, largely due to continued momentum in Red Hat and hybrid cloud offerings. Cash flow generation was notably strong, with $1.9 billion recorded in free cash flow, an increase of $600 million from the prior year, showcasing IBM’s robust cash management and operational efficiency. With the announcement of the acquisition of HashiCorp for $6.4 billion, IBM aims to enhance its capabilities in hybrid cloud solutions and strengthen its AI strategy. Despite challenges in its Consulting segment, overall performance aligns well with IBM's strategic goals and expectations for sustained growth in 2024, especially in AI-driven productivity advancements.
Key Performance Indicators
Revenue
Increasing
14.46B
QoQ: -16.80% | YoY: 1.47%
Gross Profit
Increasing
7.74B
53.54% margin
QoQ: -24.59% | YoY: 3.10%
Net Income
Increasing
1.61B
QoQ: -51.19% | YoY: 73.14%
EPS
Increasing
1.75
QoQ: -51.25% | YoY: 71.57%
Revenue Trend
Margin Analysis
Financial Highlights
Financial Highlights:
- Revenue: $14.46 billion, up 3% YoY.
- Gross Profit: $7.74 billion, with a gross profit margin of 53.5%.
- Net Income: $1.61 billion, a significant 73.1% rise YoY.
- EPS: $1.75, a 71.6% increase compared to Q1 2023.
- Free Cash Flow: $1.9 billion, achieving an annualized run rate towards $12 billion.
Expense Management:
- R&D expenses totaled $1.80 billion; SG&A expenses were $4.74 billion, reflecting consistent investment in innovation.
- Increased operating margin by 130 basis points to reach 12.3% (normalized).
Strategic Moves: The acquisition of HashiCorp is expected to drive synergies across IBM's hybrid cloud and AI services, enhancing operational efficiency and contributing to revenue growth in the software sector.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
14.46B
1.47%
-16.80%
Gross Profit
7.74B
3.10%
-24.59%
Net Income
1.61B
73.14%
-51.19%
EPS
1.75
71.57%
-51.25%
Key Financial Ratios
Gross Profit Margin
Good
53.50%
Gross profit margin is healthy and competitive within industry standards
Net Profit Margin
Good
11.10%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
1.17%
Return on assets suggests inefficient capital allocation
Return on Equity
Fair
6.90%
Return on equity is acceptable but below top-tier companies
Current Ratio
Adequate
1.10
Current ratio meets minimum requirements but limited cushion
Debt to Equity
High Risk
2.70
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Growth
27.12x
Elevated P/E suggests growth expectations or premium valuation
Price to Book
High Premium
7.49x
Very high premium suggests asset-light business model or lofty expectations
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International Business Machines Corporation (IBM) Q2 2024 Financial Results: Strong Performance in Software and Infrastructure Amid Consulting Challen...