"We delivered double-digit revenue growth in software with the reacceleration in Red Hat and continued strength in transaction processing." - Arvind Krishna
— Arvind Krishna
03Detailed Report
IBM
International Business Machines Corporation
Period
Q3 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 19, 2026
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Executive Summary
International Business Machines Corporation (IBM) released its Q3 2024 earnings report, showcasing a revenue of $15 billion, marking a slight year-over-year increase of 1.46% but a decline of 5.09% quarter-over-quarter. The earnings call led by CEO Arvind Krishna emphasized robust growth in the software segment, particularly driven by the accelerating performance of Red Hat, which recorded a growth rate of 14%. Despite this success, consulting revenues were flat, attributed to ongoing macroeconomic uncertainties affecting discretionary spending by clients. The company's balanced focus on increasing profitability, highlighted by a 210 basis points expansion in operating gross margin, reflects a strategic shift toward higher-margin software offerings and the positioning for long-term opportunities within artificial intelligence (AI) and hybrid cloud services.
Key Performance Indicators
Revenue
Increasing
14.97B
QoQ: -5.09% | YoY: 1.46%
Gross Profit
Increasing
8.42B
56.26% margin
QoQ: -5.92% | YoY: 4.95%
Net Income
Decreasing
-330.00M
QoQ: -117.99% | YoY: -119.37%
EPS
Decreasing
-0.36
QoQ: -118.09% | YoY: -119.25%
Revenue Trend
Margin Analysis
Financial Highlights
### Financial Performance Metrics
- Revenue: $15 billion
- Gross Profit: $8.42 billion with a Gross Profit Margin of 56.26%
- Net Income: -$330 million, resulting in a Net Income Margin of -2.2%
- EPS: -$0.36 (diluted)
- Operating Cash Flow: $2.88 billion
- Free Cash Flow: $2.46 billion
### Year-Over-Year Comparison (Q3 2023 vs. Q3 2024)
- Revenue Growth: +1.46%
- Gross Profit Growth: +4.95%
- Net Income Decrease: -119.37%
- EPS Decrease: -119.25%
### Key Ratios
- Current Ratio: 1.025, indicating short-term liquidity.
- Debt-to-Equity Ratio: 2.46, suggesting a leveraged capital structure.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
14.97B
1.46%
-5.09%
Gross Profit
8.42B
4.95%
-5.92%
Net Income
-330.00M
-119.37%
-117.99%
EPS
-0.36
-119.25%
-118.09%
Key Financial Ratios
Gross Profit Margin
Good
56.30%
Gross profit margin is healthy and competitive within industry standards
Net Profit Margin
Weak
-0.02%
Net profit margin is below industry norms, profitability concerns
Return on Assets
Weak
0.00%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
-0.01%
Return on equity suggests inefficient capital allocation
Current Ratio
Adequate
1.03
Current ratio meets minimum requirements but limited cushion
Debt to Equity
High Risk
2.46
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Negative
-154.14x
Negative earnings make P/E ratio not meaningful
Price to Book
High Premium
8.32x
Very high premium suggests asset-light business model or lofty expectations
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