"We delivered more than **120%** program-to-program growth for z16, our most successful program in history."
— Jim Kavanaugh
03Detailed Report
IBM
International Business Machines Corporation
Period
Q4 2024
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedJun 19, 2026
Swipe to view all report sections
Executive Summary
In the fourth quarter of 2024, International Business Machines Corporation (IBM) delivered a robust performance with revenues reaching $17.6 billion, reflecting an increase of 2% year-over-year at constant currency, bolstered by strong growth in its Software segment, particularly in Red Hat, which grew 17%. The company generated $12.7 billion in free cash flow, marking the highest level in years, demonstrating its strong cash generation capabilities and financial health. Furthermore, management expressed confidence in continuing momentum into 2025, forecasting revenue growth of over 5% and free cash flow reaching $13.5 billion. This positions IBM well for sustained growth as it navigates a dynamic economic landscape characterized by geopolitical tensions and evolving technology needs.
Key Performance Indicators
Revenue
Increasing
17.55B
QoQ: 17.28% | YoY: 1.00%
Gross Profit
Increasing
10.44B
59.47% margin
QoQ: 23.98% | YoY: 1.68%
Operating Income
Stable
3.54B
QoQ: N/A | YoY: N/A
Net Income
Decreasing
2.92B
QoQ: 983.33% | YoY: -11.34%
EPS
Decreasing
3.11
QoQ: 963.89% | YoY: -13.37%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue Performance: IBM reported a quarterly revenue of $17.6 billion, a 2% increase from the previous quarter. The full-year revenue stood at approximately $63 billion, with Software leading the charge at 9% growth overall.
Profitability Metrics: The net income for Q4 was $2.915 billion, down from last year's Q4, reflecting an annual decline of 11% but with a significant quarterly increase of 983%. Operating income positively expanded by 120 basis points year-over-year. Operating earnings per share reached $3.92, a 1% increase year-over-year.
Cash Flow Generation: The company reported a free cash flow of $12.7 billion for the year, an increase of 14%. The cash conversion cycle remained favorable, giving it the capacity to innovate and sustain dividends.
Balance Sheet Integrity: Cash and cash equivalents totaled $14.8 billion, and total debt decreased to $55 billion, an improvement of $1.6 billion over the year. The debt-to-equity ratio remained at 2.14, indicating a healthy leverage position.
Margin Expansion: Operating pre-tax margin increased by 120 basis points, reflecting effective cost management and operating leverage adjustments.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
17.55B
1.00%
17.28%
Gross Profit
10.44B
1.68%
23.98%
Operating Income
3.54B
N/A
N/A
Net Income
2.92B
-11.34%
983.33%
EPS
3.11
-13.37%
963.89%
Key Financial Ratios
Gross Profit Margin
Good
59.50%
Gross profit margin is healthy and competitive within industry standards
Operating Profit Margin
Good
20.20%
Operating margin is healthy and competitive within industry standards
Net Profit Margin
Good
16.60%
Net profit margin is healthy and competitive within industry standards
Return on Assets
Weak
2.13%
Return on assets suggests inefficient capital allocation
Return on Equity
Fair
10.70%
Return on equity is acceptable but below top-tier companies
Current Ratio
Adequate
1.04
Current ratio meets minimum requirements but limited cushion
Debt to Equity
High Risk
2.14
Debt-to-equity indicates high leverage and elevated financial risk
P/E Ratio
Fair Value
17.46x
P/E ratio in line with market averages
Price to Book
High Premium
7.45x
Very high premium suggests asset-light business model or lofty expectations
Management Insights Available for Members
Get exclusive access to management commentary, earnings call quotes, and forward guidance from company leadership.
International Business Machines Corporation (IBM) Q2 2024 Financial Results: Strong Performance in Software and Infrastructure Amid Consulting Challen...