IBM showed strong performance in its software segment and cash flow generation, while facing challenges in consulting and infrastructure due to macroeconomic conditions. The company remains optimistic about its growth prospects for 2025.

Company Guidance

During IBM's Q3 2024 earnings call, the executives provided several key metrics and guidance details, highlighting the company's strategic focus and performance across various segments. They reported $15 billion in revenue for the quarter, with software revenue growth accelerating to 10%, driven by strong contributions from Red Hat at 14% and transaction processing growth. The software segment's profit margin was approximately 30%, and the recurring revenue base, which constitutes about 80% of annual software revenue, showed strong growth with ARR for hybrid platforms and solutions reaching $14.9 billion, up 11% year-over-year. Consulting revenue was flat, impacted by macroeconomic conditions, though IBM's book of business related to generative AI surpassed $3 billion, showing significant growth. The infrastructure segment's revenue declined by 7% due to product cycle dynamics. However, IBM expanded its operating gross margin by 210 basis points and operating pretax margin by 100 basis points, delivering $6.6 billion in free cash flow year-to-date. The company remains confident in its outlook and expects revenue growth in Q4 to match Q3 levels, with software anticipated to achieve low double-digit growth. IBM also raised its full-year operating pretax margin expansion outlook to about 1 point year-over-year, anticipating over $12 billion in free cash flow for 2024.

Double-Digit Revenue Growth in Software

IBM delivered strong and accelerating software revenue growth of 10%, including Red Hat at 14%, supported by key platforms and a recurring revenue base.

Strong Operating Profitability and Cash Flow

The company generated $3.8 billion of adjusted EBITDA and $6.6 billion of free cash flow through the first nine months, marking the highest levels of gross margin and free cash flow in many years.

Significant Advances in AI and Partnerships

IBM's generative AI book of business grew by over $1 billion quarter-over-quarter, reaching over $3 billion, with significant partnerships enhancing its AI capabilities.

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International Business Machines (IBM) Earnings, Revenues Date & History

The upcoming earnings date is based on a company’s previous reporting, and may be updated when the actual date is announced

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IBM Earnings History

Report Date	Fiscal Quarter	Forecast / EPS	Last Year's EPS	EPS YoY Change	Slides	Play Transcript
Jan 29, 2025	2024 (Q4)	3.80 / -	3.87	―	―	―
Oct 23, 2024	2024 (Q3)	2.23 / 2.30	2.2	4.55% (+0.10)
Jul 24, 2024	2024 (Q2)	2.18 / 2.43	2.18	11.47% (+0.25)
Apr 24, 2024	2024 (Q1)	1.59 / 1.68	1.36	23.53% (+0.32)
Jan 24, 2024	2023 (Q4)	3.79 / 3.87	3.6	7.50% (+0.27)
Oct 25, 2023	2023 (Q3)	2.12 / 2.20	1.81	21.55% (+0.39)
Jul 19, 2023	2023 (Q2)	2.01 / 2.18	2.31	-5.63% (-0.13)
Apr 19, 2023	2023 (Q1)	1.26 / 1.36	1.4	-2.86% (-0.04)
Jan 25, 2023	2022 (Q4)	3.60 / 3.60	3.35	7.46% (+0.25)
Oct 19, 2022	2022 (Q3)	1.79 / 1.81	2.407	-24.80% (-0.60)

The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.

Beat

Missed

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IBM Earnings-Related Price Changes

Report Date	Price 1 Day Before	Price 1 Day After	Percentage Change
Oct 23, 2024	$230.93	$216.68	-6.17%
Jul 24, 2024	$181.00	$188.83	+4.33%
Apr 24, 2024	$179.30	$164.50	-8.25%
Jan 24, 2024	$167.86	$183.79	+9.49%

Earnings announcements can affect a stock’s price. This table shows the stock's price the day before and the day after recent earnings reports, including the percentage change.

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