0000051143falseCHX00000511432024-10-232024-10-230000051143exch:XNYSus-gaap:CommonStockMember2024-10-232024-10-230000051143exch:XCHIus-gaap:CommonStockMember2024-10-232024-10-230000051143exch:XNYSibm:Notes2.875PercentDue2025Member2024-10-232024-10-230000051143exch:XNYSibm:Notes0.950PercentDue2025Member2024-10-232024-10-230000051143exch:XNYSibm:Notes0.875PercentDue2025Member2024-10-232024-10-230000051143exch:XNYSibm:Notes0.300PercentDue2026Member2024-10-232024-10-230000051143exch:XNYSibm:Notes1.250PercentDue2027Member2024-10-232024-10-230000051143exch:XNYSibm:A3375NotesDue2027Member2024-10-232024-10-230000051143exch:XNYSibm:Notes0.300PercentDue2028Member2024-10-232024-10-230000051143exch:XNYSibm:Notes1.750PercentDue2028Member2024-10-232024-10-230000051143exch:XNYSibm:Notes1.500PercentDue2029Member2024-10-232024-10-230000051143exch:XNYSibm:Notes0.875PercentDue2030Member2024-10-232024-10-230000051143exch:XNYSibm:Notes1.750PercentDue2031Member2024-10-232024-10-230000051143exch:XNYSibm:A3625NotesDue2031Member2024-10-232024-10-230000051143exch:XNYSibm:Notes0.650PercentDue2032Member2024-10-232024-10-230000051143exch:XNYSibm:Notes1.250PercentDue2034Member2024-10-232024-10-230000051143exch:XNYSibm:A3750NotesDue2035Member2024-10-232024-10-230000051143exch:XNYSibm:A4875NotesDue2038Member2024-10-232024-10-230000051143exch:XNYSibm:Notes1.200PercentDue2040Member2024-10-232024-10-230000051143exch:XNYSibm:A4000NotesDue2043Member2024-10-232024-10-230000051143exch:XNYSibm:Debentures7.00PercentDue2025Member2024-10-232024-10-230000051143exch:XNYSibm:Debentures6.22PercentDue2027Member2024-10-232024-10-230000051143exch:XNYSibm:Debentures6.50PercentDue2028Member2024-10-232024-10-230000051143exch:XNYSibm:Debentures5.875PercentDue2032Member2024-10-232024-10-230000051143exch:XNYSibm:Debentures7.00PercentDue2045Member2024-10-232024-10-230000051143exch:XNYSibm:Debentures7.125PercentDue2096Member2024-10-232024-10-23

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 23, 2024
(Date of earliest event reported)
INTERNATIONAL BUSINESS MACHINES CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-236013-0871985
(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)
914-499-1900
(Registrant’s telephone number)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ 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))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Capital stock, par value $.20 per shareIBMNew York Stock Exchange
NYSE Chicago
2.875% Notes due 2025IBM 25ANew York Stock Exchange
0.950% Notes due 2025IBM 25BNew York Stock Exchange
0.875% Notes due 2025IBM 25CNew York Stock Exchange
0.300% Notes due 2026IBM 26BNew York Stock Exchange
1.250% Notes due 2027IBM 27BNew York Stock Exchange
3.375% Notes due 2027IBM 27FNew York Stock Exchange
0.300% Notes due 2028IBM 28BNew York Stock Exchange
1.750% Notes due 2028IBM 28ANew York Stock Exchange
1.500% Notes due 2029IBM 29New York Stock Exchange
0.875% Notes due 2030IBM 30ANew York Stock Exchange
1.750% Notes due 2031IBM 31New York Stock Exchange
3.625% Notes due 2031IBM 31BNew York Stock Exchange
0.650% Notes due 2032IBM 32ANew York Stock Exchange
1.250% Notes due 2034IBM 34New York Stock Exchange
3.750% Notes due 2035IBM 35New York Stock Exchange
4.875% Notes due 2038IBM 38New York Stock Exchange
1.200% Notes due 2040IBM 40New York Stock Exchange
4.000% Notes due 2043IBM 43New York Stock Exchange
7.00% Debentures due 2025IBM 25New York Stock Exchange
6.22% Debentures due 2027IBM 27New York Stock Exchange
6.50% Debentures due 2028IBM 28New York Stock Exchange
5.875% Debentures due 2032IBM 32DNew York Stock Exchange
7.00% Debentures due 2045IBM 45New York Stock Exchange
7.125% Debentures due 2096IBM 96New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 7.01. Regulation FD Disclosure.
Exhibit 99.1 of this Form 8-K contains the prepared remarks for IBM's Chairman, President and Chief Executive Officer Arvind Krishna and Chief Financial Officer Jim Kavanaugh's third-quarter 2024 earnings presentation to investors on October 23, 2024.
The slides for IBM's Chairman, President and Chief Executive Officer Arvind Krishna and Chief Financial Officer Jim Kavanaugh's third-quarter 2024 earnings presentation on October 23, 2024, are Exhibit 99.2 to this Form 8-K.
Reconciliations of non-GAAP financial measures discussed in the earnings presentation to the most directly comparable financial measures calculated and presented in accordance with GAAP are included in Exhibit 99.2 to this Form 8-K.
The information in this Item 7.01, including the corresponding Exhibits 99.1 and 99.2, is being furnished with the Commission and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits
The following exhibits are being furnished as part of this report:

The following exhibit is being filed as part of this report:
Exhibit No.Description of Exhibit
104Cover Page Interactive Data File (embedded within the Inline XBRL Document)

IBM’s web site (www.ibm.com) contains a significant amount of information about IBM, including financial and other information for investors (www.ibm.com/investor/). IBM encourages investors to visit its various web sites from time to time, as information is updated and new information is posted.
2

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Date: October 24, 2024
By:/s/ Nicolás A. Fehring
Nicolás A. Fehring
Vice President and Controller
3
IBM 3Q24 Earnings Prepared Remarks 1 Introduction Thank you. I’d like to welcome you to IBM’s third quarter 2024 earnings presentation. I’m Olympia McNerney, and I’m here today with Arvind Krishna, IBM’s Chairman, President and Chief Executive Officer, and Jim Kavanaugh, IBM’s Senior Vice President and Chief Financial Officer. We’ll post today’s prepared remarks on the IBM investor website within a couple of hours, and a replay will be available by this time tomorrow. To provide additional information to our investors, our presentation includes certain non-GAAP measures. For example, all of our references to revenue and signings growth are at constant currency. We’ve provided reconciliation charts for these and other non-GAAP financial measures at the end of the presentation, which is posted to our investor website. Finally, some comments made in this presentation may be considered forward looking under the Private Securities Litigation Reform Act of 1995. These statements involve factors that could cause our actual results to differ materially. Additional information about these factors is included in the company’s SEC filings. So with that, I’ll turn the call over to Arvind. Exhibit 99.1

 
IBM 3Q24 Earnings Prepared Remarks 2 CEO Perspective Thank you for joining us today. Let me start by discussing the quarter before I get into more detail on the execution of our strategy. We delivered double-digit revenue growth in Software, with a re-acceleration in Red Hat and continued strength in Transaction Processing. Infrastructure reflects product cycle dynamics, with z16 well ahead of prior cycles highlighting customer adoption and continued reliance on the mainframe. In Consulting, we continue to navigate an uncertain macro environment, with results at the lower end of our expectations. We generated strong operating profitability and the highest level of first nine months cash generation in many years, while overall revenue performance was mixed. We continue to reposition our portfolio towards a higher growth, higher margin business that is well-positioned to address client needs around hybrid cloud and Artificial Intelligence. I'll start with a few thoughts on the macroeconomic environment. Technology spending remains strong. Businesses view technology as a source of competitive advantage, allowing them to scale operations, improve productivity, and drive growth. However, a pause in discretionary spending is impacting our Consulting business. This is due to economic uncertainty, which stems from several temporary factors including geopolitical issues, upcoming elections, and the changing landscape of interest rates and inflation levels. The consulting market remains dynamic, with significant opportunity as clients prepare for AI. Overall, we're confident in our business and our ability to capture these opportunities. Now turning to our performance. Software is nearly 45% of our total revenue, up from the high twenties in 2018, a testament to our focus on organic innovation and repositioning our portfolio. You can see this in our

 
IBM 3Q24 Earnings Prepared Remarks 3 quarterly results as we delivered strong and accelerating Software revenue growth of 10%, including Red Hat at 14%, seven points of organic growth and strength across all our key platforms. Software segment profit margin was about 30%. Our recurring revenue base, which is about 80% of annual software revenue, continues to deliver strong growth. ARR for Hybrid Platform & Solutions now stands at $14.9 billion, up 11% year over year. This quarter marks the five-year anniversary of our acquisition of Red Hat, and I am proud of our accomplishments together. Since IBM announced the acquisition, Red Hat revenue has grown to approximately $6.5 billion, doubling in size and delivering a mid-teens CAGR. OpenShift scaled from about $100 million in ARR to $1.3 billion, expanding more than 10x. Red Hat has also continued to diversify its global footprint, expanding into many new countries since acquisition. We continue to drive innovation, announcing new capabilities including Ansible 2.5, RHEL AI and OpenShift AI. Red Hat was also named a Leader for the second consecutive year in the 2024 Gartner® Magic Quadrant™ for Container Management. 1 We continue to gain traction in enterprise AI. Our book of business related to generative AI is now over $3 billion inception to date, up more than $1 billion quarter over quarter. The mix is roughly one-fifth software and four- fifths consulting signings. This performance has placed us in an early leadership position, which is crucial at the onset of any technology shift. The AI portfolio we have built is designed to give clients a comprehensive 1 Gartner, Magic Quadrant for Container Management, September 2024. Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and MAGIC QUADRANT is a registered trademark of Gartner, Inc. and/or its affiliates and are used herein with permission. All rights reserved. The Gartner content described herein, (the "Gartner Content") represent(s) research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and are not representations of fact. Gartner Content speaks as of its original publication date (and not as of the date of this exhibit) and the opinions expressed in the Gartner Content are subject to change without notice.

 
IBM 3Q24 Earnings Prepared Remarks 4 set of tools to deploy AI within their enterprise. RHEL AI and OpenShift AI allow clients to build a consistent AI foundation based on open-source technology while watsonx provides an AI middleware platform. Our assistants are designed to help clients become more productive using AI across a variety of business processes – from code, to HR, customer service and more. Consulting is helping clients design and execute AI strategies. We also continue to see our Infrastructure segment play a larger role as clients bring AI to their data. Choosing the right AI model is top of mind for our clients. IBM’s Granite family of AI models are fit-for-purpose. Earlier this year, we released code models with 8 to 34 billion parameters. This month, we updated Granite models making them approximately 90% more cost-efficient than larger models. These models can be trained in weeks instead of months and are easier to fine tune for specific tasks. Granite models are available on watsonx and Red Hat and are also integrated into offerings from partners like AWS, Salesforce, Qualcomm and SAP. Globally, clients are turning to IBM to transform their operations with technology. This quarter, we announced new collaborations with NatWest, Telefonica, Samsung SDS, Toyota Systems and many others. At the US Open, IBM delivered AI-generated Match Report summaries, and we are collaborating with ESPN to enhance their sports coverage through advanced AI insights. We also continue to deepen our relationships with key technology partners, including Dell, Intel, Microsoft, Oracle, Salesforce, SAP and ServiceNow. We remain focused on delivering innovations to the market. For example, this quarter we announced Telum II, IBM's next-generation processor for Z, and the Spyre Accelerator, which will significantly enhance IBM Z’s AI capabilities and processing power for enterprise-scale applications.

 
IBM 3Q24 Earnings Prepared Remarks 5 Investment in emerging technologies also remains a focus for IBM. Earlier this month, we opened Europe's first IBM Quantum Data Center. This is the second IBM quantum data center deployed globally which will greatly advance our goal of expanding access to the world’s most performant quantum computers. Before I conclude, let me touch on our outlook. The momentum in our Software strategy can be seen in our year-to-date results. Our revenue guidance for the fourth quarter reflects this progress, balanced by macro dynamics in Consulting and Infrastructure product cycle dynamics. We remain confident in our free cash flow guidance, which we raised in July, driven by continued strength in our operating margin performance. Overall, our portfolio is well positioned to deliver an upward inflection in growth in 2025. I am excited about the opportunities ahead of us and will share more details with you in January. I will now hand over to Jim to walk you through the details of the quarter. Jim, over to you.

 
IBM 3Q24 Earnings Prepared Remarks 6 Financial Highlights Thanks Arvind. In the third quarter, we delivered $15.0 billion in revenue, $3.8 billion of Adjusted EBITDA, $2.5 billion of operating pre-tax income and $2.30 operating diluted earnings per share. And through the first nine months, we generated $6.6 billion of free cash flow. We are pleased with the solid operating profitability and free cash flow generation of the business. Revenue growth, combined with 100 basis points of operating pre-tax margin expansion drove 8% operating pre-tax profit growth and 5% operating diluted earnings per share growth. Our revenue growth for the quarter was up 2% at constant currency. Software growth accelerated to 10%, with strength across our key platforms of Red Hat, Automation, Data & AI and Transaction Processing. Consulting was flat and continued to be impacted by a dynamic market environment as clients reprioritize spending. And Infrastructure was down 7%, reflecting product cycle dynamics. Our portfolio mix, operating leverage and yield from productivity initiatives generated strong gross margin, operating profit and free cash flow performance. These results represent our highest third quarter levels of gross margin and free cash flow in many years. We expanded operating gross margin by 210 basis points and operating pre-tax margin by 100 basis points over last year. Year to date, operating pre-tax margin is up 150 basis points, well ahead of our guidance provided in July of over 50 basis points of improvement in 2024. In September, we closed on the Palo Alto QRadar transaction, generating a pre-tax gain of about $350 million in the quarter. As we previously discussed, this was substantially offset by charges we took to address stranded costs and accelerate our productivity initiatives.

 
IBM 3Q24 Earnings Prepared Remarks 7 These productivity initiatives allowed for continued investments to drive innovation which you can see in our higher R&D expense, up 10% year to date. Year to date, we generated $6.6 billion of free cash flow, up $1.5 billion year over year. The largest driver of this year-to-date growth comes from Adjusted EBITDA, up about $800 million year-over-year. This quarter we realized $500 million in proceeds from the Palo Alto QRadar transaction. As I mentioned last quarter, for the full year, we expect only a modest contribution to free cash flow given payouts from structural actions we have taken and forgone profit from the QRadar business. Through the first nine months of the year, excluding the impact of the QRadar transaction, we are several points ahead of our two-year average attainment levels. In terms of cash uses, year to date, we returned $4.6 billion to shareholders in the form of dividends. From a balance sheet perspective, we have a strong liquidity position with cash of about $14 billion. Our debt balance at the end of the third quarter was flat with year-end 2023 at $56.6 billion, including $10.4 billion from our financing business.

 
IBM 3Q24 Earnings Prepared Remarks 8 Software Turning to the segments, Software revenue growth accelerated to 10% with broad based growth across the portfolio. This reflects the repositioning of Software around key growth platforms - Hybrid Cloud, Automation, Data and Transaction Processing – where we deliver a differentiated value proposition to address clients’ most pressing needs. Growth this quarter was fueled by the same performance drivers we've highlighted throughout the year. Red Hat accelerated, contributing about 3.5 points of growth to Software. The combination of innovation and recurring revenue contributed about 3.5 points to growth. And our focused M&A strategy contributed about 3 points of growth. Let me take you through some more details on each of these. Red Hat revenue growth accelerated to 14%, up six points sequentially. We gained market share across each of our key solutions, with OpenShift and Ansible growing more than 20% and RHEL growing in the double digits. This strength reflects the demand for our hybrid cloud solutions as clients continue to prioritize application modernization on OpenShift containers and Ansible automation to optimize their IT spend and reduce operational complexity. We saw strong acceleration in Red Hat's subscription business while the consumption-based services business stabilized, as we expected. Looking at our revenue under contract over the next six months, this metric continues to grow in the mid-teens as our annual bookings grew double digits in the third quarter. We are excited about the opportunities ahead of us, including generative AI, early client interest in our virtualization solution and, after the deal completion, potential synergies with HashiCorp.

 
IBM 3Q24 Earnings Prepared Remarks 9 We delivered strong growth in our recurring revenue base and are seeing momentum from innovation across our Software portfolio. Hybrid Platform & Solutions ARR was $14.9 billion, up 11% year over year driven by strength across Automation, Data & AI and Red Hat. Transaction Processing grew 9% in the quarter. Growing capacity, solid renewal rates, and continued customer interest in our new generative AI product, watsonx Code Assistant for Z, contributed to this growth. We continue to invest in bringing innovation to market launching new offerings like RHEL AI, Ansible 2.5, and updated capabilities to our family of assistants including the recently announced watsonx Code Assistant with advanced features for enterprise java applications. Red Hat also announced a partnership with Dell that makes RHEL AI the preferred platform for AI deployments on Dell PowerEdge servers. This innovation is driving organic growth acceleration with increasing contribution from our core watsonx middleware in Data & AI, watsonx Orchestrate and IBM Concert in Automation, and our AI embed strategy across our Software portfolio. Revenue performance this quarter also benefited from recent software acquisitions. August marked the one-year anniversary of the Apptio acquisition, and we are seeing strong synergies with our automation capabilities and broader software portfolio, driving continued acceleration in bookings and ARR growth since close. Additionally, the StreamSets and webMethods assets are now part of the Software business, and we continue to expect the HashiCorp acquisition to close by the end of this year. Moving to Software profit, we expanded gross margin, and segment profit was up over 120 basis points from last year as we continue to deliver operating leverage driven by our revenue performance.

 
IBM 3Q24 Earnings Prepared Remarks 10 Consulting Consulting revenue was flat, which was at the lower end of our expectations. As we discussed throughout this year, we are operating in a challenging macroeconomic environment and see no change in client buying behavior. At the same time, clients are reprioritizing their IT budgets to prepare for generative AI. While demand for large digital transformations remained solid, our overall signings declined for the second consecutive quarter as we wrapped on record third quarter signings from last year. Despite the weak current demand environment, we are well positioned to capture growth from generative AI. We continue to build a solid generative AI book of business with about $1 billion of new bookings in the quarter as we partner with our clients to design and scale AI solutions and develop new ways of working. This early momentum is important – engaging with clients as they architect their AI strategies is establishing IBM Consulting as a strategic partner of choice. In the third quarter, our Red Hat practice, which helps clients optimize how they build, deploy, and manage applications for a hybrid cloud environment continued to grow at a double-digit rate, with this quarter being the largest single quarter of signings since the acquisition of Red Hat. Additionally, within our strategic partnerships both our AWS and Azure practices continue to contribute robust revenue growth. Turning to our lines of business, Business Transformation revenue grew 2% driven by strength in transformation projects for data, finance and supply chain. Both Technology Consulting and Application Operations declined in the quarter. While there was strength in cloud-based application services, across modernization, development, and

 
IBM 3Q24 Earnings Prepared Remarks 11 management we continued to see clients reprioritizing spending away from on-prem customized services. Looking at Consulting profit, we expanded gross profit margin almost one point and delivered segment profit margin of 11%, a sequential improvement of two points, reflecting yield from our productivity actions.

 
IBM 3Q24 Earnings Prepared Remarks 12 Infrastructure Moving to the Infrastructure segment, revenue was down 7%, reflecting product cycle dynamics. Hybrid Infrastructure was down 9% and Infrastructure Support declined 3%. Within Hybrid Infrastructure, IBM Z revenue declined 19% in what is now the tenth quarter of z16 availability. The z16 program continues to exceed prior cycles delivering revenue growth in eight of the last ten quarters and program to date installed MIPs are up over 30%. Our clients continue to face increasing demands for workloads given rapid business expansion, complex regulatory environments, and increasing cybersecurity threats and attacks. IBM Z remains uniquely positioned to address these demands with the technologies that our latest program offers - embedded AI at scale, quantum-safe security, and cloud-native development for hybrid cloud. Distributed Infrastructure revenue was down 3% with product cycle dynamics impacting our Power business while we saw solid growth in Storage which continues to take share. For Infrastructure profit, we expanded gross profit margin 120 basis points across the portfolio this quarter. At the same time, segment profit margin was down 110 basis points, driven by continued investments in innovation for our next generation of products.

 
IBM 3Q24 Earnings Prepared Remarks 13 Summary Now, let me bring it back to the IBM level to wrap up. Through the first nine months of the year, we have grown revenue by 3%, expanded our operating pre-tax margin by 150 basis points, and grown free cash flow by $1.5 billion. We have made solid progress in transitioning our portfolio to a higher growth, higher margin business that is well positioned as we head into next year. With nine months of the year behind us, let me now focus on the fourth quarter. We expect revenue growth in the fourth quarter to be consistent with the third quarter levels. Software revenue growth has accelerated throughout the year, and this should continue. We expect low double-digit fourth quarter revenue growth for Software, led by Red Hat growth in the mid-teens, and continued strength in Transaction Processing. This now represents strong high-single digit growth for the year. Consulting revenue is up 1% year to date, impacted by the challenging macroeconomic environment. We expect fourth quarter revenue performance to be similar to the third quarter. This represents the weaker end of our prior expectations of low single digit revenue growth for the year. And given we are at the end of a multi-year product cycle, we now expect Infrastructure to be about a one point impact to IBM for the full year. On currency, given the strengthening of the dollar, we now expect currency to be about a half- a-point headwind to revenue growth in the quarter and about a point impact to revenue growth for the year. Now turning to profitability. For the full year we are raising our expectation for operating pre-tax margin expansion to about a point year to year, well above our model. The strength of this performance is driven by our revenue scale, portfolio mix, and productivity initiatives, enabling

 
IBM 3Q24 Earnings Prepared Remarks 14 operating leverage while providing investment flexibility. Actions taken in the third quarter help accelerate our productivity initiatives and we now believe we can achieve approximately $3.5 billion in annual run rate savings by the end of 2024, up from $3 billion. Drilling down on segment margins, we expect Software segment profit margin to expand by well over a point for the year. Consulting segment profit margin is now expected to be flat and we continue to see Infrastructure segment profit margin in the mid to high teens. Consistent with last year, we are maintaining our full year view of operating tax rate in the mid-teens range. For free cash flow, given the strength of our performance year to date, we remain confident in delivering greater than $12 billion of free cash flow for the year, driven primarily by growth in adjusted EBITDA. We are on track to grow revenue, expand operating profit and grow free cash flow as we close out 2024. This positions us well as we look forward to 2025. We are confident in our portfolio and growth trajectory as we head into 2025 given the acceleration in Software, the opportunities ahead of us in Red Hat, our new mainframe cycle and associated hardware and software stack, our generative AI positioning and contribution from acquisitions. Arvind and I are now happy to take your questions. Olympia, let’s get started.

 
IBM 3Q24 Earnings Prepared Remarks 15 Closing Thank you, Jim. Before we begin the Q&A, I’d like to mention a couple of items. First, supplemental information is provided at the end of the presentation. And then second, as always, I’d ask you to refrain from multi-part questions. Operator, let’s please open it up for questions.

 
October 23, 2024 ibm.com/investor 3Q 2024 Earnings Exhibit 99.2

 
Forward-looking statements and non-GAAP information Certain comments made in this presentation may be characterized as forward looking under the Private Securities Litigation Reform Act of 1995. Forward- looking statements are based on the company’s current assumptions regarding future business and financial performance. Those statements by their nature address matters that are uncertain to different degrees. Those statements involve a number of factors that could cause actual results to differ materially. Additional information concerning these factors is contained in the Company’s filings with the SEC. Copies are available from the SEC, from the IBM website, or from IBM Investor Relations. Any forward-looking statement made during this presentation speaks only as of the date on which it is made. The company assumes no obligation to update or revise any forward-looking statements except as required by law; these charts and the associated remarks and comments are integrally related and are intended to be presented and understood together. In an effort to provide additional and useful information regarding the company’s financial results and other financial information as determined by generally accepted accounting principles (GAAP), the company also discusses, in its earnings press release and presentation materials, certain non-GAAP information including operating earnings and other “operating” financial measures, free cash flow, net cash from operating activities excluding IBM Financing receivables, adjusted EBITDA and adjustments for currency. The rationale for management’s use of this non-GAAP information is included as Exhibit 99.2 to the company’s Form 8-K submitted to the SEC on October 23, 2024. The reconciliation of non- GAAP information to GAAP is included in the press release within Exhibit 99.1 to the company’s Form 8-K submitted to the SEC on October 23, 2024, as well as on the slides entitled “Non-GAAP supplemental materials” in this presentation. To provide better transparency, the company also discusses management performance metrics including annual recurring revenue, annual bookings, signings, and book-to-bill. The metrics are used to monitor the performance of the business and are viewed as useful decision-making information for management and stakeholders. The rationale for management’s use of these performance metrics and their calculation, as well as other information including the definition of book of business, are included in Exhibit 99.2 to the company’s Form 8-K submitted to the SEC on October 23, 2024, or in the Management Discussion section of the company’s 2023 Annual Report, which is Exhibit 13 to the Form 10-K submitted with the SEC on February 26, 2024. For other related information please visit the Company’s investor relations website at: https://www.ibm.com/investor/events/earnings-3Q24 2

 
3 Arvind Krishna Chairman, President and Chief Executive Officer James Kavanaugh SVP, Finance & Operations and Chief Financial Officer

 
“Our third-quarter performance was led by double-digit growth in Software, including a re-acceleration in Red Hat. We continue to see great momentum in AI as our models are trusted, fit-for-purpose, and lower cost, with performance leadership. Our generative AI book of business now stands at more than $3 billion, up more than $1 billion quarter to quarter. Heading into the final quarter of 2024, we expect fourth quarter constant currency revenue growth to be consistent with the third quarter, with continued strength in Software. We are confident in our ability to deliver more than $12 billion in free cash flow for the year, driven by continued expansion of our operating margins.” Arvind Krishna IBM Chairman, President and CEO 4 3Q24 Performance Investments, innovation and clients Generative AI CEO perspective

 
Financial highlights 5Revenue growth rates @CC $15.0B Revenue $6.6B Free cash flow ytd 3Q24 “Our investments are paying off in Software as we’ve repositioned our portfolio in recent years. In the third quarter, Software delivered broad-based growth and now represents nearly 45 percent of our total revenue. Our ongoing focus on product mix, coupled with our productivity initiatives enables us to continue to drive operating leverage in our underlying profit performance. With our strong cash generation, we are well-positioned to continue investing for growth while returning value to shareholders through dividends.” James Kavanaugh IBM SVP & CFO $1.5B Free cash flow ytd yr/yr 100bps Pre-tax margin expansion (operating) 5% Diluted EPS growth (operating) 2% Revenue growth 210bps Gross margin expansion (operating) 8% Pre-tax income growth (operating)

 
6 Revenue categories Red Hat +14% Automation +13% Data & AI +5% Security (1%) Software 3Q24 results; revenue growth rates @CC *Annual recurring revenue for Hybrid Platform & Solutions, growth rate @CC Transaction Processing +9% yr/yr Hybrid Platform & Solutions +10% yr/yr Growth accelerated to 10% including 7 points of organic contribution Red Hat revenue growth +14%, up 6 points sequentially Solid and recurring revenue base; ARR* of $14.9 billion, +11% yr/yr Strong gross and segment profit margin expansion $6.5B Revenue +10% Revenue growth

 
7 Technology Consulting (4%) yr/yr Consulting 3Q24 results; revenue growth rates @CC Revenue categories Application Operations (1%) yr/yr Business Transformation +2% yr/yr Solid demand for large digital transformations Book-to-bill ratio 1.14 for the last year Continued momentum in generative AI bookings Client reprioritization and spend constraints impacting revenue yield $5.2B Revenue Flat Revenue growth

 
8 Infrastructure 3Q24 results; revenue growth rates @CC Revenue categories IBM Z (19%) Distributed Infrastructure (3%) Infrastructure Support (3%) yr/yr Hybrid Infrastructure (9%) yr/yr Infrastructure performance reflects product cycle dynamics z16 continues to outpace prior programs Ongoing investment in innovation $3.0B Revenue (7%) Revenue growth

 
9 Summary Expectations Fourth quarter revenue growth @CC similar to third quarter Raising full-year operating pre-tax margin expansion to about a point Full-year free cash flow greater than $12 billion Well positioned to deliver an upward inflection in growth in 2025 3Q24 Summary Software accelerated to 10% growth, with Red Hat delivering 14% growth Investments in innovation driving strong organic growth Generative AI continues to gain traction; book of business greater than $3 billion inception to date Operating leverage and productivity initiatives drove strong operating margin performance Strong year-to-date free cash flow generation, +$1.5 billion ytd yr/yr

 
ibm.com/investor

 
Supplemental material 11Some columns and rows in these materials, including the supplemental exhibits, may not add due to rounding Revenue and P&L highlights Adjusted EBITDA performance Cash flow and balance sheet highlights Currency impact on revenue growth Software & Infrastructure segment details Consulting segment details Expense summary Balance sheet summary Cash flow summary Cash flow (ASC 230) Software segment categories Consulting segment categories Infrastructure segment categories Non-GAAP supplemental materials

 
Revenue and P&L highlights 12Revenue growth rates @CC, $ in billions Revenue highlights 3Q24 B/(W) Yr/Yr Revenue $15.0 2% Americas $7.5 (2%) Europe/ME/Africa $4.6 7% Asia Pacific $2.9 5% Operating P&L highlights $ 3Q24 B/(W) Yr/Yr Gross profit $8.6 5% Expense $6.1 (4%) Pre-tax income $2.5 8% Net income $2.2 6% Earnings per share $2.30 5% Adjusted EBITDA $3.8 6% Operating P&L highlights % 3Q24 B/(W) Yr/Yr Gross profit margin 57.5% 2.1 pts Expense E/R 40.9% (1.0 pts) Pre-tax income margin 16.6% 1.0 pts Net income margin 14.4% 0.6 pts Tax rate 13.4% (1.7 pts)

 
Adjusted EBITDA performance 13 $ in billions *Corporate (gains) and charges primarily consists of unique corporate actions such as gains on divestitures and asset sales (e.g., certain QRadar SaaS assets) QTD YTD 3Q24 Yr/Yr 3Q24 Yr/Yr Operating (non-GAAP) pre-tax income/(loss) from continuing operations $2.5 $0.2 $6.9 $0.8 Net interest expense $0.3 $0.0 $0.7 $0.0 Depreciation/Amortization of non-acquired intangible assets $0.7 $0.0 $2.1 $0.1 Stock-based compensation $0.3 $0.0 $1.0 $0.1 Workforce rebalancing charges $0.3 $0.3 $0.7 $0.3 Corporate (gains) and charges* ($0.4) ($0.3) ($0.6) ($0.6) Adjusted EBITDA $3.8 $0.2 $10.8 $0.8

 
Cash flow and balance sheet highlights 14 $ in billions *Non-GAAP financial measure; excludes Financing receivables **Non-GAAP financial measure; adjusts for Financing receivables and net capital expenditures Balance sheet Sep 24 Dec 23 Sep 23 Cash & marketable securities $13.7 $13.5 $11.0 Total debt $56.6 $56.5 $55.2 Select debt measures Sep 24 Dec 23 Sep 23 IBM Financing debt $10.4 $11.9 $9.9 Core (non-IBM Financing) debt $46.2 $44.7 $45.4 Cash flow 3Q24 YTD Yr/Yr Net cash from operations* $7.3 $0.9 Free cash flow** $6.6 $1.5 Select uses of cash 3Q24 YTD Yr/Yr Net capital expenditures $0.7 ($0.5) Acquisitions $2.7 ($2.2) Dividends $4.6 $0.1

 
Currency impact on revenue growth 15 Quarterly averages per US $ 3Q24 Yr/Yr Spot 4Q24 FY24 1Q25 2Q25 FY25 Assumed Euro 0.91 1% 0.93 0% 0% (1%) 0% (1%) Pound 0.77 3% 0.77 4% 3% 2% 3% 1% Yen 149 (3%) 151 (3%) (8%) (3%) 2% (1%) Revenue impact, future @assumed Spot ~(0.5 pts) ~(1 pts) ~(1 pts) ~0 pts (0-1 pts) Prior view ~(1.5 pts) ~(1 pts) (1-2 pts) US $B Yr/Yr Revenue as reported $15.0 1% Currency impact ($0.0) (0.1 pts) Revenue @CC 2%

 
Software & Infrastructure segment details 16 Revenue growth rates @CC, $ in billions *Annual recurring revenue for Hybrid Platform & Solutions, growth rate @CC Software segment 3Q24 B/(W) Yr/Yr Revenue $6.5 10% Hybrid Platform & Solutions $4.6 10% Red Hat 14% Automation 13% Data & AI 5% Security (1%) Transaction Processing $1.9 9% Segment profit $2.0 14% Segment profit margin 30.2% 1.2 pts Annual recurring revenue* $14.9 11% Infrastructure segment 3Q24 B/(W) Yr/Yr Revenue $3.0 (7%) Hybrid Infrastructure $1.8 (9%) IBM Z (19%) Distributed Infrastructure (3%) Infrastructure Support $1.3 (3%) Segment profit $0.4 (14%) Segment profit margin 13.9% (1.1 pts)

 
Consulting segment details 17Revenue & signings growth rates @CC, $ in billions Consulting segment 3Q24 B/(W) Yr/Yr Revenue $5.2 Flat Business Transformation $2.3 2% Technology Consulting $0.9 (4%) Application Operations $1.9 (1%) Gross profit margin 28.4% 0.9 pts Segment profit $0.6 (1%) Segment profit margin 10.9% (0.1 pts) Signings $5.4 (9%) Book-to-bill ratio (TTM) 1.14

 
Expense summary 18 $ in billions *Yr/Yr includes a gain of $0.4B from the sale of certain QRadar SaaS assets **Includes acquisitions in the last twelve months net of non-operating acquisition-related charges and includes impact of closed divested businesses ***Represents the percentage change after excluding the impact of currency translation & hedges, acquisitions and divestitures Expense 3Q24 B/(W) Acq/ Yr/Yr Currency Divest** Base*** Operating expense & other income $6.1 (4%) 0 pts (2 pts) (3 pts) impact of workforce rebalancing $0.3 (5 pts) SG&A – operating $4.6 (10%) 0 pts (1 pts) (9 pts) impact of workforce rebalancing $0.3 (6 pts) RD&E $1.9 (11%) 0 pts (1 pts) (10 pts) IP and custom development income ($0.2) 25% Other (income)/expense - operating* ($0.6) 172% Interest expense $0.4 (4%)

 
Balance sheet summary 19 $ in billions *Includes eliminations of inter-company activity Sep 24 Dec 23 Sep 23 Cash & marketable securities $13.7 $13.5 $11.0 Core (non-IBM Financing) assets* $109.0 $107.9 $106.8 IBM Financing assets $11.7 $13.9 $11.5 Total assets $134.3 $135.2 $129.3 Other liabilities $53.2 $56.1 $50.9 Core (non-IBM Financing) debt* $46.2 $44.7 $45.4 IBM Financing debt $10.4 $11.9 $9.9 Total debt $56.6 $56.5 $55.2 Total liabilities $109.8 $112.6 $106.2 Equity $24.5 $22.6 $23.2

 
Cash flow summary 20$ in billions QTD B/(W) YTD B/(W) 3Q24 Yr/Yr 3Q24 Yr/Yr Net cash from operations $2.9 ($0.2) $9.1 ($0.4) Less: IBM Financing receivables $0.9 ($0.2) $1.8 ($1.3) Net cash from operations (excluding IBM Financing receivables) $2.0 $0.0 $7.3 $0.9 Net capital expenditures $0.1 $0.3 ($0.7) $0.5 Free cash flow (excluding IBM Financing receivables) $2.1 $0.4 $6.6 $1.5 Acquisitions ($2.5) $2.1 ($2.7) $2.2 Divestitures $0.0 $0.0 $0.7 $0.7 Dividends ($1.5) ($0.0) ($4.6) ($0.1) Non-IBM Financing debt ($0.4) $0.6 $0.7 ($6.9) Other (includes IBM Financing net A/R & IBM Financing debt) $0.1 $0.1 ($0.4) $0.7 Change in cash & marketable securities ($2.2) $3.1 $0.3 ($1.9)

 
Cash flow (ASC230) 21 $ in billions *Includes operating lease right-of-use assets amortization **2024 includes a $0.7B tax effect associated with the one-time, non-cash pension settlement charge in 3Q ***2024 includes proceeds of $0.4B from the sale of certain QRadar SaaS assets QTD QTD YTD YTD 3Q24 3Q23 3Q24 3Q23 Net income from operations ($0.3) $1.7 $3.1 $4.2 Pension settlement charges $2.7 - $2.7 - Depreciation / amortization of intangibles* $1.3 $1.1 $3.6 $3.2 Stock-based compensation $0.3 $0.3 $1.0 $0.8 Operating assets and liabilities / other, net** ($2.0) ($1.1) ($3.1) ($2.0) IBM Financing A/R $0.9 $1.1 $1.8 $3.1 Net cash provided by operating activities $2.9 $3.1 $9.1 $9.5 Capital expenditures, net of payments & proceeds*** $0.1 ($0.3) ($0.7) ($1.2) Divestitures, net of cash transferred $0.0 ($0.0) $0.7 ($0.0) Acquisitions, net of cash acquired ($2.5) ($4.6) ($2.7) ($4.9) Marketable securities / other investments, net $0.9 $2.9 ($0.8) ($3.7) Net cash provided by/(used in) investing activities ($1.6) ($2.0) ($3.6) ($9.9) Debt, net of payments & proceeds ($1.3) ($1.5) ($0.8) $4.6 Dividends ($1.5) ($1.5) ($4.6) ($4.5) Financing - other $0.0 ($0.1) ($0.0) ($0.3) Net cash provided by/(used in) financing activities ($2.8) ($3.1) ($5.4) ($0.2) Effect of exchange rate changes on cash $0.2 ($0.1) ($0.0) ($0.1) Net change in cash, cash equivalents & restricted cash ($1.3) ($2.1) $0.1 ($0.7)

 
Software segment categories Revenue categories – FY 2023 Hybrid Platform & Solutions Transaction Processing Hybrid Platform & Solutions Software, infused with AI, to help clients operate, manage, and optimize their IT resources and business processes within hybrid, multi-cloud environments: – Red Hat: incl. RHEL, OpenShift, Ansible – Automation: incl. business automation, AIOps and management, integration, and application servers – Data & AI: incl. data fabric, customer care, data management, business analytics, dataops & governance, asset & supply chain management, and information exchange – Security: incl. software for threat, data and identity Transaction Processing Software that supports clients’ mission-critical on-premise workloads in industries such as banking, airlines and retail incl. transaction processing software such as Customer Information Control System and storage software, and analytics and integration software running on IBM operating systems (e.g., DB2 and WebSphere running on z/OS). Revenue categories Red Hat Data & AI Security Automation 22

 
Business Transformation Technology Consulting Application Operations Consulting segment categories Business Transformation Strategy, process design, system implementation and operations services to improve and transform key business processes. Deploys AI and automation in business processes to exploit the value of data and includes an ecosystem of partners alongside IBM technology, including strategic partnerships with Adobe, Oracle, Salesforce and SAP, among others. Technology Consulting Skills to architect and implement solutions across cloud platforms, including Amazon, Microsoft and IBM, and strategies to transform the enterprise experience and enable innovation, including transformation using AI with watsonx and application modernization for hybrid cloud with Red Hat OpenShift. Application Operations Manages, optimizes, orchestrates and secures custom applications and ISV packages for clients. Provides application management, platform engineering, and security services across hybrid cloud environments. Revenue categories – FY 2023 23 Revenue categories

 
Infrastructure segment categories Hybrid Infrastructure Innovative infrastructure platforms to help meet the new requirements of hybrid multi-cloud and enterprise AI workloads leveraging flexible and as-a-service consumption models: – IBM Z: incl. hardware and operating system – Distributed Infrastructure: incl. Power hardware and operating system, storage hardware, IBM Cloud IaaS, OEM asset recovery service Infrastructure Support Comprehensive, proactive and AI enabled services to maintain and improve the availability and value of clients’ IT infrastructure (hardware and software) both on-premises and in the cloud incl. maintenance for IBM products and other technology platforms. Hybrid Infrastructure Infrastructure Support Revenue categories – FY 2023 24 Revenue categories IBM Z Distributed Infrastructure

 
Non-GAAP supplemental materials Reconciliation of revenue performance – 3Q 2024 25 The above reconciles the non-GAAP financial information contained in the “Financial highlights”, “Revenue and P&L highlights” and “Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated October 23, 2024, for additional information on the use of these non-GAAP financial measures. GAAP @CC Total revenue 1% 2% Americas (3%) (2%) Europe/ME/Africa 9% 7% Asia Pacific 3% 5% 3Q24 Yr/Yr

 
Non-GAAP supplemental materials Reconciliation of revenue performance – 3Q24 YTD 26 The above reconciles the non-GAAP financial information contained in the “Prepared remarks” discussion in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated October 23, 2024, for additional information on the use of these non-GAAP financial measures. GAAP @CC Total revenue 2% 3% Consulting revenue (1%) 1% 3Q24 YTD Yr/Yr

 
GAAP @CC Software 10% 10% Hybrid Platform & Solutions 10% 10% Red Hat 14% 14% Automation 13% 13% Data & AI 5% 5% Security (1%) (1%) Transaction Processing 9% 9% 3Q24 Yr/Yr GAAP @CC Consulting Flat Flat Business Transformation 2% 2% Technology Consulting (4%) (4%) Application Operations (1%) (1%) Infrastructure (7%) (7%) Hybrid Infrastructure (9%) (9%) IBM Z (19%) (19%) Distributed Infrastructure (3%) (3%) Infrastructure Support (4%) (3%) 3Q24 Yr/Yr Non-GAAP supplemental materials Reconciliation of segment revenue performance – 3Q 2024 27 The above reconciles the non-GAAP financial information contained in the “Software”, “Consulting”, “Infrastructure”, “Software & Infrastructure segment details”, “Consulting segment details” and “Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated October 23, 2024, for additional information on the use of these non-GAAP financial measures.

 
Non-GAAP supplemental materials Reconciliation of expense summary – 3Q 2024 28 *Represents the percentage change after excluding the impact of currency translation & hedges, acquisitions and divestitures ** Includes the impact of a one-time, non-cash pension settlement charge of $2.7B The above reconciles the non-GAAP financial information contained in the “Expense summary” discussion in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated October 23, 2024, for additional information on the use of these non-GAAP financial measures. Non-GAAP Operating GAAP adjustments (non-GAAP) SG&A Currency 0 pts 0 pts 0 pts Acquisitions/divestitures (1 pts) 0 pts (1 pts) Base* (9 pts) 0 pts (9 pts) RD&E Currency 0 pts 0 pts 0 pts Acquisitions/divestitures (1 pts) 0 pts (1 pts) Base* (10 pts) 0 pts (10 pts) Operating expense & other income Currency 1 pts 0 pts 0 pts Acquisitions/divestitures (1 pts) 0 pts (2 pts) Base*,** (49 pts) 47 pts (3 pts) 3Q24

 
Non-GAAP supplemental materials Reconciliation of continuing operations – 3Q 2024 29 $ in millions (except EPS which is in whole dollars) *Includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7B ($2.0B net of tax) **Operating (non-GAAP) EPS includes 14.9M dilutive potential shares under our stock-based compensation plans and contingently issuable shares. Due to the GAAP net loss for the three months ended September 30, 2024, these dilutive potential shares were excluded from the GAAP loss per share calculation as the effect would have been antidilutive. The difference in share count resulted in an additional ($0.04) reconciling item The above reconciles the non-GAAP financial information contained in the “Revenue and P&L highlights”, “Expense summary” and “Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated October 23, 2024, for additional information on the use of these non- GAAP financial measures. GAAP Acquisition- related adjustments Retirement- related adjustments* Tax reform impacts Operating (non-GAAP) Gross profit $8,420 $192 — — $8,612 Gross profit margin 56.3% 1.3 pts — — 57.5% SG&A 4,911 (300) — — 4,611 Other (income) & expense 2,244 0 (2,797) — (553) Total expense  9,222 (300) (2,797) — 6,125 Pre-tax income/(loss) (802) 492 2,797 — 2,487 Pre-tax income/(loss) margin (5.4%) 3.3 pts 18.7 pts — 16.6% Tax rate 60.4% (7.2 pts) (39.8 pts) (0.1 pts) 13.4% Net income/(loss) (317) 373 2,097 2 2,155 Net income/(loss) margin (2.1%) 2.5 pts 14.0 pts 0.0 pts 14.4% Earnings/(loss) per share** ($0.34) $0.40 $2.27 $0.00 $2.30 3Q24

 
QTD YTD 3Q24 Yr/Yr 3Q24 Yr/Yr Net income/(loss) as reported (GAAP)* ($0.3) ($2.0) $3.1 ($1.1) Less: income/(loss) from discontinued operations, net of tax ($0.0) ($0.0) $0.0 $0.0 Income/(loss) from continuing operations ($0.3) ($2.0) $3.1 ($1.1) Provision for/(Benefit from) income taxes from continuing operations ($0.5) ($0.6) ($0.6) ($1.3) Pre-tax income/(loss) from continuing operations (GAAP) ($0.8) ($2.7) $2.5 ($2.4) Non-operating adjustments (before tax) Acquisition-related charges** $0.5 $0.1 $1.5 $0.2 Non-operating retirement-related costs/(income)* $2.8 $2.8 $3.0 $3.0 Operating (non-GAAP) pre-tax income/(loss) from continuing operations $2.5 $0.2 $6.9 $0.8 Net interest expense $0.3 $0.0 $0.7 $0.0 Depreciation/Amortization of non-acquired intangible assets $0.7 $0.0 $2.1 $0.1 Stock-based compensation $0.3 $0.0 $1.0 $0.1 Workforce rebalancing charges $0.3 $0.3 $0.7 $0.3 Corporate (gains) and charges*** ($0.4) ($0.3) ($0.6) ($0.6) Adjusted EBITDA $3.8 $0.2 $10.8 $0.8 Non-GAAP supplemental materials Reconciliation of GAAP net income to adjusted EBITDA 30 $ in billions *2024 includes the impact of a one-time, non-cash pension settlement charge of $2.7B ($2.0B net of tax) **Primarily consists of amortization of acquired intangible assets ***Corporate (gains) and charges primarily consists of unique corporate actions such as gains on divestitures and asset sales (e.g., certain QRadar SaaS assets) The above reconciles the non-GAAP financial information contained in the “Revenue and P&L highlights", “Adjusted EBITDA performance” and "Prepared remarks” discussions in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated October 23, 2024, for additional information on the use of these non-GAAP financial measures.

 
Non-GAAP supplemental materials Reconciliation of net cash from operations to adjusted EBITDA 31 $ in billions *Other assets and liabilities/other, net mainly consists of operating assets and liabilities/other, net in the “Cash flow (ASC230)” discussion, workforce rebalancing charges, non-operating impacts and corporate (gains) and charges The above reconciles the non-GAAP financial information contained in the “Prepared remarks” discussion in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated October 23, 2024, for additional information on the use of these non-GAAP financial measures. QTD QTD YTD YTD 3Q24 3Q23 3Q24 3Q23 Net cash provided by operating activities $2.9 $3.1 $9.1 $9.5 Add: Net interest expense $0.3 $0.3 $0.7 $0.7 Provision for/(Benefit from) income taxes from continuing operations ($0.5) $0.2 ($0.6) $0.7 Less change in: Financing receivables $0.9 $1.1 $1.8 $3.1 Other assets and liabilities/other, net* ($2.0) ($1.2) ($3.5) ($2.3) Adjusted EBITDA $3.8 $3.5 $10.8 $10.1

 
Non-GAAP supplemental materials Reconciliation of tax rate and Pre-tax income margin – FY 2024 expectations *Includes estimated discrete tax events for the year; actual events will be recoded as they occur **Includes the impact of a one-time, non-cash pension settlement charge of $2.7B ($2.0B net of tax) in the third quarter of 2024 The above reconciles the non-GAAP financial information contained in the “Prepared remarks” discussion in the company’s earnings presentation. See Exhibit 99.2 included in the company’s Form 8-K dated October 23, 2024, for additional information on the use of these non-GAAP financial measures. Tax rate GAAP ** Operating (non-GAAP) Full-Year 2024* Negative Low to Mid Single Digits Mid Teens GAAP Operating (non-GAAP) Pre-tax income margin B/(W)** B/(W) Pre-tax income margin Yr/Yr ~(5 pts) ~1 pts 32

 
ibm.com/investor

 
v3.24.3
Cover
Oct. 23, 2024
Document Information [Line Items]  
Document Type 8-K
Document Period End Date Oct. 23, 2024
Entity Registrant Name INTERNATIONAL BUSINESS MACHINES CORPORATION
Entity Incorporation, State or Country Code NY
Entity File Number 1-2360
Entity Tax Identification Number 13-0871985
Entity Address, Address Line One One New Orchard Road
Entity Address, City or Town Armonk
Entity Address, State or Province NY
Entity Address, Postal Zip Code 10504
City Area Code 914
Local Phone Number 499-1900
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Entity Central Index Key 0000051143
Amendment Flag false
NEW YORK STOCK EXCHANGE, INC. | Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Capital stock, par value $.20 per share
Trading Symbol IBM
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 2.875% Notes due 2025  
Document Information [Line Items]  
Title of 12(b) Security 2.875% Notes due 2025
Trading Symbol IBM 25A
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 0.950% Notes due 2025  
Document Information [Line Items]  
Title of 12(b) Security 0.950% Notes due 2025
Trading Symbol IBM 25B
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 0.875% Notes due 2025  
Document Information [Line Items]  
Title of 12(b) Security 0.875% Notes due 2025
Trading Symbol IBM 25C
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 0.300% Notes due 2026  
Document Information [Line Items]  
Title of 12(b) Security 0.300% Notes due 2026
Trading Symbol IBM 26B
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 1.250% Notes due 2027  
Document Information [Line Items]  
Title of 12(b) Security 1.250% Notes due 2027
Trading Symbol IBM 27B
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 3.375% Notes due 2027  
Document Information [Line Items]  
Title of 12(b) Security 3.375% Notes due 2027
Trading Symbol IBM 27F
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 0.300% Notes due 2028  
Document Information [Line Items]  
Title of 12(b) Security 0.300% Notes due 2028
Trading Symbol IBM 28B
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 1.750% Notes due 2028  
Document Information [Line Items]  
Title of 12(b) Security 1.750% Notes due 2028
Trading Symbol IBM 28A
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 1.500% Notes due 2029  
Document Information [Line Items]  
Title of 12(b) Security 1.500% Notes due 2029
Trading Symbol IBM 29
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 0.875% Notes due 2030  
Document Information [Line Items]  
Title of 12(b) Security 0.875% Notes due 2030
Trading Symbol IBM 30A
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 1.750% Notes due 2031  
Document Information [Line Items]  
Title of 12(b) Security 1.750% Notes due 2031
Trading Symbol IBM 31
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 3.625% Notes due 2031  
Document Information [Line Items]  
Title of 12(b) Security 3.625% Notes due 2031
Trading Symbol IBM 31B
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 0.650% Notes due 2032  
Document Information [Line Items]  
Title of 12(b) Security 0.650% Notes due 2032
Trading Symbol IBM 32A
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 1.250% Notes due 2034  
Document Information [Line Items]  
Title of 12(b) Security 1.250% Notes due 2034
Trading Symbol IBM 34
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 3.750% Notes due 2035  
Document Information [Line Items]  
Title of 12(b) Security 3.750% Notes due 2035
Trading Symbol IBM 35
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 4.875% Notes due 2038  
Document Information [Line Items]  
Title of 12(b) Security 4.875% Notes due 2038
Trading Symbol IBM 38
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 1.200% Notes due 2040  
Document Information [Line Items]  
Title of 12(b) Security 1.200% Notes due 2040
Trading Symbol IBM 40
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 4.000% Notes due 2043  
Document Information [Line Items]  
Title of 12(b) Security 4.000% Notes due 2043
Trading Symbol IBM 43
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 7.00% Debentures due 2025  
Document Information [Line Items]  
Title of 12(b) Security 7.00% Debentures due 2025
Trading Symbol IBM 25
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 6.22% Debentures due 2027  
Document Information [Line Items]  
Title of 12(b) Security 6.22% Debentures due 2027
Trading Symbol IBM 27
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 6.50% Debentures due 2028  
Document Information [Line Items]  
Title of 12(b) Security 6.50% Debentures due 2028
Trading Symbol IBM 28
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 5.875% Debentures due 2032  
Document Information [Line Items]  
Title of 12(b) Security 5.875% Debentures due 2032
Trading Symbol IBM 32D
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 7.00% Debentures due 2045  
Document Information [Line Items]  
Title of 12(b) Security 7.00% Debentures due 2045
Trading Symbol IBM 45
Security Exchange Name NYSE
NEW YORK STOCK EXCHANGE, INC. | 7.125% Debentures due 2096  
Document Information [Line Items]  
Title of 12(b) Security 7.125% Debentures due 2096
Trading Symbol IBM 96
Security Exchange Name NYSE
NYSE CHICAGO, INC. | Common Stock  
Document Information [Line Items]  
Title of 12(b) Security Capital stock, par value $.20 per share
Trading Symbol IBM
Security Exchange Name CHX
International Business M... (NYSE:IBM)
Historical Stock Chart
From Oct 2024 to Nov 2024 Click Here for more International Business M... Charts.
International Business M... (NYSE:IBM)
Historical Stock Chart
From Nov 2023 to Nov 2024 Click Here for more International Business M... Charts.