The earnings call reflected strong performance in software and free cash flow, driven by successful initiatives in AI and mainframe programs. However, there were challenges in consulting and infrastructure segments, along with broader macroeconomic concerns. The overall sentiment is optimistic with a positive outlook for 2025.

Company Guidance

During IBM's fourth quarter 2024 earnings call, the company highlighted its strong financial performance and provided detailed guidance for 2025. IBM reported a revenue growth of 3% for 2024 and generated $12.7 billion in free cash flow, marking its highest level in many years. The software segment saw a 9% growth, led by Red Hat with a 17% increase in the fourth quarter. Looking ahead to 2025, IBM expects revenue growth to exceed 5%, driven by a mix of software and infrastructure growth, with free cash flow projected at approximately $13.5 billion. The company anticipates software revenue to approach double-digit growth, consulting to achieve low-single-digit growth, and infrastructure to contribute about a point to overall revenue growth. IBM's technology initiatives, such as advancements in generative AI and strategic partnerships, are expected to bolster future performance.

Strong Revenue Growth and Cash Flow

IBM delivered revenue growth of 3% and $12.7 billion of free cash flow in 2024, marking the highest level of cash flow generation in many years. Software grew by 9% in 2024, surpassing the mid-single-digit target.

Record Performance in Software and Red Hat

Software saw an 11% revenue growth in the fourth quarter with Red Hat growing 17%. IBM's AI book of business reached over $5 billion, with significant contributions from Software and Consulting.

Successful Mainframe Program

IBM's z16 mainframe program was the most successful in history, with a 122% program-to-program growth and a 30% increase in installed MIPS.

Strong Free Cash Flow and Financial Flexibility

IBM generated $12.7 billion of free cash flow for the full year, marking a 14% growth. The company ended the year with $14.8 billion in cash, enhancing their financial flexibility.

Positive Outlook for 2025

IBM expects revenue growth to increase to 5% plus in 2025, with about $13.5 billion in free cash flow. Software revenue is expected to grow approaching double-digits.

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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
Apr 22, 2025	2025 (Q1)	1.42 / -	1.68	―	―	―
Jan 29, 2025	2024 (Q4)	3.78 / 3.92	3.87	1.29% (+0.05)
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)

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
Jan 29, 2025	$227.12	$256.56	+12.96%
Oct 23, 2024	$229.40	$215.25	-6.17%
Jul 24, 2024	$179.80	$187.58	+4.33%
Apr 24, 2024	$178.11	$163.41	-8.25%

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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