Technology
IBM RELEASES THIRD-QUARTER RESULTS
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Accelerated Software revenue growth, expanded gross profit margin, and strong free cash flow
ARMONK, N.Y., Oct. 23, 2024 /PRNewswire/ — IBM (NYSE: IBM) today announced third-quarter 2024 earnings results.
“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,” said Arvind Krishna, IBM chairman, president and chief executive officer. “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.”
Third-Quarter Highlights
Revenue
– Revenue of $15.0 billion, up 1 percent, up 2 percent at constant currency
– Software revenue up 10 percent
– Consulting revenue flat
– Infrastructure revenue down 7 percent
Profit
– Gross Profit Margin: GAAP: 56.3 percent, up 190 basis points; Operating (Non-GAAP):
57.5 percent, up 210 basis points
Cash Flow
– Year to date, net cash from operating activities of $9.1 billion; free cash flow of $6.6 billion
THIRD-QUARTER 2024 INCOME STATEMENT SUMMARY
GAAP results include impact of one-time, non-cash pension settlement charge (1)
Revenue
Gross
Profit
Gross
Profit
Margin
Pre-tax
Income/
(Loss) (1)
Pre-tax
Income
Margin (1)
Net
Income/
(Loss) (1)
Diluted
Earnings/
(Loss) Per
Share (1)
GAAP from
Continuing
Operations
$ 15.0 B
$ 8.4 B
56.3
%
$ (0.8) B
(5.4)
%
$ (0.3) B
$ (0.34)
Year/Year
1
%(2)
5
%
1.9
Pts
NM
-18.1
Pts
NM
NM
Operating
(Non-GAAP)
$ 8.6 B
57.5
%
$ 2.5 B
16.6
%
$ 2.2 B
$ 2.30
Year/Year
5
%
2.1
Pts
8
%
1.0
Pts
6
%
5
%
(1) 2024 GAAP results include the impact of a one-time, non-cash, pension settlement charge of $2.7 billion ($2.0 billion net of tax) related
to the transfer of a portion of the company’s U.S. defined benefit pension obligations and related plan assets to a third-party insurer,
announced in September 2024.
(2) 2% at constant currency.
“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,” said James Kavanaugh, IBM senior vice president and chief financial officer. “With our strong cash generation, we are well-positioned to continue investing for growth while returning value to shareholders through dividends.”
Segment Results for Third Quarter
Software — revenues of $6.5 billion, up 9.7 percent, up 9.6 percent at constant currency:
– Hybrid Platform & Solutions up 10 percent
— Red Hat up 14 percent
— Automation up 13 percent
— Data & AI up 5 percent
— Security down 1 percent
– Transaction Processing up 9 percent
Consulting — revenues of $5.2 billion, down 0.5 percent, down 0.2 percent at constant currency:
– Business Transformation up 2 percent
– Technology Consulting down 4 percent
– Application Operations down 1 percent
Infrastructure — revenues of $3.0 billion, down 7.0 percent, down 6.7 percent at constant currency:
– Hybrid Infrastructure down 9 percent
— IBM Z down 19 percent
— Distributed Infrastructure down 3 percent
– Infrastructure Support down 4 percent, down 3 percent at constant currency
Financing — revenues of $0.2 billion, down 2.5 percent, down 1.3 percent at constant currency
Cash Flow and Balance Sheet
In the third quarter, the company generated net cash from operating activities of $2.9 billion, down $0.2 billion year to year. IBM’s free cash flow was $2.1 billion, up $0.4 billion year to year. The company returned $1.5 billion to shareholders in dividends in the third quarter.
For the first nine months of the year, the company generated net cash from operating activities of $9.1 billion, down $0.4 billion year to year. IBM’s free cash flow was $6.6 billion, up $1.5 billion year to year.
IBM ended the third quarter with $13.7 billion of cash, restricted cash and marketable securities, up $0.3 billion from year-end 2023. Debt, including IBM Financing debt of $10.4 billion, totaled $56.6 billion, flat year to date.
Expectations
Revenue: The company expects fourth-quarter constant currency revenue growth consistent with the third quarter. At current foreign exchange rates, currency is expected to be about a half-point headwind to revenue growth in the quarter
Free cash flow: The company continues to expect more than $12 billion in free cash flow for the full year
Forward-Looking and Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this release may constitute forward-looking statements within the meaning of 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. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including, but not limited to, the following: a downturn in economic environment and client spending budgets; a failure of the company’s innovation initiatives; damage to the company’s reputation; risks from investing in growth opportunities; failure of the company’s intellectual property portfolio to prevent competitive offerings and the failure of the company to obtain necessary licenses; the company’s ability to successfully manage acquisitions, alliances and dispositions, including integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels; fluctuations in financial results; impact of local legal, economic, political, health and other conditions; the company’s failure to meet growth and productivity objectives; ineffective internal controls; the company’s use of accounting estimates; impairment of the company’s goodwill or amortizable intangible assets; the company’s ability to attract and retain key employees and its reliance on critical skills; impacts of relationships with critical suppliers; product quality issues; impacts of business with government clients; reliance on third party distribution channels and ecosystems; cybersecurity and data privacy considerations; adverse effects related to climate change and environmental matters; tax matters; legal proceedings and investigatory risks; the company’s pension plans; currency fluctuations and customer financing risks; impact of changes in market liquidity conditions and customer credit risk on receivables; potential failure of the separation of Kyndryl Holdings, Inc. to qualify for tax-free treatment; risk factors related to IBM securities; and other risks, uncertainties and factors discussed in the company’s Form 10-Qs, Form 10-K and in the company’s other filings with the U.S. Securities and Exchange Commission or in materials incorporated therein by reference.
Statements in this communication regarding the strategic acquisition that are forward-looking may include projections as to closing date for the transaction, the extent of, and the time necessary to obtain, the regulatory approvals required for the transaction, the anticipated benefits of the transaction, the impact of the transaction on IBM’s business, the synergies from the transaction, and the combined company’s future operating results.
Any forward-looking statement in this release speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements.
Presentation of Information in this Press Release
For generative AI, book of business includes Software transactional revenue, SaaS Annual Contract Value and Consulting signings. The generative AI book of business is further defined within Exhibit 99.2 in the Form 8-K that includes this press release.
In an effort to provide investors with additional information regarding the company’s results as determined by generally accepted accounting principles (GAAP), the company has also disclosed in this press release the following non-GAAP information, which management believes provides useful information to investors:
IBM results —
adjusting for currency (i.e., at constant currency);
presenting operating (non-GAAP) earnings per share amounts and related income statement items;
free cash flow;
adjusted EBITDA.
The rationale for management’s use of these non-GAAP measures is included in Exhibit 99.2 in the Form 8-K that includes this press release and is being submitted today to the SEC.
Conference Call and Webcast
IBM’s regular quarterly earnings conference call is scheduled to begin at 5:00 p.m. ET, today. The Webcast may be accessed via a link at https://www.ibm.com/investor/events/earnings-3q24. Presentation charts will be available shortly before the Webcast.
Financial Results Below (certain amounts may not add due to use of rounded numbers; percentages presented are calculated from the underlying whole-dollar amounts).
Contact: IBM
Sarah Meron, 347-891-1770
sarah.meron@ibm.com
Tim Davidson, 914-844-7847
tfdavids@us.ibm.com
INTERNATIONAL BUSINESS MACHINES CORPORATION
COMPARATIVE FINANCIAL RESULTS
(Unaudited; Dollars in millions except per share amounts)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023 (1)
2024
2023 (1)
REVENUE BY SEGMENT
Software
$ 6,524
$ 5,947
$ 19,162
$ 17,832
Consulting
5,152
5,178
15,517
15,601
Infrastructure
3,042
3,272
9,764
9,988
Financing
181
186
543
566
Other
68
170
214
491
TOTAL REVENUE
14,968
14,752
45,199
44,479
GROSS PROFIT
8,420
8,023
25,112
24,033
GROSS PROFIT MARGIN
Software
83.2
%
82.3
%
83.1
%
82.3
%
Consulting
28.4
%
27.6
%
26.7
%
26.3
%
Infrastructure
55.0
%
53.7
%
55.3
%
54.0
%
Financing
47.2
%
49.7
%
48.2
%
47.5
%
TOTAL GROSS PROFIT MARGIN
56.3
%
54.4
%
55.6
%
54.0
%
EXPENSE AND OTHER INCOME
S,G&A
4,911
4,458
14,823
14,212
R,D&E
1,876
1,685
5,512
5,027
Intellectual property and custom development income
(238)
(190)
(696)
(618)
Other (income) and expense
2,244
(215)
1,694
(721)
Interest expense
429
412
1,288
1,202
TOTAL EXPENSE AND OTHER INCOME
9,222
6,150
22,621
19,102
INCOME/(LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
(802)
1,873
2,491
4,931
Pre-tax margin
(5.4)
%
12.7
%
5.5
%
11.1
%
Provision for/(Benefit from) income taxes
(485)
159
(597)
702
Effective tax rate
60.4
%
8.5
%
(24.0)
%
14.2
%
INCOME/(LOSS) FROM CONTINUING OPERATIONS
$ (317)
$ 1,714
$ 3,088
$ 4,229
DISCONTINUED OPERATIONS
Income/ (loss) from discontinued operations, net of taxes
(13)
(10)
21
(15)
NET INCOME/(LOSS) (2)
$ (330)
$ 1,704
$ 3,109
$ 4,214
EARNINGS/(LOSS) PER SHARE OF COMMON STOCK (2)
Assuming Dilution
Continuing Operations
$ (0.34)
$ 1.86
$ 3.30
$ 4.59
Discontinued Operations
$ (0.01)
$ (0.01)
$ 0.02
$ (0.02)
TOTAL
$ (0.36)
$ 1.84
$ 3.32
$ 4.58
Basic
Continuing Operations
$ (0.34)
$ 1.88
$ 3.36
$ 4.65
Discontinued Operations
$ (0.01)
$ (0.01)
$ 0.02
$ (0.02)
TOTAL
$ (0.36)
$ 1.87
$ 3.38
$ 4.63
WEIGHTED-AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING (M’s)
Assuming Dilution
923.6
923.7
935.4
920.3
Basic
923.6
912.8
920.3
910.1
____________________
(1) Recast to reflect January 2024 segment changes.
(2) 2024 includes the impact of a one-time, non-cash, pension settlement charge of $2.7 billion ($2.0 billion net of tax).
INTERNATIONAL BUSINESS MACHINES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(Dollars in Millions)
At
September 30,
2024
At
December 31,
2023
ASSETS:
Current Assets:
Cash and cash equivalents
$ 13,197
$ 13,068
Restricted cash
17
21
Marketable securities
505
373
Notes and accounts receivable – trade, net
5,390
7,214
Short-term financing receivables, net
5,765
6,793
Other accounts receivable, net
928
640
Inventories
1,367
1,161
Deferred costs
966
998
Prepaid expenses and other current assets
2,408
2,639
Total Current Assets
30,543
32,908
Property, plant and equipment, net
5,614
5,501
Operating right-of-use assets, net
3,355
3,220
Long-term financing receivables, net
4,931
5,766
Prepaid pension assets
7,975
7,506
Deferred costs
788
842
Deferred taxes
6,943
6,656
Goodwill
61,092
60,178
Intangibles, net
11,090
11,036
Investments and sundry assets
2,009
1,626
Total Assets
$ 134,339
$ 135,241
LIABILITIES:
Current Liabilities:
Taxes
$ 1,584
$ 2,270
Short-term debt
3,599
6,426
Accounts payable
3,274
4,132
Deferred income
12,882
13,451
Operating lease liabilities
790
820
Other liabilities
6,725
7,022
Total Current Liabilities
28,853
34,122
Long-term debt
52,980
50,121
Retirement-related obligations
10,366
10,808
Deferred income
3,666
3,533
Operating lease liabilities
2,757
2,568
Other liabilities
11,186
11,475
Total Liabilities
109,809
112,628
EQUITY:
IBM Stockholders’ Equity:
Common stock
61,013
59,643
Retained earnings
149,789
151,276
Treasury stock – at cost
(169,935)
(169,624)
Accumulated other comprehensive income/(loss)
(16,418)
(18,761)
Total IBM Stockholders’ Equity
24,448
22,533
Noncontrolling interests
82
80
Total Equity
24,530
22,613
Total Liabilities and Equity
$ 134,339
$ 135,241
INTERNATIONAL BUSINESS MACHINES CORPORATION
CASH FLOW ANALYSIS
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(Dollars in Millions)
2024
2023
2024
2023
Net Cash from Operations per GAAP
$ 2,881
$ 3,055
$ 9,115
$ 9,468
Less: change in IBM Financing receivables
873
1,092
1,824
3,119
Capital Expenditures, net
55
(282)
(705)
(1,226)
Free Cash Flow
2,064
1,682
6,586
5,123
Acquisitions
(2,513)
(4,589)
(2,748)
(4,945)
Divestitures
2
(10)
705
(4)
Dividends
(1,542)
(1,515)
(4,601)
(4,522)
Non-Financing Debt
(383)
(942)
693
7,572
Other (includes IBM Financing net receivables and debt)
131
41
(379)
(1,068)
Change in Cash, Cash Equivalents, Restricted Cash and Short-term
Marketable Securities
$ (2,241)
$ (5,333)
$ 257
$ 2,156
INTERNATIONAL BUSINESS MACHINES CORPORATION
CASH FLOW
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(Dollars in Millions)
2024
2023
2024
2023
Net Income/(loss) from Operations
$ (330)
$ 1,704
$ 3,109
$ 4,214
Pension Settlement Charge
2,725
–
2,725
–
Depreciation/Amortization of Intangibles (1)
1,268
1,093
3,555
3,243
Stock-based Compensation
330
286
966
843
Operating assets and liabilities/Other, net (2)
(1,984)
(1,119)
(3,063)
(1,952)
IBM Financing A/R
873
1,092
1,824
3,119
Net Cash Provided by Operating Activities
$ 2,881
$ 3,055
$ 9,115
$ 9,468
Capital Expenditures, net of payments & proceeds (3)
55
(282)
(705)
(1,226)
Divestitures, net of cash transferred
2
(10)
705
(4)
Acquisitions, net of cash acquired
(2,513)
(4,589)
(2,748)
(4,945)
Marketable Securities / Other Investments, net
869
2,927
(810)
(3,732)
Net Cash Provided by/(Used in) Investing Activities
$ (1,587)
$ (1,953)
$ (3,558)
$ (9,906)
Debt, net of payments & proceeds
(1,259)
(1,550)
(777)
4,619
Dividends
(1,542)
(1,515)
(4,601)
(4,522)
Financing – Other
35
(67)
(26)
(252)
Net Cash Provided by/(Used in) Financing Activities
$ (2,766)
$ (3,132)
$ (5,403)
$ (154)
Effect of Exchange Rate changes on Cash
207
(119)
(29)
(120)
Net Change in Cash, Cash Equivalents and Restricted Cash
$ (1,264)
$ (2,149)
$ 125
$ (713)
____________________
(1) Includes operating lease right-of-use assets amortization.
(2) Includes a $0.7 billion tax effect associated with the one-time, non-cash pension settlement charge in the third-quarter 2024.
(3) 2024 includes proceeds of $0.4 billion from the sale of certain QRadar SaaS assets.
INTERNATIONAL BUSINESS MACHINES CORPORATION
GAAP NET INCOME TO ADJUSTED EBITDA RECONCILIATION
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(Dollars in Billions)
2024
2023
Yr/Yr
2024
2023
Yr/Yr
Net Income/(Loss) as reported (GAAP) (1)
$ (0.3)
$ 1.7
$ (2.0)
$ 3.1
$ 4.2
$ (1.1)
Less: Income/(loss) from discontinued operations, net of tax
0.0
0.0
0.0
0.0
0.0
0.0
Income/(Loss) from continuing operations
(0.3)
1.7
(2.0)
3.1
4.2
(1.1)
Provision for/(Benefit from) income taxes from continuing ops.
(0.5)
0.2
(0.6)
(0.6)
0.7
(1.3)
Pre-tax income/(loss) from continuing operations (GAAP)
(0.8)
1.9
(2.7)
2.5
4.9
(2.4)
Non-operating adjustments (before tax)
Acquisition-related charges (2)
0.5
0.4
0.1
1.5
1.2
0.2
Non-operating retirement-related costs/(income) (1)
2.8
0.0
2.8
3.0
0.0
3.0
Operating (non-GAAP) pre-tax income/(loss) from continuing ops.
2.5
2.3
0.2
6.9
6.1
0.8
Net interest expense
0.3
0.3
0.0
0.7
0.7
0.0
Depreciation/Amortization of non-acquired intangible assets
0.7
0.7
0.0
2.1
2.0
0.1
Stock-based compensation
0.3
0.3
0.0
1.0
0.8
0.1
Workforce rebalancing charges
0.3
0.0
0.3
0.7
0.4
0.3
Corporate (gains) and charges (3)
(0.4)
0.0
(0.3)
(0.6)
0.0
(0.6)
Adjusted EBITDA
$ 3.8
$ 3.5
$ 0.2
$ 10.8
$ 10.1
$ 0.8
____________________
(1) 2024 includes the impact of a one-time, non-cash pension settlement charge of $2.7 billion ($2.0 billion net of tax).
(2) Primarily consists of amortization of acquired intangible assets.
(3) Corporate (gains) and charges primarily consists of unique corporate actions such as gains on divestitures and asset sales (e.g., certain QRadar SaaS assets).
INTERNATIONAL BUSINESS MACHINES CORPORATION
SEGMENT DATA
(Unaudited)
Three Months Ended September 30, 2024
(Dollars in Millions)
Software
Consulting
Infrastructure
Financing
Revenue
$ 6,524
$ 5,152
$ 3,042
$ 181
Segment Profit
$ 1,969
$ 559
$ 422
$ 86
Segment Profit Margin
30.2
%
10.9
%
13.9
%
47.5
%
Change YTY Revenue
9.7
%
(0.5)
%
(7.0)
%
(2.5)
%
Change YTY Revenue – Constant Currency
9.6
%
(0.2)
%
(6.7)
%
(1.3)
%
Three Months Ended September 30, 2023 (1)
(Dollars in Millions)
Software
Consulting
Infrastructure
Financing
Revenue
$ 5,947
$ 5,178
$ 3,272
$ 186
Segment Profit
$ 1,722
$ 566
$ 490
$ 91
Segment Profit Margin
29.0
%
10.9
%
15.0
%
49.2
%
__________________
(1) Recast to reflect January 2024 segment changes.
Nine Months Ended September 30, 2024
(Dollars in Millions)
Software
Consulting
Infrastructure
Financing
Revenue
$ 19,162
$ 15,517
$ 9,764
$ 543
Segment Profit
$ 5,582
$ 1,447
$ 1,387
$ 254
Segment Profit Margin
29.1
%
9.3
%
14.2
%
46.9
%
Change YTY Revenue
7.5
%
(0.5)
%
(2.3)
%
(4.1)
%
Change YTY Revenue – Constant Currency
8.0
%
1.1
%
(1.2)
%
(3.1)
%
Nine Months Ended September 30, 2023 (1)
(Dollars in Millions)
Software
Consulting
Infrastructure
Financing
Revenue
$ 17,832
$ 15,601
$ 9,988
$ 566
Segment Profit
$ 4,850
$ 1,476
$ 1,529
$ 256
Segment Profit Margin
27.2
%
9.5
%
15.3
%
45.2
%
____________________
(1) Recast to reflect January 2024 segment changes.
INTERNATIONAL BUSINESS MACHINES CORPORATION
U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION
(Unaudited; Dollars in millions except per share amounts)
Three Months Ended September 30, 2024
Continuing Operations
GAAP
Acquisition-
Related
Adjustments (1)
Retirement-
Related
Adjustments (2)
Tax
Reform
Impacts
Operating
(Non-GAAP)
Gross Profit
$ 8,420
$ 192
$ —
$ —
$ 8,612
Gross Profit Margin
56.3
%
1.3
pts
—
pts
—
pts
57.5
%
S,G&A
$ 4,911
$ (300)
$ —
$ —
$ 4,611
Other (Income) & Expense
2,244
—
(2,797)
—
(553)
Total Expense & Other (Income)
9,222
(300)
(2,797)
—
6,125
Pre-tax Income/(Loss) from Continuing Operations
(802)
492
2,797
—
2,487
Pre-tax Income Margin from Continuing Operations
(5.4)
%
3.3
pts
18.7
pts
—
pts
16.6
%
Provision for/(Benefit from) Income Taxes (3)
$ (485)
$ 119
$ 700
$ (2)
$ 332
Effective Tax Rate
60.4
%
(7.2)
pts
(39.8)
pts
(0.1)
pts
13.4
%
Income/(Loss) from Continuing Operations
$ (317)
$ 373
$ 2,097
$ 2
$ 2,155
Income Margin from Continuing Operations
(2.1)
%
2.5
pts
14.0
pts
0.0
pts
14.4
%
Diluted Earnings/(Loss) Per Share: Continuing
Operations (4)
$ (0.34)
$ 0.40
$ 2.27
$ 0.00
$ 2.30
Three Months Ended September 30, 2023
Continuing Operations
GAAP
Acquisition-
Related
Adjustments (1)
Retirement-
Related
Adjustments (2)
Tax
Reform
Impacts
Operating
(Non-GAAP)
Gross Profit
$ 8,023
$ 162
$ —
$ —
$ 8,185
Gross Profit Margin
54.4
%
1.1
pts
—
pts
—
pts
55.5
%
S,G&A
$ 4,458
$ (277)
$ —
$ —
$ 4,181
Other (Income) & Expense
(215)
0
12
—
(203)
Total Expense & Other (Income)
6,150
(277)
12
—
5,885
Pre-tax Income/(Loss) from Continuing Operations
1,873
438
(12)
—
2,299
Pre-tax Income Margin from Continuing Operations
12.7
%
3.0
pts
(0.1)
pts
—
pts
15.6
%
Provision for/(Benefit from) Income Taxes (3)
$ 159
$ 99
$ (14)
$ 24
$ 268
Effective Tax Rate
8.5
%
2.7
pts
(0.5)
pts
1.0
pts
11.7
%
Income/(Loss) from Continuing Operations
$ 1,714
$ 340
$ 1
$ (24)
$ 2,031
Income Margin from Continuing Operations
11.6
%
2.3
pts
0.0
pts
(0.2)
pts
13.8
%
Diluted Earnings/(Loss) Per Share: Continuing
Operations
$ 1.86
$ 0.37
$ 0.00
$ (0.03)
$ 2.20
____________________
(1) Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax charges related to acquisition integration and pre-closing charges, such as financing costs.
(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan curtailments/settlements and pension insolvency costs and other costs. 2024 also includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion ($2.0 billion net of tax).
(3) Tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the As Reported pre-tax income under ASC 740, which employs an annual effective tax rate method to the results.
(4) Operating (non-GAAP) earnings per share was calculated using 938.4 million shares, which includes 14.9 million 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.
INTERNATIONAL BUSINESS MACHINES CORPORATION
U.S. GAAP TO OPERATING (Non-GAAP) RESULTS RECONCILIATION
(Unaudited; Dollars in millions except per share amounts)
Nine Months Ended September 30, 2024
Continuing Operations
GAAP
Acquisition-
Related
Adjustments (1)
Retirement-
Related
Adjustments (2)
Tax
Reform
Impacts (3)
Operating
(Non-GAAP)
Gross Profit
$ 25,112
$ 533
$ —
$ —
$ 25,645
Gross Profit Margin
55.6
%
1.2
pts
—
pts
—
pts
56.7
%
S,G&A
$ 14,823
$ (854)
$ —
$ —
$ 13,969
Other (Income) & Expense
1,694
(68)
(2,991)
—
(1,364)
Total Expense & Other (Income)
22,621
(922)
(2,991)
—
18,709
Pre-tax Income/(Loss) from Continuing Operations
2,491
1,454
2,991
—
6,936
Pre-tax Income Margin from Continuing Operations
5.5
%
3.2
pts
6.6
pts
—
pts
15.3
%
Provision for/(Benefit from) Income Taxes (4)
$ (597)
$ 374
$ 731
$ 434
$ 942
Effective Tax Rate
(24.0)
%
10.4
pts
20.9
pts
6.3
pts
13.6
%
Income/(Loss) from Continuing Operations
$ 3,088
$ 1,081
$ 2,259
$ (434)
$ 5,994
Income Margin from Continuing Operations
6.8
%
2.4
pts
5.0
pts
(1.0)
pts
13.3
%
Diluted Earnings/(Loss) Per Share: Continuing
Operations
$ 3.30
$ 1.16
$ 2.42
$ (0.46)
$ 6.41
Nine Months Ended September 30, 2023
Continuing Operations
GAAP
Acquisition-
Related
Adjustments (1)
Retirement-
Related
Adjustments (2)
Tax
Reform
Impacts
Operating
(Non-GAAP)
Gross Profit
$ 24,033
$ 460
$ —
$ —
$ 24,492
Gross Profit Margin
54.0
%
1.0
pts
—
pts
—
pts
55.1
%
S,G&A
$ 14,212
$ (768)
$ —
$ —
$ 13,444
Other (Income) & Expense
(721)
(2)
16
—
(707)
Total Expense & Other (Income)
19,102
(770)
16
—
18,348
Pre-tax Income from Continuing Operations
4,931
1,229
(16)
—
6,144
Pre-tax Income Margin from Continuing
Operations
11.1
%
2.8
pts
0.0
pts
—
pts
13.8
%
Provision for/(Benefit from) Income Taxes (4)
$ 702
$ 277
$ (27)
$ (91)
$ 861
Effective Tax Rate
14.2
%
1.7
pts
(0.4)
pts
(1.5)
pts
14.0
%
Income from Continuing Operations
$ 4,229
$ 953
$ 11
$ 91
$ 5,283
Income Margin from Continuing Operations
9.5
%
2.1
pts
0.0
pts
0.2
pts
11.9
%
Diluted Earnings Per Share: Continuing
Operations
$ 4.59
$ 1.04
$ 0.01
$ 0.10
$ 5.74
____________________
(1) Includes amortization of purchased intangible assets, in process R&D, transaction costs, applicable restructuring and related expenses, tax charges related to acquisition integration and pre-closing charges, such as financing costs. 2024 also includes a loss of $68 million on foreign exchange derivative contracts entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG.
(2) Includes amortization of prior service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan curtailments/settlements and pension insolvency costs and other costs. 2024 also includes the impact of a one-time, non-cash, pre-tax pension settlement charge of $2.7 billion ($2.0 billion net of tax).
(3) 2024 includes a net benefit from discrete tax events.
(4) Tax impact on operating (non-GAAP) pre-tax income from continuing operations is calculated under the same accounting principles applied to the As Reported pre-tax income under ASC 740, which employs an annual effective tax rate method to the results.
INTERNATIONAL BUSINESS MACHINES CORPORATION
GAAP OPERATING CASH FLOW TO ADJUSTED EBITDA RECONCILIATION
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(Dollars in Billions)
2024
2023
2024
2023
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 (1)
(2.0)
(1.2)
(3.5)
(2.3)
Adjusted EBITDA
$ 3.8
$ 3.5
$ 10.8
$ 10.1
____________________
(1) Other assets and liabilities/other, net mainly consists of operating assets and liabilities/Other, net in the Cash Flow chart, workforce
rebalancing charges, non-operating impacts and corporate (gains) and charges.
View original content to download multimedia:https://www.prnewswire.com/news-releases/ibm-releases-third-quarter-results-302285120.html
SOURCE IBM
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Revenues at 17.5731 trillion won, operating profit at 7.03 trillion won, net profit at 5.7534 trillion won – all reaching new recordsAchieving best-ever quarterly performance with increasing high value-added product sales based on no.1 AI Memory technologyStrong demand of memory for AI servers – HBM’s share of DRAM revenues in Q3 marks 30% and forecast to be 40% in Q4Company to lead the global AI memory market again next year promoting long-term growth by securing both business stability and profitability
SEOUL, South Korea, Oct. 23, 2024 /PRNewswire/ — SK hynix Inc. (or “the company”, www.skhynix.com) announced today that it recorded 17.5731 trillion won in revenues, 7.03 trillion won in operating profit (with an operating margin of 40%), and 5.7534 trillion won in net profit (with a net margin of 33%) in the third quarter this year.
Quarter revenues marked all-time high, exceeding the previous record of 16.4233 trillion won in the second quarter of this year by more than 1 trillion won. Operating profit and net profit also far exceeded the record of 6.4724 trillion won and 4.6922 trillion won in the third quarter of 2018 during the semiconductor super boom.
SK hynix emphasized that the demand for AI memory continued to be strong centered on data center customers, and the company marked its highest revenue since its foundation by expanding sales of premium products such as HBM and eSSD. In particular, HBM sales showed excellent growth, up more than 70% from the previous quarter and more than 330% from the same period last year.
As sales increased mainly on highly profitable premium products, the average selling price (ASP) of both DRAM and NAND rose in the mid 10% range compared to the previous quarter, which made the company mark the highest operating profit.
While the demand of memory for AI servers such as HBM and eSSD has grown noticeably this year, the company predicts that this trend will continue next year. This is because generative AI is developing into a multi-modal1 form and global big tech companies continue to invest to develop artificial general intelligence (AGI)2.
1Multi-modal: AI service that can understand multiple complex information such as text, photos, voice, video, etc.
2Artificial General Intelligence: Artificial intelligence that implements human-like or higher intelligence with a computer
SK hynix also forecasts that the PC and mobile product markets, which had been slow to recover demand compared to memory for AI servers, will be on a steady growth path as well next year as AI memories optimized for each device are released.
As a result, the company will continue to focus on profitability by increasing sales centered on high value-added products based on its world-leading technology in AI memory.
In the DRAM area, SK hynix is continuing the rapid transition from existing HBM3 to HBM3E 8-layer products. The company also plans to start supplying 12-layer HBM3E products, which were mass-produced last month, in the fourth quarter as scheduled. This makes HBM sales, which accounted for 30% of total DRAM revenues in the third quarter, expected to reach 40% in the fourth quarter.
For NAND, the company plans to expand sales of high-capacity eSSD, which is rapidly increasing market demand, while focusing on investment efficiency and production optimization.
“SK hynix has solidified its position as the world’s No.1 AI memory company by achieving the highest business performance ever in the third quarter of this year.” said Kim Woohyun, Vice President and Chief Financial Officer (CFO) at SK hynix. “We will continue to maximize profitability while securing stable revenues by taking flexible product and supply strategies in line with market demand.”
3Q24 Financial Results (K-IFRS)
*Unit: Billion KRW
3Q24
QoQ
YoY
2Q24
Change
3Q23
Change
Revenues
17,573.1
16,423.3
7 %
9,066.2
94 %
Operating
Profit
7,030
5,468.5
29 %
-1,792
Turn to profit
Operating
Margin
40 %
33 %
7%p
-20 %
60%p
Net Income
5,753.4
4,120
40 %
-2,184.7
Turn to profit
Financial information of the earnings is based on K-IFRSPlease note that the financial results discussed herein are preliminary and speak only as of October 24, 2024. Readers should not assume that this information remains operative at a later time.
About SK hynix Inc.
SK hynix Inc., headquartered in Korea, is the world’s top tier semiconductor supplier offering Dynamic Random Access Memory chips (“DRAM”), flash memory chips (“NAND flash”) and CMOS Image Sensors (“CIS”) for a wide range of distinguished customers globally. The Company’s shares are traded on the Korea Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about SK hynix is available at www.skhynix.com, news.skhynix.com.
View original content:https://www.prnewswire.com/news-releases/sk-hynix-announces-3q24-financial-results-302285211.html
SOURCE SK hynix Inc.
Technology
The Wedding Services market is projected to grow by USD 125 Billion from 2024-2028, driven by increased wedding spending and AI’s impact on market trends – Technavio
Published
2 hours agoon
October 23, 2024By
NEW YORK, Oct. 23, 2024 /PRNewswire/ — Report on how AI is redefining market landscape – The Global Wedding Services Market size is estimated to grow by USD 125 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of 5.44% during the forecast period. Increased spending on weddings is driving market growth, with a trend towards increase in smartphone momentum. However, threat from open-source event wedding management software poses a challenge – Key market players include 7x Weddings Pvt. Ltd., A Charming Fete, Augusta Wedding Planning, Bridal Bliss Inc., Colin Cowie Lifestyle, David Stark Design, Deer Creek Valley Ranch Management LLC, EVENTURES, Fallon carter, Joy Inc., JZ Events, Lindsay Landman Events, Marry Me Wedding Planners Private Ltd., Nordic Adventure, Panache Events Pvt Ltd., Shaadi Squad, SK Jaipur Decoration, Tamarind, VIP Hosting, WeddingSutra.com India Pvt. Ltd, Zola Inc., and Zzeeh Events and Weddings.
Key insights into market evolution with AI-powered analysis. Explore trends, segmentation, and growth drivers- View the snapshot of this report
Wedding Services Market Scope
Report Coverage
Details
Base year
2023
Historic period
2018 – 2022
Forecast period
2024-2028
Growth momentum & CAGR
Accelerate at a CAGR of 5.44%
Market growth 2024-2028
USD 125 billion
Market structure
Fragmented
YoY growth 2022-2023 (%)
4.9
Regional analysis
APAC, North America, Europe, South America, and Middle East and Africa
Performing market contribution
APAC at 37%
Key countries
US, China, India, Canada, and UK
Key companies profiled
7x Weddings Pvt. Ltd., A Charming Fete, Augusta Wedding Planning, Bridal Bliss Inc., Colin Cowie Lifestyle, David Stark Design, Deer Creek Valley Ranch Management LLC, EVENTURES, Fallon carter, Joy Inc., JZ Events, Lindsay Landman Events, Marry Me Wedding Planners Private Ltd., Nordic Adventure, Panache Events Pvt Ltd., Shaadi Squad, SK Jaipur Decoration, Tamarind Global , VIP Hosting, WeddingSutra.com India Pvt. Ltd, Zola Inc., and Zzeeh Events and Weddings
Market Driver
The proliferation of smartphones and faster Internet speeds, facilitated by technologies like 4G, has significantly influenced how wedding services companies engage with their clients and employees. Social networking sites such as Twitter, LinkedIn, and Facebook have become essential tools for communication and networking in the industry. Wedding vendors develop mobile applications for iOS and Android devices to expand their market reach and remain competitive. Innovative smartphone features, like push notifications and emails, enable wedding service providers to promote new services and discounts to consumers, thereby increasing market awareness. These trends are expected to positively impact the global wedding services market throughout the forecast period.
The Wedding Services Market is thriving with trends that prioritize personalized celebrations and specialized services. Event planning companies offer customized experiences, from high-end venues and curated entertainment to sustainable options. Marriage rates continue to rise, with an increase in same-sex marriages and millennials seeking unique experiences. Wedding planners use digital platforms for offline bookings and social media influence for Instagram-worthy moments. Specialized services include customized catering, wedding stationery, and floral arrangements. Vendor management, budget tracking, and culinary experiences are essential planning duties. Economic stability and cultural traditions are key factors in brand differentiation. Wedding ambassadors help create memorable experiences, while wedding planning tools simplify the process. Trends include personalized experiences, sustainable options, and destination weddings. Staffing challenges and quality control are ongoing concerns. Customization and wedding trends continue to shape the industry, with an emphasis on creating unforgettable moments for couples.
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Market Challenges
The global wedding services market faces significant competition from open-source wedding management software vendors, such as eventplanner.net, WeddingWire, and Loverly. For instance, Loverly is a DIY event planning platform offering a free wedding planning checklist and guest list manager. These open-source solutions provide innovative technologies, which can serve as alternatives to commercial wedding services. Their availability on various platforms and zero purchasing cost makes them attractive to individuals planning high-ticket events. Consequently, open-source wedding management software is reducing the market share of proprietary wedding service vendors, posing a threat to the industry during the forecast period.The Wedding Services Market faces several challenges in today’s dynamic business environment. Customized weddings and unique experiences are in high demand among millennial couples, requiring wedding planners to offer flexible planning duties. Destination weddings and local weddings present logistical challenges, especially with economic stability and budget constraints. Social media influence drives the need for customization and quality control, while wedding trends and cultural traditions require brand differentiation. Staffing challenges arise from the need for skilled professionals in photography, catering, event decoration, transportation services, and wedding planning. Economic downturns and marriageable age variations impact booking patterns, with online and offline booking options essential for reaching a wider audience. Virtual weddings and wedding postponements add complexity to the planning process. Investment opportunities exist in full planning services, partial planning services, day of coordination, videography, and photography services. Developing strategies to address these challenges and capitalize on trends, such as second marriages and cultural shifts, can help businesses thrive in the competitive wedding services market.
Discover how AI is revolutionizing market trends- Get your access now!
Segment Overview
This wedding services market report extensively covers market segmentation by
Service 1.1 Catering service1.2 Gift service1.3 Decoration1.4 Event planning1.5 OthersType 2.1 Local wedding2.2 Destination weddingGeography 3.1 APAC3.2 North America3.3 Europe3.4 South America3.5 Middle East and Africa
1.1 Catering service- Catering services play a significant role in weddings, extending beyond meal preparation and service. Comprehensive caterers manage decoration and ambiance, table settings, and food presentation. They also consider dietary restrictions and food allergies among guests, as well as wedding themes. Alcoholic and non-alcoholic beverages are standard inclusions. The increasing popularity of catering services for weddings fuels market growth. Contract catering agreements, such as cost-plus, cost-plus guarantee, and fixed cost per head, offer accountability, convenience, and regulatory compliance. Therefore, catering services are a crucial wedding component, ensuring a successful event.
Download a Sample of our comprehensive report today to discover how AI-driven innovations are reshaping competitive dynamics
Research Analysis
The wedding services market is experiencing a demand due to the increasing number of millennial couples seeking customised and unique experiences for their big day. With economic stability on the rise, more couples are opting for destination weddings, both local and international, to create unforgettable memories. Customization is key, from personalised planning duties to bespoke catering services and photography. Social media influence plays a significant role in shaping wedding trends, with couples seeking inspiration and ideas from various platforms. However, staffing challenges and quality control can pose challenges for wedding planners. Brand differentiation is crucial in a competitive market, with cultural traditions and local weddings offering unique selling points. The average wedding cost continues to rise, leading to the popularity of partial planning services and virtual weddings. Wedding planning postponements due to unforeseen circumstances have become common, leading to increased booking and planning flexibility. Despite these challenges, the wedding services market remains a thriving industry, offering endless opportunities for creativity and innovation.
Market Research Overview
The wedding services market is experiencing a demand as millennial couples seek customised and unique experiences for their special day. From destination weddings to local weddings, the trend towards personalised celebrations continues to shape the industry. Economic stability and social media influence are key factors driving growth, with couples looking for high-quality services and brand differentiation. Wedding planning duties have become increasingly complex, with couples requiring full planning services, partial planning services, day of coordination, and vendor management. Quality control, staffing challenges, and budget constraints are major concerns for wedding service providers. Cultural traditions and same-sex marriages are also influencing the market, with specialized services and personalized celebrations becoming increasingly popular. Developmental strategies and investment opportunities abound, with economic downturns and marriage rate trends impacting the industry. Wedding planning tools, such as online booking platforms and digital platforms, are transforming the way couples plan their weddings. Virtual weddings and wedding postponements have also become common due to the pandemic. Catering services, photography, videography, event decoration, transportation services, and wedding planning services are all essential components of a successful wedding. Custom menus, floral arrangements, wedding stationery, curated entertainment, and sustainable options are some of the trends shaping the market. High-end venues and culinary experiences continue to be popular, with an emphasis on creating Instagram-worthy moments and personalised experiences for couples and their guests.
Table of Contents:
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation
ServiceCatering ServiceGift ServiceDecorationEvent PlanningOthersTypeLocal WeddingDestination WeddingGeographyAPACNorth AmericaEuropeSouth AmericaMiddle East And Africa
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix
About Technavio
Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.
With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.
Contacts
Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: media@technavio.com
Website: www.technavio.com/
View original content to download multimedia:https://www.prnewswire.com/news-releases/the-wedding-services-market-is-projected-to-grow-by-usd-125-billion-from-2024-2028-driven-by-increased-wedding-spending-and-ais-impact-on-market-trends—technavio-302284192.html
SOURCE Technavio
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AI Commerce Inc. Announces 2024 Sushi Hackathon in Silicon Valley Featuring Generative AI Innovation
Published
2 hours agoon
October 23, 2024By
Key Takeaways:
Top talent from Stanford, UC Berkeley, and GAFAM come together to drive transformative innovation in business through generative AI. Audrey Tang, Taiwan’s Digital Minister, will deliver the keynote address. Winners will receive $30,000, a sushi experience by renowned Japanese chef, and a study trip to Japan.
SILICON VALLEY, Calif., Oct. 23, 2024 /PRNewswire/ — AI Commerce Inc. (Headquarters: Palo Alto, CA; CEO: Jun Horata) has announced the 2024 Sushi Hackathon, to be held in Silicon Valley on November 3rd. This event will gather top talent to showcase cutting-edge AI-driven solutions using generative AI, designed to improve productivity and tackle complex business challenges across various industries.
Global Talent to Compete in Generative AI Innovation
The Sushi Hackathon will feature student teams from Stanford University, UC Berkeley, and others, along with junior engineers from global leaders like Google, Meta, and Amazon. With only 20 slots, over 280 teams have applied, demonstrating strong interest in the intersection of AI and business. Participants will collaborate in a highly competitive setting to revolutionize business efficiency and showcase the potential of AI technology.
Audrey Tang to Share Insights on the Future of AI and Society
A key highlight of the Sushi Hackathon will be a keynote address by Audrey Tang, Taiwan’s digital policy leader, renowned for her expertise in programming and policy, which has made her a prominent figure in AI and digital innovation. Tang’s speech will delve into how AI technology can transform societies and shape the future, inspiring to both participants and attendees.
Winners to Be Rewarded with an Exclusive Sushi Experience
In addition to prize money and the prestige of winning, the Sushi Hackathon’s top team will be treated to a once-in-a-lifetime sushi dinner crafted by Chef Yuichi Arai, flown in from Japan for this special occasion. This unique reward aims to celebrate the team’s AI innovation while offering them a memorable, creative culinary journey.
About AI Commerce inc.
AI Commerce Inc. is a U.S.-based retail DX and e-commerce platform with a global presence. Leveraging generative AI, the company delivers cutting-edge omnichannel solutions by integrating Silicon Valley’s technology, Japan’s production expertise, and India’s system development strengths. The company leads transformative innovation in brand e-commerce, reshaping profit models and driving economic growth across Southeast Asia, India, and beyond.
Media Contact:
Denise Styerwalt
Trier and Company
denise@triercompany.com
408-406-9726
View original content to download multimedia:https://www.prnewswire.com/news-releases/ai-commerce-inc-announces-2024-sushi-hackathon-in-silicon-valley-featuring-generative-ai-innovation-302285176.html
SOURCE AI Commerce Inc.
SK hynix Announces 3Q24 Financial Results
The Wedding Services market is projected to grow by USD 125 Billion from 2024-2028, driven by increased wedding spending and AI’s impact on market trends – Technavio
AI Commerce Inc. Announces 2024 Sushi Hackathon in Silicon Valley Featuring Generative AI Innovation
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