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Jun 30, 2024
IBM Q2 2024 Earnings Report
IBM's Q2 2024 earnings were released, revealing accelerated revenue growth driven by Software and an increased full-year free cash flow expectation.
Key Takeaways
IBM reported a strong second quarter, exceeding expectations with growth in both revenue and free cash flow. The company's focus on enterprise AI and generative AI, with the watsonx platform, has contributed to a growing book of business. IBM is raising its full-year free cash flow outlook to more than $12 billion.
Revenue increased by 2 percent, and 4 percent at constant currency.
Software revenue was up 7 percent, or 8 percent at constant currency.
Consulting revenue decreased by 1 percent, but increased 2 percent at constant currency.
Free cash flow increased, leading to an increased full-year free cash flow expectation to over $12 billion.
Forward Guidance
IBM expects constant currency revenue growth consistent with its mid-single digit model and now expects more than $12 billion in free cash flow.
Positive Outlook
- The company continues to expect constant currency revenue growth consistent with its mid-single digit model.
- IBM now expects more than $12 billion in free cash flow.
- Continued execution on strategy
- Strong cash generation enables investments in innovation
- Returning value to shareholders through dividends
Challenges Ahead
- Currency is expected to be about a one to two-point headwind to revenue growth
- Downturn in economic environment and client spending budgets
- Failure of the company’s innovation initiatives
- Damage to the company’s reputation
Historical Earnings Impact
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Avg. Return Before/After Earnings
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