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IBM Reports 2021 First-Quarter Results

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Growing Hybrid Cloud Platform Adoption; Return to Revenue Growth; Strong Cash Flow


First Quarter:

  • GAAP EPS from continuing operations of $1.06; Operating (non-GAAP) EPS of $1.77
  • Revenue of $17.7 billion, up 1 percent (down 2 percent adjusting for currency)
    -- Cloud & Cognitive Software up 4 percent (up 1 percent adjusting for currency)
    -- Systems up 4 percent (up 2 percent adjusting for currency)
    -- Global Business Services up 2 percent (down 1 percent adjusting for currency)
  • Total cloud revenue of $6.5 billion, up 21 percent (up 18 percent adjusting for divested businesses and currency) 
    -- Cloud revenue of $26.3 billion over last 12 months, up 19 percent (up 18 percent adjusting for divested businesses and currency)
  • Red Hat revenue up 17 percent (up 15 percent adjusting for currency), normalized for historical comparability
  • GAAP gross profit margin of 46.3 percent, up 120 basis points; Operating (non-GAAP) gross profit margin of 47.3 percent, up 110 basis points
  • Net cash from operating activities of $4.9 billion, up $0.4 billion; adjusted free cash flow of $2.2 billion, up $0.8 billion 
    --  Over last 12 months: Net cash from operating activities of $18.6 billion; adjusted free cash flow of $11.6 billion
  • Debt reduced by $5.1 billion since year end 2020

ARMONK, N.Y., April 19, 2021 - IBM today announced first-quarter 2021 earnings results.

“Strong performance this quarter in cloud, driven by increasing client adoption of our hybrid cloud platform, and growth in software and consulting enabled us to get off to a solid start for the year," said Arvind Krishna, IBM chairman and chief executive officer.  "While we have more work to do, we are confident we can achieve full-year revenue growth and meet our adjusted free cash flow target in 2021.”




























GAAP from Continuing Operations






























Operating (Non-GAAP)





























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“In the first quarter we continued to improve the fundamentals of our business model," said James Kavanaugh, IBM senior vice president and chief financial officer.  "With strong cash generation and disciplined financial management, we increased investments in our hybrid cloud and AI capabilities, while significantly deleveraging in the quarter and supporting our commitment to a secure and growing dividend.” 

Cash Flow and Balance Sheet

In the first quarter, the company generated net cash from operating activities of $4.9 billion, or $2.1 billion excluding Global Financing receivables.  IBM’s free cash flow was $1.5 billion, which includes $0.6 billion of cash impacts from the company’s structural actions initiated in the fourth quarter of 2020 and the transaction costs associated with the separation of the managed infrastructure services business.  IBM’s adjusted free cash flow, excluding these cash impacts, was $2.2 billion.  The company returned $1.5 billion to shareholders in dividends.

Over the last 12 months, the company generated net cash from operating activities of $18.6 billion.  IBM’s free cash flow for the last 12 months was $11.0 billion.  The company’s adjusted free cash flow, excluding cash impacts as described above, was $11.6 billion.

IBM ended the first quarter with $11.3 billion of cash on hand (includes marketable securities), down $3.0 billion from year-end 2020.  Debt, including Global Financing debt of $18.3 billion, totaled $56.4 billion, down $5.1 billion since the end of 2020, and down $16.6 billion since closing the Red Hat acquisition. 

Segment Results for First Quarter

  • Cloud & Cognitive Software (includes Cloud & Data Platforms, Cognitive Applications and Transaction Processing Platforms) — revenues of $5.4 billion, up 3.8 percent (up 0.8 percent adjusting for currency).  Cloud & Data Platforms grew 13 percent (up 10 percent adjusting for currency), led by the company’s hybrid cloud platform and Cloud Pak growth.  Cognitive Applications grew 4 percent (up 2 percent adjusting for currency), led by growth in Security.  Transaction Processing Platforms declined 12 percent (down 15 percent adjusting for currency).  Cloud revenue up 38 percent (up 34 percent adjusting for currency).  Gross profit margin up 60 basis points.
  • Global Business Services (includes Consulting, Application Management and Global Process Services) — revenues of $4.2 billion, up 2.4 percent (down 1.4 percent adjusting for currency), with growth in Consulting and Global Process Services.  Application Management revenue declined.  Cloud revenue up 33 percent (up 28 percent adjusting for currency).  Gross profit margin up 100 basis points.
  • Global Technology Services (includes Infrastructure & Cloud Services and Technology Support Services) — revenues of $6.4 billion, down 1.5 percent (down 5.3 percent adjusting for currency).  Infrastructure & Cloud Services and Technology Support Services declined.  Cloud revenue up 6 percent (up 2 percent adjusting for currency).  Gross profit margin up 60 basis points.
  • Systems (includes Systems Hardware and Operating Systems Software) — revenues of $1.4 billion, up 4.3 percent (up 2.2 percent adjusting for currency), led by IBM Z, while Power and Storage Systems declined.  Operating Systems Software declined.  Cloud revenue up 23 percent (up 21 percent adjusting for currency).  Gross profit margin up 430 basis points.
  • Global Financing (includes financing and used equipment sales) — revenues of $240 million, down 20.0 percent (down 21.9 percent adjusting for currency), driven by lower financing volumes and sale of receivables.

Full-Year 2021 Expectations

The company expects to grow revenue for the full year 2021 based on mid-April 2021 foreign exchange rates.  The company also expects adjusted free cash flow of $11 billion to $12 billion in 2021.  Adjusted free cash flow expectations exclude approximately $3 billion of cash impacts from the company’s structural actions initiated in the fourth quarter of 2020 and the transaction costs associated with the separation of the managed infrastructure services business.


IBM is a leading global hybrid cloud and AI, and business services provider, helping clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Nearly 3,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently, and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and business services deliver open and flexible options to our clients. All of this is backed by IBM's legendary commitment to trust, transparency, responsibility, inclusivity, and service.

For more information, visit: www.ibm.com.



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