IBM Releases Fourth Quarter Results 

ARMONK, N.Y., Jan. 25, 2022 -- IBM has announced its fourth-quarter 2021 earnings results.

"We increased revenue in the fourth quarter with hybrid cloud adoption driving growth in software and consulting," said Arvind Krishna, IBM chairman and chief executive officer. "Our fourth-quarter results give us confidence in our ability to deliver our objectives of sustained mid-single digit revenue growth and strong free cash flow in 2022."

On November 3, 2021, IBM completed the separation of Kyndryl. Unless otherwise specified, fourth-quarter and full-year results are presented on a continuing operations basis.

Fourth-Quarter Highlights

• Revenue
  - Revenue of $16.7 billion, up 6.5 percent, up 8.6 percent at constant currency (including about 3.5 points from incremental external sales to Kyndryl)
  - Software revenue up 8 percent, up 10 percent at constant currency (including about 5 points from incremental external sales to Kyndryl)
  - Consulting revenue up 13 percent, up 16 percent at constant currency
  - Infrastructure revenue flat, up 2 percent at constant currency (including about 5 points from incremental external sales to Kyndryl)
  - Hybrid cloud revenue:
  -- Fourth Quarter: $6.2 billion, up 16 percent, up 18 percent at constant currency
  -- Full Year: $20.2 billion, up 20 percent, up 19 percent at constant currency
• Pre-tax Income:
  - GAAP: $2.9 billion, up 183 percent, including 167 points from the impact of fourth-quarter 2020 charge for structural actions
  - Operating (Non-GAAP): $3.5 billion, up 102 percent, including 92 points from the impact of fourth-quarter 2020 charge for structural actions

Segment Results for Fourth Quarter

• Software (includes Hybrid Platform & Solutions, Transaction Processing)— revenues of $7.3 billion, up 8.2 percent, up 10.1 percent at constant currency (including about 5 points from incremental external sales to Kyndryl):
  - Hybrid Platform & Solutions up 7 percent, up 9 percent at constant currency (including about 1 point from incremental external sales to Kyndryl):
  -- Red Hat up 19 percent, up 21 percent at constant currency
  -- Automation up 13 percent, up 15 percent at constant currency
  -- Data & AI up 1 percent, up 3 percent at constant currency
  -- Security down 2 percent, down 1 percent at constant currency
  - Transaction Processing up 11 percent, up 14 percent at constant currency (including about 16 points from incremental external sales to Kyndryl)
  - Software segment hybrid cloud revenue up 22 percent, up 24 percent at constant currency
• Consulting (includes Business Transformation, Technology Consulting and Application Operations)— revenues of $4.7 billion, up 13.1 percent, up 15.7 percent at constant currency:
  - Business Transformation up 18 percent, up 20 percent at constant currency
  - Technology Consulting up 14 percent, up 19 percent at constant currency
  - Application Operations up 6 percent, up 8 percent at constant currency
  - Consulting segment hybrid cloud revenue up 31 percent, up 34 percent at constant currency
• Infrastructure (includes Hybrid Infrastructure, Infrastructure Support)— revenues of $4.4 billion, down 0.2 percent, up 1.7 percent at constant currency (including about 5 points from incremental external sales to Kyndryl):
  - Hybrid Infrastructure flat, up 2 percent at constant currency (including about 4 points from incremental external sales to Kyndryl)
  -- IBM Z down 6 percent, down 4 percent at constant currency
  -- Distributed Infrastructure up 5 percent, up 7 percent at constant currency
  - Infrastructure Support down 1 percent, up 1 percent at constant currency (including about 6 points from incremental external sales to Kyndryl)
  - Infrastructure segment hybrid cloud revenue down 12 percent, down 11 percent at constant currency
• Financing (includes client and commercial financing)— revenues of $0.2 billion, down 29.4 percent, down 28.8 percent at constant currency

Cash Flow and Balance Sheet

On a consolidated basis, full-year cash from operating activities was $12.8 billion and free cash flow was $6.5 billion. These consolidated results include ten months of Kyndryl results, and reflect cash paid in 2021 for separation charges and fourth-quarter 2020 structural actions.

IBM's post-separation baseline free cash flow for the year was $7.9 billion excluding Kyndryl charges and pre-separation activity. This view is aligned to the company's go-forward business. Payments for IBM-related structural actions and deferred cash taxes paid in 2021 contributed to the year-to-year decline in the post-separation baseline free cash flow.

IBM ended the year with $7.6 billion of cash on hand (which includes marketable securities), down $6.7 billion from year-end 2020, reflecting acquisitions of $3.3 billion and debt reduction payments consistent with the company's previously-stated intention to deleverage. Debt, including Financing debt of $13.9 billion, totaled $51.7 billion, down $9.6 billion since the end of 2020, and down more than $21 billion since closing the Red Hat acquisition. The company returned $5.9 billion to shareholders in dividends.

For the complete financial information, visit IBM's full release here.

Source: IBM