You might also like
IBM is a global technology company that focuses on providing integrated solutions and products leveraging hybrid cloud and artificial intelligence (AI) technologies. The company operates through key segments, including Software, Consulting, and Infrastructure, to support clients' digital transformations. IBM's offerings include a range of software solutions, consulting services, and infrastructure products, all designed to enhance business operations and drive innovation .
-
Software - Offers hybrid platform software solutions, transaction processing, and distributed infrastructure software, including proprietary and open-source software delivered through as-a-Service or cloud models, and on-premise licenses. Red Hat, part of this segment, has shown substantial growth .
-
Consulting - Provides business transformation, technology consulting, and application operations services, delivered through various models, including cloud and as-a-Service, crucial for clients preparing for AI integration .
-
Infrastructure - Delivers Hybrid Infrastructure solutions like zSystems and Distributed Infrastructure solutions such as Power and Storage, supporting mission-critical workloads and driving hardware and related software adoption .
| Name | Position | External Roles | Short Bio | Start Date |
|---|---|---|---|---|
Arvind Krishna ExecutiveBoard | Chairman, President, and CEO | Director of Federal Reserve Bank of New York; Director of Northrop Grumman Corporation | Joined IBM in 1990; became CEO in April 2020 and Chairman in December 2020; key architect of Red Hat acquisition. | April 2020 (CEO) |
Gary D. Cohn Executive | Vice Chairman | None | Vice Chairman since 2021; former COO of Goldman Sachs and Director of National Economic Council (2017-2018). | 2021 |
James J. Kavanaugh Executive | Senior Vice President and CFO | None | CFO of IBM; achieved $11.2B in free cash flow in 2023; led productivity initiatives and portfolio optimization. | N/A |
Nickle J. LaMoreaux Executive | Senior Vice President and Chief HR Officer | None | Chief HR Officer since 2020; no additional details provided in the documents. | 2020 |
Nicolás A. Fehring Executive | Vice President and Controller | None | Vice President and Controller; no additional details provided in the documents. | N/A |
Robert D. Thomas Executive | Senior Vice President of Software and CCO | None | Leads IBM's software business and global sales; joined IBM in consulting and transitioned to software leadership in 2006-2007. | N/A |
Alex Gorsky Board | Director | Director of Apple, JPMorgan Chase, and Travis Manion Foundation | Former Chairman and CEO of Johnson & Johnson; expertise in healthcare and corporate governance. | 2014 |
Andrew N. Liveris Board | Director | Chairman of Lucid Motors (stepping down April 2024); Director of Worley and Saudi Aramco | Former Chairman and CEO of Dow Chemical; expertise in global business and sustainability; President of Brisbane 2032 Olympic and Paralympic Games Organizing Committee. | 2010 |
David N. Farr Board | Director | None | Retired Chairman and CEO of Emerson Electric Co.; expertise in global business and technology. | 2012 |
F. William McNabb III Board | Director | Director of UnitedHealth Group and Axiom; Co-Chair of CECP | Former Chairman and CEO of Vanguard; expertise in investment management and corporate governance. | 2019 |
Frederick H. Waddell Board | Director | Director of AbbVie Inc.; Trustee of Art Institute of Chicago, Chicago Symphony Orchestra, Northwestern University | Retired Chairman and CEO of Northern Trust Corporation; expertise in financial services and corporate governance. | 2017 |
Marianne C. Brown Board | Director | Director of Akamai Technologies, The Charles Schwab Corporation, and Northrop Grumman Corporation | Former COO of FIS Global Financial Solutions; expertise in digital transformation, cybersecurity, and technology services. | December 2023 |
Martha E. Pollack Board | Director | President of Cornell University | President of Cornell University; computer scientist with expertise in artificial intelligence and organizational leadership. | 2019 |
Michael Miebach Board | Director | CEO of Mastercard; Member of Business Roundtable, Business Council, and World Economic Forum | CEO of Mastercard since 2021; expertise in digital transformation, cybersecurity, and global business. | October 2023 |
Michelle J. Howard Board | Director | None | Retired U.S. Navy Admiral; first African American woman to command a U.S. Navy ship and achieve four-star rank; expertise in cybersecurity and leadership. | 2019 |
Peter R. Voser Board | Director | Chairman of ABB Ltd.; Director of Temasek Holdings and PSA International | Former CEO of Royal Dutch Shell; expertise in global business, energy, and technology. | 2015 |
Thomas Buberl Board | Director | CEO of AXA S.A.; Member of Supervisory Board of Bertelsmann VerwaltungsGesellschaft | CEO of AXA since 2016; expertise in digital transformation and insurance; member of Climate Finance Leadership Initiative. | 2020 |
-
Consulting revenue was flat this quarter with signings declining for the second consecutive quarter; given the ongoing macroeconomic challenges and client spending shifts, how confident are you in Consulting returning to growth in 2025, and what specific strategies are you implementing to drive this turnaround?
-
With the HashiCorp acquisition potentially diluting free cash flow in the near term, especially if Consulting remains flat, how do you plan to achieve the high single-digit free cash flow growth you've previously targeted for 2025?
-
IBM's revenue growth has averaged around 3% in several of the past four years, below your mid-single-digit model; considering that some growth drivers like the mainframe cycle and acquisitions could be one-time boosts, what initiatives are in place to ensure sustainable mid-single-digit revenue growth beyond 2025?
-
While your generative AI book of business has grown significantly, you mentioned that these AI engagements have longer durations and lower immediate revenue yield; how will this affect your Consulting revenue growth and margins in the near term, and when do you expect these AI investments to contribute meaningfully to your financial performance?
-
Software segment profit margin expanded to about 30% this quarter, above historical levels; given the competitive pressures in the software industry, how sustainable is this margin expansion, and what risks could potentially impact your software margins moving forward?
Notable M&A activity and strategic investments in the past 3 years.
| Company | Year | Details |
|---|---|---|
Applications Software Technology LLC (AST) | 2025 | IBM plans to acquire AST in Q1 2025 to enhance its Oracle Cloud Application offerings for public sector digital transformations; the deal’s financial terms were not disclosed and AST will join IBM Consulting. |
StreamSets | 2024 | IBM completed the acquisition of StreamSets for approximately $2.3 billion in cash to add real‑time data ingestion and integration capabilities to its watsonx platform, integrating the company into its Software segment. |
webMethods | 2024 | IBM acquired webMethods alongside StreamSets in a bundled $2.3 billion cash transaction to enhance its integration platform (iPaaS) and hybrid cloud capabilities, with the business integrated into the Software segment. |
HashiCorp, Inc. | 2024 | IBM agreed to acquire HashiCorp for an enterprise value of $6.4 billion at $35 per share in cash to build a comprehensive hybrid cloud platform leveraging Terraform and Vault, with the transaction expected to be accretive and subject to regulatory approvals. |
StepZen, Inc. | 2023 | IBM completed the acquisition of StepZen in February 2023 to add GraphQL API technology that facilitates quicker API development; the financial impact was minimal, supporting IBM’s hybrid cloud and AI strategy. |
ASL Portfolio of Uptake Technologies | 2023 | Acquired in Q1 2023, this portfolio brings an industrial asset management data library that enhances IBM’s capabilities in hybrid cloud and AI within its Software segment. |
NS1 | 2023 | IBM integrated NS1, a leading network automation SaaS provider, into its Software segment following its February 2023 acquisition aimed at strengthening the company’s cloud and AI solutions; financial details were not disclosed. |
Ahana Cloud, Inc. | 2023 | Acquired in April 2023, Ahana Cloud brings expertise in open‑source, managed cloud‑native data analytics solutions to IBM’s Software segment, with complete financial terms yet to be fully disclosed. |
Polar Security | 2023 | IBM acquired Polar Security in Q2 2023 to boost its data security offerings for cloud and SaaS applications, aligning with its multi‑cloud and hybrid cloud strategies. |
Agyla SAS | 2023 | Acquired in Q2 2023, Agyla SAS is a leading provider of cloud, DevOps, and security services in France and was integrated into IBM’s Consulting segment to strengthen its hybrid cloud offerings. |
Apptio, Inc. | 2023 | IBM closed its acquisition of Apptio in Q3 2023 for approximately $4.6 billion in cash to accelerate IT management and automation capabilities, generating significant goodwill and integrating the business into its Software segment. |
Envizi | 2022 | IBM acquired Envizi in early 2022 to enhance environmental performance management through data analytics, integrating its capabilities into the Environmental Intelligence Suite within the Software segment as part of a broader $798 million package. |
Sentaca | 2022 | Completed in Q1 2022, IBM acquired Sentaca, a telco consulting services provider specializing in automation and cloud migration, as part of a $798 million acquisition package to bolster its Consulting segment. |
Neudesic | 2022 | IBM acquired Neudesic in February 2022, a company specializing in application development and cloud services, to enhance its hybrid cloud and AI strategy within the Consulting segment; this acquisition was part of a broader package totaling $798 million. |
Randori | 2022 | IBM completed the Q2 2022 acquisition of Randori, a cybersecurity attack surface management provider, to strengthen its security portfolio and complement solutions like QRadar XDR in its hybrid cloud strategy. |
Databand.ai | 2022 | Acquired in Q2 2022, Databand.ai provides a proactive data observability platform that enhances IBM’s Data Fabric capabilities; the deal’s purchase price allocation included $903 million in goodwill and $87 million for completed technology. |
Omnio | 2022 | IBM completed the Q3 2022 acquisition of Omnio, a developer of IoT connectors for industrial raw data collection, as part of an aggregate acquisition cost of $1,102 million for six deals, supporting its hybrid cloud and AI ambitions. |
Recent developments and announcements about IBM.
Earnings
New Earnings (Q4 2024)
·Jan 30, 2025, 5:31 AMView full earnings summary →IBM Q4 software revenue surged 11%, powered by GenAI moves like watsonx and Red Hat. 2024 free cash flow hit $12.7B, projected to reach $13.5B in 2025—fueling M&A, including HashiCorp, despite a 1% consulting dip and near-term EPS dilution.
8-K Filings
8-K Filing
·Feb 19, 2025, 9:34 PMFinancial ExhibitsRegulation FD DisclosureView full 8-K filing →IBM filed an 8-K on January 29, 2025, featuring Q4 FY24 earnings remarks from CEO Arvind Krishna and CFO Jim Kavanaugh. The filing includes slides and non‐GAAP reconciliations (Exhibits 99.1 and 99.2) and highlights free cash flow of $12.7B.
Press Releases
Press Release
·Feb 25, 2025, 12:46 PMView full press release →IBM completes its acquisition of HashiCorp, bolstering its hybrid cloud platform with enhanced automation and security capabilities. The deal values HashiCorp at an enterprise value of $6.4B with a share price of $35.