• International Business Machines Corp. is an information technology company.
  • IBM integrates technology and expertise, providing infrastructure, software (including market-leading Red Hat) and consulting services.
  • IBM operates in more than 175 countries around the world.


International Business Machines Corp. (NYSE: IBM, LSE: IBM) is an information technology company. IBM integrates technology and expertise, providing infrastructure, software (including market-leading Red Hat) and consulting services. IBM operates in more than 175 countries around the world. The company's platform-centric hybrid cloud and AI strategy is executed through its operations and consists of four business segments: Software, Consulting, Infrastructure and Financing.

Recent Developments

IBM to Cut 3,900 Jobs Amid Broader Tech Slowdown1

Jan. 25, 2023; International Business Machines Corp. on Wednesday joined the wave of companies making layoffs, saying it would cut about 3,900 jobs. The cuts will stem from Kyndryl Holdings Inc., the IT services business that IBM spun off last year, and its healthcare divestiture, from which the company will incur about a $300 million charge, a spokesman confirmed. The layoffs would amount to a 1.4% reduction from its head count of 280,000, according to its latest annual report.

Kyndryl Holdings Inc Spinoff

On November 3, 2021, the company completed the separation of its managed infrastructure services unit into a new public company with the distribution of 80.1 percent of the outstanding common stock of Kyndryl Holdings, Inc. (Kyndryl) to IBM stockholders on a pro rata basis. To effect the separation, IBM stockholders received one share of Kyndryl common stock for every five shares of IBM common stock held at the close of business on October 25, 2021, the record date for the distribution. IBM retained 19.9 percent of the shares of Kyndryl common stock immediately following the separation.


Financial Highlights

In 2022, the company reported $60.5 billion in revenue, income from continuing operations of $1.8 billion, including a one-time, non-cash, pre-tax pension settlement charge of $5.9 billion ($4.4 billion net of tax), and operating (non-GAAP) earnings of $8.3 billion, which excludes the impact of the settlement charge. The pension settlement charge was the result of the transfer to Insurers of a portion of its U.S. benefit pension obligations, an action the company took to further reduce the risk profile of its retirement-related plans. Diluted earnings per share from continuing operations was $1.95 as reported, including an impact of $4.84 from the pension settlement charge, and diluted earnings per share was $9.13 on an operating (non-GAAP) basis. On a consolidated basis, the company generated $10.4 billion in cash from operations and $9.3 billion in free cash flow and returned $5.9 billion to shareholders in dividends. IBM is pleased with the fundamentals of its business and the progress IBM has made in executing its strategy.2

Total revenue grew 5.5 percent as reported and 12 percent adjusted for currency compared to the prior year, including approximately 4 points from incremental sales to Kyndryl. Over 70 percent of current-year revenue was in its growth areas of Software and Consulting and approximately half of its revenue is recurring. Software revenue increased 6.9 percent as reported and 12 percent adjusted for currency, including approximately 6 points of growth from incremental sales to Kyndryl. There was continued momentum in its recurring revenue stream in both Hybrid Platform & Solutions and Transaction Processing. Hybrid Platform & Solutions grew 4.9 percent as reported and 9 percent adjusted for currency, led by strong double-digit revenue growth in Red Hat. Transaction Processing increased 12.2 percent as reported and 19 percent adjusted for currency, including approximately 19 points of growth from incremental sales to Kyndryl. Consulting revenue increased 7.1 percent as reported and 15 percent adjusted for currency as the company help clients with their digital transformations. Infrastructure revenue increased 7.8 percent year to year as reported and 14 percent adjusted for currency, reflecting strong double-digit growth in Hybrid Infrastructure driven by its z16 program, which launched in the second quarter of 2022. The Infrastructure revenue performance also includes approximately 6 points of growth from incremental sales to Kyndryl. Across the segments, total hybrid cloud revenue of $22.4 billion in 2022 grew 11 percent as reported and 17 percent adjusted for currency, and represents 37 percent of IBM’s revenue.

The gross margin of 54.0 percent decreased 0.9 points year to year, however, gross profit dollars increased 3.8 percent compared to the prior year. Overall, gross margin was impacted by the investments IBM is making to drive its hybrid cloud and artificial intelligence (AI) strategy, higher labor and component costs and the impacts of currency, while the mitigating hedging benefits and operational productivity and efficiency IBM has realized are primarily reflected in expense. The operating (non-GAAP) gross margin of 55.1 percent decreased 1.0 points versus the prior year.

Pre-tax income from continuing operations of $1.2 billion decreased 76.1 percent and the pre-tax margin was 1.9 percent, a decrease of 6.5 points versus 2021. These declines were primarily driven by the $5.9 billion pension settlement charge. The continuing operations effective tax rate for 2022 was (54.2) percent compared to 2.6 percent in 2021. The current-year effective tax rate was primarily driven by the pension settlement charge. The prior-year effective tax rate was primarily driven by tax benefits related to audit settlements in multiple jurisdictions. Net income from continuing operations of $1.8 billion decreased 62.2 percent and the net income from continuing operations margin was 2.9 percent, down 5.3 points year to year. Operating (non-GAAP) pre-tax income from continuing operations of $9.8 billion increased 24.6 percent year to year and the operating (non-GAAP) pre-tax margin from continuing operations increased 2.5 points to 16.2 percent. These profit dynamics reflect its portfolio shift toward higher value, driven by Software and Consulting. The company's pre-tax profit includes the contribution from incremental sales to Kyndryl and the negative impacts of currency primarily due to the strengthening of the U.S. dollar. The operating (non-GAAP) effective tax rate for 2022 was 15.2 percent compared to 9.0 percent in 2021. The lower prior-year operating (non-GAAP) effective tax rate was primarily driven by tax benefits related to audit settlements in multiple jurisdictions. Operating (non-GAAP) income from continuing operations of $8.3 billion increased 16.0 percent and the operating (non-GAAP) income margin from continuing operations of 13.8 percent was up 1.2 points year to year.

Diluted earnings per share from continuing operations of $1.95 in 2022 decreased 62.6 percent, which included an impact of $4.84 from the pension settlement charge. Operating (non-GAAP) diluted earnings per share of $9.13 increased 15.1 percent versus 2021.

At December 31, 2022, the balance sheet remained strong with the flexibility to support and invest in the business. Cash and cash equivalents, restricted cash and marketable securities at year end were $8.8 billion, an increase of $1.3 billion from December 31, 2021. During 2022, the company continued to invest in acquisitions and provide a solid and modestly growing dividend to shareholders. Total debt of $50.9 billion at December 31, 2022 decreased $0.8 billion driven by currency impacts, partially offset by net debt issuances.

Total assets decreased $4.8 billion ($1.3 billion adjusted for currency) from December 31, 2021 primarily driven by decreases in prepaid pension assets, intangible assets, deferred taxes, and prepaid expenses and other; partially offset by an increase in cash and restricted cash. Total liabilities decreased $7.8 billion ($4.3 billion adjusted for currency) from December 31, 2021 primarily driven by a decrease in retirement and postretirement benefit obligations. Total equity of $22.0 billion increased $3.0 billion from December 31, 2021 as a result of a decrease in accumulated other comprehensive losses, 2022 net income and common stock issuances, partially offset by dividends paid.

The company's cash flows from operating, investing and financing activities, as reflected in the Consolidated Statement of Cash Flows, include the cash flows of discontinued operations. On a consolidated basis, cash provided by operating activities was $10.4 billion in 2022, a decrease of $2.4 billion compared to 2021, driven by financing receivables. Net cash used in investing activities of $4.2 billion decreased $1.8 billion compared to the prior year and net cash used in financing activities of $5.0 billion decreased $8.4 billion compared to 2021.


Company Overview

International Business Machines Corp. (NYSE: IBM, LSE: IBM) is an information technology company. IBM integrates technology and expertise, providing infrastructure, software (including market-leading Red Hat) and consulting services. IBM operates in more than 175 countries around the world. The company's platform-centric hybrid cloud and AI strategy is executed through its operations and consists of four business segments: Software, Consulting, Infrastructure and Financing.


Software provides software solutions that address client needs for a hybrid cloud platform, data and AI, automation, and security on their journey to hybrid cloud. It includes all software, except operating system software reported in the Infrastructure segment.

Hybrid Platform & Solutions: includes software, infused with AI, to help clients operate, manage and optimize their IT resources and business processes within hybrid, multi-cloud environments.

Red Hat: provides enterprise open-source solutions, for hybrid, multi-cloud environments, which includes Red Hat Enterprise Linux (RHEL), OpenShift, its hybrid cloud platform, as well as Ansible.

Automation: optimizes processes from business workflows to IT operations with AI-powered automation. Automation includes software for business automation, IT automation, integration and application runtimes.

Data & AI: accelerates data-driven agendas by infusing AI throughout the enterprise, empowering intelligent decision making. The portfolio includes capabilities that simplify data consumption through data fabric with data management, optimize lifecycle management, and make better predictions through business analytics. Data & AI capabilities facilitate sustainable, resilient businesses and enable intelligent management of enterprise assets and supply chains with environmental intelligence and the world’s most accurate weather forecast data.

Security: creates a risk-aware, secure business by gaining real-time threat insights, orchestrating actions and automating responses across all touchpoints, in line with a zero-trust security strategy. Security includes software and services for threat management, data security, and identity and access management.

Transaction Processing: the software that supports clients’ mission-critical, on-premise workloads in industries such as banking, airlines and retail. This includes transaction processing software such as Customer Information Control System and storage software, as well as the analytics and integration software running on IBM operating systems such as DB2 and WebSphere running on z/OS.


Consulting provides deep industry expertise and market-leading capabilities in business transformation and technology implementation. Consulting designs, builds and operates technology and business processes based on open, hybrid cloud architectures with IBM technology and ecosystem partner technologies. Consulting uses its IBM Garage method to convene experts to co-create solutions with clients to accelerate their digital transformations through AI and automation.

Business Transformation: provides strategy, process design, system implementation and operations services to improve and transform key business processes. These services deploy AI and automation in business processes to exploit the value of data and include an ecosystem of partners alongside IBM technology, including strategic partnerships with Adobe, Oracle, Salesforce and SAP, among others.

Technology Consulting: helps clients architect and implement solutions across cloud platforms, including Amazon, Microsoft and IBM, and strategies to transform the enterprise experience and enable innovation, including application modernization for hybrid cloud with Red Hat OpenShift.

Application Operations: focuses on application and cloud platform services required to operationalize and run cloud platforms. It facilitates clients’ efforts to manage, optimize and orchestrate application and data workloads across platforms and environments through both custom applications and ISV packages.


Infrastructure provides trusted, agile and secure solutions for hybrid cloud and is the foundation of the hybrid cloud stack. Infrastructure is optimized for infusing AI into mission-critical transactions and tightly integrated with IBM Software including Red Hat for accelerated hybrid cloud benefits.

Hybrid Infrastructure: provides clients with innovative infrastructure platforms to help meet the new requirements of hybrid multicloud and enterprise AI workloads leveraging flexible and as-a-service consumption models. Hybrid Infrastructure includes zSystems and Distributed Infrastructure.

zSystems: the premier transaction processing platform with leading security, resilience and scale, highly optimized for mission-critical, high-volume transaction workloads. It includes zSystems and LinuxONE, with a range of high-performance systems designed to address computing capacity, security and performance needs of businesses. zSystems operating system software environments include z/OS, a security-rich, high-performance enterprise operating system, as well as Linux and other platforms that are enabled with enterprise AI and are hybrid cloud ready.

Distributed Infrastructure: the portfolio is uniquely positioned for hybrid cloud, meeting client demands for scalability, security and capacity. Distributed Infrastructure includes Power, Storage and IBM Cloud Infrastructure-as-a-Service (IaaS). Power consists of high performance servers, designed and engineered for big data and AI-enabled workloads and are optimized for hybrid cloud and Linux. The Storage portfolio consists of a broad range of storage hardware and software-defined offerings, including Z-attach and distributed flash, tape solutions, software-defined storage controllers, data protection software and network-attach storage. IBM Cloud IaaS is built on enterprise-grade hardware with an open architecture and is specifically designed for regulated industries with leading security and compliance capabilities. IBM Cloud IaaS offers flexible computing options across x86, Power, Storage and zSystems as a service to meet client workload needs.

Infrastructure Support: works across hybrid cloud environments providing a uniquely integrated services experience for clients. Infrastructure Support delivers comprehensive, proactive and AI-enabled services to maintain and improve the availability and value of clients’ IT infrastructure (hardware and software) both on-premises and in the cloud. These offerings include maintenance for IBM products and other technology platforms, as well as open-source and cross-vendor software and solution support.


Financing facilitates IBM clients’ acquisition of information technology systems, software and services through its financing solutions. The financing arrangements are predominantly for products or services that are critical to the end users’ business operations and support IBM’s hybrid cloud and AI strategy. Financing conducts a comprehensive credit evaluation of its clients prior to extending financing. As a captive financier, Financing has the benefit of both deep knowledge of its client base and a clear insight into the products and services financed. These factors allow the business to effectively manage two of the primary risks associated with financing, credit and residual value, while generating strong returns on equity.

Client Financing: lease, installment payment plan and loan financing to end-user clients for terms up to seven years, and internal loan financing in support of IBM IaaS service arrangements. Assets financed are primarily new and used IT hardware, software and services where IBM has expertise.

Commercial Financing: short-term working capital financing to distributors and resellers primarily of IBM products. The company has an existing agreement with a third-party investor to sell IBM short-term commercial financing receivables on a revolving basis.

Company History

IBM was founded as the Computing-Tabulating-Recording Company and later change its name to International Business Machines Corporation, or IBM.3

1911IBM was foundedIBM was founded as the Computing-Tabulating-Recording Company (CTR) through the merger of four separate companies: the Computing Scale Company of America, the International Time Recording Company, the Tabulating Machine Company, and the Bundy Manufacturing Company.
1924IBM nameCTR was renamed to International Business Machines Corporation, or IBM.
1928The punch card and the US CensusIBM punch cards become the industry standard for the next 50 years, holding nearly all of the world’s known information and enabling large-scale projects like the US Census.
1936Social Security, made possible by IBMIBM works with the government on the US Social Security Act of 1935, tabulating employment records for 26 million Americans — the largest accounting project of its time.
1937Super Calculator was introducedIBM's "Super Calculator" was introduced, which was the world's first electromechanical calculator.
1952The inception of digital storageIBM introduces the world to digital storage via magnetic tape data, marking the transition from punched-card calculators to electronic computers.
1953The first heart and lung machineA heart-lung machine built by IBM enables the world’s first successful open-heart surgery on a human. Millions of lives will be saved each year by this technology.
1956AI before AIArthur L. Samuel programs an IBM 704 to play checkers and learn from its experience. It is considered the first demonstration of artificial intelligence.
1961The birth of speech recognitionWilliam C. Dersch demonstrates speech recognition at the World’s Fair. The Shoebox machine converts sounds to electrical impulses, paving the way for Siri, Alexa and Watson AI.
1962SABRE: the genesis of eCommerceIBM and American Airlines launch the first computer-driven airline reservation system. This is the precursor for all eCommerce today, from eBay to Amazon.
1969The first men on the moonIn an epic feat of engineering, IBM builds the computers and software for the Apollo missions, landing Neil Armstrong and Buzz Aldrin on the moon and guiding them back to Earth.
1970Charge it — the magnetic swipe stripIBM’s inception of the magnetic swipe strip changes the way commercial transactions are enacted. An entirely new industry is born, revolutionizing travel and security access.
1971The world’s first floppy discOne of the industry’s most influential products ever, the IBM floppy disc makes storage powerful, affordable and portable. Over 5 billion units will sell.
1973The UPC bar codeSupermarkets start scanning UPC bar codes invented by IBMer Norman Woodland. The retail industry is transformed, with UPC codes tracking everything from clothing to cows.
1980IBM patents LASIK surgeryUsing a laser so precise it can write on a human hair, IBM earns the first patent for LASIK surgery. More than 30 million people will enjoy improved vision.
1981Introducing the IBM PCThe PC revolution begins. With the IBM Personal Computer, computing goes mainstream, beyond hobbyists and into the realm of common household commodity.
1986Scanning tunnel microscope wins the Nobel PrizeIBM scientists win the Nobel Prize for the scanning tunnel microscope. The impact on microelectronics and nanotechnology is global.
1997AI defeats a reigning chess championIBM Deep Blue supercomputer defeats the best chess player in the world. Thinking computers take a giant leap forward toward the kind of AI that we know and use today.
2011First AI to understand fluid languageIn an unprecedented demonstration of natural speech recognition and cognitive computing, IBM Watson defeats the champions of the TV quiz show Jeopardy!.
2018The Summit of supercomputingThe Summit supercomputer, with a new computing architecture purpose-built for AI, reaches speeds of 200 petaflops, becoming the most powerful processor on the planet.
2019IBM Q brings quantum to the massesIBM unveils the first circuit-based commercial quantum computer, allowing users, researchers and developers to explore the potential of quantum to solve real-world problems.
2021The world's first 2-nanometer chipWith 50 billion transistors on a fingernail-sized chip, the most dense to date, this innovation holds the potential for greener data centers and safer autonomous vehicles.


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Created by Asif Farooqui on 2023/03/23 17:45
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