IBM reports 6.5% increase in Q4 revenue as cloud business booms

IBM announced 6.5 percent increase in fourth-quarter 2021 revenue driven by hybrid cloud adoption driving growth in software and consulting.
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“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,” said Arvind Krishna, IBM chairman and chief executive officer.

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

Fourth-Quarter Highlights

Revenue
– Revenue of $16.7 billion, up 6.5 percent, (including about 3.5 points from incremental external sales to Kyndryl)
– Software revenue up 8 percent, (including about 5 points from incremental external sales to Kyndryl)
– Consulting revenue up 13 percent

– Infrastructure revenue flat, (including about 5 points from incremental external sales to Kyndryl)

– Hybrid cloud revenue:
— Fourth Quarter: $6.2 billion, up 16 percent
— Full Year: $20.2 billion, up 20 percent

“In 2021, we continued to invest for the future by increasing R&D spending, expanding our ecosystem and acquiring 15 companies to strengthen our hybrid cloud and AI capabilities,” said James Kavanaugh, IBM senior vice president and chief financial officer.

Segment Results for Fourth Quarter

Software (includes Hybrid Platform & Solutions, Transaction Processing)— revenues of $7.3 billion, up 8.2 percent, (including about 5 points from incremental external sales to Kyndryl):
– Hybrid Platform & Solutions up 7 percent, (including about 1 point from incremental external sales to Kyndryl):
— Red Hat up 19 percent
— Automation up 13 percent
— Data & AI up 1 percent
— Security down 2 percent
– Transaction Processing up 11 percent, (including about 16 points from incremental external sales to Kyndryl)
– Software segment hybrid cloud revenue up 22 percent

Consulting (includes Business Transformation, Technology Consulting and Application Operations) — revenues of $4.7 billion, up 13.1 percent
– Business Transformation up 18 percent
– Technology Consulting up 14 percent
– Application Operations up 6 percent
– Consulting segment hybrid cloud revenue up 31 percent

Infrastructure (includes Hybrid Infrastructure, Infrastructure Support)— revenues of $4.4 billion, down 0.2 percent, (including about 5 points from incremental external sales to Kyndryl):
– Hybrid Infrastructure flat, (including about 4 points from incremental external sales to Kyndryl)
— IBM Z down 6 percent,
— Distributed Infrastructure up 5 percent
– Infrastructure Support down 1 percent, (including about 6 points from incremental external sales to Kyndryl)
– Infrastructure segment hybrid cloud revenue down 12 percent

Financing (includes client and commercial financing)— revenues of $0.2 billion, down 29.4 percent

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