IBM on the Up and Up: Company Boasts Strong Growth of IBM Cloud, Analytics

IBM Reports 2016 Third-Quarter Earnings: Strong Growth by IBM Cloud, Analytics

The results are in! This week, IBM announced their third-quarter 2016 earnings as throughout the year, IBM has worked to bolster and invest in opportunities to create new markets to strengthen their enterprise IT leadership position. IBM’s earnings report shows that the hard work is paying off. Under Chief Executive Ginni Rometty, the company has shifted attention towards booming and profitable areas, such as cloud services, analytics, and security. Revenue from those categories, which the company calls “strategic imperatives”, rose 16 percent to $8 billion in the third quarter.

“IBM’s third-quarter performance, led by continued double-digit growth in our strategic imperatives, is a testament to our leadership in cognitive solutions and cloud,” said Ginni Rometty, IBM chairman, president and chief executive officer. “Our ability to apply deep expertise and breakthrough technology, led by Watson and the IBM Cloud, to massive amounts of data is enabling us to build new markets and transform industries. Whether it is banks implementing IBM blockchain solutions, hospitals leveraging Watson to fight cancer, or retailers using cognitive apps built on the IBM Cloud to transform the customer experience, clients across all industries are tapping into a new kind of innovation value from IBM.”

Highlights of the Report Include:

  • Diluted EPS: GAAP of $2.98; Operating (non-GAAP) of $3.29
  • Revenue from continuing operations of $19.2 billion
  • Strategic imperatives revenue of $31.8 billion over the last 12 months represents 40 percent of IBM revenue- Strategic imperatives revenue of $8.0 billion in the quarter, up 16 percent year to year (up 15 percent adjusting for currency)
  • Cloud revenue of $12.7 billion over the last 12 months- Cloud as-a-Service annual run rate of $7.5 billion in the quarter, up 66 percent year to year (up 65 percent adjusting for currency)

This week’s press release features the full report that you can view here, and includes full year-to-date results.

THIRD QUARTER 2016
Gross Profit
Diluted EPS Net Income Margin
GAAP from Continuing Operations $2.98 $2.9B 46.9%
Year/Year -1% -4% -2.1Pts
Operating (Non-GAAP) $3.29 $3.1B 48.0%
Year/Year -1% -4% -2.1Pts
Strategic
REVENUE Total IBM Imperatives Cloud
As reported (US$) $19.2B $8.0B $3.4B
Year/Year 0% 16% 44%
Year/Year adjusting for currency -1% 15% 42%

 

Within the detailed report, third-quarter revenues from IBM’s cloud, analytics, mobility and security initiatives showed a 16 percent increase year to year, with  public, private and hybrid cloud revenues for the quarter increased a mega 44 percent. The report details growth in other cloud sectors, including cloud as-a-Service revenue to have increased to $7.5 billion from $4.5 billion in the third quarter of 2015. Additionally, revenues from mobile increased 19 percent and revenues from security increased 11 percent.

IBM Senior VP and CFO Martin Schroeter, explains how IBM strive to create new opportunities and maintain leadership within enterprise tech.

“Throughout the year, we have continued to invest where we see the greatest opportunities to create new markets and strengthen our enterprise IT leadership position. This has included more than $12 billion across capital expenditures, R&D and acquisitions so far this year. At the same time, we have returned more than $6 billion to shareholders through dividends and share repurchases.”

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