International Business Machines (IBM) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 19, 2023 5:00 p.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome, and thank you for standing by. At this time, all participants are in a listen-only mode. Today's conference is being recorded. If you have any objections you may disconnect at this time.

Now, I will turn the meeting over to Ms. Patricia Murphy, IBM's Vice President, Investor Relations. Ma'am, you may begin.

Patricia Murphy

Thank you. I'd like to welcome you to IBM's Second Quarter 2023 Earnings Presentation. I'm here today with Arvind Krishna, IBM's Chairman and Chief Executive Officer; and Jim Kavanaugh, IBM's Senior Vice President, and Chief Financial Officer. We'll post today's prepared remarks on the IBM Investor website within a couple of hours and a replay will be available by this time tomorrow.

To provide additional information to our investors, our presentation includes certain non-GAAP measures. For example, all of our references to revenue and signings growth are at constant currency. We have provided reconciliation charts for these and other non-GAAP measures at the end of the presentation which is posted to our investor website.

Finally, some comments made in this presentation may be considered forward-looking under the Private Securities Litigation Reform Act of 1995. These statements involve factors that could cause our actual results to differ materially. Additional information about these factors is included in the company's SEC filings.

So with that, I'll turn the call over to Arvind.

Arvind Krishna

Thank you for being here. Our second quarter results reflect continued solid execution of our hybrid cloud and AI strategy. We again had strength in our growth vectors of software and consulting and solid cash generation, consistent with our financial model. Clients and partners continue to view technology as a source of competitive advantage. Clients turn to us to speed up their transformation journeys, modernize applications and optimize their business workflows. At the same time, they continue to prioritize projects that focus on productivity and deliver quick time to value.

To seize this opportunity, we are bringing new innovations to market, expanding strategic partnerships, and making investments in targeted growth markets, while unlocking value through our productivity initiatives. All of this gives us confidence in our ability to achieve our full-year expectations for revenue and free cash flow, which remain our two primary areas of focus.

We've made progress in our strategy around hybrid cloud and AI, the two key drivers of business innovation. Hybrid cloud is the most widespread form of IT architecture. Red Hat OpenShift, our leading container platform based on open-source innovations plays a crucial role in making this possible along with IBM software and infrastructure. Our consultants use their technical and business knowledge to speed-up clients' digital transformation journeys and help drive adoption of our technology platforms. Our broad ecosystem of partners amplifies our reach and ability to meet client demand.