IBM (IBM) Q1 2023 Earnings Call Transcript

For the period ending March 31, 2023.

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

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome, and thank you for standing by. Today's conference is being recorded.

Now I will turn the meeting over to Ms. Patricia Murphy with IBM. Ma'am, you may begin.

Patricia Murphy - Vice President,Investor Relations

Thank you. This is Patricia Murphy, and I'd like to welcome you to IBM's first 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 growth are at constant currency. We have provided reconciliation charts for these and other non-GAAP measures at the end of the presentation 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. More information about these factors is included in the company's SEC filings.

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

Arvind Krishna - Chairman & Chief Executive Officer

Thank you for joining us. Our first quarter results demonstrate that clients continue to turn to IBM to help them address today's business needs while positioning them for the future. We had a good start to the year with mid-single-digit revenue growth at constant currency, in line with our midterm model and growth in free cash flow. Performance was led by Software and Consulting as clients continue to accelerate their digital transformations, modernize their applications, automate their workflows, and create flexible and secure hybrid cloud environments. More recently, clients are prioritizing digital transformation projects that focus on cost takeout, productivity and quick returns. While demand for our offerings that support these priorities remains solid, we are seeing some deceleration in Consulting from the previous robust growth levels, especially in the United States.

Globally, our clients continue to see technology as a fundamental source of competitive advantage. Technology helps them scale and enhance productivity, which is especially important in the face of inflation, demographic shift, cybersecurity, supply chain issues and sustainability goals. All of this supports our revenue growth expectations for the year. Our focus remains on revenue growth and free cash flow.