International Business Machines Corporation (NYSE:IBM) Q3 2024 Earnings Conference Call October 23, 2024 5:00 PM ET

Company Participants

Olympia McNerney - Global Head of IR
Arvind Krishna - Chairman & CEO
James Kavanaugh - SVP & CFO

Conference Call Participants

Amit Daryanani - Evercore ISI
Toni Sacconaghi - Bernstein
Wamsi Mohan - Bank of America
Benjamin Reitzes - Melius Research
James Schneider - Goldman Sachs
Brent Thill - Jefferies
Erik Woodring - Morgan Stanley
Matt Swanson - RBC Capital Markets

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 Olympia McNerney, IBM’s Global Head of Investor Relations. Olympia, you may begin.

Olympia McNerney

Thank you. I'd like to welcome you to IBM's Third Quarter 2024 Earnings Presentation. I'm Olympia McNerney. and I'm here today with Arvind Krishna, IBM's Chairman, President 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 provided reconciliation charts for these and other non-GAAP financial 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 joining us today. Let me start by discussing the quarter before I get into more detail on the execution of our strategy. We delivered double-digit revenue growth in software with the reacceleration in Red Hat and continued strength in transaction processing. Infrastructure reflects product cycle dynamics with z16 well ahead of prior cycles, highlighting customer adoption and continued reliance on the mainframe.

In consulting, we continue to navigate an uncertain macro environment with results at the lower end of our expectations. We generated strong operating profitability and the highest levels of first-nine months cash generation in many years, while overall revenue performance was mixed. We continue to reposition our portfolio towards a higher growth, higher margin business that is well positioned to address client needs around hybrid cloud and artificial intelligence.