IBM (finally) raises revenue after almost 6 years
- Although IBM's revenue decreased 1% year-over-year in 2017, it rose by about 3.5% year-over-year in Q4 to $22.5 billion, according to the company's earnings call Thursday. Public, private and hybrid cloud revenue for the year came in at around $17 billion, a 24% increase year-over-year.
- Strategic imperatives — which contain the company's analytics, cloud, mobile, security and social segments — experienced year-over-year growths of 11% and 17% for the year and Q4, respectively, and now makes up 46% of IBM's total revenue, according to the report.
- Shares fell about 4.4% in late trading despite the company beating earnings expectations and increasing revenue for the first time in almost six years, according to Seeking Alpha.
The strong Q4 performance breaks a 23 quarter precedent of lackluster earnings for the company.
Within Big Blue's strategic imperatives, analytics and cloud had the highest Q4 revenues, coming in at $6.1 billion and $5.5 billion, respectively. Cloud and security grew the most year-over-year at 27% and 127%, respectively.
The company had a sore adjustment period as it shifted away from its legacy businesses, but the focus on key technology sectors it matured last year is paying off. IBM is widely considered a leader in the industrial IoT and blockchain markets — with 35 active blockchain networks at the time of the earnings call.
"2018 will be all about reinforcing IBM's leadership position in key high-value segments of the IT industry, including cloud, AI, security and blockchain," said James Kavanaugh, senior VP and CFO, in the report.
IBM is pushing its success in many of these markets with new technologies. The company was once again the No. 1 recipient of U.S. patents in 2017 with 9,043 patents, many of which were tied to these strategic imperatives segments. It will continue a "high level of investment" in advanced technologies in the coming year, said Kavanaugh during the earnings call.
Many of the company's SaaS businesses saw growth in Q4 thanks to a focus on building solutions to scale and building out industry verticals, though room for improvement is evident, according to the earnings call. The company will continue this business model across its segments. "For 2018, we'll continue to build scale in these as a Service businesses," said Kavanaugh.
During the earnings call, the company did not address reports that circulated last week regarding the redeployment of about 30% of service, delivery and technology workers.
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