Saw the recent earnings announcement. While they are somewhat respectable, are they really anything for the IBM executives to be gloating over? When they mention layoffs, it kind of ki-ls the excitement for us ground troops.
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Left 3 years ago for a dynamic startup. Been working way more than I did at ibm, but my work turns into real solutions for customers. Never been happier. Wish the best to my former colleagues who are competent but can’t say the same for ibm mgmt as a whole.
What is the overall health of the tech sector? I hear layoffs all the time but isn’t the economy overall doing well.
LOL that was totally posted by some exec pos. The language tells it all "Extinct" ... how about ripped away from the people that rely on it most. What a jerk to post that. He got his dividends and his bonus at our cost.
"Dividends are a cash outflow in the financing-activities section of the statement of cash flow so yes, taking away the IBM contribution for the now extinct 401K provides more cash for investor dividends, among other things."
LMFAO and fu ahole. The "other things" are their bonuses. This was certainly written by one of them
Remember these words: "Shareholder Primacy"
It sounds rather crass to the average rank and file employee, but corporate executives in the US are sworn to protect shareholder interests, and they believe in those interests with all their hearts. Shareholder interests are measured using the terms that most people gloss over...gross and net revenue, free cash flow, dividends and stuff like that. You would think that "employee interest" is the same as "shareholder interest", but it often doesn't work that way. IBM over the years has done everything they could to protect shareholder interest, and they've sacrificed the entire company to do it. It will be a shining example in business textbooks someday on what shareholder primacy means.
Dividends are a cash outflow in the financing-activities section of the statement of cash flow so yes, taking away the IBM contribution for the now extinct 401K provides more cash for investor dividends, among other things.
They definitely do. Ginni moved revenues to hit her cloud incentives and eran bonuses. Now Arvin has ki-led our 401k to hit his FCF bonus. Same old story.
You know the Senior Executives have bonuses tied to FCF targets.
Could be interesting to see how much of 2.3% revenue increase was made of acquisitions, divestitures impact and organic growth. I bet the last one was about flat.
@2pou is absolutely right. Without additional top-line revenue, IBM's trickery of stuff like cutting the 401k match won't amount to much. They need more revenue and they need it now.
If they had managed their multiple lines of business better over the years, then they may have been able to pull it off. Alas, they didn't do so hot in that area, and they gave up and cashed in their chips. You name the branch of IT, and you can find a former IBM business that was SOLD OFF FOR CASH.
So without some magic, no more top-line revenue for them. What they have will have to do (assuming they don't sell that off too).
Thanks IBM workers for giving up your 401K contributions from corporate so we can improve our FCF!
I assume FCF will grow in the future due to no more IBM 401K contributions
2023 vs 2022 Revenue growth was only 2.3%. Inflation over the same period was 3.4%. IBM grew Revenue less than inflation.
FCF grew 20.4% ($11.2B vs $9.3B). Combination of layoffs + several one time items
Net Income grew 369% ($7.5B vs $1.6B) over the same time period. Mainly through accounting tricks. "Cash is fact, profit is opinion."
IBM desperately needs to grow top line Revenue. But this can't be done through layoffs and cost cutting or one time things like RBA. Sale of Weather in 2024 will generate NI and FCF but result in less Revenue. Running out of tricks.
@2kzr Past history suggests this will be another one to add to the list of failures. No evidence for any hype whatsoever. I really hope IBM does get into decent growth with a new strategy but I’m rather afraid it looks like IBM has a great future behind it…
It’s not about current earnings but about turning the ship and projecting future growth. THATS what IBM announced They have turned the corner on their new strategy and see potential and operational results ahead.
https://www.fool.com/investing/2024/01/28/ibms-artificial-intelligence-business-is-booming/?source=eptyholnk0000202&utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article
IBM ended the fourth quarter with $13.5 billion of cash and marketable securities, up $4.6 billion from year-end 2022. Debt, including IBM Financing debt of $11.9 billion, totaled $56.5 billion, up $5.6 billion since the end of 2022.
- 6 - 5.6 = 1
So we have net $1 billion less cash than a year ago. The debt is rising faster than the cash.
It cost more to fire than to hire. So now is the time for a purging while they have the funds. Get ready for a major bloodbath.
@1wao:
Remember that IBM sold the weather company and the Raleigh estate in 2023.
That makes the increased revenue from 2022 to 2023 very suspicious.
IBM executives are no different from used cars salesme.
That’s the reason why IBM is now tackling the over-management issue. By the end of 2024, IBM will be a much leaner company from a management perspective. We have way too many managers in this company.
At least for now, it looks like the revenue decline has stopped and we are seeing a slight uptick… that is better than nothing. No doubt IBM is great at making the bottom line look great by managing costs very aggressively but what company wouldn’t do that. The question becomes with all the layoffs of experienced employees, when is that going to affect the top line?
I have no evidence whatsoever to support my suspicions, but given IBM's business I would think that SWG is dependent on a small customer base (enterprise) that is both consolidating their licenses (scaling up vs out) and/or moving workloads to other platforms (z/OS to Linux or something like that). So they would have to raise license renewal prices just to stay in place year after year.
Also, it's hard to imagine what new licenses are like since IBM is a legacy platform company. Who is buying new stuff from them these days?
IBM raised its software prices by around 24% last year, yet revenue increase was a mere 5%. Tell me why that doesn’t indicate a) heavy discounting on net new b) lack of net new c) software renews in decline d) eroding of market share…
As an ex IBM software guy and as a stockholder, it doesn’t look good to me.
Net income and free cash flow were very respectable. Revenue, on the other hand, grew less than the inflation rate. As always, it's easy to financially engineer the bottom line, the top line not so much.
Revenue $B
2011 106.9
2012 104.5
2013 99.8
2014 92.8
2015 81.7
2016 79.9
2017 79.1
2018 79.6
2019 77.1
2020 73.6
2021 57.4
2022 60.5
2023 61.9
IBM is, more or less, back where it was many decades ago. Its revenue comes from mainframes and enterprise software, with a cost structure that even after decades of reductions is still too big. However, they are running out of room for cost take-outs, so cooking the books won't be very easy going forward. It would be easier if they made significant revenue from other sources, but it has been difficult for them to achieve it.
Execs are touting 2023 results like it's a validation of a turnaround. But IBM full year 2023 revenue was up only 3% while nominal US GDP growth was 6.2%. IBM continues to shrink in real terms, hence why there is constant pressure to reduce costs via benefit reductions (RBA) and layoffs (RTO mandate).
nothing to celebrate. IBM will keep slashing and cutting everything in sight so it can keep buying back shares of the company, which in turn raises earnings. ibm su-ks