Tech giant IBM closed 2024 with stable revenue growth, driven by strong demand for its software segment and increasing interest in artificial intelligence (AI). The company reported $62.8 billion in revenue for the year, showing a 1% increase, or 3% in constant currency.
“Our generative AI book of business now stands at more than $5 billion inception-to-date, up nearly $2 billion quarter over quarter,” Arvind Krishna, chair, president, and CEO of IBM, said in a statement.
The software segment led IBM’s growth, generating $7.9 billion in revenue in the fourth quarter, a 10% increase, or 11% in constant currency. Red Hat, IBM’s open-source software business, saw a 16% revenue increase, or 17% in constant currency. Other software divisions, including automation, data and AI, and security, also recorded revenue increases.
IBM’s consulting revenue declined by 2% to $5.2 billion in the fourth quarter, while infrastructure revenue dropped by 8% to $4.3 billion. The company’s financing unit generated $200 million, a 2.5% decrease.
2025 guidance
IBM reported a 56.7% gross profit margin for the year, an increase of 120 basis points. Operating profit margin stood at 57.8%, up 130 basis points. The company generated $13.4 billion in cash from operations, with free cash flow at $12.7 billion.
“With strong performance across our Software portfolio, we continue to drive solid fundamentals within our business,” said James Kavanaugh, IBM senior vice president and CFO. “As a result, we generated $12.7 billion in free cash flow, far outpacing our expectation for the year.”
Looking ahead, IBM expects revenue growth of at least 5% in 2025 and free cash flow of about $13.5 billion. Krishna said the company remains focused on growth and profitability.
“Three years ago, we laid out a vision for a faster-growing, more-profitable IBM,” said Krishna. “With our focused strategy, enhanced portfolio, and culture of innovation, we’re well-positioned for 2025 and beyond.”