International Business Machines Corp (NYSE:IBM), aka IBM, aka the Big Blue, increased its revenues by 3% in the fourth quarter of 2023, with the US technology stalwart touting the widespread adoption of its hybrid cloud and AI offerings as the main drivers of growth.
Notably, the company's flagship AI and data platform, watsonx, saw its book of business double sequentially from the previous quarter, signifying an accelerating demand for its AI solutions.
For the full year, IBM's revenue stood at nearly $62 billion, also marking a 3% growth, led predominantly by a 5% increase in software revenue and over 6% in consulting.
IBM's full-year profit margins saw a notable uptick, with gross margins up 140 basis points to 55.4% and operating margins up 130bps to 56.5%.
Net cash from operating activities of $13.9 billion, up $3.5 billion from 2022, with free cash flow of $11.2 billion, up $1.9 billion from 2022.
The company completed nine acquisitions in 2023, including Apptio, and announced further acquisitions of StreamSets and webMethods from Software AG.
Looking ahead to 2024, IBM expects mid-single-digit revenue growth and around $12 billion in free cash flow.
CEO Arvind Krishna commented: “We entered the year intent on enhancing our Software portfolio and strengthening our Consulting position. We have done both.
“Mid-last year, we launched watsonx, our flagship AI and data platform, and we are excited by the traction we are seeing. Consulting has delivered durable revenue growth through the year, despite an uneven macro environment.
“Our expanding ecosystem, skills and technical expertise, global reach and co-creation approach not only set us apart, but also contributed to our consulting performance outpacing that of our competitors.”
Investors were pleased with the results, with IBM shares rallying over 12% on Thursday.