IBM reports sales growth driven by software and cloud performance

CEO Arvind Krishna said the results 'demonstrate the progress' IBM is making

IBM posted a three per cent year-on-year revenue rise for its Q2, with the vendor seeing strong sales gains across cloud, global business services and its software business Red Hat, despite net income falling marginally overall.

Total revenue for the quarter stood at $18.7bn for the three months ending 30 June, up from $18.1bn the year before, with global business services revenue up 12 per cent and total cloud revenue rising 13 per cent to $7bn.

Meanwhile, Red Hat revenue grew 20 per cent in the quarter, despite net income falling slightly from $1.36bn to $1.32bn.

"We continue to take decisive steps and make the investments required to execute on our strategy," CEO Arvind Krishna said on the earnings call.

"We are pleased with the early signs of progress from the significant changes we are making. But, as you would expect, it will take time before we realise the full benefit of these changes.

"Our second quarter results demonstrate the progress we are making toward achieving our two financial objectives, sustainable mid-single digit revenue growth post separation and strong cash generation."

IBM said its debt has been reduced by $6.4bn since the end of 2020, while it generated net cash from operating activities of $2.6bn during the most recent quarter.

Non-GAAP diluted earnings per share rose seven per cent to $2.33 and the results saw the company beat consensus expectations as its share price rose following the announcement.

Decreases in sales were reported in its systems and global financing divisions as well as in its ‘other' category.

IBM recently announced that president Jim Whitehurst, who arrived at the company when he was CEO of Red Hat, was stepping down from the business.

It is also currently in the process of spinning off its global technical services division into a separate company called Kyndryl.