ARMONK, N.Y – PRNewswire – IBM (NYSE: IBM) today announced fourth-quarter 2022 earnings results.

"Our solid fourth-quarter performance capped a year in which we grew revenue above our mid-single digit model. Clients in all geographies increasingly embraced our hybrid cloud and AI solutions as technology remains a differentiating force in today's business environment," said Arvind Krishna, IBM chairman and chief executive officer. "Looking ahead to 2023, we expect full-year revenue growth consistent with our mid-single digit model."

Fourth-Quarter Highlights

• Revenue of $16.7 billion, flat, up 6 percent at constant currency 
  - Software revenue up 3 percent, up 8 percent at constant currency
  - Consulting revenue up 0.5 percent, up 9 percent at constant currency
  - Infrastructure revenue up 2 percent, up 7 percent at constant currency

Full-Year Highlights

• Revenue of $60.5 billion, up 6 percent, up 12 percent at constant currency (about 4 points from sales to Kyndryl)
  - Hybrid cloud revenue of $22.4 billion, up 11 percent, up 17 percent at constant currency
   
• On a consolidated basis, net cash from operating activities of $10.4 billion; free cash flow of $9.3 billion

Full-Year 2023 Expectations

• The company expects constant currency revenue growth consistent with its mid-single digit model and about $10.5 billion in consolidated free cash flow, up more than $1 billion year to year

"IBM's revenue growth and operating profit in 2022 demonstrate the strength and multiplier effect of our platform-centric approach to hybrid cloud and AI," said James Kavanaugh, IBM senior vice president and chief financial officer. "Our client-focused portfolio and strong recurring revenue stream position IBM well for continued growth, solid cash generation and returning value to shareholders through dividends."

Segment Results for Fourth Quarter

• Software (includes Hybrid Platform & Solutions, Transaction Processing)— revenues of $7.3 billion, up 2.8 percent, up 8.0 percent at constant currency:
  - Hybrid Platform & Solutions up 5 percent, up 10 percent at constant currency:
        -- Red Hat up 10 percent, up 15 percent at constant currency
        -- Automation up 4 percent, up 9 percent at constant currency
        -- Data & AI up 4 percent, up 8 percent at constant currency
        -- Security up 4 percent, up 10 percent at constant currency
  - Transaction Processing down 3 percent, up 3 percent at constant currency
   
• Consulting (includes Business Transformation, Technology Consulting and Application Operations)— revenues of $4.8 billion, up 0.5 percent, up 9.3 percent at constant currency:
  - Business Transformation down 1 percent, up 7 percent at constant currency
  - Technology Consulting up 1 percent, up 10 percent at constant currency
  - Application Operations up 2 percent, up 12 percent at constant currency
   
• Infrastructure (includes Hybrid Infrastructure, Infrastructure Support)— revenues of $4.5 billion, up 1.6 percent, up 7.4 percent at constant currency:
  - Hybrid Infrastructure up 6 percent, up 11 percent at constant currency:
        -- IBM z Systems up 16 percent, up 21 percent at constant currency
        -- Distributed Infrastructure flat, up 5 percent at constant currency
  - Infrastructure Support down 8 percent, flat at constant currency
   
• Financing (includes client and commercial financing)— revenues of $0.2 billion, down 0.4 percent, up 3.9 percent at constant currency

Cash Flow and Balance Sheet
On a consolidated basis, in the fourth quarter, the company generated net cash from operating activities of $4.0 billion, up $1.4 billion. Net cash from operating activities excluding IBM Financing receivables was $5.8 billion, up $1.9 billion. IBM's free cash flow was $5.2 billion, up $1.9 billion. The company returned $1.5 billion to shareholders in dividends in the fourth quarter.

On a consolidated basis, for the full year, the company generated net cash from operating activities of $10.4 billion, down $2.4 billion. Net cash from operating activities excluding IBM Financing receivables was $11.2 billion, up $2.3 billion. IBM's free cash flow was $9.3 billion, up $2.8 billion. IBM returned $5.9 billion to shareholders in dividends.

IBM ended the fourth quarter with $8.8 billion of cash on hand (which includes marketable securities), up $1.3 billion from year-end 2021. Debt, including IBM Financing debt of $12.9 billion, totaled $50.9 billion, down $0.8 billion since the end of 2021.