CEO Arvind Krishna said the company is ‘pleased’ with its progress and remains ‘on track’ to deliver full-year revenue growth.
IBM has continued to see its revenue grow, reporting second-quarter earnings that beat Wall Street expectations.
The tech giant experienced four consecutive quarters of revenue decline in 2020, but reversed the trend in Q1 of this year. This quarter’s growth reflects an increase in client spending as the global economy recovers from the pandemic.
The company posted revenue of $18.7bn for Q2, a 3pc increase year on year, beating analyst estimates of $18.29bn. Its cloud business saw revenue increase by 6pc, while its global business services division grew sales by 12pc. CNBC reports that this is the company’s fastest quarterly revenue growth in three years.
“With the reopening [of economies] in particular around North America and Western Europe, we’re seeing a nice rebound in travel and transportation, automotive, industrial and consumer sectors overall,” the company’s chief financial officer, James Kavanaugh, told Reuters.
Arvind Krishna, IBM’s CEO and chair, added in a statement: “In the second quarter, client adoption of our hybrid cloud platform contributed to strong performance in global business services and software and drove improved overall revenue growth. At the same time, we continued to help clients infuse our AI-based technology offerings into their core business workflows.
“We are pleased with our progress and we remain on track to deliver full-year revenue growth and meet our cash flow objective.”
The last year has seen shake-ups at the 110-year-old company under Krishna’s leadership, with its IT infrastructure business due to be spun out as IBM shifts to focus on cloud computing and AI. The move, which is expected to be completed by the end of 2021, was described by Krishna as a way to tap into a “$1trn hybrid cloud opportunity”.
IBM has recently been making acquisitions in this space, snapping up cloud consultancies Waeg and 7Summits among other businesses. In the second quarter of the year, IBM spent $1.75bn on acquisitions.
Earlier this month, IBM president Jim Whitehurst stepped down. Whitehurst had formerly been CEO of Red Hat, which IBM acquired in 2018 for $34bn. The Red Hat deal was IBM’s largest ever purchase and the open-source software business remains a key part of the company’s strategy. In Q2, Red Hat saw revenue growth of 20pc.
These results suggest that Big Blue has managed to turn itself around after a disappointing 2020, but it remains to be seen what happens after the company’s restructuring is complete.