IBM Cites Strong Growth in Cloud and Analytics

IBM reported Q2 revenue from continuing operations of $20.2 billion, with second-quarter revenues from the company’s strategic imperatives — cloud, analytics and engagement — increased 12 percent year to year. Cloud revenues (public, private and hybrid) for the quarter increased 30 percent. Cloud revenue over the trailing 12 months was $11.6 billion.

The annual run rate for cloud as-a-service revenue — a subset of total cloud revenue — increased to $6.7 billion from $4.5 billion in the second quarter of 2015. Revenues from analytics increased 5 percent (up 4 percent adjusting for currency). Revenues from mobile increased 43 percent and from security increased 18 percent.

“IBM continues to establish itself as the leading cognitive solutions and cloud platform company. In doing so, IBM is pioneering new business opportunities beyond the traditional IT marketplace,” said Ginni Rometty, IBM chairman, president and chief executive officer. “In the second quarter we delivered double-digit revenue growth in our strategic imperatives, driven by innovations in areas such as analytics, security, cloud video services and Watson Health, all powered by the IBM Cloud and differentiated by industry. And we continue to invest for growth with recent breakthroughs in quantum computing, Internet of Things and Blockchain solutions for the IBM Cloud.”

Segment Results

• Cognitive Solutions (includes solutions software and transaction processing software) — revenues of $4.7 billion, up 3.5 percent (up 3.8 percent adjusting for currency). Cloud revenue within the segment grew 54 percent. Solutions software revenue grew, led by Analytics (including Watson) and Security.
• Global Business Services (includes consulting, global process services, application management) — revenues of $4.3 billion, down 2.0 percent (down 2.5 percent adjusting for currency). Strategic imperatives revenue within the segment was up 14 percent (up 13 percent adjusting for currency).
• Technology Services & Cloud Platforms (includes infrastructure services, technical support services, integration software) — revenues of $8.9 billion, down 0.5 percent (flat adjusting for currency). Growth of 35 percent in strategic imperatives revenue within the segment was driven by strong hybrid cloud infrastructure services performance.
• Systems (includes systems hardware and operating systems software) — revenues of $2.0 billion, down 23.2 percent (down 23.3 percent adjusting for currency). Revenue reflects z Systems product cycle dynamics; gross profit margin improved in both z Systems and Power.
• Global Financing (includes financing and used equipment sales) — revenues of $424 million, down 11.3 percent (down 10.0 percent adjusting for currency).

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