IBM has beat Wall Street expectations, returning to revenue growth after four quarters of declines.
IBM has been in the process of reinventing itself as a hybrid cloud provider. The company plans to spin off its legacy operations, focusing primarily on its hybrid cloud business, and has been snapping up startups to help drives its transformation.
The company’s strategy appears to be paying off as it reported revenue of $17.7 billion, up 1%. The company’s Cloud & Cognitive Software was up 4%. Cloud revenue accounted for $6.5 billion, up 21%. Over the past 12 months, cloud revenue accounted for $26.3 billion, an increase of 19%.
“Strong performance this quarter in cloud, driven by increasing client adoption of our hybrid cloud platform, and growth in software and consulting enabled us to get off to a solid start for the year,” said Arvind Krishna, IBM chairman and chief executive officer. “While we have more work to do, we are confident we can achieve full-year revenue growth and meet our adjusted free cash flow target in 2021.”
“In the first quarter we continued to improve the fundamentals of our business model,” said James Kavanaugh, IBM senior vice president and chief financial officer. “With strong cash generation and disciplined financial management, we increased investments in our hybrid cloud and AI capabilities, while significantly deleveraging in the quarter and supporting our commitment to a secure and growing dividend.”