IBM returned to overall revenue growth in its fourth quarter (ended Dec. 31) behind continued strength in its cloud, cybersecurity and mobile businesses, according to Martin Schroeter, who recently shifted from CFO to the company’s SVP-global markets.
“Across all of our businesses, our strategic imperatives revenue was up 17 percent, or 14 percent at constant currency, as we embed cognitive and cloud into more of what we offer,” he said Jan. 18 on an earnings call with analysts. IBM’s strategic imperatives include its cloud, security and mobile businesses.
The strategic imperatives growth was “led by cloud and by security,” he said, pointing out cloud revenue grew 27% in Q4 from a year earlier and was $17 billion for the year, up from just $7 billion three years ago, he said.
“Over the last several years, we’ve been making investments and shifting resources, embedding” artificial intelligence (AI) and cloud “into more of what we offer, and building new solutions and modernizing existing ones,” he went on to say. Those investments “not only drive our strategic imperatives revenue performance today, but will also extend our innovation leadership into the future,” he said.
Revenue from security soared 132% in Q4, while mobile revenue grew 23%, IBM said. Total Q4 revenue grew 4% from a year earlier, to $22.5 billion. But IBM swung to a $1.1 billion loss in Q4 from a $4.5 billion profit in the prior year.
IBM’s Systems results were strong in Q4 across IBM Z, power and storage, Schroeter also said, noting it was “our first full quarter” with the new z14 mainframe. Systems revenue grew 32% from a year earlier, to $3.3 billion, according to IBM.
“With pervasive encryption and the ability to address new technologies like blockchain, we’re adding new clients and new workloads to the platform,” Schroeter said.
In Cognitive Solutions, meanwhile, IBM saw “good growth in several areas” during Q4, including security, Internet of Things (IoT) and industry-based solutions including Watson Health and Watson Financial Services, he said. Cognitive Solutions revenue increased 3% to $5.4 billion in Q4.
IBM led the U.S in patents in 2017, marking its 25th-straight year at number one, Schroeter said, adding: “Nearly half of the more than 9,000 patents in 2017 are for advancements in AI, cloud computing, cybersecurity, blockchain and quantum computing.”
The company will “maintain a high level of investment” in 2018, James Kavanaugh, its new CFO, told analysts, adding: “This is important as we continue to build out capabilities in AI, in cloud, in security, and in blockchain, just to name a few.”
IBM “strengthened our position as the leading enterprise cloud provider and established IBM as the blockchain leader for business” during 2017, Ginni Rometty, IBM CEO, president and chairman, said in the company’s earnings press release. “Looking ahead, we are uniquely positioned to help clients use data and AI to build smarter businesses,” she said.