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IBM reported revenue growth in its first quarter (ended March 31) behind continued strength in its cloud and cybersecurity businesses, according to CFO James Kavanaugh.

Total revenue grew 5% from a year ago, to $19.1 billion. Cloud revenue jumped 22% to $17.7 billion, while strategic imperative revenue increased 12% to $37.7 billion, the company said. IBM’s strategic imperatives include its cloud, security and mobile businesses.

While analytics revenue increased 9% in Q1, mobile revenue widened 19% and security revenue soared 65%, the company said.

Cognitive Solutions revenue inched up 2% as IBM saw “continued strength in security software and industry platforms, and a return to growth in our analytics revenue,” Kavanaugh said April 17 on an earnings call. Those Cognitive results “contributed to growth in our total software revenue” for the quarter, with “strong transactional performance and continued growth” in Software-as-a-Service (SaaS), he said.

“Our first quarter results reflect much of the work we’ve done to reposition our portfolio and our skills to address the secular trends in the market, led by the phenomenon of data,” he said, adding: “We’ve been building new platforms and solutions, while modernizing existing ones, embedding cloud” and artificial intelligence (AI) “into more of what we offer.”
IBM’s Q1 strategic imperatives revenue result was an “indication of our success in addressing these secular trends,” he said.

In the quarter, IBM introduced “several new offerings to accelerate client journeys to AI,” including the enhanced Watson Assistant, with “conversational offerings tailored to specific industries like automotive and hospitality,” he noted.

He cited Orange Bank and AutoDesk as two examples of early adopters of IBM’s latest technology on that front.

Security, meanwhile, had “great growth this quarter and we continued to gain share,” he said, adding: “We are well positioned in this market with our extensive security portfolio, which is enhanced with AI to address the needs of our clients. There is obviously a lot of demand here given the important of cyber security risks and data privacy concerns, especially in an environment where security talent is at a premium. We had good performance in areas like data security, with GDPR as a driver, endpoint management and orchestration. And we had strong revenue growth in our SaaS offerings in security, as we continue to increase our AI capabilities across the portfolio.”

IBM also continued to “make progress in emerging areas like blockchain,” he went on to say, adding: “We’ve grown to over 50 active blockchain networks since the release of our IBM Blockchain Platform in the third quarter last year. And last month, we announced a beta version of our IBM Blockchain Platform Starter Plan, designed for startups, developers and companies of any size that want to quickly stand up a blockchain network. In the first two weeks, we had over 750 networks provisioned.”

But IBM’s storage hardware revenue declined in the quarter, he noted, telling analysts: “We were disappointed in our storage performance and it contributed to a modest shortfall to our own expectations of IBM’s revenue growth in the quarter.”

Revenue in Asia Pacific and the Americas were flat year-over-year, including a decline in the U.S. that Kavanaugh told analysts was “offset by solid growth in Canada and Latin America, which was led by Brazil.” IBM’s European revenue “trajectory also improved and in fact, returned to growth,” in Q1, including “strong” performance in France and Spain, he said. Although Germany and U.K. revenue declined, those markets had “marked improvement in their year-to-year trajectory,” he said. IBM profit, meanwhile, slipped to $1.7 billion from $1.8 billion.