IBM announced third quarter 2021 earnings results. In the quarter, IBM generated net cash of $2.7 billion from operating activities. The revenue increased by 0.3% to $17.6, when it is normalized to exclude Kyndryl, which will be separated in November, the revenue increase is 2.5%. Red Hat revenue up 17%, normalized for historical comparability.
Debt reduced by $7.0 billion
At the end of the quarter, IBM had $8.4 billion of cash on hand, $5.9 billion less than year-end 2020 due to $3.0 billion acquisition and debt reduction payments. According to IBM’s announcement, the debt, totaled $54.5 billion, down $7.0 billion since the end of 2020, and down $18.5 billion since IBM closed the acquisition of Red Hat.
Cloud & Cognitive Software revenues increased by 2.5% to $5.7 billion, which includes Cloud & Data Platforms grew 10%, Cognitive Applications revenue was flat, and Transaction Processing Platforms declined 9%. IBM’s cloud revenue increased by 21%. On the other hand, the Systems segment’s revenues of $1.1 billion, down 11.9%. James Kavanaugh, senior vice president and chief financial officer of IBM said,
“We again had solid cash generation for the quarter and over the last year, while maintaining a strong balance sheet and the liquidity to support our hybrid cloud and AI strategy. Our post-separation portfolio mix is shifted toward our growth vectors, with a higher-value recurring revenue stream and strong cash generation, allowing us to continue to invest in the business and provide attractive shareholder returns.”