tech
Read IBM CEO's letter to investors warning about its poor results: 'This quarter we faltered'
CEO Arvind Krishna said in his letter to investors that IBM had underestimated the "magnitude" of clients changing spending habits.
TL;DR
- IBM's preliminary second-quarter revenue of $17.2 billion was up just 1%, below analyst forecasts.
- Infrastructure revenue decreased by 7%, worse than anticipated, with a shortfall in Z performance and associated software.
- Clients shifted spending towards servers, storage, and memory to secure supply ahead of expected price increases.
- Numerous large deals failed to close on expected timelines, contributing significantly to the shortfall.
- Despite challenges, Red Hat revenue growth accelerated to 11%, and distributed infrastructure grew by 37%.
- IBM is making substantial investments in AI and quantum computing, including a $5 billion commitment to Lightwell and a $10 billion investment in quantum over five years.