International Business Machines (IBM) Q3 2016 Earnings Call

posted in: Earnings Call, Notes | 0

International Business Machines (IBM) CFO Martin Schroeder said currency fluctuations helped reported results for the first time in awhile

“Cloud delivered as-a-service is part of a solid recurring revenue base across software and services, and our annuity revenue continued to grow. Of course, the acquisitions we made in the last 12 months contributed to growth about the same amount as last quarter and for the first time in quite a while currency was a modest tailwind to revenue growth.”

Continuing to forge partnerships with other technology companies

“We are building the industry’s broadest and deepest cognitive solutions and cloud platform portfolio and we are extending our capabilities. For example, this quarter we continued the global expansion of our cloud footprint and we now have 49 cloud centers. We formed a partnership with Workday, where IBM cloud will become the foundation for Workday’s development and testing environment. And we extended our partnership with VMware to enable easy hybrid cloud adoption.”

Brazil surprisingly showed strong growth

“Latin America was up 5% led by Brazil. While the environment remains uncertain, double-digit growth of Brazil this quarter reflects the importance of our z Systems platform to the banking sector.”

They are devoting a large number of resources to their Watson Healthcare platform

“Turning to our vertical plays, we are focussed on scaling our Watson Health business. We have over 7000 employees and target four major areas, life sciences, oncology, imaging and value based care. We launched new offerings, such as Watson for drug discovery which is a cloud based scalable platform that helps life science researchers discover new disease pathways, new drug targets and additional drug indications. We had several major client wins, including UPMC and Best Doctors.”

Company is still specializing in making sure their clients data is 100% secure

“And moving to the cloud, our clients need to be sure that data is secure. Those in regulated industries need to know where their data is and many need to keep it in country. Our cloud infrastructure allows clients automatically to provision virtual with bare metal service while meeting their data sovereignty and regulatory requirements.”

International Business Machines (IBM) CFO Martin Schroeder explained how he sees the company’s 2017 performance unfolding

“Now, as we go into 2017, with our big transactional quarter coming up obviously and 90 days we’ll talk about what we saw in the environment and what that position us for 2017, but I do think we know, we know a few things as we head into next year already today, so we know for instance we’ve got good momentum in our strategic imperatives and we continue to see with our investments and our view of the market, how that resonates with clients and I think we would expect to continue to see good strategic imperatives performance which also by the way will drive some investments but keep in mind that with everything we got done this year, the bulk of the spending, the bulk of the investment dollars we freed up next year, that’s a much bigger number next year, so we have a freedom and an ability to invest more heavily given what we’ve got and done so far this year.”