International Business Machines Corp. operates in 4 segments: Software; Consulting; Infrastructure; and Financing.
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Segment Profit Margin
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Software | |||||
Consulting | |||||
Infrastructure | |||||
Financing |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Software Segment Profit Margin
- The profit margin for the software segment exhibited a significant upward trend over the five-year period. Starting at 14.57% in 2020, it increased consistently each year, reaching a peak of 32.06% by the end of 2024. This reflects a strong and growing profitability in the software business line.
- Consulting Segment Profit Margin
- The consulting segment showed a steady increase in profit margin from 6.36% in 2020 to 10.20% in 2023. However, in 2024, there was a slight decline to 9.93%. Despite this minor dip, the overall trend remains positive, indicating improved profitability over the longer term.
- Infrastructure Segment Profit Margin
- The infrastructure segment profit margin demonstrated a general upward trajectory from 11.38% in 2020 to a peak of 19.38% in 2023. Nevertheless, it then declined to 17.48% in 2024. This pattern suggests growing profitability until 2023, followed by some margin compression in the most recent year.
- Financing Segment Profit Margin
- The financing segment consistently maintained the highest profit margins among all segments. It started at 46.05% in 2020 and rose substantially to 56.98% in 2021. Subsequently, the margin decreased gradually each year to 48.81% in 2024. While still dominant in profitability, this segment experienced a moderate decline after its 2021 peak.
- Overall Insights
- The software segment exhibits the strongest growth in profit margin, indicating a successful expansion or increased efficiency. Consulting and infrastructure segments also improved over time but faced slight declines in the latest period. The financing segment, although highly profitable, shows a decreasing margin trend post its peak in 2021. These variations may suggest shifting business dynamics, varying operational efficiencies, or changing market conditions across segments.
Segment Profit Margin: Software
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Segment profit | |||||
Revenue | |||||
Segment Profitability Ratio | |||||
Segment profit margin1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Segment profit ÷ Revenue
= 100 × ÷ =
- Revenue
- The revenue for the software segment demonstrated an overall upward trend over the five-year period. Starting at approximately $22.9 billion in 2020, it experienced a moderate rise to about $24.1 billion in 2021, followed by a slight decrease to roughly $23.6 billion in 2022. Subsequently, revenue increased consistently, reaching approximately $25.0 billion in 2023 and further climbing to around $27.1 billion in 2024. This suggests a recovery and growth phase after the dip observed in 2022.
- Segment Profit
- Segment profit exhibited a strong and steady growth trajectory throughout the period. Beginning at $3.3 billion in 2020, the profit increased significantly to $4.7 billion in 2021, followed by a substantial rise to $7.0 billion in 2022. The upward momentum continued with profits reaching nearly $7.5 billion in 2023 and culminating at $8.7 billion in 2024. This consistent increase in profit indicates effective cost management, improved operational efficiency, or enhanced product/service value within the segment.
- Segment Profit Margin
- The profit margin showed a marked improvement over the five years. In 2020, the margin was at 14.57%, and it rose sharply to 19.56% in 2021. The margin growth accelerated in 2022, reaching 29.68%, and continued to improve slightly in the following years to 29.98% in 2023 and 32.06% in 2024. The rising profit margin, especially the sharp increase between 2021 and 2022, highlights a significant enhancement in profitability relative to revenue, suggesting increased efficiency or a shift toward higher-margin products and services within the software segment.
Segment Profit Margin: Consulting
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Segment profit | |||||
Revenue | |||||
Segment Profitability Ratio | |||||
Segment profit margin1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Segment profit ÷ Revenue
= 100 × ÷ =
- Revenue Trends
- Revenue for the segment showed an upward trajectory from 2020 through 2023, increasing from $16,257 million to $20,884 million. However, in 2024, there was a slight decline to $20,692 million, indicating a potential plateau or slight contraction in the segment's sales performance after several years of growth.
- Segment Profit Trends
- Segment profit consistently increased from $1,034 million in 2020 to a peak of $2,130 million in 2023. In 2024, profit decreased marginally to $2,054 million, paralleling the slight drop in revenue.
- Profit Margin Analysis
- The segment profit margin exhibited a strong positive trend from 6.36% in 2020 to 10.2% in 2023, reflecting improved profitability and operational efficiency. In 2024, the margin declined slightly to 9.93%, though it remained significantly higher than in earlier years.
- Overall Insights
- Over the five-year period, the segment demonstrated solid growth in both revenue and profitability, with profit margins expanding notably. The slight decreases in 2024 for revenue, profit, and margin suggest the possibility of emerging challenges or market saturation needing further evaluation. Nevertheless, the segment maintained robust performance relative to its starting point in 2020.
Segment Profit Margin: Infrastructure
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Segment profit | |||||
Revenue | |||||
Segment Profitability Ratio | |||||
Segment profit margin1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Segment profit ÷ Revenue
= 100 × ÷ =
The analysis of the “Infrastructure” segment reveals several notable trends in financial performance over the five-year period.
- Segment Profit
- Segment profit exhibited a consistent upward trend from 2020 through 2023, rising from US$1,654 million in 2020 to a peak of US$2,828 million in 2023. However, in 2024, a decline to US$2,450 million was observed, marking a reduction after several years of growth.
- Revenue
- Revenue displayed relatively stable but slightly fluctuating behavior. It started at US$14,533 million in 2020, experienced minor decreases and increases over the years, peaking at US$15,288 million in 2022 before declining to US$14,020 million in 2024. This suggests the segment faced some pressure on topline growth, especially in the latest year.
- Segment Profit Margin
- The profit margin showed a consistent and marked improvement from 11.38% in 2020 to a high of 19.38% in 2023, indicating enhanced profitability and operational efficiency during this period. The margin slightly contracted to 17.48% in 2024, aligning with the fall in segment profit despite relatively stable revenues.
In summary, the segment achieved solid profitability growth and improved margins through 2023, supported by mostly stable revenues. The decline in both profit and margin in the final year suggests emerging challenges impacting cost management or pricing power. Continuous monitoring is advised to understand whether this represents a temporary adjustment or a longer-term shift in financial performance.
Segment Profit Margin: Financing
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Segment profit | |||||
Revenue | |||||
Segment Profitability Ratio | |||||
Segment profit margin1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment profit margin = 100 × Segment profit ÷ Revenue
= 100 × ÷ =
- Revenue
- Revenue displays a declining trend from 2020 through 2022, decreasing substantially from 975 million US dollars in 2020 to 645 million US dollars in 2022. Thereafter, a moderate recovery is observed in 2023, where revenue rises to 741 million US dollars, followed by a slight decrease to 713 million US dollars in 2024. Overall, revenue demonstrates volatility with an initial marked decline followed by partial recuperation.
- Segment Profit
- Segment profit exhibits a contraction from 449 million US dollars in 2020 to 340 million US dollars in 2022. Although it recovers somewhat to 373 million US dollars in 2023, it subsequently decreases again to 348 million US dollars in 2024. The overall pattern mirrors the revenue trend, highlighting challenges in maintaining profitability levels over the recent years.
- Segment Profit Margin
- Segment profit margin experiences growth from 46.05% in 2020, peaking at 56.98% in 2021. Following this peak, the margin declines steadily over three years, reaching 48.81% by 2024. Despite the reduction, the margin remains above the initial 2020 level, indicating some efficiency gains or cost controls likely offsetting declining revenue and profit figures to some extent.
- Summary
- The segment shows financial performance characterized by a reduction in both revenue and profit from 2020 to 2022, followed by a partial rebound that does not fully restore earlier levels. The profit margin initially improves significantly in 2021, suggesting enhanced operational efficiency or favorable cost structures during that year, but gradually diminishes afterwards, reflecting increased pressures on profitability. This combined pattern suggests external or internal factors impacting sales and earnings stability, with ongoing efforts to manage profit margins amid fluctuating revenues.
Segment Return on Assets (Segment ROA)
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Software | |||||
Consulting | |||||
Infrastructure | |||||
Financing |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Software Segment ROA Trend
- The return on assets (ROA) for the software segment shows a consistent upward trend over the five-year period. Starting at 5.71% in 2020, it increased significantly to 7.96% in 2021, followed by a substantial rise to 12.56% in 2022. The ROA slightly decreased to 12.54% in 2023 but rebounded to a new high of 14.3% in 2024. This indicates steady improvement in asset utilization and profitability within the software segment.
- Consulting Segment ROA Trend
- The consulting segment exhibited a generally positive performance with some fluctuations. ROA began at 9.8% in 2020, rising to 12.16% in 2021 and further to 13.12% in 2022. It continued to improve to 14.12% in 2023 before experiencing a slight decline to 13.85% in 2024. Overall, the consulting segment maintains strong and relatively stable returns, reflecting effective asset use despite minor volatility in the latest year.
- Infrastructure Segment ROA Trend
- The infrastructure segment demonstrated the highest ROA among all segments throughout the period. Beginning at 13.36% in 2020, the ROA increased steadily, reaching a peak of 23.58% in 2023. However, in 2024, the ROA decreased to 20.15%, indicating some reduction in asset efficiency or profitability. Despite this decline, the infrastructure segment remains the most robust in terms of asset returns.
- Financing Segment ROA Trend
- The financing segment showed the lowest ROA values, with a modest upward progression from 1.8% in 2020 to 2.61% in 2021. It experienced a slight drop to 2.16% in 2022, then increased again to 2.59% in 2023, followed by a minor decline to 2.47% in 2024. Overall, this segment maintains relatively low but stable returns, potentially indicating limited profitability or cautious asset deployment.
- Comparative Insights
- Comparing segment performance, infrastructure consistently delivers the highest ROA, highlighting efficient use of assets in this area. Software and consulting segments both show strong growth with software demonstrating the most significant percentage increase over the five years. Financing remains the least profitable segment, with minimal fluctuations but no substantial growth. Notably, the slight declines observed in 2024 for infrastructure, consulting, and financing suggest potential emerging challenges or market conditions affecting asset returns across segments.
Segment ROA: Software
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Segment profit | |||||
Assets | |||||
Segment Profitability Ratio | |||||
Segment ROA1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment ROA = 100 × Segment profit ÷ Assets
= 100 × ÷ =
- Segment Profit
- The segment profit exhibited a consistent upward trajectory over the five-year period. Starting at 3,341 million US dollars at the end of 2020, it increased substantially to 4,722 million in 2021, followed by a more pronounced rise to 7,012 million in 2022. Growth continued though at a slower pace in 2023, reaching 7,499 million, with a further increase to 8,684 million by the end of 2024. This trend indicates steady expansion in profitability within the segment.
- Assets
- The asset base for the segment showed modest fluctuations throughout the period. Beginning at 58,558 million US dollars in 2020, assets slightly increased to 59,336 million in 2021 before declining to 55,822 million in 2022. The asset value then recovered in the subsequent years, reaching 59,811 million in 2023 and 60,707 million by the end of 2024. Overall, the asset levels appear relatively stable with minor variability.
- Segment Return on Assets (ROA)
- Return on assets demonstrated a marked improvement during the period under review. From a starting point of 5.71% in 2020, ROA increased to 7.96% in 2021 and rose significantly to 12.56% in 2022. It maintained a similar level at 12.54% in 2023 before climbing to 14.3% in 2024. This indicates enhanced efficiency in utilizing assets to generate profit, reflecting improved operational performance within the segment.
Segment ROA: Consulting
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Segment profit | |||||
Assets | |||||
Segment Profitability Ratio | |||||
Segment ROA1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment ROA = 100 × Segment profit ÷ Assets
= 100 × ÷ =
- Segment Profit
- The segment profit exhibited a consistent upward trend from 2020 to 2023, increasing from $1,034 million in 2020 to a peak of $2,130 million in 2023. However, in 2024, there was a slight decline to $2,054 million, marking a moderate downturn after several years of growth.
- Assets
- Assets associated with the segment showed steady growth from $10,548 million in 2020 to $15,089 million in 2023. In 2024, asset value slightly declined to $14,826 million, indicating a marginal reduction following four years of expansion.
- Segment Return on Assets (ROA)
- The segment ROA followed an overall increasing trend from 9.8% in 2020 to a high of 14.12% in 2023, reflecting improved asset efficiency over this period. In 2024, the ROA slightly decreased to 13.85%, indicating a minor reduction in profitability relative to assets despite remaining significantly higher than the 2020 level.
- Summary of Trends
- Between 2020 and 2023, the segment demonstrated robust growth in profitability, asset base, and asset utilization efficiency. The 2024 data reveals a stabilization phase where slight declines in profit, assets, and ROA suggest the segment may be experiencing challenges in maintaining the previous pace of growth. Nonetheless, performance metrics in 2024 remain substantially stronger than at the start of the observed period.
Segment ROA: Infrastructure
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Segment profit | |||||
Assets | |||||
Segment Profitability Ratio | |||||
Segment ROA1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment ROA = 100 × Segment profit ÷ Assets
= 100 × ÷ =
- Segment Profit
- The segment profit demonstrated an overall upward trend from 2020 to 2023, increasing from $1,654 million in 2020 to a peak of $2,828 million in 2023. However, in 2024, the profit decreased significantly to $2,450 million, indicating a reversal of the growth pattern observed in the prior years.
- Assets
- Assets within the segment experienced minor fluctuations over the five-year period, starting at $12,378 million in 2020 and declining slightly to $11,766 million in 2021. Following that, assets increased somewhat in 2022 to $12,243 million before decreasing again in 2023 to $11,991 million and then rising moderately to $12,161 million in 2024. Overall, asset levels remained relatively stable without substantial growth or decline.
- Segment Return on Assets (ROA)
- The segment ROA shows a strong positive trend from 2020 through 2023, improving from 13.36% in 2020 to a peak of 23.58% in 2023. This indicates enhanced efficiency in using assets to generate profit over these years. In 2024, the ROA declined to 20.15%, though it remained significantly higher than the starting point in 2020. The drop in ROA aligns with the decrease in segment profit during the same year, despite relatively stable asset levels.
Segment ROA: Financing
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Segment profit | |||||
Assets | |||||
Segment Profitability Ratio | |||||
Segment ROA1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment ROA = 100 × Segment profit ÷ Assets
= 100 × ÷ =
The segment profit of the financing segment exhibited a fluctuating trend over the five-year period. Starting at 449 million US dollars in 2020, the profit slightly decreased to 441 million in 2021, followed by a more pronounced drop to 340 million in 2022. In 2023, there was a modest recovery to 373 million, but it fell again to 348 million in 2024. This indicates variability in profitability with an overall downward tendency after 2020.
Regarding assets, there was a clear declining trend across the reported years. Assets decreased significantly from 24,974 million US dollars at the end of 2020 to 16,880 million in 2021. The downward movement continued in subsequent years, reaching 15,757 million in 2022, 14,409 million in 2023, and further decreasing to 14,075 million by the end of 2024. This consistent reduction suggests a contraction in the asset base allocated to the financing segment.
Return on Assets (ROA) showed varying performance throughout the period. The ROA started at 1.8% in 2020 and improved to 2.61% in 2021, indicating an increase in efficiency or profitability relative to assets during that year. However, it decreased to 2.16% in 2022 before rebounding to 2.59% in 2023 and then slightly declining to 2.47% in 2024. Overall, the ROA demonstrates moderate stability in profitability relative to assets despite fluctuations.
- Summary of Trends
- The financing segment's profit demonstrated volatility with a general decline after 2020, while assets steadily decreased over the analyzed period. Despite the contraction in assets, the segment's ROA showed resilience, experiencing fluctuations but maintaining a level above the initial 2020 rate except for the dip in 2022. These patterns suggest that although the segment's asset base is shrinking, the efficiency in generating profits on assets has been relatively maintained, albeit with some variability.
Segment Asset Turnover
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Software | |||||
Consulting | |||||
Infrastructure | |||||
Financing |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Software Segment
- Over the five-year period, the asset turnover ratio for the software segment demonstrated a gradual and consistent increase. Beginning at 0.39 in 2020, the ratio steadily rose to 0.45 by the end of 2024, indicating improved efficiency in generating revenue from assets within this segment.
- Consulting Segment
- The consulting segment showed a declining trend in asset turnover from 2020 through 2023, decreasing from 1.54 to 1.38. Although there was a slight recovery to 1.40 in 2024, the overall pattern suggests a reduction in asset utilization efficiency in this segment over the analyzed timeframe.
- Infrastructure Segment
- The infrastructure segment experienced some fluctuations. The asset turnover ratio increased from 1.17 in 2020 to a peak of 1.25 in 2022, followed by a modest decline to 1.15 by 2024. This indicates that while there was an improvement in asset efficiency up to 2022, the subsequent decrease suggests challenges in maintaining that efficiency.
- Financing Segment
- The financing segment maintained a consistently low asset turnover ratio throughout the period, starting at 0.04 in 2020 and ending at 0.05 in 2024. The minimal variation indicates limited revenue generation relative to assets in this segment, with little fluctuation in operational efficiency.
Segment Asset Turnover: Software
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Revenue | |||||
Assets | |||||
Segment Activity Ratio | |||||
Segment asset turnover1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment asset turnover = Revenue ÷ Assets
= ÷ =
The software segment demonstrates a generally positive trajectory over the five-year period from December 31, 2020, to December 31, 2024. Revenue shows a steady increase overall, rising from 22,927 million US dollars in 2020 to 27,085 million US dollars in 2024. Although there was a slight dip in 2022 to 23,629 million US dollars, the segment quickly recovered and continued its growth trend.
Assets in the segment fluctuate somewhat during the period but remain relatively stable and show a modest increase by the end of the timeframe. Assets decreased in 2022 to 55,822 million US dollars from previous years but rebounded in subsequent years, reaching 60,707 million US dollars in 2024, which is a modest increase from the 2020 level of 58,558 million US dollars.
The segment asset turnover ratio, which measures the efficiency of asset usage to generate revenue, consistently improves throughout the period. It increased from 0.39 in 2020 to 0.45 in 2024. This upward trend indicates enhanced operational efficiency, as the segment generated more revenue per unit of asset over time. The ratio remained steady at 0.42 for two consecutive years, 2022 and 2023, before increasing again in 2024.
- Revenue Trend
- Overall growth with a minor decline in 2022, followed by recovery and a peak in 2024.
- Asset Base
- Moderate fluctuations with a slight decline in 2022, followed by gradual increases, ending higher than the initial 2020 value.
- Asset Turnover Ratio
- Consistent improvement, indicating more efficient use of assets to generate revenue across the five years.
In summary, the software segment exhibits a positive growth pattern coupled with increasing operational efficiency. Despite some variability in asset levels, the improved asset turnover ratio and rising revenue suggest successful management of resources to fuel growth in this segment.
Segment Asset Turnover: Consulting
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Revenue | |||||
Assets | |||||
Segment Activity Ratio | |||||
Segment asset turnover1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment asset turnover = Revenue ÷ Assets
= ÷ =
The segment demonstrates a consistent increase in revenue over the analyzed five-year period, rising from $16,257 million in 2020 to $20,692 million in 2024. The most significant growth occurred between 2021 and 2022, with revenue increasing by approximately 12.3%, while the growth rate between 2023 and 2024 showed a slight decline, indicating a potential leveling off in revenue expansion.
Assets within the segment also increased steadily from $10,548 million in 2020 to $14,826 million in 2024. This growth in assets is indicative of continued investment or accumulation of resources to support the segment’s operations. The period between 2021 and 2022 saw the largest increase in assets, aligning with the strong revenue growth during the same period.
The segment asset turnover ratio, which measures the efficiency of asset utilization to generate revenue, reveals a gradual downward trend over the five years. The ratio decreased from 1.54 in 2020 to a low of 1.38 in 2023, before showing a slight recovery to 1.40 in 2024. This decline suggests that although revenue and assets increased, the rate at which assets generated revenue decreased, reflecting a potential decline in operational efficiency or a shift in asset structure.
- Revenue
- Increased over the period with notable growth in 2021-2022; growth slowed in 2023-2024.
- Assets
- Consistently rose throughout the five years, indicating increased investment or resource accumulation.
- Segment Asset Turnover
- Showed a decreasing trend from 2020 to 2023, suggesting reduced efficiency in asset use, with a minor improvement in 2024.
Overall, the segment exhibits growth in both revenue and asset base, while the efficiency of asset usage to generate revenue has experienced some decline, implying potential challenges in optimizing asset utilization despite expanding scale.
Segment Asset Turnover: Infrastructure
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Revenue | |||||
Assets | |||||
Segment Activity Ratio | |||||
Segment asset turnover1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment asset turnover = Revenue ÷ Assets
= ÷ =
- Revenue Trends
- The segment's revenue experienced fluctuations over the five-year period. Starting at $14,533 million in 2020, revenue decreased slightly to $14,188 million in 2021. It then saw an increase to $15,288 million in 2022, followed by declines in both 2023 and 2024, ending at $14,020 million. Overall, revenue exhibited a peak in 2022 before gradually declining in subsequent years.
- Assets Trends
- Total assets for the segment showed moderate variability. Assets began at $12,378 million in 2020, declined to $11,766 million in 2021, increased to $12,243 million in 2022, then slightly decreased to $11,991 million in 2023, and increased marginally to $12,161 million in 2024. The asset base remained relatively stable with minor fluctuations but no strong upward or downward trend.
- Segment Asset Turnover Ratio
- The segment asset turnover ratio, indicating the efficiency of asset utilization in generating revenue, improved from 1.17 in 2020 to a peak of 1.25 in 2022. After 2022, the ratio declined to 1.22 in 2023 and further to 1.15 in 2024. This suggests that asset efficiency increased up to 2022 but diminished somewhat in the following years.
- Overall Insights
- The data reflects a segment with relatively stable asset levels and fluctuating revenue. Revenue peaked in 2022, corresponding with the highest asset turnover ratio, implying efficient use of assets at that time. Subsequent declines in both revenue and asset turnover ratio from 2023 onwards may indicate reduced operational efficiency or challenges in maintaining previous revenue levels relative to the asset base. The modest changes in assets suggest a cautious approach to asset investment or management.
Segment Asset Turnover: Financing
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Revenue | |||||
Assets | |||||
Segment Activity Ratio | |||||
Segment asset turnover1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment asset turnover = Revenue ÷ Assets
= ÷ =
- Revenue Trends
- The revenue from the financing segment exhibited a decline from 975 million US dollars in 2020 to 645 million US dollars in 2022. Subsequently, there was a partial recovery with revenue increasing to 741 million US dollars in 2023, yet it experienced a slight decrease to 713 million US dollars in 2024. Overall, the trend shows a contraction in revenue over the five-year period, with some variability in the latter years.
- Asset Trends
- Total assets attributed to the financing segment decreased steadily from 24,974 million US dollars in 2020 to 14,075 million US dollars in 2024. This represents a continuous reduction in asset base, with no reversal of the downward trend during the observed period.
- Segment Asset Turnover Trends
- The segment asset turnover ratio, which measures revenue generated per unit of asset, showed some fluctuation but remained relatively stable between 0.04 and 0.05 throughout the five years. The ratio increased slightly in 2021 and again in 2023 and 2024 after a dip in 2022, indicating modest improvements in asset utilization efficiency during those years despite shrinking total assets.
- Overall Insights
- The data reveals a declining asset base and overall revenue contraction in the financing segment over the five-year span. Despite these reductions, the segment maintained a relatively stable asset turnover ratio, suggesting that the company managed to sustain its operational efficiency in generating revenue relative to its assets. The partial revenue recovery in 2023 contrasts with the continued asset decline, implying potential changes in business operations or market conditions affecting revenue generation independent of asset size.
Segment Capital Expenditures to Depreciation
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Software | |||||
Consulting | |||||
Infrastructure | |||||
Financing |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Software Segment
- The capital expenditures to depreciation ratio in the software segment showed an overall increasing trend from 0.44 in 2020 to a peak of 0.85 in 2022, indicating a substantial rise in investments relative to depreciation. However, ratios decreased to 0.72 in 2023 and further to 0.68 in 2024, suggesting a moderation in capital investment intensity following the peak period.
- Consulting Segment
- The consulting segment demonstrated a gradual increase in the ratio from 0.13 in 2020 to 0.26 in 2022, reflecting rising capital expenditures relative to depreciation. This was followed by a decline to 0.19 in 2023 and a further drop to 0.14 in 2024, pointing to a reduction in capital spending or possibly increased depreciation.
- Infrastructure Segment
- For the infrastructure segment, the ratio decreased from 0.77 in 2020 to 0.57 in 2021, before recovering to 0.68 in 2022. It then increased to a high of 0.82 in 2023 but declined again to 0.62 in 2024. This fluctuation indicates variable investment levels over the years, with an overall tendency towards stabilization below the initial 2020 level by 2024.
- Financing Segment
- The financing segment ratios display a notable upward trend from 0.34 in 2020 to a sharp increase reaching 1.93 in 2022. Thereafter, the ratio slightly decreased to 1.88 in 2023 and dropped more significantly to 1.22 in 2024. These elevated ratios suggest a period of aggressive capital investment relative to depreciation, especially in 2022, followed by a gradual scaling back.
- Overall Insights
- The data indicates that all segments experienced increasing capital expenditures relative to depreciation through 2022 or 2023, followed by decreases in 2024. The financing segment exhibited the highest ratios across all years, reflecting a particularly capital-intensive approach or new asset investments during the period. Software and consulting segments showed moderate volatility, while infrastructure's changes were less dramatic but still notable. The general pattern suggests that 2022 was a peak year for capital investments relative to depreciation across the company’s reportable segments, with a trend toward reduced investment intensity in the following years.
Segment Capital Expenditures to Depreciation: Software
International Business Machines Corp.; Software; segment capital expenditures to depreciation calculation
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Capital expenditures/investments in intangibles | |||||
Depreciation/amortization of non-acquired intangibles | |||||
Segment Financial Ratio | |||||
Segment capital expenditures to depreciation1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment capital expenditures to depreciation = Capital expenditures/investments in intangibles ÷ Depreciation/amortization of non-acquired intangibles
= ÷ =
- Capital Expenditures/Investments in Intangibles
- Over the five-year period ending in 2024, capital expenditures and investments in intangibles showed a general downward trend. Starting at 548 million US dollars in 2020, the amount increased slightly to 565 million in 2021 before declining significantly in subsequent years. The figures dropped to 463 million in 2022, further decreased to 369 million in 2023, and reached 338 million by 2024. This pattern indicates a consistent reduction in investment levels within this segment after the peak in 2021.
- Depreciation/Amortization of Non-Acquired Intangibles
- Depreciation and amortization expenses of non-acquired intangibles experienced a notable decrease over the period. The expense was highest at 1,237 million US dollars in 2020, followed by a slight reduction to 1,204 million in 2021. Subsequently, there was a sharp decline to 547 million in 2022, with smaller decreases in the following years to 510 million in 2023 and 495 million in 2024. The steep drop from 2021 to 2022 suggests a significant change in the asset base or amortization schedule.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio of segment capital expenditures to depreciation displayed a fluctuating pattern. Initially, the ratio was relatively low at 0.44 in 2020, increasing slightly to 0.47 in 2021. A pronounced rise occurred in 2022, where the ratio peaked at 0.85, indicating capital expenditures were nearing parity with depreciation expenses. However, this ratio then declined to 0.72 in 2023 and further to 0.68 in 2024, signifying a reduction in capital investments relative to depreciation.
- Summary
- The data reflects a segment characterized by decreasing investments in intangible assets alongside declining amortization costs, which are likely connected. The peak in the capital expenditures to depreciation ratio in 2022 suggests a temporary alignment of new investments with asset consumption, followed by a trend toward reduced capital spending relative to depreciation in subsequent years. The overall trend points to a strategic shift towards lower expenditure on intangible assets within the segment over the observed period.
Segment Capital Expenditures to Depreciation: Consulting
International Business Machines Corp.; Consulting; segment capital expenditures to depreciation calculation
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Capital expenditures/investments in intangibles | |||||
Depreciation/amortization of non-acquired intangibles | |||||
Segment Financial Ratio | |||||
Segment capital expenditures to depreciation1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment capital expenditures to depreciation = Capital expenditures/investments in intangibles ÷ Depreciation/amortization of non-acquired intangibles
= ÷ =
- Capital Expenditures/Investments in Intangibles
- There was an initial increase from $26 million in 2020 to $55 million in 2021, followed by a consistent decline over the subsequent years, reaching $14 million by 2024. This indicates a gradual reduction in investment activity in intangible assets after a peak in 2021.
- Depreciation/Amortization of Non-Acquired Intangibles
- This expense rose from $207 million in 2020 to a peak of $250 million in 2021, then decreased sharply to $112 million in 2022. It continued to decrease slightly over the next two years, reaching $100 million by 2024. The initial increase followed by a marked decline suggests changes in the intangible asset base or shifts in amortization schedules.
- Segment Capital Expenditures to Depreciation Ratio
- The ratio increased from 0.13 in 2020 to 0.22 in 2021 and further to 0.26 in 2022, indicating a relative growth in capital expenditures compared to depreciation. After 2022, the ratio decreased to 0.19 in 2023 and further to 0.14 in 2024, reflecting a declining trend in capital expenditures relative to the declining depreciation expenses.
- Summary of Trends
- The data reveals that while investments in intangibles and capital expenditures peaked in 2021, both capital expenditures and amortization expenses decreased notably in the following years. The segment’s capital expenditure relative to depreciation ratio initially demonstrated increasing investment activity but reverted to a lower level by 2024, signifying reduced emphasis on new intangible investments relative to the amortization of existing assets.
Segment Capital Expenditures to Depreciation: Infrastructure
International Business Machines Corp.; Infrastructure; segment capital expenditures to depreciation calculation
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Capital expenditures/investments in intangibles | |||||
Depreciation/amortization of non-acquired intangibles | |||||
Segment Financial Ratio | |||||
Segment capital expenditures to depreciation1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment capital expenditures to depreciation = Capital expenditures/investments in intangibles ÷ Depreciation/amortization of non-acquired intangibles
= ÷ =
- Capital expenditures and investments in intangibles
- Over the five-year period, capital expenditures and investments in intangibles demonstrated a generally declining trend. Starting at $1,093 million in 2020, the figure dropped significantly to $792 million in 2021. Although there was a moderate increase to $853 million in 2022, the amounts decreased again in subsequent years, reaching $836 million in 2023 and further declining to $684 million by the end of 2024.
- Depreciation and amortization of non-acquired intangibles
- Depreciation and amortization expenses for non-acquired intangibles showed a steady downward trajectory from 2020 through 2023, starting at $1,419 million in 2020 and dropping consistently each year to $1,399 million (2021), $1,250 million (2022), and $1,018 million (2023). However, in 2024, this trend reversed slightly, with the expense increasing to $1,103 million.
- Segment capital expenditures to depreciation ratio
- The ratio of segment capital expenditures to depreciation fluctuated during the period. It started at 0.77 in 2020 and dropped to 0.57 in 2021, indicating a lower level of reinvestment relative to depreciation. There was a recovery to 0.68 in 2022 and a further increase to 0.82 in 2023, suggesting a higher rate of capital renewal. Nevertheless, the ratio declined again to 0.62 in 2024, reflecting a decrease in capital expenditures in relation to depreciation levels.
- Overall insights
- The data indicates a cautious investment approach within the infrastructure segment, with capital expenditures generally trending downward after an initial drop in 2021. The depreciation and amortization expense generally declined, possibly reflecting aging intangible assets or changes in asset composition, though a slight uptick in 2024 could denote new intangible assets beginning to amortize. The variability in the capital expenditures to depreciation ratio highlights fluctuating reinvestment intensity, with 2023 showing the highest relative capital spending before a moderation in 2024. This pattern suggests intermittent adjustments in investment strategy, balancing asset renewal and cost control.
Segment Capital Expenditures to Depreciation: Financing
International Business Machines Corp.; Financing; segment capital expenditures to depreciation calculation
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Selected Financial Data (US$ in millions) | |||||
Capital expenditures/investments in intangibles | |||||
Depreciation/amortization of non-acquired intangibles | |||||
Segment Financial Ratio | |||||
Segment capital expenditures to depreciation1 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Segment capital expenditures to depreciation = Capital expenditures/investments in intangibles ÷ Depreciation/amortization of non-acquired intangibles
= ÷ =
The analysis of the financing segment data reveals a clear pattern of declining expenditure alongside fluctuating depreciation trends over the observed five-year period.
- Capital expenditures/investments in intangibles
- There is a consistent decrease in capital expenditures allocated to investments in intangibles, dropping from 41 million USD in 2020 to 11 million USD in 2024. The reduction is steady, with the most significant annual declines observed between 2021 and 2023.
- Depreciation/amortization of non-acquired intangibles
- Depreciation shows a sharp decrease from 120 million USD in 2020 to 8 million USD in 2023, followed by a slight rise to 9 million USD in 2024. This suggests a rapid amortization or reduced intangible asset base after 2020, stabilizing at a lower level in recent years.
- Segment capital expenditures to depreciation ratio
- The ratio, indicating capital expenditures relative to depreciation, exhibits an increasing trend from 0.34 in 2020 to a peak of 1.93 in 2022, before a slight decrease to 1.22 in 2024. The rise in this ratio despite declining absolute capital expenditures is explained by the more pronounced decrease in depreciation expenses, pointing to a possible shift toward less capital-intensive intangible assets or a changing amortization profile.
Overall, the segment shows a marked reduction in both capital spending on intangibles and the associated depreciation costs. The capital expenditure to depreciation ratio increase suggests relatively higher proportionate investments compared to depreciation over time, implying a strategic adjustment in asset management or investment focus within the financing segment.
Revenue
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Software | |||||
Consulting | |||||
Infrastructure | |||||
Financing | |||||
Total segments |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Software Segment Revenue
- The Software segment demonstrated a consistent upward trend over the analyzed period. Starting at $22,927 million in 2020, revenue increased each year, reaching $27,085 million by 2024. This reflects a steady growth trajectory with an approximate 18% increase over the five-year span, indicating a strong and expanding demand for software solutions.
- Consulting Segment Revenue
- Consulting revenues showed robust growth from 2020 through 2023, rising from $16,257 million to a peak of $20,884 million. However, in 2024, a slight decline occurred with revenues decreasing to $20,692 million. Despite this minor drop, the overall trend indicates significant expansion, almost a 27% increase over the five years, underscoring the importance and increasing demand for consulting services, albeit with a recent stabilization or minor contraction.
- Infrastructure Segment Revenue
- Infrastructure revenues experienced fluctuations with a peak of $15,288 million in 2022, followed by a decline in subsequent years to $14,020 million in 2024, marking a net decrease from the 2020 figure of $14,533 million. The data suggests a modest downward trend over the period, reflecting possible shifts in market demand or competitive pressures affecting this segment.
- Financing Segment Revenue
- The Financing segment revealed a consistent decline in revenues, falling from $975 million in 2020 to $713 million in 2024. This steady reduction indicates either diminished financing activities or reduced returns from financing operations, amounting to a decrease of approximately 27% over the period.
- Total Segment Revenue
- Overall, total segment revenues increased steadily from $54,692 million in 2020 to $62,510 million in 2024, representing an approximate increase of 14%. This growth appears primarily driven by gains in the Software and Consulting segments, which offset declines observed in Infrastructure and Financing. The total revenue trend reflects a robust overall business expansion despite some segment-specific challenges.
Segment profit
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Software | |||||
Consulting | |||||
Infrastructure | |||||
Financing | |||||
Total segments |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Software Segment
- The Software segment showed a consistent and significant upward trend over the five-year period. Starting at $3,341 million in 2020, revenues grew steadily each year, reaching $8,684 million by 2024. This represents a substantial increase, more than doubling the initial value, indicating strong growth and possibly increasing demand or successful product offerings in this segment.
- Consulting Segment
- The Consulting segment experienced continual growth from 2020 to 2023, rising from $1,034 million to a peak of $2,130 million. However, in 2024, there was a slight decline to $2,054 million. Despite this minor drop, the overall trend remains positive over the five-year span, with the segment nearly doubling in size compared to 2020.
- Infrastructure Segment
- The Infrastructure segment showed moderate growth from 2020 through 2023, increasing from $1,654 million to $2,828 million. However, in 2024, the segment experienced a notable decline to $2,450 million. This decrease suggests potential challenges or shifts in market demand affecting this segment after several years of expansion.
- Financing Segment
- The Financing segment displayed a downward trajectory overall. Starting at $449 million in 2020, the segment's value slightly decreased each year, with a minor rebound in 2023, reaching $373 million, but then declined again to $348 million in 2024. This consistent reduction may indicate decreased focus or profitability within this segment.
- Total Segments
- The aggregate total of all segments combined has increased steadily from $6,478 million in 2020 to $13,536 million in 2024. Despite some fluctuations within individual segments, especially the decline in Infrastructure and modest reduction in Consulting and Financing segments toward the end of the period, the overall business showed substantial growth, almost doubling over five years.
Assets
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Software | |||||
Consulting | |||||
Infrastructure | |||||
Financing | |||||
Total segments |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Software Segment
- The software segment assets show a generally stable to slightly increasing trend over the observed period. Beginning at 58,558 million USD in 2020, the value increased marginally to 59,336 million USD in 2021, before dipping to 55,822 million USD in 2022. Subsequently, there is a recovery and growth trend with figures rising to 59,811 million USD in 2023 and further to 60,707 million USD by 2024, indicating resilience and possibly strategic investment in software assets.
- Consulting Segment
- The consulting segment assets exhibit a consistent and significant upward trajectory from 2020 to 2024. Starting at 10,548 million USD in 2020, the assets expanded steadily, reaching 11,914 million USD in 2021, then accelerating growth to 14,261 million USD in 2022 and peaking at 15,089 million USD in 2023. Although there is a slight decrease to 14,826 million USD in 2024, the overall trend points to considerable growth in consulting assets over five years.
- Infrastructure Segment
- The infrastructure segment assets present relative stability with minor fluctuations over the period. The assets started at 12,378 million USD in 2020, decreased slightly to 11,766 million USD in 2021, then recovered to 12,243 million USD in 2022. This is followed by a small decline to 11,991 million USD in 2023 and a moderate rise back up to 12,161 million USD in 2024. The values indicate a steady level of investment with no substantial growth or decline.
- Financing Segment
- The financing segment assets demonstrate a clear declining trend throughout the period. Beginning at 24,974 million USD in 2020, assets held in this segment decreased sharply to 16,880 million USD in 2021. This downward trajectory continued with figures dropping to 15,757 million USD in 2022, 14,409 million USD in 2023, and further to 14,075 million USD by 2024. This consistent decline suggests a strategy of reducing financing assets or divestment in this segment.
- Total Segment Assets
- Total segment assets decreased notably from 106,458 million USD in 2020 to 99,896 million USD in 2021 and further to 98,083 million USD in 2022. Despite this reduction, the total asset base showed recovery in 2023, increasing to 101,300 million USD and remained relatively stable with 101,769 million USD in 2024. The early decline appears largely influenced by the decrease in financing assets, while the latter stabilization is supported by growth in software and consulting segments.
Depreciation/amortization of non-acquired intangibles
International Business Machines Corp., depreciation/amortization of non-acquired intangibles by reportable segment
US$ in millions
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Software | |||||
Consulting | |||||
Infrastructure | |||||
Financing | |||||
Total segments |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The data on annual reportable segment depreciation and amortization of non-acquired intangibles reveals discernible trends across various business segments over the five-year period from 2020 to 2024.
- Software Segment
- This segment shows a consistent decline in depreciation and amortization expenses over the years. Starting at US$1,237 million in 2020, the figure slightly decreased to US$1,204 million in 2021, followed by a significant drop to US$547 million in 2022. This downward trend continued with smaller reductions in 2023 and 2024, reaching US$510 million and US$495 million, respectively. The pattern suggests a substantial reduction in depreciable intangible assets within the software segment or a shift in the capital structure or amortization schedule.
- Consulting Segment
- Depreciation and amortization expenses for consulting initially increased from US$207 million in 2020 to US$250 million in 2021, indicating heightened intangible asset usage or additions. However, a sharp decline to US$112 million occurred in 2022, followed by further decreases to US$109 million in 2023 and US$100 million in 2024. This reflects a reversal from the previous increase, possibly due to asset write-offs, amortization completion, or changes in capital allocation within the consulting business.
- Infrastructure Segment
- The infrastructure segment presented relatively high and fluctuating expenses. Beginning at US$1,419 million in 2020, there was a slight decrease to US$1,399 million in 2021. A more marked decline followed in 2022 to US$1,250 million, reaching a low of US$1,018 million in 2023. Interestingly, the amount increased again to US$1,103 million in 2024, suggesting renewed investments or changes in amortization schedules within the infrastructure segment.
- Financing Segment
- Depreciation and amortization expenses in financing consistently decreased over the period. From US$120 million in 2020, expenses dropped sharply to US$49 million by 2021, then further to US$14 million in 2022. The trend of lower charges continued with modest values of US$8 million and US$9 million in the following two years, indicating substantial asset amortization completion or asset disposals in this segment.
- Total Segments
- The overall depreciation and amortization expenses across all segments declined from US$2,983 million in 2020 to US$2,902 million in 2021, followed by a sharp reduction to US$1,923 million in 2022. The downward trend persisted, reaching US$1,645 million in 2023. A slight increase to US$1,707 million in 2024 was observed. This aggregate behavior mirrors the trends seen predominantly in the infrastructure segment's recovery, contrasting with sustained decreases in other segments.
Capital expenditures/investments in intangibles
International Business Machines Corp., capital expenditures/investments in intangibles by reportable segment
US$ in millions
Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
---|---|---|---|---|---|
Software | |||||
Consulting | |||||
Infrastructure | |||||
Financing | |||||
Total segments |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of annual capital expenditures and investments in intangibles across reportable segments reveals several notable trends over the period from 2020 to 2024.
- Software Segment
- There is a clear downward trend in expenditures, declining from $548 million in 2020 to $338 million in 2024. This represents a substantial reduction of approximately 38% over the five-year period. The decline is consistent year-over-year, with the most significant drop observed between 2021 and 2023.
- Consulting Segment
- Expenditures in this segment show volatility but generally trend downward. After more than doubling from $26 million in 2020 to $55 million in 2021, the figure decreased gradually in subsequent years, reaching $14 million in 2024. The initial spike followed by a steady decrease may reflect a temporary increase in consulting investments or projects in 2021.
- Infrastructure Segment
- Investment here peaked at $1,093 million in 2020 but then declined to $684 million by 2024. While the drop is notable, it is less steep compared to the Software segment. Between 2021 and 2023, the investments fluctuated modestly but generally remained below 2020 levels, indicating a possible strategic shift or efficiency improvements.
- Financing Segment
- Expenditures decreased steadily from $41 million in 2020 to $11 million in 2024. The consistent decline reflects a potential reduction in financing activities or related intangible investments.
- Total Segments
- The cumulative capital expenditures across all segments declined significantly from $1,708 million in 2020 to $1,047 million in 2024. This overall reduction underscores a broader decrease in investments in intangible assets across the company’s segments, with nearly a 39% reduction over five years.
In summary, the data indicate a consistent downward trend in capital expenditures and intangible investments across all reported segments. The most pronounced reductions are observed in Software and Financing, whereas Infrastructure shows some fluctuation but overall decline. Consulting expenditures experienced a brief increase early in the period followed by a gradual decrease. The aggregate decrease in total segment expenditures suggests a strategic reallocation or scaling down of investments in intangibles over the analyzed timeframe.