Enterprise Value to EBITDA (EV/EBITDA)
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Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
International Business Machines Corp., EBITDA calculation
US$ in millions
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).
- Net Income Attributable to IBM
- The net income showed moderate growth from 5590 million US dollars in 2020 to 5743 million in 2021. However, a sharp decline occurred in 2022, dropping significantly to 1639 million. This was followed by a notable recovery and peak in 2023 at 7502 million, before declining again to 6023 million in 2024. Overall, the net income exhibited volatility with a strong rebound after a significant dip in 2022.
- Earnings Before Tax (EBT)
- EBT followed a similar pattern to net income, with an increase from 4659 million in 2020 to 4856 million in 2021. Thereafter, a steep fall to 1176 million in 2022 was observed, mirroring the net income trend. A marked increase occurred in 2023, reaching 8706 million, followed by a decrease to 5814 million in 2024. This indicates substantial fluctuations in profitability before taxes over the period.
- Earnings Before Interest and Tax (EBIT)
- EBIT started at 5947 million in 2020 and saw a slight increase to 6011 million in 2021. The year 2022 experienced a considerable decline to 2392 million, consistent with other profit metrics. EBIT surged dramatically in 2023 to 10313 million, then declined to 7526 million in 2024. This suggests significant variability in operating performance, with a particularly strong recovery in 2023.
- Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
- EBITDA was the highest among the reported earnings metrics and displayed a peak of 12642 million in 2020, slightly decreasing to 12428 million in 2021. A substantial drop to 7194 million followed in 2022. In 2023, EBITDA reached its highest level in the period at 14709 million, before falling to 12193 million in 2024. The trend indicates considerable earnings volatility with the strongest operational cash flow generation in 2023.
Enterprise Value to EBITDA Ratio, Current
International Business Machines Corp., current EV/EBITDA calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | |
| Valuation Ratio | |
| EV/EBITDA | |
| Benchmarks | |
| EV/EBITDA, Competitors1 | |
| Accenture PLC | |
| Adobe Inc. | |
| Cadence Design Systems Inc. | |
| CrowdStrike Holdings Inc. | |
| Fair Isaac Corp. | |
| Intuit Inc. | |
| Microsoft Corp. | |
| Oracle Corp. | |
| Palantir Technologies Inc. | |
| Palo Alto Networks Inc. | |
| Salesforce Inc. | |
| ServiceNow Inc. | |
| Synopsys Inc. | |
| Workday Inc. | |
| EV/EBITDA, Sector | |
| Software & Services | |
| EV/EBITDA, Industry | |
| Information Technology | |
Based on: 10-K (reporting date: 2024-12-31).
1 Click competitor name to see calculations.
If the company EV/EBITDA is lower then the EV/EBITDA of benchmark then company is relatively undervalued.
Otherwise, if the company EV/EBITDA is higher then the EV/EBITDA of benchmark then company is relatively overvalued.
Enterprise Value to EBITDA Ratio, Historical
International Business Machines Corp., historical EV/EBITDA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Earnings before interest, tax, depreciation and amortization (EBITDA)2 | ||||||
| Valuation Ratio | ||||||
| EV/EBITDA3 | ||||||
| Benchmarks | ||||||
| EV/EBITDA, Competitors4 | ||||||
| Accenture PLC | ||||||
| Adobe Inc. | ||||||
| Cadence Design Systems Inc. | ||||||
| CrowdStrike Holdings Inc. | ||||||
| Fair Isaac Corp. | ||||||
| Intuit Inc. | ||||||
| Microsoft Corp. | ||||||
| Oracle Corp. | ||||||
| Palantir Technologies Inc. | ||||||
| Palo Alto Networks Inc. | ||||||
| Salesforce Inc. | ||||||
| ServiceNow Inc. | ||||||
| Synopsys Inc. | ||||||
| Workday Inc. | ||||||
| EV/EBITDA, Sector | ||||||
| Software & Services | ||||||
| EV/EBITDA, Industry | ||||||
| Information Technology | ||||||
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).
3 2024 Calculation
EV/EBITDA = EV ÷ EBITDA
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrates a consistent upward trend throughout the observed periods. Starting at 155,259 million USD in 2020, it remains relatively stable through 2021 and 2022 before experiencing significant increases in 2023 and 2024, reaching 279,256 million USD by the end of 2024. This growth indicates a strengthening market valuation and potentially increased investor confidence or expanded business operations over the latter years.
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- EBITDA shows considerable fluctuations across the years. After a slight decrease from 12,642 million USD in 2020 to 12,428 million USD in 2021, there is a marked decline in 2022 to 7,194 million USD. EBITDA recovers strongly in 2023 to 14,709 million USD but drops again to 12,193 million USD in 2024. This volatility may indicate operational challenges or varying profitability from core business activities within these years.
- EV/EBITDA Ratio
- The EV/EBITDA ratio reflects the combined effects of changes in enterprise value and EBITDA. The ratio hovered around 12.3 to 12.5 in 2020 and 2021, sharply rising to 22.17 in 2022 due to the EBITDA decrease. It then decreased to 14.41 in 2023 as EBITDA improved and surged again to 22.9 in 2024 with the EBITDA decline alongside rising enterprise value. The elevated EV/EBITDA ratios in 2022 and 2024 suggest valuations may be higher relative to earnings, which could reflect market expectations, reduced profitability, or other financial dynamics during these periods.