IBM said it plans to introduce a new mainframe during its conference call on fourth-quarter 2021 earnings. The new IBM Z introduction will occur late in the first half of 2022.
Discussing the Q4 results, Arvind Krishna, IBM chairman and CEO, said, "We increased revenue in the fourth quarter with hybrid cloud adoption driving growth in software and consulting." He added, “Our fourth-quarter results give us confidence in our ability to deliver our objectives of sustained mid-single digit revenue growth and strong free cash flow in 2022."
On November 3, 2021, IBM completed the separation of Kyndryl. Unless otherwise specified, IBM said, fourth-quarter and full-year results are presented on a continuing operations basis.
IBM announced revenue of $16.7 billion, up 6.5%, up 8.6% at constant currency (including about 3.5 points from incremental external sales to Kyndryl). Software revenue was up 8% up 10% at constant currency (including about 5 points from incremental external sales to Kyndryl). Consulting revenue was up 13%, up 16% at constant currency. Infrastructure revenue was flat, up 2% at constant currency (including about 5 points from incremental external sales to Kyndryl).
"In 2021, we continued to invest for the future by increasing R&D spending, expanding our ecosystem and acquiring 15 companies to strengthen our hybrid cloud and AI capabilities," said James Kavanaugh, IBM senior vice president and chief financial officer. "With the separation of Kyndryl we now have taken the next step in the evolution of our strategy, creating value through focus and strengthening our financial profile."
In additional prepared remarks during the earnings call, Kavanaugh turned to the new Infrastructure segment and said, “revenue was up 2%. The Kyndryl commercial relationship contributed about five points of growth which is higher than we expected in October. In this segment, we brought together Hybrid Infrastructure with Infrastructure Support, which was formerly Technology Support Services. This allows us to better manage the lifecycle of our hardware platforms and to provide end-to-end value for our clients. Hybrid Infrastructure and Infrastructure Support revenue were up 2% and 1%, respectively, with pretty consistent contribution from the new Kyndryl relationship.”
Hybrid Infrastructure includes IBM Z and Distributed Infrastructure, Kavanaugh explained. “IBM Z revenue performance, now inclusive of both hardware and operating system, is down 4% this quarter. This is the tenth quarter of z15 availability, and the combination of security, scalability and reliability continues to resonate with clients. This program continues to outpace the strong z14 program and we’ve shipped more MIPs in the z15 program than any program in our history. Our clients are leveraging IBM Z as an essential part of their hybrid cloud infrastructure. And then in Distributed Infrastructure, revenue was up 7% driven by pervasive strength across our storage portfolio.”
Kavanaugh added, “Infrastructure revenue performance will vary with product cycle. In 2022, with a new IBM Z introduction late in the first half, we expect performance above the model and a slight contribution to IBM's overall growth.”
A replay of the earnings call and the prepared remarks script are available at www.ibm.com/investor/events/earnings-4q21.