IBM plans to revise revenue categories in reportable segments.
We have decided to adjust how we categorize reported revenues within our Software and Consulting segments in order to better reflect market opportunities and our business strategies. These changes are aimed at aligning our portfolio with our core goals and business models while providing more relevant information to investors. It is important to note that these modifications will not affect IBM’s overall financial statements or our existing reportable segments.
Starting from the first quarter of 2025, our Software and Consulting segments will adopt these changes. To ensure transparency, we are releasing recast historical financial data to allow investors and analysts to update their models prior to the first quarter earnings report in April. The guidance provided in our Investor Day presentation in February 2025 already includes these adjustments to our reported revenue categories.
Within the Software segment, we focus on offering hybrid cloud platform and software solutions to assist clients in various aspects such as prediction, automation, security, and modernization. The overall scope of the Software segment remains unchanged despite the alterations to the reported revenue categories. In the first quarter of 2025, IBM will provide revenue details and year-to-year percent changes for Hybrid Cloud, Automation, Data, and Transaction Processing within the Software category. Notably, Hybrid Cloud products will remain unchanged, while new placements have been made for several businesses that enhance the Automation, Data, and Transaction Processing categories.
On the other hand, the Consulting segment is dedicated to helping clients design and implement open, hybrid cloud architectures while optimizing key workflows and processes. Like the Software segment, the overall scope of the Consulting segment will remain consistent following the adjustments to the reported revenue categories. Starting from the first quarter of 2025, IBM will report revenue details and year-to-year percent changes for Strategy and Technology, as well as Intelligent Operations, within the Consulting segment.
It is worth mentioning that additional information on the company’s financial results is provided in these materials, including revenue growth rates adjusted for constant currency as a non-GAAP measure. The rationale behind management’s use of this non-GAAP information can be found in the company’s 2024 Annual Report.
In summary, IBM’s strategic realignment of reported revenue categories within the Software and Consulting segments aims to streamline our business operations and provide stakeholders with a more accurate representation of our market focus and growth strategies. These changes reflect our commitment to innovation and responsiveness to evolving market demands.
