IBM Corp on Wednesday reported its highest annual revenue growth in a decade and beat Wall Street expectations for the fourth quarter as more businesses looked to optimize their operations and save costs amid an economic downturn.
A man stands near an IBM logo at the Mobile World Congress in Barcelona, Spain, February 25, 2019. REUTERS/Sergio Perez//File Photoon Wednesday reported its highest annual revenue growth in a decade and beat Wall Street expectations for the fourth quarter as more businesses looked to optimize their operations and save costs amid an economic downturn.
The IT software and consulting company also forecast annual revenue growth in the mid-single digits on constant currency terms, weaker than the 12% it reported for 2022 but in line with mid-term targets announced in 2021. Analysts have raised concerns if IBM would be able to deliver on that considering the turbulent macroeconomic backdrop.
Big Blue's forecast for slower growth comes after a boom over the pandemic when companies splurged on digitizing their operations. Now, rising borrowing costs and recession fears are forcing businesses to tighten spending. IBM in October flagged softness in new bookings in Western Europe while peer Accenture Plc also noted weakness in its consulting business. Cognizant Technology Solutions CorpStill, IBM Chief Financial Officer James Kavanaugh told Reuters on Wednesday that the company is seeing its consulting business grow in terms of cloud spending. Its deal signings doubled in 2022 for setting up services with hyperscaler partners such as Amazon.
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