On February 26th, IBM announced that it is updating its reportable segments in first quarter 2024 to reflect the way the company manages operations and allocates resources. These changes include:

• The Weather Company divested assets moving from Software segment to Other-divested businesses
• Security Services moving from Software to Consulting
• Improved transparency of segment profitability with the removal of stock-based compensation and net interest expense allocations from the reportable segments – now referred to as Segment profit.

Accordingly, the company has updated its reportable segments. There is no change to IBM’s consolidated results.

The company’s results will reflect the new segment structure starting with first quarter 2024, which will be reported in April. Today, the company is providing a view of the segment results on the new basis for the last 2 years, to allow investors to update their historical financial models in advance of the first quarter earnings report. The attached exhibits provide data for 2022 and 2023 under the new segment structure.

A more detailed description of the segment reporting changes was provided in the February 26th article.