IBM CEO Arvind Krishna attends the World Economic Forum in Davos, Switzerland on January 16, 2024.
Stefan Wormuth | Bloomberg | Getty Images
International Business Machines Corporation Shares of HashiCorp fell 6% in after-hours trading on Wednesday after the hardware, software and consulting provider said it would acquire cloud software maker HashiCorp and reported first-quarter revenue that fell short of analysts’ expectations.
in a statement, IBM announced its intention to acquire HashiCorp for $35 per share in cash, a deal with an enterprise value (net of cash) of $6.4 billion. On Tuesday, the Wall Street Journal reported that IBM was about to acquire HashiCorp, sending the stock price higher.Bloomberg explain Earlier Wednesday, IBM sought an offer of $35 per share.
The transaction will be accretive to adjusted EBITDA in the first full year after closing and free cash flow in the second year after closing. IBM said it expects the deal to close by the end of 2024.
HashiCorp will complement Red Hat, which has contributed to IBM’s revenue growth since its $34 billion acquisition in 2019. Neutral entity. HashiCorp is a pioneer in open source software that developers use to control cloud infrastructure. Advanced versions of Terraform cloud management software and other products generate revenue for HashiCorp.
In 2021, HashiCorp stock began trading on Nasdaq. But revenue growth slowed and the company continued to report losses. Still, its revenue is growing faster than IBM’s.
HashiCorp shares rose 4% in after-hours trading following the acquisition announcement.
Here’s how IBM’s performance compares to the consensus of analysts polled by LSEG:
- Earnings per share: Adjusted $1.68, expected $1.60
- income: $14.46 billion vs. $14.55 billion expected
IBM data shows that IBM’s revenue increased by about 1.5% this quarter. statement. This marked the third time in the past five quarters that the company has missed revenue estimates.
Software revenue was $5.9 billion, up about 6%, below the $5.96 billion consensus among analysts polled by StreetAccount.
IBM’s consulting revenue was $5.19 billion, down slightly and slightly below StreetAccount’s forecast of $5.2 billion.
Infrastructure revenue totaled $3.08 billion. It fell 0.7% but topped StreetAccount’s consensus forecast of $2.94 billion.
IBM said it will provide its 160,000 consultants with Artificial intelligence assistant Company completes divestitures to boost productivity weather company Francisco Partner.
Despite the after-hours moves, IBM shares are still up about 13% year to date, outperforming the S&P 500, which has gained 6% during the same period.
Executives will discuss the report with analysts on a conference call starting at 5 p.m. ET.
This is breaking news. Please check back for updates.
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