IBM’s Strong Free Cash Flow Drives Its Acquisitions

In the last five years, IBM (IBM) has generated FCF (free cash flow) at an average of ~$13 billion per year, allowing the company to make more than 34 acquisitions in the last three years. The chart below shows IBM’s FCF growth over the last five years. In fiscal 2017, its FCF rose YoY (year-over-year) to ~$13 billion from $11.7 billion, and in the first quarter of this year, its FCF rose YoY to $1.4 billion from $1.1 billion. Strong revenue growth driven by huge demand for IBM’s Watson AI and blockchain platforms continues to act as a key catalyst for IBM’s FCF growth.