IBM affected by DOGE cuts, downplays impact during Q1 earnings call

Group 1 - IBM experienced cancellations of 15 federal contracts due to cuts from the Department of Government Efficiency (DOGE), resulting in a loss of $100 million in future payments [1][2] - Federal contracts account for approximately 5% to just under 10% of IBM's consulting practice, which made up 34% of the company's revenue in Q1 [1][3] - The consulting revenue for IBM in Q1 was slightly over$ 5 billion, reflecting a 2% decline overall [4] Group 2 - IBM's CEO and CFO downplayed the potential impact of DOGE on future business, emphasizing that the cancelled contracts represent a small portion of their annualized backlog of over $30 billion [2][3] - The majority of IBM's federal government consulting contracts are focused on critical work, such as processing veterans benefit claims and implementing payroll systems, with only a minority being discretionary [4] - The diversity of IBM's business portfolio is seen as a strength in navigating the current economic climate, with confidence in future growth [5]